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HomeMy WebLinkAboutResolution - 80-18 - Providing for Issuance and Sale of MIDB Funds for Ryan Construction - M RESOLUTION TIO. R80-18 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A REVENUE BOND PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT TO PROVIDE FUNDS TO BE LOANED TO RYAN CONSTRUCTION COMPANY OF MINNESOTA, INC . , A MINNESOTA CORPORATION, FOR A COMMERCIAL PROJECT AND APPROVING THE CONSTRUCTION LOAN AGREEMENT. , LOAN AGREEMENT, ASSIGNMENT AND PLEDGE OF LOAN AGREEMENT AND MORTGAGE AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT BE IT RESOLVED by the .City Council (this "Council." ) of the City of Eden Prairie, Minnesota (the "City" ) , as follows: 1 . Authority. The City is, by the Constitution and Laws of the State of Minnesota, including the Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended (the "Act" ) authorized to issue and sell its revenue bonds for the purpose of financing the acauisition, construction and equipping 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 Commercial Development Revenue Bond (Ryan Construction Company of Minnesota, Inc. Project) in substan- tially the form set forth in Exhibit A attached hereto (the "Bond" ) and loan the proceeds thereof to Ryan Construction Company of Minnesota, Inc. , a Minnesota corporation (the "Company" ) to partially pay the cost of acquiring, constructing and equipping a shopping center and related facilities, together with necessary exterior utilities and site improvements (the "Project" ) , all pursuant to the Act. Forms of the following documents relating to the Bond and the Project have been submitted to this Council and are now on file in the office of the City Clerk: (a) Construction Loan Agreement, dated as of February 4 , 1980, among the City, the Mortgagee, hereinafter defined, and the Company, providing for the purchase of the Bond by the Mortgagee and the making of advances thereunder in accordance with the terms and conditions set forth therein; (b) Loan Agreement, dated as of February 4 , 1980, between the City and the Company whereby the City agrees to make a loan to the Company of the funds advanced by the Mortgagee, hereinafter defined , under the Construction Loan Agreement 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; -2- (c) Assignment and Pledge of Loan Agreement dated as of February 4 1980 (the "Pledge" ) by the City in favor of the First National Bank of Minneapolis (the "Mortgagee" ) whereby the City assigns certain of its interest in the Loan Agreement to the Mortgagee as security for the Bond; (d) Mortgage and Security Agreement and Fixture Financing Statement dated as of February 4 , 1980 (the "Mortgage" ) , by the Company in favor of the Mort- gagee by which the Company grants to the Mortgagee a first 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) . 3. . Findings. It is hereby found, determined and declared that: (a) The City is a duly organized and existing municipal corporation under the Constitution and the laws of. the State of Minnesota with the powers and authority,. among others, to issue the Bond under -the Act. • (b) The Project, comprised of the. buildings, improvements and equipment described in the Loan Agree- ment and. the Mortgage, constitutes a protect authorized by and described in Section 474. 02, Subd . la of the Act. (c) The purpose of the Project is and the effect thereof_ will be to promote .the public welfare by: the encouragement and promotion of employment opportunities within the City and its surrounding areas; the develop- ment of sound industry and commerce to use the available resources of. the City, in order to retain the benefit of the City's existing investment in educational and public service facilities; halting the movement of talented, educated personnel to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; and increasing the tax base of the City, county and school district in which the Project is located. (d) The Project has been approved by the Commis- sioner of Securities, Minnesota Department of Commerce, as tending to further the purposes and policies of the Act. (e) The issuance and sale of the Bond, the execu- tion and delivery of the Construction Loan Agreement, -3- ti Loan Agreement and Pledge and the performance of all covenants and agreements of the City contained in the Bond, Construction Loan Agreement, Loan Agreement and Pledge and of all other acts of the City to make the Construction Loan Agreement, Loan Agreement, Pledge and Bond valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (f) To the best knowledge of the members of this Council, there is no litigation, action, suit, proceed- ing . or investigation at law or in equity before or by any court, public board or body pending or threatened against the City wherein an unfavorable decision, ruling or finding would adversely affect the transac- tions contemplated by or the validity or enforceability of this Bond Resolution, the Construction Loan Agree- ment, Loan Agreement, or Pledge in accordance with their respective terms. (g) 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 this Bond. Resolution, the Construc- tion Loan Agreement, Loan Agreement or Pledge provided, however, that this finding is made solely for the • purpose of estopping the City from denying the validity of the Bond , Construction Loan Agreement, Loan Agree- ment or Pledge by reason of -the existence of any facts contrary to this finding. (h) It is desirable that the City of Eden Prairie, Minnesota Commercial Development Revenue Pond (Ryan Construction Company of Minnesota, Inc. Project) in the amount of $2, 400, 000. 00 be issued by the City upon the terms set forth herein, and that certain of the City's interest in the Loan Agreement be assigned to the Mortgagee as security for the payment of principal of and interest on the Bond. ( i) 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 Fond 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 Pro-iect, including adeauate insurance, taxes and special assessments. (j ) ' Under the provisions of Section 474. 10 of the Act, and as provided in the Loan Agreement, the Bond is -4- lb • 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 interest 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 forms of Construction Loan Agreement, Loan Agreement, Pledge and Mortgage referred to in Paragraph 2 hereof are approved. The Construction Loan Agreement and the Loan Agreement shall be executed in the name and on behalf of the City by the Mayor and the City -Manager, upon execution thereof by the Company, in substantially the form on • file, but with all such changes therein, not inconsistent with the Act or other law, as may he approved by the officers executing the same, which approval shall be conclusively evidenced by the execu- tion thereof. The Pledqe shall also be executed in the name and on behalf of the City by the Mayor and the City Manager in sub- stantially 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 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 Commercial Development Revenue Bond (Ryan 'Construction Company of Minnesota, Inc. Project) , to be dated the date of delivery, in the principal amount of $2, 400, 000. 00 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 the Bond at a price of $2 , 400, 000:00 (100% of its par value) by making advances in accor- s dance with the Construction Loan Agreement is hereby found and determined to be reasonable and is hereby accepted. The Mayor and the City Manager are authorized and directed to prepare the Bond in typewritten form substantially in the form set forth in Exhibit A attached hereto. The Bond shall be executed by the manual signatures of the Mayor and the City Manager and the official seal of the City shall be affixed thereto. 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 Agreement 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 to have the Ten Million Dollar ($10, 000, 000) limitation set forth in Section 103 (b) (6 ) (D) of the Internal Revenue Code of 1954, as amended from time to time, applicable to the Bond in lieu of the One Million Dollar ($1,000, 000) limitation set forth in Section 103 (b) (6 ) (A) of said Code. The City Clerk shall execute and file, in the name and on behalf of the City, the form of election required by Section 103 (b) (6 ) (D) of said Code and shall provide the information required pursuant to the regulations . promulgated thereunder. 7. Registration Records. The City Clerk, as bond regis- trar (the "Bond Registrar" ) , shall keep a bond register (the "Bond Register" ) in which the City shall provide for the registration of the Bond and for transfers of the Bond. The principal of and interest on the Bond shall be payable to the Mortgagee or regis- tered 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. 8. Mutilated., .Lost, Stolen or Destroyed Bond.- If the Bond is mutilated, lost, stolen or destroyed, the City may execute 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 destruction satisfactory to the City and the Company together with indemnity satisfactory to them. - The City may charge the holder of the Bond 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 -6- 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 writinq. The registered owner seeking to transfer ownership of the Bond shall also give written notice thereof to the Company. The Bond shall continue to he sub-iect 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 there- with. The Bond Registrar shall give written notice to the Company of any transfer of ownership recorded on the Bond Reaister 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 registered owner thereof, or its attorney duly authorized in writing, and neither the City, the Bond Registrar nor the Company shall he affected by any notice to the contrary. All such payments shall he 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. The City shall not, without the written consent of the Mortgagee, enter into any agreement, change, modification, alteration or termination of. the Construction Loan Agreement, Loan Agreement, or the Pledae. 11 . Proceedings and Records Relating to Bond. 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 certifi- cates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished , shall constitute representations of the City as to the truth of all statements contained therein. Appr ov ayor Attest:- y Clerk -7-