HomeMy WebLinkAboutResolution - 89-230 - Provide for the Issuance of Industrial Development Refunding Revenue Bonds to Provide for Refinancing of Industrial Development Project on Behalf of Burton McGlynn - 10/17/1989 Resolution No . 89-230
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE
OF INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS
TO PROVIDE
FUNDS FOR. REFINANCING OF INDUSTRIAL DEVELOPMENT
PROJECT ON BEHALF OF BURTON J. MCGLYNN
WHEREAS, the City is , by the Constitution and laws of
the State of Minnesota , including Minnesota Statutes , Section
469 . 152 to 469 . 165 , as amended (the "Act" ) , authorized to issue
and sell its revenue bonds for the purpose of financing and
refinancing the cost of authorized projects , and to enter into
agreements necessary or convenient in the exercise of the
powers granted by the Act ; and
WHEREAS, Burton J. McGlynn, an individual doing busi-
ness as H .J .M. Properties (the "Borrower" ) , has proposed to
this Council that the City issue and sell its $2 , 050 , 000 City
of Eden Prairie Industrial Development Refunding Revenue Bonds
(McGlynn Bakeries , Inc . Project) , Series 1989 , in substantially
the form and bearing the terms and provisions set forth in the
hereinafter-mentioned Indenture (the "Bonds" ) pursuant to the
Act and lend the proceeds thereof to the Borrower in order to
pay in full and refund the outstanding City of Eden Prairie
Industrial Development Revenue Bonds (McGlynn Bakeries, Inc .
Project) , Series 1984 (hereinafter referred to as the "Prior
Bonds" ) , and thereby refinance the costs of acquiring , con-
structing and equipping an approximately 32 , 000 square foot
addition to an existing facility at 7752 Mitchell Road in the
City, which is owned by the Borrower and leased to McGlynn
Bakeries , Inc . for use as a warehousing and manufacturing
facility (the "Project" ) . Forms of the following documents
relating to the Bonds have been submitted to the City and are
now on file :
(a) Loan Agreement (the "Loan Agreement") dated as of
November 1, 1989 , between the City and the Borrower, where-
by the City agrees to make a loan to the Borrower of the
proceeds of sale of the Bonds and the Borrower agrees to
refund the Prior Bonds and to pay amounts in repayment of
the loan sufficient to provide for the full and prompt
paynent of the principal of, premium, if any, and interest
on the Bonds ; and
(b) Trust Indenture (the " Indenture" ) dated as of
:f November 1 , 1989 , between the City and American National
Bank and Trust Company, as Trustee , pledging revenues,
including those to be derived from the Loan Agreement, as
security for the Bonds , and setting forth proposed
recitals , covenants and agreements relating thereto; and
(c) Ir.revocable Letter of Credit (the "Letter of
Credit" ) to be dated the date of issuance and original
delivery of the Bonds , to be issued by First Bank National
Association (the "Bank" ) , to the Trustee, for the account
of the Borrower , securing payment of the principal of, the
purchase price for, and the accrued interest on the Bonds
( this document not to be executed by the City) ;
(d) Remarketing Agreement ( the "Remarketing Agree-
ment" ) dated as of November 1 , 1989 , between the Borrower
and Piper, Jaffray & Hopwood Incorporated, as Remarketing
Agent , providing for the terms and conditions of remarket-
ing the Bonds (this document not to be executed by the
City) ; and
(e) Bond Purchase Agreement ( the "Bond Purchase
Agreement" ) , by and between Piper , Jaffray & Hopwood incor-
porated (the "Underwriter" ) , the Borrower and the City,
providing for the purchase of the Bonds from the City by
the Underwriter and setting the terms and conditions of
purchase;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF EDEN PRAIRIE, AS FOLLOWS :
1 . Findings_. It is hereby found, determined and
declared that :
(a) Following approval of the Project by the City and
the Minnesota Energy and Economic Development Authority,
the City duly issued the Prior Bonds , pursuant to a resolu-
tion duly and validly adopted by the City Council of the
C-ity on December 4 , 1984 ( the "Prior Bond Resolution" ) , at
a meeting thereof duly and regularly called and field.
(b) The Bonds are being issued to refund the Prior
Bonds .
(c) There is no litigation pending against the City
or , to the best of its knowledge, threatened against the
City relating to the Project, the Prior Bond Resolutions or
the Prior Bonds , or to the Bonds , the Loan Agreement, the
Indenture or the Bond Purchase Agreement , or questioning
t.
the organization, powers or authority of the City.
-3-
(d) It is desirable that the Bonds be issued by the
r City upon the terms set forth in the Indenture, under the
provisions of which the City' s interest in the Loan Agree-
ment will be pledged to the Trustee as security for the
payment of principal of , premium, if any, and interest on
the Bonds .
(e) The Loan Agreement provides for payments by the
Borrower to the Trustee for the account of the City of such
amounts as will be sufficient to pay the principal of ,
premium, if any, and interest on the Bonds when due . The
Loan Agreement obligates the Borrower to pay for all costs
of operation and maintenance of the Project Facilities ,
including adequate insurance, taxes and special assessments .
( f) Under the provisions of the Act, and as provided
in the Loan Agreement and Indenture , the Bonds are not to
be payable from nor charged upon any funds other than
amounts payable pursuant- to the Loan Agreement and the
Letter of. Credit and moneys in the funds and accounts held
by the Trustee under the Indenture which are pledged to the
payment thereof; no holders of the Bonds shall ever have
the right to compel the exercise of the taxing power of the
City to pay any of the Bonds or the interest thereon, nor
to enforce payment thereof against any property of the
City; the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable , upon any property of the
City; and each Bond issued under the Indenture shall recite
that such Bond, including interest thereon, shall not con-
stitute or give rise to a charge against the general credit
or taxing powers of the City.
2 . ApprQvand Exu i n of Documents . The forms of
Loan Agreement , Indenture and Bond Purchase Agreement referred
to in the recitals hereof are approved . The Loan Agreement and
Indenture shall be executed in the name and on behalf of the
City by the Mayor, the City Manager and the City Clerk, and
acknowledged as may be further provided therein, in substan-
tially the form on file, but with all such changes therein, not
inconsistent with the Act or other law, as may be approved by
the officers executing the same, which approval shall be con-
clusively evidenced by the execution thereof, and then shall
be delivered to the Trustee . The Bond Purchase Agreement shall
be executed as provided therein. Copies of all documents shall
be delivered and filed as provided therein, or as required by
law.
3 . Approval . Execution and Delivery of Bo zc§. The
City shall proceed forthwith to issue the Bonds , to be dated
November 1, 1989 , in the aggregate principal amount of
$2 , 050 , 000 , bearing interest at an initial rate not to exceed
seven and one-half percent (7 . 50%) per annum (which rate shall
-a._
be approved by the officers executing the Indenture , such
? aproval to be conclusively evidenced by the execution thereof ) ,
in the form and upon the terms set forth in the Indenture ,
which terms are for this purpose incorporated in this resolu-
tion and made a part hereof . The Underwriter has agreed pursu-
ant to the provisions of the Bond Purchase Agreement , and
subject to the conditions therein set forth, to purchase the
Bonds at a purchase price of 1000 of the par amount thereof ,
and said purchase price is hereby found to be favorable and is
hereby accepted. The Mayor , the City Manager and the City
Clerk are authorized and directed to prepare and execute the
Bonds as prescribed in the Indenture and to deliver them to the
Trustee, tcgether with a certified copy of this Resolution and
the other documents required by Section 2 . 08 of the Indenture ,
for authentication, registration and delivery to the Under-
writer . As provided in the Indenture, each Bond shall contain
a recital that it is issued pursuant to the Act , and such
recital , to the extent permitted by law, shall be conclusive
evidence of the validity and regularity of the issuance thereof .
4 . Certificates , eta . The Mayor, City Manager , City
Clerk, and other officers of the City are authorized and
directed to prepare and furnish to bond counsel and the
original purchasers of the Bonds , when issued, certified copies
of all proceedings and records of the City relating to the
Prior Bonds and the Bonds , and such other affidavits and cer-
tificates as may be required to show the facts appearing from
the books and records in the officers ' custody and control or
as otherwise known to them; and all such certified copies ,
certificates and affidavits , including any heretofore
furnished, shall constitute represeritat ions of the City as to
the truth of all statements contained therein .
5 . Filing wi h County. The City Clerk is authorized
and directed to deliver a certified copy of this Bond Resolu-
tion to the Director of Property Tax and Public Records , acting
as County Auditor of Hennepin County, together with such other
information as the Director of Property Tax and Public Records
may require, and obtain the certificate of the Director of
Property Tax and Public Records as to entry of the Bonds on the
Director ' s bond register as required by the Act and Minnesota
Statutes , Section 475 . 63 .
6 . Election Under Internal Revenue Code . The City
Council hereby elects that the provisions of section
103 (b) ( 6) (D) of the Internal Revenue Code of 1954 , as amended
(or, if applicable, Section 144 ( a) ( 4) of the Internal Revenue
Code of 1986, as amended) , permitting the issuance of bonds in
an aggregate principal amount up to $10 , 000 , 000 under certain
conditions , shall apply to the Bonds .
1815d
-5-
Mayor Gafy D. Peterson
ATTEST:
John Dl' .i- e , City Clerk
1