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HomeMy WebLinkAboutResolution - 79-178 - Final Approval MIDB- Northland/ United - Member _ _ _ introduced the following resolution and moved its ado'pti gin : Resolution IJo . ?r-172 _T RESOLUTION RELATING TO A $2 , 250, 000 COIHiI RCIAL DEVELOPMENT REVENUE NOTE ; AUTHORIZING THE :ISSUANCE THEREOF PURSUANT' TO MINNESOTA STATUTES , CHAPTER 474 B13 IT RESOLVED b- the City Council of the City of Eden Prairie , Minnesota , as follows : Section 1 . Definitions 1 .01 . In this Resolution the following terms have the following respective mean;.ngs unless the context hereof or use herein clearly requires otherwise : Act : the Minnesota Municipal Industrial Development Act , Minnesota Statutes , Chapter 474 , as amended ; Assignment of Rents : the Assignment of Rents and Leases to be executed by the Company to the Lender ; Buildings : the three ( 3) off ice/warehouse f buildings , to contain approximately 91 , 700 total square feet of building area , and related facilities and improvements constructed and to be constructed on the Land by the Company ; City the City of Eden Prairie , Minnesota , its successors and assigns ; Commitment : the loan commitment made by the Lender to the Company dated August C7 1979 ; Company : The Northland Company , a Minnesota corporation , its successors and assigns , which may assume its obligations in accordance with the Loan Agreement ; Fixtures : those items defined as Fixtures in Section 1-1 of the Mortgage ; Holder : the Lender or any person to whom the Note has been assigned pursuant to Section 5 . 04 of. this Resolution ; Land : the real estate described in Exhibit A to the Mortgage ; -2- Lender : P13S F'inancia L , Inc . , a Delaware corporation , its successor.- and assigns ; Loan Ag_ r. Bement = the Loan Agreement to be executed by and between the City and the Company ; Loan Assignment : the Assignment of Loan Agreement , to be executed by the City in favor of the Lender ; Mortgage : the Mortgage and Security Agreement , between the Company , as mortgagor , and the Lender , as mortgagee ; Note : the Commercial Development Revenue Note (The Northland Company Project) in the principal amount of $2 , 250 , 000 , to be issued by the City pursuant to this Resolution ; Project : the Land, the Buildings and the Fixtures as they may at any time exist ; Project Costs_: those costs defined as Project Costs in Section 1. 01 of the Loan Agreement ; and Resolution : this resolution of the City authorizing the issuance of the Note . Section 2 . Findings . It is hereby found and declared that : (a) based upon the representations made to the City by the Company as to the nature of the Project and the anticipated use of the proceeds of the Note , the real property and improvements described in the Loan Agreement and the Mortgage constitute a Project authorized by the Act ; (b) the purpose of the Project is , and the effect thereof will be to promote the public welfare by the attraction , encouragement and development of economically sound industry and commerce so as to prevent the emergence of or to rehabilitate , as far as possible , blighted and marginal lands and areas of chronic unemployment ; to retain industry' s use of the available resources of the community in order to sustain the benefit of its existing investment in educational and public service facilities ; to halt the movement of talented , educated personnel of mature age to other areas and thus to preserve the economic and - 3- human resources needed as a base for providing governmental services and t .icilities ; and by more intensive development of larid available in the community , to provide an adequate and better balanced tax base to finance the increase in the amount and cost of governmental services ; (c) the Project when completed will add to the tax base of the City , and will accordingly be of direct benefit of the taxpayers of the City as well as those of the County and School District in which the City is located ; (d') the Project has been approved by the Commissioner of Securities of the State of Minnesota as tending to further the purposes and policies of the Act; (e) the financing of the Project , the issuance and sale of the Note , the execution and delivery of the Loan Agreement and the Loan Assignment , and the performance of all covenants and agreements of the City contained in the Note , the Loan Agreement and the Loan Assignment and of all other acts and things required under its ordinances and the Constitution and laws of the State of Minnesota to make the Loan Agreement , the Loan Assignment and the Note valid and binding obligations of the City in accordance with their terms , are authorized by the Act ; (f) it is desirable that the Note in the principal amount of $2 , 250 , 000 , be issued by the City upon the terms set forth herein , and that the City assign its interest in the Loan Agreement and grant a security interest therein to the Lender as security for the payment of the principal of and interest and prepayment premium, if any , on the Note ; (g) the loan payments contained in the Loan Agreement are fixed and required to be revised from time to time as necessary, so as to produce income and revenue sufficient to provide for prompt payment of principal of and interest on the Note issued under this Resolution when due , and the Loan Agreement also provides that the Company is required to pay all expenses of the operation and maintenance of the Project including , but without limitation , adequate insurance thereon and all taxes and special assessments levied upon or with respect to the Land and payable during the term of the Loan Agreement ; -4- (h ) under the pr_ ovis i ,)ns of Minnesota Statutes , Section 474 . 1.0 , and as prow ided in the Loan Agreement and in the Mortgage, the Note is not to be payable from nor charged upon any Lunds of the City other than the revenue pledged to the payment thereof ; the City is not subject to any Liability thereon ; no holder 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 equitable , upon any property of. the City ; the Note issued hereunder shall recite that the Note , including interest thereon, is payable solely from the revenue pledged to the payment thereof ; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; ( i) the execution and delivery of the Loan Agreement , the Loan Assignment and the Note will not conflict with , or constitute on the part of the City a breach of , or a default under , any existing agreement , indenture, mortgage , lease or other instrument to which the City is subject or is a party or by which it is bound , provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Note, the Loan Agreement or the Loan Assignment by reason of the existence of any facts contrary to this finding; ( j ) no litigation is pending , or , to the best knowledge of the members of this Council , threatened, against the City questioning the organization or boundaries of the City or the right of any officer of the City to hold his or her office , or in any manner questioning the right and power of the City to execute and deliver the Note, or otherwise questioning the validity of the Note or the execution , delivery or validity of the Loan Agreement , or the Loan Assignment , or questioning the appropriation of revenues to payment of the Note or the right of the City to loan the proceeds of the Note to the Company; (k ) all acts and things required under the Constitution and the laws of the State of Minnesota to make the Note , the Agreement and the Loan Assignment the valid and binding obligations of the City in accordance with their terms will have been done upon adoption of this resolution and execution of the Loan Agreement , the Loan Assignment and the Note provided -5- that this finding is made :�.olely for the purpose of estopping the City from denying the val- idity of the Note , the Loan Agreement of the Loan Assignment by reason of the existence of any facts contrary to this finding ; and ( 1) the City is duly organized and existing under the Constitution and the laws of the State of Minnesota and is authorized to issue the Note in accordance with the Act . Section 3. Authorization and Sale 3 . 01 . Authorization . The City is authorized by the Act to issue revenue bonds and ]_oan the proceeds thereof to business enterprises to finance the acquisition, construction and equipping of "projects " as defined in the Act, and to make all contracts , execute all instruments and do all things necessary or convenient in the exercise of such authority . 3 . 02 . Preliminary Cit L Approval . By preliminary resolution adopted by the Council on December 19 , 1978 , this Council approved the sale of a revenue note pursuant to the Act and the loan of the proceeds to the Company for the acquisition of the Land and construction thereon of the Project suitable and designed for use as office/warehouse facilities and authorized the preparation of such documents as may be appropriate to the Project . 3 . 03 . Apx)roval of Documents . Pursuant to the above , there have been prepared and presented to this Council copies of the following documents , all of which are now , or shall be , placed on file in the office of the Clerk : (a) Assignment of Rents ; (b) Loan Agreement ; (c) Loan Assignment ; and (d) Mortgage . The forms of the documents listed in (a ) through (d) above are approved , with such variations , insertions and additions as are deemed appropriate by the parties and approved by the City Attorney . -6- Section 4 . Author .izai- ions . Upon the completion of the Loan Agreement and the loan Assignment approved in Section 3 .03 hereof and the exrcution thereof by the Company and the Lander , as the case may be , the Mayor and the City Manager shall execute the same on behalf of the City and shall execute the Note in substantially the form referred to in paragraph 5 . 01 hereof on behalf of the City , and shall execute such other certifications , documents or instruments as bond counsel or counsel for the Lender, shall require , subject to the approval of the City Attorney . All certifications , recitals and representations therein shall constitute the certificates , recitals and representations of the City. Execution of any instrument or document by one or more appropriate officers of the City shall constitute , and shall be deemed the conclusive evidence of, the approval and authorization by the City and the Council of the instrument or document so executed . Section 5 . The Note 5. 01 . Form and Authorized Amount . The Note shall be issued substantially in the form of that set forth in Exhibit A attached hereto and made a part hereof , with such appropriate variations , omissions and insertions as are permitted or required by this Resolution, in the total principal amount of $2 , 250 , 000 . The terms of the Note are set forth therein , and such terms , including but not limited to provisions as to interest rate , dates and amount of payment of principal and interest and prepayment privileges, are incorporated by reference herein . 5. 02 . Execution . The Note shall be executed on behalf of the City by the signatures of the Mayor and the City Manager , and shall be sealed with its corporate seal . In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery thereof , such signature shall nevertheless be valid and sufficient for all purposes . 5 .03 . Mutilated , Lost and Destroyed Note . In case the dote shall become mutilated or be destroyed or lost , the City shall cause to be executed and delivered a new note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated note , or in lieu of and in substitution for such note destroyed or lost , upon the Holder ' s paying the reasonable expenses and charges of the City in connection therewith , and , in case the Note is destroyed or lost , upon filing with the City evidence satisfactory to it of such loss or destruction . -7- 5. 04 . Assignment . The). Note may be assigned by the Holder , from time to time , F_)y endorsement thereon or by separate written instrument ; provided that notice of any such assignment shall be given in writing to the City and the Company in the manner provided in the Loan Agreement . 5 . 05 . Delivery and Use of Proceeds . Prior to delivery of the Note , the documents referred to in Section 3 . 03 hereof shall be completed and executed in form and substance as approved by the City Attorney and an original , executed counterpart of each such document shall be delivered to the Lender . The City shall thereupon deliver to the Lender the Note , together with a copy , duly certified by the Clerk , of this Resolution and such closing certificates as are required by bond counsel. Upon delivery of the Note and the above items to the Lender , the Lender shall. , on behalf of the City, disburse the proceeds of the Note to the Company in reimbursement of Project Costs pursuant to the provisions of the Loan Agreement and the Commitment . Section 6 . Limitations of the Citv ' s Obligations . Notwithstanding anything contained in the Note , the Loan Agreement , the Loan Assignment or any other document referred to in Section 3 . 03 hereof , the Note shall not constitute a debt of the City within the meaning of any constitutional_ or statutory limitation and shall not he payable from or charged upon any funds other than the revenue pledged to the payment thereof, the City shall not be subject to any liability thereon , no holder of such 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 or to enforce payment thereof against any property of the City and the Note shall not constitute a charge , lien or encumbrance , legal or equitable , upon any property of the City . The agreement o.f the City to perform the covenants and other provisions contained in this Resolution or the Note , the Loan Agreement or the Loan Assignment and the other documents listed in Section 3 . 03 hereof !�zha1_1 be subject at all times to the availability of revenues furnished by the Company sufficient to pay all costs of such performance by the enforcement thereof , and the City shall not be subject to any personal or pecuniary liability thereon . Adopted : a y o r l� r Attest : _ -GZL. -City Clerk �' -8 EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE Commercial Development Revenue Note (The Northland Company Project) $2, 250 , 000 FOR VALUE RECEIVED, The CITY OF EDEN PRAIRIE, MINNESOTA , a municipal_ corporation and political subdivision of the State of Minnesota ( the "City ") , hereby promises to pay to the order of FBS FINANCIAL , INC . , a Delaware corporation, or assign ( the "Holder " ) , at its principal office in Minneapolis , Minnesota , or at such other place as the Holder may designate in writing , from the source and in the manner hereinafter provided , the principal sum of TWO MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($2, 250 ,000) , or so much thereof as may be advanced , together with interest on the unpaid principal balance thereof from and after the date hereof at the rate of eight and three-eighths percent (8 . 375%) per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America. This Note is payable in installments due as follows: (a) From and after the date hereof until the Amortization Date , as defined in Section 3. 01 of that certain Loan Agreement ( the "Loan Agreement") of even date herewith between The Northland Company , a Minnesota corporation (the "Company") and the City , the City shall pay interest only on the outstanding principal balance hereof . Payments of accrued interest shall be due on the first day of the month next succeeding the date hereof , on the first day of each and every month thereafter to and including the first day of the month prior to the Amortization Date , and on the Amortization Date- (b) Commencing on the date which is one month subsequent to the Amortization Date and continuing on the same day of each month thereafter until the date on which the payment payable pursuant to paragraph (c) hereof is due , the principal balance hereof , together with interest thereon , shall be due and payable in monthly installments , each in the amount of Seventeen Thousand Nine Hundred Forty-three and No/100 Dollars ($17 , 943. 00) ; provided , however , that if only Six Hundred Fifty Thousand Dollars ($650 , 000 ) of the principal amount hereof is advanced , then the amount of such monthly installments shall be the sum of Five Thousand One Hundred Eighty-three and No/100 Dollars ( $ 5 , 183 . 00) _ (c ) Payment of the entire unpaid principal balance hereof , together with all accrued but unpaid interest thereon , and all other indebtedness due hereunder , shall be due on the date which is fifteen (15) years subsequent to the Amortization Date . All interest hereon shall be computed on the basis of the actual number of days elapsed and on the assumptions that each month contains thirty (30 ) days and each year contains three hundred sixty (360) days . All payments hereunder shall be applied first to interest due on the unpaid principal balance and the balance to reduction of principal. Notwithstanding the foregoing , in the event of a Determination of Tamability , as defined in Section 4 . 08 of the Loan Agreement, the rate of interest hereon shall be automatically increased to ten and one-quarter percent ( 10 . 25% ) per annum, effective as of the Date of Taxability , as defined in Section 4 . 08 of the Loan Agreement . Further , in the event of such Determination of Taxability , the monthly installment payments payable pursuant to paragraph (b) hereof from and after the Date of Taxability shall be increased to the sum of Twenty Thousand Eight Hundred Forty-four and No/100 Dollars ($20 , 844. 00) , or if only $650 , 000 of the principal amount hereof is advanced, to the sum of Five Thousand Nine Hundred Seven and No/100 Dollars ($5 , 907. 00) , and the City shall , within ninety (90) days thereafter , pay to the appropriate Holder (s) the difference between (i ) the amounts actually paid hereunder from said Date of •Taxability and ( ii) the amounts which would have been paid during such period if the increased interest rate had been in effect . Prior to the expiration of the first ten (10) loan years , no principal payments other than the required monthly installment payments above provided may be made , except as follows : -2- ( i) If , on or before the Amortization Date , not less than ninety percent (90% ) of the rentable area in the Project (as defined in the Loan Agreement) is occupied by tenants under leases , but such leases provide for actual gross annual rentals of less than the Projected Rentals (as defined in the Loan Agreement ) , then the City may , at its option, on or before the Amortization Date , prepay , without premium , a portion of the principal balance hereof , equal to $7 .50 multiplied by each dollar of difference between the Projected Rentals and the then actual total gross annual rentals of the Project . ( ii ) If, on or before the Amortization Date, less than ninety percent ( 90%) of the rentable area in the Project is occupied by tenants under leases , and such leases provide for actual total gross annual rentals less than the Projected Rentals , then the City may , at its option , on or before the Amortization Date, prepay , without premium , a portion of the principal balance hereof , equal to $7 . 50 multiplied by each dollar of difference between the sum of $278 ,900 and the then actual total gross annual rentals of the Project . Beginning with the eleventh (llth) loan year , the City may prepay in full the unpaid principal balance of this Note , together with all accrued interest hereon, upon payment to the Holder of a premium equal to five percent ( 5% ) of the principal balance so prepaid . The rate at which such prepayment premium is calculated shall thereafter decline at the rate of one percent (1% ) per loan year , to a minimum of one percent ( 1% ) during the fifteenth ( 15th) loan year . No premium shall be payable upon payment hereof in full at the end of the fifteenth (15th ) loan year . As used herein the term "loan year " shall mean a year consisting of twelve ( 12) calendar months , the first day of such first loan year being the Amortization Date . Prepayment shall be permitted only upon at least thirty ( 30) days ' advance written notice to the Holder , and only on a regularly scheduled installment payment date . This Note constitutes an 1SSUe_ in the total. authorized face amount of $2 , 250 ,000 , or so much thereof as may be advanced . This Note is issued by the City - 3- pursuant to the authority granted by Minnesota Statutes , Chapter 474 , as amended ( the "Act ") , for the purpose of providing funds for a Project, as defined in Minnesota Statutes , Section 474 . 02 , Subdivision 1_a , consisting of acquisition of certain real estate and construction and equipping of improvements thereon , and paying necessary expenses incidental thereto , such funds to be loaned by the City to the Company pursuant to a Resolution , adopted , 1979 , by the City (the "Resolution ") , and the Loan Agreement , thereby assisting activities in the public interest and for the public welfare of the City of Eden Prairie . This Note is secured by a Mortgage and Security Agreement of even date herewith between the Company , as Mortgagor , and the Holder , as Mortgagee (the "Mortgage ") , and by an Assignment of Rents and Leases of even date herewith from the Company to the Holder (the "Assignment") . All of the agreements , conditions , covenants , provisions and stipulations contained in the Mortgage , Loan Agreement , Assignment and any other loan or security document collateral hereto are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein . Time is of the essence hereof . In the event of any default in the payment of any principal , interest or other indebtedness due hereunder , or if an Event of Default (as defined in the Mortgage , Loan Agreement , Assignment or any other loan or security document collateral hereto) occurs , then the Holder may at its right and option declare immediately due and payable the principal balance of this Note and interest accrued thereon to the date of declaration, together with any attorneys ' fees incurred by the Holder in collecting or enforcing payment thereof , whether suit be brought or not , and all other sums due hereunder or under the Mortgage, Assignment or the Loan Agreement , anything to the contrary therein notwithstanding , and payment thereof may be enforced and recovered in whole or in part , at any time by one or more of the remedies provided in the Mortgage, in this Note , in the Assignment or in the Loan Agreement. The Holder may extend the time of payment of interest and/or principal of this Note , without notice to or consent of any party liable hereon , and without releasing such party The City , for itself its successors and assigns , hereby waives demand , presentment, notice of nonpayment , protest , notice of protest , notice of dishonor , and diligence in collection and agrees that without any notice - 4- the Holder hereof may take and/or release additional security herefor. , or the Holder hereof may from time to time release any part or parts of the property and interests subject to said Mortgage with or without consideration , and that in any such case the City shall continue liable to pay the unpaid balance of the indebtedness evidenced hereby as so additionally secured , extended , renewed or modified and notwithstanding any such release , subject to the limitations of the City 's liability as set forth herein . This Note and the interest hereon shall never constitute a debt of the City within the meaning of any constitutional or statutory limitation , and shall never constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers . This Note and the interest hereon are payable solely from the revenues pledged to the payment- thereof pursuant to the Loan Agreement and secured by the provisions of the Mortgage and the Assignment . No Holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest hereon or to enforce payment thereof against any property of the City except revenues under the Loan Agreement , and this Note does not constitute a charge , lien or encumbrance , legal or equitable , upon any property of the City except revenues under the Loan Agreement . The agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues from the Loan Agreement or other funds furnished to the City in accordance with the documents hereinabove referred to sufficient to pay all. costs of such performance or the enforcement thereof . The remedies of the Holder , as provided herein and in the documents hereinabove referenced , shall be cumulative and concurrent , and may be pursued singly , successively or together , at the sole discretion of the Holder , and may be exercised as often as occasion therefor shall occur. The failure to exercise any such right or remedy shall in no event be construed as a waiver or -r'elease thereof . The Holder may , in its discretion , waive any default hereunder and its consequences and rescind any declaration of acceleration of principal ; provided , however , that no action or inaction by the Holder shall be deemed a waiver of any of the Holder ' s rights or remedies unless the Holder specifically agrees in writing that such -5- action or inaction will. constitute a waiver of its rights or remedies . Any waiver shall only apply to the particular instance for which it was agreed . No delay in exercising and no failure in exercising any right or remedy hereunder or afforded by law shall be a waiver of or preclude the exercise of any right or remedy hereunder or provided by law whether on such occasion or any future occasion, nor shall such delay be construed as a waiver of any default or acquiescence therein . The exercise or the beginning of the exercise of one right or remedy shall not be deemed a waiver of the right to exercise at the same time or thereafter any other right or remedy . As provided in the Resolution , this Note may be assigned by the Holder , from time to time , by an endorsement hereon or by other writing ; provided that notice of such assignment shall be given in writing to the City and the Company . It is intended that this Note is made with reference to and shall be governed by and construed in accordance with the laws of the State of Minnesota . IT IS HEREBY CERTIFIED AND RECITED that all conditions , acts and things required to exist, happen and be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. 1 IN WITNESS WHEREOF, the City has caused this Note to be duly executed by its authorized officers and its corporate seal to be hereunto affixed, all as of this 2nd day of October 1979 . CITY OF EDEN PRAIRIE, MINNFSQT By IA- Mayer (Sea.-I. ) , At t e s / City Manager I,. -6