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HomeMy WebLinkAboutResolution - 78-156 - Providing for Issuance and Sale of Revenue Bonds, to Provide Funds to be Loaned to BADA Realty Company - Barrett Moving & Storage Company - 7 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF REVENUE BONDS PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, TO PROVIDE FUNDS TO BE LOANED TO BADA REALTY CO, INC. FOR INDUSTRIAL PROJECT AND APPROVING MORTGAGE, ASSIGNMENT OF RENTS, LOAN AGREEMENT, CONSTRUCTION LOAN AGREEMENT, LEASE AND PLEDGE AGREEMENT BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota, as follows : 1. Authority. The City is, by the Constitution and Laws of the State of Minnesota, including Chapter 474, Minnesota Statutes, as amended (the "Act") authorized to issue and sell its revenue bonds for the purpose of financing the cost- of construc- tion of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Documents Presented. This Council proposes that the City shall issue and sell its City of Eden Prairie Industrial Development Revenue Bond (Barrett Moving & Storage Company Proj- ect) in substantially the form set forth in Exhibit A hereto (the "Bond") pursuant to the Act and loan the proceeds thereof to Bada Realty Co. , Inc. (the "Company") to pay the cost of constructing • a terminal-office building and a maintenance building, together with necessary equipment, exterior utilities and site improve- ments (the "Project") , all pursuant to the Act. Forms of the following documents relating to the Bond and the Project have been submitted to the City Council and are now on file in the office of the City Clerk: (a) Loan Agreement, dated as of September 1, 1978, between the City and Bada Realty Co. , Inc. whereby the City agrees to make a loan to the Company and the Company agrees to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of and interest on the Bond; (b) Assignment and Pledge Agreement (the "Pledge Agreement") , dated as of September 1, 1978 from the City to the Mortgagee whereby the City assigns its interest in the Loan Agreement to the Mortgagee as security for the Bond; (c) Construction Loan Agreement, dated as of September 1, 1978, by and among the City, the Mortgagee and the Company, providing for the purchase of the Bond by making advances thereunder; (d) Combination Mortgage and Security Agreement, dated as of September 1, 1978, between the Company and Northwestern National Bank of Minneapolis (the "Mort- gagee") by which the Company will grant to the Mortgagee -2- . a mortgage lien on and security interest in the Project and all improvements thereto as security for the Bond (this document-will not be executed by the City) ; (e) Assignment of Rents, dated September 1, 1978, from the Company to the Mortgagee assigning the Company' s interest in leases of the Project to the Mortgagee as additional security for the Bond (this document will not be executed by the City) ; (f) Lease, dated as of September 1, 1978, between the Company and Barrett Moving & Storage Company (the "Lease") (this document will not be executed by the City) ; 3. Findings. It is hereby found, determined and declared that: (a) The Project, comprised of the buildings, improvements and equipment described in the Loan Agree- ment and the Mortgage constitutes a project authorized by and described in Section 474.02, Subd. la of the Act. (b) The purpose of the Project is and the effect • thereof will be to promote the public welfare by: preventing the emergence of blighted and marginal lands and areas of chronic unemployment, preventing economic deterioration; the development of sound industry and commerce to use the available resources of the commu- nity, in order to retain the benefit of the community's existing investment in educational and public service facilities; halting the movement of talented, educated personnel to other areas and thus preserving the eco- nomic and human resources needed as a base for providing governmental services and facilities; and increasing the tax base of the city and the county and school district in which the Project is located. (c) The Project has been approved by the Commis- sioner of Securities of the State of Minnesota as tending to further the purposes and policies of the Act. (d) The issuance and sale of the Bond, the execu- tion and delivery of the Loan Agreement, the Construc- tion Loan Agreement and the Pledge Agreement and the performance of all covenants and agreements of the City contained in the Bond, the Loan Agreement, the Construc- tion Loan Agreement and the Pledge Agreement and of all • other acts of the City and the State of Minnesota to make the Loan Agreement, the Construction Loan Agreement -3- • and the Pledge Agreement and Bond valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (e) There are no agreements to which the City is a party, ordinances or resolutions of the City or court orders directed to the City affecting the validity or enforceability of the Loan Agreement, the Construction Loan Agreement, the Pledge Agreement, the Bond or this Bond Resolution. (f) It is desirable that the City of Eden Prairie Industrial Development Revenue Bond (Barrett Moving & Storage Company Project) in the amount of $1,100,000 be issued by the City upon the terms set forth herein, and that the City isinterest in the Loan Agreement be assigned to the Mortgagee as security for the payment of principal and interest on the Bond. (g) The Loan Agreement provides for payments by the Company to the Mortgagee for the account of the City of such amounts as will be sufficient to pay the principal of and interest on the Bond when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Company to provide for • the operation and maintenance of the Project, including adequate insurance, taxes and special assessments. (h) Under the provisions of Section 474.10, Minnesota Statutes, and as provided in the Loan Agree- ment, the Bond is not to be payable from nor charged upon any funds other than amounts payable by the Company pursuant to the Loan Agreement which are pledged to the payment thereof; the City is not subject to any liability thereon; no holder of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the in- _ terest thereon, nor to enforce payment thereof against any property of the City; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, other than its rights under the Loan Agreement; the Bond shall recite that the Bond, including interest thereon, shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and that the Bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. 4. Approval and Execution of Documents. The transaction • in the form indicated by the Loan Agreement, Pledge Agreement, Construction Loan Agreement, Combination Mortgage and Security Agreement, Lease and Assignment of Rents referred to in paragraph 2 is hereby approved. The Loan Agreement and Construction Loan Agreement are hereby .approved and shall be executed in the name -4- • and on behalf of the City by the Mayor and City Manager, upon execution thereof by an authorized officer of Bada Realty Co. , Inc. , in substantially 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 approv- al shall be conclusively evidenced by the execution thereof. The Pledge Agreement is hereby approved and shall also be executed in the name and on behalf of the City by the Mayor and City Manager in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other laws, as may be approved by the officers executing the same, which approval shall .be conclusively evidenced by the execution thereof. Copies of all documents shall be delivered and filed as provided therein. The Mortgage, Lease and Assignment of Rents may contain such revisions as may be approved by the Mortgagee and the parties executing the same. 5. Approval, Execution and Delivery of Bond. The City shall proceed forthwith to issue its City of Eden Prairie Indus- trial Development Revenue Bond (Barrett Moving & Storage Company Project) , to be dated the date of delivery, in the principal amount of $1,100,000 in the form and containing the terms set forth in the form of Bond attached hereto as Exhibit A, which terms are for this purpose incorporated in this resolution and made a part hereof. The proposal of the Mortgagee to purchase • such Bond at a price of $1,100,000 (1000 of its par value) by making advances in accordance with the Construction Loan Agree- ment is hereby found and determined to be reasonable and is hereby accepted. The Mayor and City Manager are authorized and directed to prepare the Bond in typewritten form substantially in the form set forth in Exhibit A. The Bond shall be executed by the manual signatures of the Mayor and City Manager and the official seal of the City shall be affixed thereto and attested by the City Clerk. When so prepared and executed the Bond shall be delivered to the Mortgagee upon receipt of the purchase price therefor, which may be paid to the parties entitled to receive the loan proceeds in accordance with the Construction Loan Agree- ment and the Loan Agreement. The Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Capital Expenditures Election. The City hereby elects that the 5 million limitation of capital expenditures set forth in Section 103 (b) (6) (D) of the Internal Revenue Code shall be applicable to the Project and the Bond, and the City Clerk shall execute and file on behalf of the City the form of election required by said Section and the regulations thereunder. 7. Registration Records. The City Clerk, as Bond • Registrar, shall keep a Bond Register in which the City shall provide for the registration of the Bond and for transfers of the Bond. The principal of, premium, if any, and interest on the Bond shall be payable to the Mortgagee or registered assigns in lawful money of the United States of America at the address of the Mortgagee or registered assigns as shown on the Bond Register. -5- 8. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond is mutilated, lost, stolen or destroyed, the City may exe- cute and deliver to the registered owner a new Bond of like date, number, maturity and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Bond, there shall be first furnished to the City and the Company evidence of such loss, theft or destruc- tion satisfactory to the City and the Company together with indemnity satisfactory to them. The City may charge the Bond- holder with its reasonable fees and expenses in this connection. 9. Transfer of Bond; Person Treated as Owner. The Bond shall be transferable by the registered owner on the Bond Register of the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as Bond Registrar, accompanied by a written instrument of transfer in form satisfactory to the Bond Registrar duly executed by the registered owner or its attorney duly authorized in writing. The registered owner seeking to transfer ownership of the Bond shall also give written notice thereof to the Company. The Bond shall continue to be subject to successive transfers at the option of the registered owner of the Bond. No service charge shall be made for any such transfer, but the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental • charge payable in connection therewith. The Bond Registrar shall give written notice to the Company of any transfer of ownership recorded on the Bond Register immediately upon effectuating same. The person in whose name the Bond shall be registered from time to time shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the owner thereof, or its attorney duly authorized in writing, and neither the City, the Bond Registrar nor the Company shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. 10. Amendments, Changes and Modifications to Loan Agreement, Construction Loan Agreement and Bond Resolution. The City shall not, without the written consent of the Mortgagee, enter into any agreement, change, modification, alteration or termination of the Loan Agreement, the Construction Loan Agree- ment, the Pledge Agreement or this Bond Resolution. 11. The Mayor, City Manager and City Clerk and other officers of the City are authorized and directed to prepare and furnish to the purchaser of the Bond, certified copies of all proceedings and records of the City relating to the Bond, and such other affidavits and certificates 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 -6- certified copies, certificates and affidavits, including any heretofore furnished, shall constitute repren ations of the City as to the truth of all statements contes c� ther i � Approved (( Mayor Attest CitVUlerk STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Eden Prairie, Minnesota, do hereby certify that the attached extract of minutes of a regular meeting • of the City Council of the City held September 5, 1978, is a full, true and correct transcript therefrom insofar as the same relates to a $1, 100,000 Industrial Development Revenue Bond of the City. WITNESS My hand officially and seal officially as said City Clerk this 5th day of September, 1978. y C (Seal) -7- EXHIBIT A (Form of Bond) UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE No. R-1 $1,100,000 Industrial Development Revenue Bond (Barrett Moving & Storage Company Project) The City of Eden Prairie, Minnesota, a municipality in the County of Hennepin and State of Minnesota, being a body corporate and politic (hereinafter sometimes called the "City") , for value received, hereby promises to pay to Northwestern National Bank of Minneapolis, or registered assigns, solely from the revenues derived by the City from the Loan Agreement herein- after described, the principal sum of ONE MILLION ONE HUNDRED THOUSAND DOLLARS ($1,100, 000) , or such portion thereof as may be advanced under the Construction Loan Agreement hereinafter described, and to pay interest on the unpaid principal amount thereof at the rate of Seven and one-fourth percent (7.25%) per annum (computed on the basis of a 360-day year, 30-day month) . Interest only accruing on said principal amount from the date of the delivery of this Bond shall be paid on October 1, 1978, and the first day of each month thereafter to and including the first day of the month following the month in which the Assignment Date, as defined in the Loan Agreement, occurs. Thereafter principal and interest shall be due and payable in 299 equal consecutive monthly installments of principal_ and interest in the amount of $7,950. 88 each on the first day of each month, com- mencing on the first day of the second month following the month in which the Assignment Date occurs, and one final installment of all unpaid principal and interest shall be paid on the first day of the following month, which final payment shall in no event occur later than February 1, 2005. In the event of a Determi- nation of Taxability, as defined in the Loan Agreement, the rate of interest hereon shall be increased to 9. 75% per annum effective as of the Date of Taxability, as defined in the Loan Agreement, unless the Date of Taxability occurs before the Assignment Date, in which case the Bona shall bear interest from the Date of Taxability until the Assignment Date at an annual rate (calcu- lated on the basis of the actual number of days elapsed in a 360- day year) that shall at all times be equal to 3% over the prime rate of interest charged by Northwestern National Bank of Minne- apolis from time to time on 90-day unsecured loans to its commer- cial borrowers of the highest. credit standing, which annual rate shall change when and as said prime rate shall change. In the -8- Y event of a Determination of Taxability, monthly payments of principal and interest from and after the Date of Taxability shall be recomputed at the applicable rate or rates set forth above and the Municipality shall promptly pay to the registered owner and to any prior registered owner the aggregate difference between (i) the amounts actually paid hereunder between the Date of Taxability and the effective date of such rate increase and (ii) the amounts which would have been paid to such registered owner during such period if the increased rate or rates had been in effect and this Bond had been amortized at the rate of 9.75% per annum from the Date of Taxability or the Assignment Date, whichever occurs later, to maturity. This Bond is issued under the Minnesota Municipal Industrial Development Act, Chapter 474, Minnesota Statutes, as amended (herein called the "Act") , and in conformity with the provisions, restrictions and limitations thereof.. This Bond does not represent a debt or pledge the faith or credit of the City or grant to the owner of this Bond any right to have the City levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation of the City or the individual officers or agents thereof. This Bond and interest hereon are payable solely and only out of the moneys received under the Loan Agreement or realized from the enforcement of the security hereinafter described. This Bond is issued pursuant to a resolution of the City- adopted by its City Council on September 5, 1978 (the "Bond Resolution") for the purpose of constructing a terminal-office building and a maintenance building, together with appurtenant equipment and site improvements (hereinafter called the "Project") and pursuant to a Loan Agreement dated as of September 1, 1978 (herein called the "Loan Agreement") between the City and Bada Realty Co. , Inc. , a Minnesota corporation (hereinafter called the "Company") . Under the Loan Agreement, the Company has agreed to construct and equip the Project and has agreed to make certain Loan Repayments in amounts and at times sufficient to pay the principal of, premium, if any, and interest on this Bond when due. Pursuant to an Assignment and Pledge Agreement dated as of September 1, 1978 between the Company and the Mortgagee (the "Pledge Agreement") , the City has pledged and assigned its interest in the Loan Agreement (except its rights under Sections 4.02, 6. 01, 7. 04 and 7. 05 thereof) to the registered holder hereof. This Bond is further secured by a Combination Mortgage and Security Agreement dated as of September 1, 1978 (the "Mortgage") by which the Company has granted to Northwestern National Bank of Minne- apolis a mortgage lien on and security interest in the Project and an Assignment of Dents dated as of September 1, 1978 (herein- after called the "Assignment") by which the Company has assigned to Northwestern National Bank of Minneapolis its interests in all leases with respect to the Mortgaged Property. Advances of funds for the Project are being made pursuant to a Construction Loan Agreement dated as of September 1, 1978 by and among the City, the Mortgagee and the Company. Reference is hereby made to the Bond Resolution, the Loan Agreement, the Construction Loan Agreement, -9- the Mortgage and the Assignment for a complete description of the covenants and agreements therein contained, the nature and extent of the security thereby created and the rights, duties and immunities- of the City thereunder. This Bond is subject to prepayment prior to maturity, at the option of the City upon direction of the Company, in whole or in part, on any installment payment date on or after September 1, 1983, at the redemption prices (expressed as percentages of the unpaid principal amount of the Bond to be prepaid) set forth in the table below plus accrued interest to the redemption date: Redemption Redemption Dates Price September 1, 1983 to August 1, 1984 105% September 1, 1984 to August 1, 1985 104% September 1, 1985 to August 1, 1986 103% September 1, 1986 to August 1, 1987 102% September 1, 1987 to August 1, 1988 101% but without premium if redeemed thereafter. This Bond may also be prepaid in whole but not in part without premium upon a Determina- tion of Taxability as provided in the Loan Agreement upon payment of the principal amount then outstanding, accrued interest and • all other amounts representing additional interest from the Date of Taxability to the prepayment date. Notice of any such prepayment shall be deemed sufficient if mailed by the Company to the regis- tered owner of this Bond at least 30 days prior to the redemption date. This Bond is also subject to prepayment without premium in certain instances of damage to or destruction or condemnation of the Project as provided in the Loan Agreement and Mortgage. All prepayments, whether voluntary or otherwise, shall be applied in inverse order of maturity. This Bond is transferable, as provided in the Bond Resolution, only upon the books of the City kept for that purpose at the office of the City Clerk, by the registered owner hereof in person or his duly appointed attorney and similarly noted hereon. By acceptance of this Bond, the- registered owner agrees to provide to the City Clerk, at the Clerk's request, a verified statement of the dates and amounts of all payments of principal, premium and interest received in respect to this Bond. In the event of default in the payment of principal or interest hereon or if an Event of Default as defined in the • Mortgage or Loan Agreement occurs, or if for any reason the Assignment Date does not occur before January 15 , 1979, the unpaid principal of this Bond together with all interest then due thereon may -10- v be declared or may become immediately due in the manner and with the effect and subject to the conditions provided therein. It is hereby recited and the City Council has found: That the Project is an eligible "project" defined in Section 474. 02, Subd. la of the Act; that the issuance of this Bond and the acquisition and construction of the Project will promote the public welfare and carry out the purposes of the Act; that the Project has been approved by the Commissioner of Securities as tending to further the purposes and policies of the Act; that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that this Bond does not exceed or constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation. IN WITNESS WHEREOF, the CITY OF EDEN PRAIRIE, by its City Council, has caused this Bond to be signed in its behalf by the signatures of the Mayor and. City Manager and attested by the City Clerk and sealed with the corporate seal of the City, all as of the day of 1978. CITY OF E PRAI-FI • By Ma And B iL ity Manager (Seal) Att t: Ci Clea- Certificate of Registration It is hereby certified that, at the request of the holder of the within Bond, the City of Eden Prairie has this day registered it as to principal and interest, in the name of such holder, as indicated in the registration blank below, on the books kept by the undersigned for such purpose: Name of Authorized Registered Date of Signature Owner Registration of City Clerk -11-