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HomeMy WebLinkAboutResolution - 79-16 - Municipal Industrial Development Bonds for Kensington Development - 7 % RESOLUTION OF THE CITY OF EDEN PRAIRIE PROVIDING FOR THE ISSUANCE AND MAKING OF A COMMERCIAL DEVELOPMENT REVENUE NOTE PURSUANT TO CHAPTER 474 , MINNESOTA STATUTES , THE MINNESOTA MUNICIPAL, INDUSTRIAL DEVELOPMENT ACT, TO PROVIDE FUNDS TO BE RELOANED TO KENSINGTON INVESTMENTS , INC . , A MINNESOTA CORPORATION, AND NEIL A. BRASTAD , FOR A PROJECT AS DEFINED IN MINNESOTA STATUTES , SECTION 474 . 02 , SUBDIVISION la . AND APPROVING LOAN AGREEMENT, CONSTRUCTION LOAN AGREEMENT, MORTGAGE AND SECURITY AGREEMENT, GUARANTEE AGREEMENT , ASSIGNMENT OF RENTS AND LEASES, AND BUY-SELL AGREEMENT. RESOLVED, BY THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE : 1 . Statutory Powers . Pursuant to Chapter 474 , Minne- sota Statutes , as amended, ("Act" ) , the City is authorized to issue , sell , and make its revenue bonds ("Commercial Development Revenue Note" ) , in anticipation of the col- lection of revenues for authorized projects , to finance in whole or in part , the cost of construction of authorized projects and to enter into such contracts and agreements which it may deem proper and feasible for or concerning the construction and financing of an authorized project. 2 . Issuance of Commercial Development Revenue Note . The City shall issue , sell and make a Commercial Development Revenue Note , Series 1979 (Kensington Investments, Inc . and Neil A. Brastad , Project) substantially in the form set forth in Exhibit "A" attached hereto and made a part hereof ( "Note" ) , pursuant to the Act and shall reloan the proceeds of the Note to Kensington Investments , Inc . , a Minnesota corporation , and Neil A . Brastad (hereinafter collectively referred to as "Borrower" ) , to pay the cost of construction and installation of an automotive parts office , manufacturing and warehouse facility on the real property described in Exhibit "B" attached hereto and made a part hereof (said improvements and real property are hereinafter referred to as the "Project") . 3 . Purposes and Findings . The City Council hereby finds and states that : (a) The Project will promote, attract , encourage and develop economically sound industry and commerce , will help to prevent the emergence of blighted and marginal lands and areas' of chronic unemployment , will assist in pre- venting 'economic deterioration of the area , will further put to use available resources in the community including the existing investment of the community in educational and public service facilities , will help stop the movement of talented , educated personnel of mature age to other :seas , and will .result in an increase to the tax base of the City , County and School. District in which the Project is located . (b) The Commissioner of Securities for the State of Minnesota has given his approval to the Project by letter dated September 25 , 1978 , to Mayor Penzel . (c) The issuance, making and sale of the Note , the execution and delivery of the collateral documents as described in Paragraph 4 below which the City is a party to and all other acts of the City of Eden Prairie in connec- tion therewith to make said documents valid and binding obligations of the City of Eden Prairie in accordance with their respective terms are authorized by the Act . (d) Under the terms of the Note and the collat- eral documents described in Paragraph 4 below and as provided in Minnesota Statutes §474 . 10 , the Note shall not be payable from nor charged upon any funds other than the sums payable by the Borrower pursuant to the Loan Agreement which are pledged to the payment thereof and the City is not subject to any liability thereon . No holder or holders of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City. The Note shall not constitute a charge , lien or encumbrance , legal or equit- able, upon any property of the City . The Note shall recite in substance that the Note, including interest thereon, is payable solely from the revenue of the Loan Agreement pledged to the payment thereof . The Note shall further recite that it shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation . -2- 4 . Collateral Documents . The following proposed documents relative to the Note and the Project have been submitted to the City: (a) Loan Agreement between the City and Borrower, a copy of which is attached hereto as Exhibit "C" and made a part hereof, whereby the City agrees to reloan the proceeds of. the Note to the Borrower; (b) Mortgage and Security Agreement , a copy of which is attached hereto as Exhibit "D" and made a part hereof , whereby the Borrower grants to First National Bank of Minneapolis a mortgage lien on the Project as security for the Note; (c) Assignment of Rents and Leases , a copy of which is attached 'hereto as Exhibit "E" and made a part hereof , whereby the Borrower assigns all of the rents and leases from all or any part of the Project as additional security for the Note; (d) Construct-ion Loan Agreement, a copy of which is attached hereto as Exhibit "F" and made a part hereof, between Borrower, First National Bank of Minneapolis and the City which sets forth the terms of disbursing the proceeds of the Note ; (e) Guaranty Agreement by Thomas W. Noble to First National Bank of Minneapolis , a copy of which is attached hereto as Exhibit "G" and made a part hereof. , whereby Thomas W . Noble guarantees to First National Bank of Minne- apolis , among other things , that the Borrower shall fully and punctually pay, as and when due , the indebtedness evidenced by the Note and Borrower ' s full and punctual compliance with all- of the terms, covenants , and condi- tions of the Loan Agreement, Mortgage and Security Agreement, and Assignment of Rents and Leases and all other documents defined in the Loan Agreement; (f) Buy-Sell Agreement between First National Bank of Minneapolis , Borrower and Northwestern National Life insurance Company, a copy of which is attached hereto as Exhibit "H" and made a part hereof, whereby Northwestern -3- National Life Insurance Company agrees to purchase the Note upon completion of the Project; (g) Subordination Agreement , a copy of which is attached hereto as Exhibit "I" and made a part hereof , whereby Herleiv Helle and Borghild Belle subordinate all of their interest in the Project to the Mortgage and Security Agreement and the Assignment of Rents and Leases . All of which documents are sometimes referred to herein as the "Collateral Documents " . The Mortgage and Security Agreement , Assignment of Rents and Leases , Buy-Sell Agreement and Guaranty Agreement by Thomas W. Noble are not to be executed by the City of Eden Prairie . The form of the Note and the Collateral Documents attached hereto are hereby approved. The City shall execute the Note, Loan Agreement and Construction Loan Agreement, all of which shall be executed in the name of and on behalf of the City by the Mayor and City Clerk, but the Loan Agreement and Construction Loan. Agreement only upon execution thereof by the Borrower _ The Note , Loan Agreement and Construction Loan Agreement shall be substantially in the form attached hereto , with all such changes therein , not inconsistent with the Act or other law, as may be approved by the officers executing same on behalf of the City, which approval shall be conclusively evidenced by their execution thereof . Copies of the Note and the Collateral Documents shall be delivered and filed or recorded as may be required. Collateral Documents which do not require execution by the City may be revised as approved by the Borrower. 5 . Assignment of Loan Agreement . The City shall assign its rights under the Loan Agreement to First National Bank of Minneapolis , and does hereby consent to the reas- signment of such rights by First National Bank of Plinn e- a.polis to Northwestern National Life Insurance Company or to any subsequent holder of the Note. However , such assignment and consent shall not operate to limit or otherwise affect the following covenants running to the City from Borrower contained within said Loan Agreement : Sections 2 . 02 ; 4 . 02 ; 4 . 04 ; 4 . 05 ; 4 . 07 ; 4 . 08 ; 4 . 09 ; and 7 . 06 . The assignment of the Loan Agreement shall also be executed in the name of and on behalf of the City by the Mayor and City Clerk in sub- stantially the form attached hereto as Exhibit "I" , with all such changes as may be approved by the officers executing same , which are not inconsistent with the Act or other laws, which approval shall be conclusively evidenced by their execution thereof . -4- b . Disbursement . First National Bank of Minneapolis is hereby authorized and directed to disburse the proceeds of the Note directly to Borrower, and such other parties as may be entitled to payment for Project costs as defined in the Loan Agreement , upon receipt of such supporting docu- mentation and compliance with such conditions and require- ments as First National Bank of Minneapolis may deem reason- ably necessary. All such surns disbursed directly to or for the benefit of Borrower pursuant to the Loan Agreement and Construction Loan Agreement shall constitute sums disbursed pursuant to the Note , shall.. constitute part of the indebted- ness evidenced thereby, and shall be deemed advanced to or for the benefit of the City . 7 . Execution of the Note . The City shall issue and make its Commer is al Development Revenue Note, Series 1978 (Kensington Investments , Inc . and Neil A. Brastad, Project) , to be dated the date of delivery , in the principal amount of One Million Dollars ( $1 , 000 , 000 . 00 ) substantially in the form attached hereto as Exhibit ".A" . The Note shall be executed by the Mayor and the City Clerk and the official seal of the City shall be affixed thereto . When executed the Note shall be delivered to First National Bank of Min- neapolis , but only upon receipt of the signed legal opinion of Thompson , Nielsen , Klaverkamp & James , P .A . , as to the validity and enforceability of the Note , Loan Agreement , and Construction Loan Agreement and that the City has no pecuniary ( liability thereon and upon receipt by the City of original counterparts of all Documents to which it is a party. , The Note 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 . E . Amendment of Bond Resolution . Without the prior written consent of First National Bank of Minneapolis , Northwestern National Life Insurance Company and the Bor- rower , City shall not change , modify, alter, or terminate this Resolution. 9 . Certified Copies . T1,e Mayor and City Clerk and otizer City officers sr are authorized and directed to prepare and furnish First National Bank of Minneapolis , Northwestern National Life Insurance Company, Borrower and any subsequent holder of the Note , certified copies of all City proceedings and records relative to the Note and such affidavits or certificates as may be required to show the facts appearing from the City records , and all such certified copies, certi- ficates and affidavits , including any previously furnished, shall constitute representations of the City as to the truth and accuracy of all statements contained therein . -5- 10 . Registration. Upon written request from the holder of the Note , the City Clerk , as Bond Register , shall provide for the registration of transfer or exchange of the Note . In the event of registration , principal and interest due on the Note shall be payable to the registered holder or assigns thereof. 11 . City Expense. All costs and expenses incurred by or on behalf of the City in connection with issuing and making the Note shall be t`^^ sole obligation and responsi- bility of the Borrower, including but not limited to legal fees . SIGNATURE APPROVED: �' /// 6 Mayor ATTEST: ;r City Clerk i I -6-