PILLAR: Fiscally Sound
AGENDA DATE: April 8, 2026
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller’s Office
PRIORITY: N/A
______________________________________________________________________
SUBJECT
Title
An ordinance amending (1) that certain Second Supplemental Indenture authorizing the City of Dallas Senior Lien Special Tax Revenue Notes, Series A (Kay Bailey Hutchison Convention Center Dallas Venue Project); (2) the Taxable Note Purchase Agreement with JP Morgan Chase Bank, N.A. and Tax-Exempt Note Purchase Agreement with DNT Asset Trust, a wholly owned affiliate of JPMorgan Chase Bank, N.A., relating to such Notes; and (3) resolving other matters related thereto - Not to exceed $1,928,500 - Financing: 2025 Senior Lien Special Tax Revenue Notes Fund ($628,500, upfront closing costs plus annual fees of $1,300,000 for a total cost of $1,928,500; with additional interest costs as accrued) (subject to annual appropriations)
*In alignment with Kay Bailey Hutchison Convention Center Plan.
Body
BACKGROUND
This item authorizes the First Amendment to the Second Supplemental Indenture of Trust authorizing the City of Dallas Senior Lien Special Tax Revenue Notes, Series A (Kay Bailey Hutchison Convention Center Dallas Venue Project) (the “Notes”), and the First Amendments to the Taxable Note Purchase Agreement and Tax-Exempt Note Purchase Agreement, in connection with the extension of the Notes from June 30, 2026 to December 15, 2026.
In coordination with the Kay Bailey Hutchison Convention Center Dallas (KBHCCD) Master Plan (the “Master Plan”), the City previously established a revenue financing system under its Master Indenture of Trust authorizing City of Dallas, Texas Special Tax and Revenue Obligations, (Kay Bailey Hutchison Convention Center Dallas Venue Project), dated as of October 3, 2023 (the “Master Indenture”). The primary source of funds for the Master Plan is revenue bonds backed by pledged revenue, including local Hotel Occupancy Tax (HOT), additional two percent Brimer HOT, and designated Project Financing Zone (PFZ) collections.
On June 11, 2025, the City Council authorized the adoption of the Second Supplemental Indenture to establish the Notes. To begin enabling works in preparation for construction, the City, with advisement from the City’s co-financial advisors, Hilltop Securities, Inc. and Estrada Hinojosa & Co., secured a bridge loan in an amount up to $1,000,000,000 with JP Morgan Chase Bank, N.A. and DNT Asset Trust, a wholly owned affiliate of JPMorgan Chase Bank, N.A., to issue revenue notes as short-term financing under the Master Indenture in order to facilitate contracting and provide a source of interim financing and refinancing for the KBHCCD Venue Project obligations.
The Notes issued under the Master Indenture and any Supplemental Indenture (as defined in the Master Indenture) are authorized and issued pursuant to the Constitution and laws of the State, including particularly Chapter 334, Chapter 351, and Chapter 1371, (all as defined in the Master Indenture), and Chapter 1207, Texas Government Code, as amended, and other applicable law (collectively, the “Act”).
The Notes are a special obligation of the City, payable from and secured by first and senior liens on pledged revenues, including PFZ revenue, Chapter 351 hotel tax, and Chapter 334 (Brimer) hotel tax collections. The Notes function as a draw-down note program used as short-term liquidity to fund capital projects in the interim in anticipation of the issuance of long-term bonds for the KBHCCD Venue Project. The current Notes have a maturity date of June 30, 2026, prior to which the City must refund the Notes with long-term debt or request an extension. The Ordinance amends the Note Program to allow for an extension of maturity of the Note Program and outstanding Notes to December 15, 2026 with the option to extend further if necessary and agreed to by the parties.
S&P Global Ratings (S&P) assigned its ‘SP-1’ short-term rating on the Notes, the second highest of the rating scale for short-term notes. The outlook is stable. Pending the approval of the ordinance, the Notes extension is scheduled to close in May 2026.
ESTIMATED SCHEDULE OF PROJECT
Briefing to Finance Committee March 2026
Approval of Ordinance April 2026
Effective Date of Amended Agreements May 2026
Closing May 2026
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On June 14, 2023, the City Council authorized the preparation of plans and the payment of potential future costs and expenses for the issuance of Special Tax and Revenue Bonds (Convention Center Venue Project), Series 2023 in a principal amount not to exceed $172,000,000; and Special Tax Bonds (Fair Park Venue Project), Series 2023 in a principal amount not to exceed $51,000,000, by Resolution No. 23-0769.
On September 27, 2023, the City Council authorized an ordinance approving and authorizing the issuance and sale of City of Dallas, Texas, Special Tax Revenue Obligations (Kay Bailey Hutchison Convention Center Venue Project), Series 2023 in a principal amount not to exceed $172,000,000; a Master Indenture of Trust and a First Supplemental Indenture of Trust; making findings with respect to the issuance of such obligations; and providing an effective date, by Ordinance No. 32559.
The City Council was briefed on “Kay Bailey Hutchison Convention Center Dallas Master Plan - Convention Center Component Update” on May 21, 2025.
The City Council was briefed by memorandum regarding this matter on June 6, 2025. <https://dallascityhall.com/government/citymanager/Documents/FY24-25%20Memos/Upcoming%20Agenda%20Item%20%20Senior.pdf>
The Government Performance and Financial Management Committee was briefed by memorandum regarding this matter on June 10, 2025. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/F.%20Bridge%20Loan.pdf>
On June 11, 2025, the City Council authorized an ordinance approving and authorizing the Second Supplemental Indenture establishing the Senior Lien Special Tax Revenue Notes, Series A (Kay Bailey Hutchison Convention Center Dallas Venue Project) bridge loan in an amount not to exceed $1,000,000,000; approving the execution and delivery of one or more Note Purchase Agreements with DNT Asset Trust, a wholly owned affiliate of JPMorgan Chase Bank, N.A., and the issuance of Notes pursuant thereto; and resolving other matters related thereto, by Ordinance No. 33128.
The Committee on Finance was briefed on the “Kay Bailey Hutchison Convention Center Dallas (KBHCCD) Master Plan -Component 1: Financing Update” on March 24, 2026.
FISCAL INFORMATION
|
Fund |
FY 2026 |
FY 2027 |
Future Years |
|
2025 Senior Lien Special Tax Revenue Notes Fund |
$1,928,500.00 |
$0.00 |
$0.00 |
See Schedule I for estimated cost of issuance and commitment fees, consisting of cost of issuance fees associated with the Notes at closing, a commitment fee for the life of the Notes assessed against the average monthly balance of the undrawn amount paid monthly in arrears at a rate of 57.5 basis points, and interest accrued on outstanding Notes drawn. Cost of issuance fees at closing are estimated at $628,500. Based on projected facility draw schedules, the estimated commitment fee is approximately $1,300,000.00 and estimated interest costs are approximately $8,815,000.00.
The Notes are a special obligation of the City, payable from and secured by first and senior liens on pledged revenues, including PFZ revenue, Chapter 351 hotel tax, and Chapter 334 (Brimer) hotel tax collections. The Notes serve as a bridge loan and will be refunded with long-term bonds in 2026. Proceeds of the Notes will be used to provide interim financing for the proposed KBHCCD Venue Project expansion and to pay cost of issuance associated with the notes.