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HomeMy WebLinkAboutResolution - 79-219 - Final Approval MIDB- Menards - tpkll2779 CITY COUNCIL OF THE CITY OF EDEN PRAIRIE, MINNESOTA RESOLUTION NO . 79- ,;,2- BOND RESOLUTION AUTHORIZING $3 , 000 ,000 CITY OF' EDEN PRAIRIE , MINNESOTA INDUSTRIAL DEVELOPMENT REVENUE BONDS , SERIES A (MENARD , INC . PROJECT) WHEREAS , the City of Eden Prairie , Minnesota (the "Municipality") , is a municipal corporation organized and existing under and pursuant to the laws of the State of Minnesota and is authorized by Chapter 474 of the Statutes , as amended (hereinafter sometimes referred to as the "Act") , to issue revenue bonds and loan the proceeds thereof -o contracting parties 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 ; and WHEREAS , Menard , Inc . , a Wisconsin corporation (the "Borrower "','; , has heretofore requested the Municipality to issue industrial development revenue bonds to finance a project on behalf of the Borrower as a contracting party under the Act ; and WHEREAS , it has heretofore been found and determined that said project consisting of land , building and equipment for the purpose of constructing and equipping a facility to be used for the retail sale of lumber , home improvement products and related products , the leasing of retail space and warehousing (hereinafter called the "Project ") is a qualified "project " within the meaning of the Act and that the Borrower is a "con•- Lracting party" within the meaning of the Act ; and WHEREAS , on January 16 , 1979 , this body adopted a resolution pursuant to the Act (the "Resolution") wherein it was resolved that the Municipality would issue industrial de- velopment revenue bonds to finance the Project , subject how- ever , to the satisfaction of certain conditions including the approval by this body of the terms of the bonds and the revenue agreement described in said resolution ; and WHEREAS, the Borrower has now requested that the Munici- pality provide for the issuance of $3 , 000 , 000 principal amount of industrial development revenue bonds upon the terms set forth in this Resolution (as herein described , the "Series A Bonds ") ; and WHEREAS, in connection therewith the Borrower has presented the Municipality with proposed documentation for the Series A Bonds , as follows : (a) a Bond Purchase Agreement , to be dated as of the date of adoption of this Bond Reso- lution (the "Bond Purchase Agreement ") , to be entered into by and among the Munici- pality , the Borrower and First Wisconsin National Bank of Milwaukee (the "Bond Pur - chaser") , setting forth the terms and condi- tions on which the Municipality will sell and the Bond Purchaser will purchase the Series A Bonds ; and (b) an Indenture of Trust , to be dated as of November 1 , 1979 (the "Indenture") , to be entered into between the Municipality and the corporate trustee hereinafter desig- nated (the "Trustee") , providing for the creation of the Series A Bonds , the terms thereof and the security therefor ; and (c) a Loan Agreement , to be dated as of November 1 , 1979 (the "Loan Agreement ") , to be entered into between the Municipality and the Borrower providing for a loan of the Series A Bond proceeds to the Borrower on repayment terms scheduled to provide the Municipality with revenues sufficient to retire the Series A Bonds in accordance with their terms , and (d) a Promissory Note , to be dated November 1 , 1979 (the "Promissory Note") , to be issued by the Borrower payable to the order of the Municipality in the principal. amount of $3, 000 , 000 as evidence of the borrowing provided for in the Loan Agreement and to be assigned by the Municipality to the Trustee; and -2- (e) a Mortgage and Security Agreement to be dated as of November 1 , 1979 (the "Mort - gage") , from the Borrower to the Trustee providing collateral security for the per- formance of the Borrower ' s obligations under the Loan Agreement ; and WIiEREAS , in accordance with the Act , this Resolution and the aforesaid instruments and documents , the Series A Bonds and interest thereon shall never constitute a debt of the Munici- pality within the meaning of any State constitutional or statu- tory limitation: and shall not constitute a charge , lien , or encumbrance , legal or equitable , upon any property of the Munic- ipality (except any interest in the property subject to the Mort- gage or the Indenture) ; and WHEREAS , it is in the public interest of the Munici- pality to encourage and promote the development of projects such as the Project in order to realize public benefits such as , but not limited to , the retention of existing and related industries and the attraction of new industries which will utilize the existing and available educational and public service facilities of the Mu- nicipality ; the provision of opportunities to effectively use and compensate talented, educated personnel of mature age who might otherwise leave the Municipality ; the stimulation of the flow of investment capital into the Municipality with resultant beneficial effects on the economy in the Municipality ; and the maintenance or increase in the tax base of the Municipality resulting in greater support for education and Municipal services ; and WHEREAS , the develo-)ment of the Project and the issuance of Bonds to finance the Project as herein recited will, in the judgment of this body , serve the intended accomplishments of public. purpose and in all respects conform to the provisions acid require- ments of the Act ; NOW, THEREFORE , BE IT RESOLVED : 1 . Findings and Determinations . It has been found and determined and is hereby declared that : (a) based upon the representations made to the Municipality by the Borrower as to the nature of the Project and the anticipated use of the proceeds of the Series A Bonds . the real property , improvements and equipment des- cribed in the Loan Agreement and the Mortgage constitute a project authorized by the Act ; -3- (b) the Borrower is a qualified contracting party" under and for purposes of the Act ; (c) the Loan Agreement meets the requirements of a "revenue agreement " under and for purposes of the Act ; (d ) the loan payments pursuant to the Loan Agreement are fixed and are required to be revised from time to time as necessary , so as to produce income and revenue sufficient to provide for the prompt payment of principal and interest on the Series A Bonds when due , and the Loan Agreement also provides that the Borrower 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 ; (e) based upon the representat ions of the Bor - rower , the est imated aggregate cost of pro- viding the Project and paying the costs incident to the financing is not less than $3, 000 , 000 ; (f ) the Municipality is a city , duly created and validly existing pursuant to the Consti- tution and laws of the State of Minnesota ; (g) the Resolution was duly and validly adopted by this body at a meeting duly called and held in open session pursuant to the laws of the State of Minnesota , the other ordinances of the Municipality and the standing resolu- tions and rules of procedure of this body and neither the Resolution nor any portion of it has been repealed , rescinded or revoked ; (h ) this Bond Resolution is being considered by this body at a meeting duly called and held in open session pursuant to the laws of the State of Minnesota , the other ordinances of the Municipality and the standing resolutions j and rules of procedure of this body ; ( i ) the Municipality has full right , power and authority to enter into , execute and deliver_ -4- the Bond Purchase Agreement , the Series A Bonds , the Loan Agreement and the Indenture and to perform its obligations thereunder ; (j ) the execution , delivery and performance of the Bond Purchase Agreement , the Indenture and the Loan Agreement and the execution of the form of ass ignuient of the Promissory Note will not conflict with or constitute on the part of the Municipality a breach of or default under the Municipality ' s statutory ' enabling act , its ordinances or any commit- ment , agreement or instrument to which the Municipality is a party , or by which it is bound , provided that this finding is made solely for the purpose of estopping the Municipality from denying the validity of the Loan Agreement , the Bond Purchase Agreement , the assignment of the promissory note, the Indenture or the Series A Bonds by reason of the existence of any facts contrary to this finding ; (k) there is no litigation , administrative proceeding or investigation pending against the Municipality (nor , to the knowledge of the Municipality , is any such action threat- ened ) which in any way affects , contests , Questions or seeks to restrain or enjoin any of the following : ( i ) the validity of the Act , the Resolution or this Bond Resolution ; (i i) any of the proceedings had or actions taken leading up to the issuance of the Series A Bonds or the execution , delivery or performance of the Bond Purchase Agree - ment ; (iii) the delivery , validity or en- forceability of the Series A Bonds or any of the docuLnents referred to in subparagraph ( i) of this paragraph I . ; (iv) the corporate existence of the Municipality ; (v) any corporate boundary or geographic jurisdiction of the Municipality which may affect the Project ; or (vi ) the right of the Mayor , the City Manager , the Clerk or any member of th is body to hold his or her of f ice ; (1) the Municipality has not been notified (nor , to the knowledge of the Municipality, is any such notification contemplated or threatened) by the Internal Revenue Service of any listing -5- of the Municipality as an issuer that may not certify its bonds ; (m) the Municipality has not initiated any proceedings to change the Municipality ' s current form of government ; and (n) all acts and things required under the Constitution and Laws of the State of Minnesota to snake the Series A Bonds , the Loan Agreement , the Bond Purchase Agreement , and the Indenture valid and binding obliga- tions of the Municipality in accordance with their terms will have been done upon adoption of this Bond Resolution and the execution of the Series A Bonds and said documents ; provided that this finding is made solely for the purpose of estopping the Municipality from denying the validity of the Loan Agre�- ment , the Bond Purchase Agreement , the Indenture , or the Series A Bonds by reason of the existence of any facts contrary to this finding . 2 . Authorization to Borrow and to Lend . The Munici- pality shall barrow , but only in the manner herein recited , the sum of $3 , 000 , 000 for the purpose of ( i) financing the costs of providing the Project , ( ii ) paying the costs of issuing and selling the Series A Bonds , and ( iii ) paying such other costs related thereto as are permitted to be paid with bond proceeds under the Act. Said borrowing shall be accomplished through the sale of the Series A Bonds issued pursuant to the Act . The Municipality shall lend the SLIM of $3 , 000 , 000 to the Borrower pursuant to the terms of the Loan Agreement , which borrowing shall be evidenced by the Promissory Note and shall be secured by the Mortgage which will constitute a real estate mortgage on and a security interest in the Project . 3 . Designation , Denomination , Tenor and Maturity of Series A Bonds Created for Issuance . The Series A Bonds shall be issued in the principal amount of. $3 , 000 , 000 and shall. be designated : CITY OF EDEN PRAIRIE, MINNESOTA INDUSTRIAL DEVELOPMENT REVENUE BONDS , SERIES A (ME.NTARD , INC . PROJECT) The Series A Bonds shall mature in accordance with the schedule provided in the table below : -6- k Pr inc ipal Interest Princi_al Maturity Date Amount Rate_ May 1 , 1.983 $125 , 000 6 .55% November 1., 1.983 125 , 000 6 .55 May 1 , 1984 125 , 000 6 .65 November 1, 1984 125 , 000 6 . 70 May 1 , 1985 125 , 000 6 . 75 November 1, 1985 125 , 000 6 . 80 May 1 , 1986 125 , 000 6 . 85 November 1, 1986 125 , 000 6 . 90 May 1 , 1987 125 , 000 6 . 95 November 1, 1987 125 , 000 7 . 00 May 1 , 1988 125 , 000 7 . 05 November 1, 1988 125 , 000 7 . 10 May 1 , 1989 1.25 , 000 7 . 15 November 1, 1989 125 , 000 7 . 20 May 1 , 1990 125 , 000 7 . 25 November 1, 1990 125 , 000 7 . 30 May 1 , 1991 125 , 000 7 . 35 November 1, 1991 125 , 000 7 . 40 May 1 , 1992 125 , 000 7 .45 November 1 , 1992 125 , 000 7 . 50 May 1 , 1993 125 , 000 7 . 55 November 1 , 1993 125 , 000 7 . 60 May 1 , 1994 125 , 000 7 . 65 November_ 1 , 1994 125 , 000 7 . 65 - The Series A Bonds shall bear interest from their date at the respective rates per annum set forth in the schedule in the table above . Interest shall be payable on May 1 , 1980 , and semiannually thereafter on the first day of May and November in each calendar year until paid . The Series A Bonds shall be issuable only in the form of typewritten or engraved fully registered bonds , in denomina- tions of $25, 000 or any integral multiple thereof not exceeding the principal amount of the single maturity covered thereby . The Series A Bonds shall not be issuable as or exchangeable into cou- pon Bonds . Series A Bonds and the interest thereon shall be trans - ferable by and shall be payable to the registered owners thereof in the manner and with the effect provided in the Indenture . The principal of, premium, if any , and interest on the Series A Bonds shall be payable in lawful money of the United States of America at the principal corporate trust office of. the Trustee, as paying agent , or the office of any successor or additional paying agent designated by the Municipality and approved by the Borrower , or as otherwise provided in the Indenture . -7- The Series A Bonds sh .sl l be dated November, 1 , 1979 , ex- cept in thel ca;= e of Ser les A Bonds is:: u0d and authenticated after i the first interest date wjr ich shill be dated in accord - ance with the provi s ions therefor prov ided in the Inclentur-- e Series A Bonds steal I be letreue�d with the prefix "AR" and con- secut ively from 1 upw,lyds iri the order of their issuance . The Se ; i e :; A Bon,i�, sh- ill be issued in the respective forms th,- refor 5; s - L Eor. Lir in the Indenture , with such insec - ti-ons therein as shill be nec-e_s s .ary to cocrply with the terms of this Resolution and with such cor r- ect ions therein, if any , as the apProv i nc; bond at- L.o[ nt;✓ rl;.ay require for con forrn iry with the ter. ai_-; of tln is RE SOILIL ion , the Indetit. ure acid the Act . 4 . ExE.'(' ut i0f) acid AunccriL icat ion of Ser [es A Bonds _ fine Ser i. es A Bonds sh i 11_ be exr cutf�d on behaI f of the Mun is i- pality with the rnrrnual or facs imile signarure of its Mayor , courlLE- rsi-ned with the al<inual or Facsimile si-nature of its City tfanrJ`;f c a11(1 its Cl cork and shril l have impressed , irnpri Fit:ed or olh(-- rwise reproduced th(: reon the oEf is ial se ,-il of the Mu1-iici - pa lir_- y or- a Ears irn i 1_e thereoE . No Ser ies A Bond sha_.11- be issued unle,� Eirst authentic;_ited by the TrusLe::- , to be evidenced by the ; nu-11 S, ig n <.i ; -Irr of an Juthor i-- red off ic- [- of the Trustee on e i S ic,_; A F',t_;n,l . 5 . Desi gnat ion of Trustee . The " un is ipaIity hereby desi�rlatt„s and appo ints r iust Wiscon;--. in Trust Company , Milwaukee , Wiscuras in , to perf-ocm the furlct_- ions of the Trustee , bond registrar a rid p:-ry in agent udder the Ind(--11ture . b . A d d i t i.onaI ;ponds . Bonds in add i t ion to the Series A Bonds fn,!y be issued f=rOrn t iule to time under the Indenture Sub- ject to the terms and cond it ions therein provided and subject to the apl.;roval of this body . If so issued , such additional Bonds sha I l r:_rnk equally and on a parity with the Series A Bonds . 1'he Series A Bond,; and any such additional Bonds are hereinafter collectively referred to as the "Bonds " . 7 . Secles A Bonds as Limited Ob1-igat ions . The Series A Bonds and interest thereon shall never be or be considered a general obl- igat: ion of the Municipality or a debt of the Muni c i - pality with in the uit-aning, of any State coast itut ional. or, statutory l iotitar ion and shall_ not constitute a charge , lien or encumbrance , legal or equitable , upon any property of the Municipality created by virtue of this financing puns-u nt to the Act (except any interest of the Municipality in the property subject to the Mortgage or the Indenture) . 8 . No [Zi -ht to Tax ink, Po.✓er . No holder of any Ser ies A Bond shsl 1 even have the r ight to coc�ipel arty exercise of the e taxing power of the Municipality to pay the Series A Bonds cc the premium, if any , and the interest thereon except to the extent the Municipality chooses to further secure the Series A Bonds pur- suant to subdivisions 2 and 3 of Section 474 . 10 of the Minnesota Statutes . 9 . Source of Payrnent ; Pledge of Revenues . The Series A Bonds shall be limited obligations of the Municipality payable by it solely from revenues and income derived by or for the account of the Municipality from or for the account of the Borrower pursuant to the terms of the Loan Agreement , the Prom- issory Note , the Mortgage and the Indenture including , without limitation (i ) all payments by the Borrower on the Promissory Note or pursuant to the Loan Agreement , (ii) all monies derived by recourse to the Mortgage and (iii) all cash and securities held from time to time in the trust funds created under the In- denture, and the investment earnings thereon ; but excluding any amount- s derived by the Municipality for its own account pursuant to Sections 7 . 3 and 7 . 4 of the Loan Agreement (relating to taxes , governnien` al charges and indemnity payrnenrs) . As security for the payment of the principal of , pre- mium, if any , grid interest on the Bonds , the Municipality shall pledge and assign to the Trustee all of its right , title and interest in and to the Promissory Note , the Loan Agreement (ex- cept for its rights to receive and enforce payment of certain taxes , expenses and indemnity payments from the Borrower as set - forth in the Indenture and the Loan Agreement ) and the trust funds held by the Trustee under the Indenture . 10 . Redemption of Series A Bonds Prior to Maturity . The Series A Bonds shall be subject to redemption prior to maturity as provided in the Indenture and summarized below : (a) Extraordinary Event Redemption . Upon or within one year following the occurrence of any of the extraordinary events specified in the Indenture , the Borrower shall have the option of having the Series A Bonds redeemed in whole (but not in part ) at 100% of the principal amount thereof , plus accrued interest to the redemption date , and without premium. (b) Mandatory _Bede tt ion in Event of Tax Violation . The Series A Bonds shall be subject to mandatory redemption in whole upon the occurrence of a "Tax Violation" as defined in the Indenture (re- lating to taxability of interest on Bonds) as -9- defined in the Indenture at 100% of principal amount , plus accrued interest to the redemption date, plus a premium equal to 6 .25% of the prin- cipal amount of the Series A Bonds so redeemed . Upon certain conditions in the event of a Tax Violation , the holders of the Series A Bonds shall be entitled to certain additional payments determined in accordance with the provisions of the Indenture . (c) Optional Redemption . The Series A Bonds shall Se subject to redemption prior to maturity by the Municipality (at the Borrower ' s direction) in whole on any date , or in part on any interest payment date , and if in part , in inverse order of maturity and within a maturity by lot , at 100% of principal amount , plus accrued interest to the redemption date and without added premium. Notice of any redemption of Series A Bonds prior to stated maturity shall be given in the manner provided in the Inden- ture . The principal of , premium , if any , and interest on Series A Bonds called for redemption as aforesaid shall be payable solely from moneys held by the Trustee under the Indenture and available therefor , including moneys derived from the Borrower for such purpose pursuant to the Loan Agreement or the Mortgage . 11 . Trust Funds . The trust funds described in the Indenture shall be created under the Indenture to be held in the custody of the Trustee and applied for the uses and purposes provided in the Indenture . 12 . Investment of Trust Funds . Any moneys held as a part of the Trust Funs held by the Trustee under the Indenture hereof may be invested and reinvested by the Trustee upon request by the Borrower_ in M securities which are di- rect , full faith and credit obligations of the United States of America , ( i i ) securities which are unconditionally guaranteed as to both principal and interest by the United States of America , ( i ii) bank repurchase agreements with any national or state bank in the United States which is a member of the Federal Reserve System and whose combined capital and surplus equals or exceeds $10 , 000 , 000 , which agreements are fully secured by direct , full faith and credit obligations of the United States of America , and (v) interest-bearing accounts , time deposits and certificates of deposit issued by any bank , trust company or national banking association ( including the Trustee and any affiliate of the Trustee) authorized under the laws of the United -10- States or any state to exercise corporate trust powersswhich has aggregate capital , surplus and undivided profits in excess of $10, 000 , 000 , but in no event shall the amount invested at any one time in interest-bearing accounts , time deposits or certificates of deposit of any particular bank , trust company or national banking association equal or exceed 20% of the capital , surplus and undivided profits of such bank , trust company or national banking association . 13 . Determination of. Revenue Payment . The amount necessary in each year to pay the principal of , premium, if any , and interest on the Series A Bonds is the sum of (i) the amount of principal becoming due in such year in accordance with the table in paragraph 3 of this Bond Resolution (as reduced from time to time by reason of prior redemptions and open market purchases of Series A Bonds in accordance with the Indenture) ; plus (ii) the principal amount or Series A Bonds to be redeemed in such year in accordance with a call for .redemption made in accordance with paragraph 9 of this Bond Resolution and. the Indenture , plies the premium, if any , payable with respect there- to ; plus (i. ii ) the amount of interest becoming due in such year on the Series A Bonds in accordance with the interest rates specified in the table in paragraph 3 of t-his Bond Resolution . In expressing the Borrower ' s obligation to make the necessary revenue payments , it shall suffice herein and in the Loan Agreement to state that the Borrower shall be obligated to pay the Municipality (or the Trustee for the account of the Municipality) amounts sufficient to pay when due the principal of , premium, if any , and interest on the Bonds , The Loan Agreement contains provisions , adequate in the judgment of this body , requiring the Borrower to provide for the maintenance of the Project and the carrying of all proper insurance with respect thereto . Consequently , the Borrower need not be required to pay amounts into any reserve funds for the retirement of the Series A Bonds or for the maint enance of the Project . 14 . Award of Series A Bonds ; Execution and Delivery of the Bond Purchase Aar. eement . The Borrower has negotiated for the sa1E! of the Series A Bonds to the Bond Purchaser at a price of 100% of the principal amount of the Series A Bonds , plus accrued interest to the date of delivery . Given the purposes of the financing and the involvement of the Municipality there- with , it is the determination of this body that the Series A Bonds shall be hereby awarded to the Bond Purchaser at the price aforesaid with delivery to follow in the manner , at the time and subject to the conditions set forth in the Bond Purchase Agree- ment . As evidence thereof , the Mayor , City Manager and Clerk -ll- are hereby authorized and directed for and in the name of. the Municipality to execute , affix with the official sea]. of the Municipality and deliver the Bond Purchase Agreement in the form presented herewith , or with such insertions therein or correc- tions thereto as shall be approved by the Mayor , City Manager_ and Clerk consistent with this Bond Resolution and the terms of the Act , their execution thereof to constitute conclusive evidence of their approval of any such insertions and corrections . 15 . Execution and Deliver of the Loan A rg eement and the Indenture ; Assignment of:the Promissory Note. The terms and provisions of the Promissory Note , the Loan Agreement , the Mortgage and the Indenture are hereby approved . The Mayor , City Manager and Clerk are hereby authorized for and in the name of the Municipality to execute , affix with the official seal of the Municipality and deliver the Loan Agreement , the Indenture and the assignment of the Promissory Note in the respective forms thereof presented herewith , or with such insertions therein or corrections thereto as shall be approved by the Mayor , City Manager and Clerk consistent with this Bond Resolution and the terms of the Act , their execution thereof to constitute con- clusive evidence of their approval. of any such insertions and cor rec t ions . 15 . Execution and Delivery of the Series A Bonds . The Mayor , City Manager and Clerk are hereby authorized for and in the name of the Municipality to execute the Series A Bonds in the manner authorized by paragraph 4 of this Bond Resolution . Subject to the terms and conditions of the Bond Purchase Agree- ment, the Municipality shall deliver the Series A Bonds to the Bond Purchaser . 17 . General Authorizations . The Mayor , City Manager and Clerk and the appropriate deputies and officials of the Municipality in accordance with their assigned responsibilities are hereby each authorized to execute , publish , file and record such other documents , instruments , notices and records and to take such other actions as shall_ be necessary or desirable to accomplish the purposes of this Bond Resolution and to comply with and perform the obligations of the Municipality under the Series A Bonds , the Bond Purchase Agreement , the Loan Agreement and the Indenture . In the event that the Mayor , City Manager or Clerk shall be unable by reason of death , disability , absence or va- cancy of off ice to perform in timely fashion any of the duties specified herein (such as the execut ion of Series A Bonds , the Bond Purchase Agreement , the Loan Agreement , the Indenture or the assignment of the Promissory Note) , such duties shall be -12- performed by the officer or, official succeeding to such duties ' in accordance with law and the ordinances of the Municipality . 18 . Election Under the Internal Revenue Code . The Municipality hereby elects to have the provisions of Section 103 (b) (6) (D) of the Internal Revenue Code of 1954 , as amended , applied to the issuance of the Series A Bonds . The Mayor , City Manager , Clerk or any of them are authorized to execute and file , for and in the name of the Municipality , such documents as may he necessary or appropriate to effectuate said election . 19 . Effective Date ; This Resolution shall be effective immediately upon its passage and approval. The foregoing resolution of the amity Council of the City of Eden Prairie , Minnesota , was adopted , approved and recorded on 1979 . /�MaVor City Manager 4.�- , rk -13-