OFFICE OF THE STATE'S ATTORNEY CIVIL DIVISION oo iad County ii Toh, MeGehee, State's Attorney 210 15h Stet, ath Floor Rock Islnd, IL 61201 Phone: (308) 359-5251 Fax: (99) 786-5052 Website: wirw.rockislandepunty.org May 7, 2018 MEDIA RELEASE row Sohn McGehee, State’s Attorney, Rock Island County SUBJECT: Bond Counsel Legal Opinion Last month Chapman and Cutler, Chicago Bond Attorneys were hired as special counsel to Rock Island County to advise the County on whether Bond Funds could be used for site improvement including demolition of the Old Courthouse and make further capital improvements to the current Justice Center. Chapman and Cutler were the attorneys that provided the legal opinion that was relied upon in the securing of the $28,000,000 for financing of the project. The $28,000,009 could not have been secured from the investors without this legal opinion. Illinois States Attorneys provide legal advice by law to Illinois County Government and the State’s Attorney decides when outside counsel is necessary to provide further legal opinions. Due to concerns raised from the community and some county board members it became legally necessary to seek Bond Counse'’s opinion regarding the Old Courthouse and current Justice Center.It is Chapman and Cutlers professional legal opinion that Bond funds can be used for site preparation and demolition of the Old Courthouse as well as miscellaneous capital improvements to the current Justice Center which when complete will be all connected to the jail and new annex. | have enclosed a copy of this legal opinion.Chapman and Cutler uur ‘Rromeysat law »Foausedon Fanaa? April 18,2018, ‘The County of Rock Island, Illinois Re ‘The Rock Isnd Couaty Public Building Commi Rock Island County, Iinois| ___Publie Building Reveave Bonds, Series 2016 Ladies tnd Gentlemen: ‘We understand that: {. On February 29, 2016, The Rock Island County Public Building Commission, Rock Island County, Iino (the “PEC") issued $28,000,000 Public Building Revenue Bonds, Series 2016 (the “Bonds”. 2. The Bonds were issued pursuant to a resolution sdopted by the Board of Commissioners of the PBC (the “PBC Board") on the 23rd day of February, 2016 (the “Bond Resolution”), for the purpose of acquiring, constructing, improving, altering, equipping, repairing, maintaining, operating and securing the Justice Center (collectively, the “Project”), {including construction ofthe Justice Center annex project (the “Annex Project”). 3. ‘The Bonds are payable on a parity with the PBC’s outstanding Justice Center Revenue Refunding Bonds, Series 2009, and Justice Center Revenue Refunding Bonds, Series 2012, solely from the revenues to be derived from the operation, management and use of| the Justice Center (including the Annex Project), which revenues include payments reccived lunder an amended lease agreement, dated February 29, 2016 (the “Amended Lease"), by and between the PBC and The County of Rock Island, illinois (the “County” ‘occupancy of the sites on which the Justice Center and the improvements thereto (including the ‘Annex Project) are located (collectively, the “Sites”. 4. The County Board of the County (the “County Board”) adopted an ordinance on the 23rd day of February, 2016 (the “County Board Ordinance”) approving the Amended Lease and providing for the levy and collection of direct annual taxes upon all taxable property in the County sufficient to pay the annual rentals due under the Amended Lease. ede Ont lage Hower Stately Sntmeseo Manger oC assChapman and Cudler te ‘You have asked for our opinion as to whether the PBC may use proceeds of the Bonds (the “Proceeds”) for on: or both of the following projects: 1. Miscellaneous capital improvements in and for the Justice Center (the Justice Center improvements”); and 2. Demolition ofthe old Courthouse building and related site work (the “Old Courthouse Site Improvements” and, together with the Justice Center Improvements, the “Improvements” In rendering the opinion expressed herein, we have reviewed pertinent provisions ofthe laws of the State of llinos, including the Publie Building Commission Act, as amended (the “Act”),and pertinent provisions ofthe Internal Revenue Code of 1986, a8 amended. In rendering the opinion expressed herein, we have also assumed the following additonal facts 1, The PBC holds fee simple tile tothe Sites with provision for reverter to the County upon expiration ofthe Amended Lease, 2. The site of the Old Courthouse Site Improvements (the “Old Courthouse Site") is adjpcentto, and not included within, the Sits. 3. The County holds fee simple tite to, and maintains, operates and secures, the Old Courthouse Site, 4. Both the County Bourd and the PBC Board approve the use of Proceeds for the Old Courthouse Site Improvements 5. In approving the use of Proceeds for the Old Courthouse Site Improvements, both the County Board and the PBC Board find ard determine thatthe ‘Old Courthouse site Improvements are necessary forthe maintenance and security of the Suotioe Coner(including the Annex Project) Based upon our review of the law and the facts that we deem relevant and upon the assumptions set forth above, we are ofthe opinion that, forthe reasons set forth below, the PBC. ‘may use Proceeds fr the Improvements. [At the time the Bonds were issued, the PBC and the County covenasted with the holders of the Bonds thatthe P8C and the County would comply with federal tx law regnrding the specific use of Proceeds to assure that the interest on the Bonds would be exempt from federal income taxation. In our view, the use of Proceeds forthe Justice Center Improvements andlor the Old Courthouse Site improvements will not adversely affect the exclusic from gross income for federal income tax perposes of the interest on the Bonds to which the holders thereof would be otherwise entitled. Both the PBC and the County should note, however, that use of ProceedsChapman and Cutler i for the Old Courthouse Site Improvements may limit future non-governmental development of the Old Courthouse Site Section 14(a) of the Act authorizes the PBC to selet one or mare areas lying wholly within the County “as the site or sites to be acquired for the erection, alteration oF improvement ‘ofa building or buildings, public improvement or other facilites For the purposes set forth inthis Section.” Such sites, pursuant to Section 14(a)2) of the Act, must be approved by @ majority oF the members of the County Board. Section 14(0) of the Act further authorizes the PBC to acquire fee simple tile to or any lesser interest inthe real property located within such area or areas. Prior to issuing the Bonds, pursuant to and in accordance withthe provisions of said Sections 14(8), 14(aX2) and 14(b), the PBC selected (and the County Bourd approved) the Sites forthe purpose of acquiing, constructing, improving, altering, equipping, repairing, maintaining, ‘operating and securing the Justice Center (including the Annex Project), and the PBC acquired fee simple title to the Sites with provision for reverter to the County upoo the expiration of the ‘Amended Lease, Section 14(a)(2) of the Act provides that area or areas selected by the PBC for public ‘improvement may be erlarged by the PBC Board, from time to time, asthe need therefor arises, and Section 14(c) ofthe Act further provides the PBC withthe authority: (To demolish, repair, alter oF improve any building or buildings within the area or areas and to erecta new building oF building, improvement and ther facilites within the area ar areas to provide space for the conduct of the executive, legisladve and Judicial fanctions of goverment, its various branches, departments tnd agencies thereof and to provide buildings, improvements and other facilities for use by local government in the furnishing of ‘essential governmental, health, safety and welfare services to its citizens; to furnish and equip such bi improvements and other facilities, and maintain and operate them 0. to effectuate the purposes of this Act, Having determined thatthe need has arisen forthe Old Courthouse Site Improvements, pursuant to and in accordance with Section 14(aX2) of the Act, the PBC Board may enlarge the area selected by the PBC as the site or sites forthe Justice Center (including the Annex Project) to include the Old Courthouse Site (collectively, the “Area"). In our view, Count approval of the use o? Proceeds for the Old Courthouse Site Imprevements s requirement of Section 14(a)(2) of the Act for site approval by the County. Following the corporate action of both the PBC Board (enlarging the Area) and the County Board (approving the Old Courthouse Sie), the PEC will have the authority, pursuant to and in accordance with Section 14(¢) of the Act, to demolish any building oF buildings within the Area, erect improvements within the Area and to maintain the same. Nocwthstanding sch Seetion 14(e) powers, the Improvements mast aso fll within the description of the Project set fr in the Bond Resolution andthe County Board Ordnance in ender forthe PBC wo se Proceeds for such projets. In our view, the ining by both the PBCChapman and Cutler ip Board and the County Board thatthe Old Courthouse Site Improvements are necessary for the ‘maintenance and security of the Justice Center (including the Annex Project) satisfies this Project scope requirement, ‘The purpose of our professional engagement was not to establish or coafirm factual ‘matters set forth herein, and we have not undertaken any obligation to verify independently any ofthe Factual mater set Forth herein ‘Our opinion represents our legal judgment based upon our review ofthe law and the facts that we deem relevant to render such opinion, and isnot a guarantee of a result, THis opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to feflect any fact ar circumstances that may hereafter come to ou attention or any changes inlaw that may hezefter occur. This opinion is furnished o you by us as special counsel tothe County and may not be used, quoted, relied upon or otherwise referred t for any other purpose or by any other person without our prior weiten consent. Respectfully submitted, [lap A AAUP