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HomeMy WebLinkAboutResolution - 80-59 - Providing for Issuance and Sale of Revenue Bonds to Provide Funds to be Loaned to Burton J. McGlynn for Industrial Project to be Leased to McGlynn Bakeries, Inc. - A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF REVENUE BONDS TO PROVIDE FUNDS TO BE LOANED TO BURTON J. McGLYNN FOR INDUSTRIAL PROJECT TO BE LEASED TO McGLYNN BAKERIES, INC. AND AUTHORIZING EXECUTION AND DELIVERY OF TRUST INDENTURE, LOAN AGREEMENT AND BOND PURCHASE AGREEMENT, AND APPROVING LEASE, GUARANTY, MORTGAGE, ASSIGNMENT AND OFFERING STATEMENT BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota, as follows: 1. 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 acquisition and construction of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. This Council proposes that the City shall issue and sell its revenue bonds pursuant to the Act and loan the proceeds thereof to Burton J. McGlynn, doing business as B.J.M. Properties (the "Borrower") to pay the cost of acquiring land and constructing a warehouse and manufacturing building (the "Project" ) , all • pursuant to the Act. Forms of the following documents relating to 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 March 1, 1980, between the City and the Borrower whereby the City agrees to make a loan to the Borrower and the Borrower agrees to complete the Project and to pay amounts suf- ficient to provide for the prompt payment of the principal of and interest on such Bonds; (b) Trust Indenture, dated as of March 1, 1980, between the City and the American National Bank and Trust Company, as Trustee, pledging the revenues to be derived from the Loan Agreement as security for $1,300,000 Industrial Development Revenue Bonds (McGlynn Bakeries, Inc. Project), Series 1980, to be issued by the City, and setting forth proposed recitals, covenants and agreements relating thereto; (c) Lease, dated as of March 1, 1980 between the Borrower and McGlynn Bakeries, Inc. (the "Lessee") , the Borrower's interest in which is assigned to the Trustee as security for the Bonds (this document not to be executed by 'the City); (d) . Combination Mortgage and Security Agreement, dated as of March 1, 1980, between the Borrower and the Trustee (the "Mortgage") whereby the Trustee is granted a mortgage and security interest in the Project as security for the Bonds (this document not to be executed by the City) ; (e) Guaranty Agreement, dated March 1, 1980, whereby the Lessee unconditionally guarantees to the Trustee payment of principal, premium, if any, and interest on the Bonds (this document not to be executed by the City); (f) Assignment of Lease and Rents, dated March 1, 1980, from the Borrower to the Trustee (the "Assignment") assigning to the Trustee the Lease of the Project; (g) Bond Purchase Agreement to be entered into by Cronin & Marcotte, Inc. , as Underwriter, the Lessee and the City, establishing the terms of purchase, sale and delivery of the Bonds and setting forth proposed recitals, covenants and agreements with respect thereto; (h) Form of Offering Statement describing the Underwriter's offer of the Bonds and certain terms and provisions of the foregoing documents, to which an Appendix will be attached by the Underwriter describing the Lessee, as deemed material by the Lessee. 3. It is hereby found, determined and declared that: (a) The Project, comprised of the Land, buildings, improvements and equipment described in the Loan Agreement and Indenture referred to in paragraph 2 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 community, 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 economic and human resources needed as a base-for providing governmental services and facilities; and increasing the tax base of the City and of the county and school district in which the City 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. -2- . (d) The issuance and sale of the Bonds, the execution and delivery of the Loan Agreement and of the Trust Indenture and the performance of all covenants and agreements of the City contained in the Loan Agreement and Trust Indenture and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Loan Agreement, Trust Indenture and Bonds valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (e) It is desirable that the City of Eden Prairie Industrial Development Revenue Bonds (McGlynn Bakeries, Inc. Project) , Series 1980, in the amount of $1,300,000 be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City's interest in the boan Agreement will be pledged to the Trustee as security for the payment of principal and interest on the Bonds. (f) The Loan Agreement provides for payments by the Borrower to the Trustee for the account of the City of such amounts as will be sufficient to pay the principal of, premium (if any) and interest on the Bonds when due. The Loan Agreement obligates the Borrower to provide for the payment of operation and maintenance including adequate insurance, taxes and special assessments. • (g) Under the provisions of Section 474.10, Minnesota Statutes, and as provided in the Loan Agreement and Trust Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable by the Borrower pursuant to the Loan Agreement which are pledged to the payment thereof; the City is not subject to any liability thereon; no holders of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; each Bond issued under the Indenture shall recite that the Bond, including interest thereon, shall not constitute nor give rise to 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 limita- tion. (h) The City is a duly organized and existing municipal corporation under the laws of Minnesota and has power to issue the Bonds under the Act. (i) The Project, the issuance and sale of the Bonds, the execution and delivery of the Loan Agreement, Trust Indenture, the performance of all covenants and agreements of the City contained therein and of all other acts and -3- things required by Constitution and laws of the State of . Minnesota to make the Loan Agreement and Trust Indenture valid and binding obligations of the City in accordance with their terms, and the loan of money thereunder are authorized and have been duly authorized by this resolution, provided, however that this finding is made solely for the purpose of estopping the City from denying the validity of the Bonds, or of any of the documents referred to in this paragraph, by reason of the existence of any facts contrary to this finding. (j ) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the acquisition, construction and financing of the Project or to the Bonds or the Loan Agreement, Trust Indenture or Bond Purchase Agreement or questioning the organization, powers or authority of the City. (k) The execution, delivery and performance by the City of the Bonds, the Trust Indenture and the Loan Agreement will not conflict with or result in any breach of, any provisions of, or constitute a default under, any agreement or instrument to which the City is a party or by which it is bound; provided, however, that this finding is made solely for the purpose of estopping the City from denying the validity of the Bonds, or of any of the documents referred to in this paragraph, by reason of the existence of any • facts contrary to this finding. (1) To the best of the City' s knowledge and belief, no councilman of the City and no other elected or appointed official who is authorized to take part in the making of the Loan Agreement or the Trust Indenture or the issuance of the Bonds, is directly or indirectly interest in this Loan Agreement, the Bonds, the Project, or any contract, agreement or job hereby contemplated to be entered into or undertaken. 4. The forms of Loan Agreement, Trust Indenture, Mortgage, Guaranty Agreement, Lease, Assignment and Bond Purchase Agreement referred to in paragraph 2 are approved. The Loan Agreement and Bond Purchase Agreement shall 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 law, as may be approved by the officers executing the same. The Trust Indenture shall be executed in the name and on behalf of the City by the Mayor and the 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 and then shall be delivered to the Trustee. Copies of all documents shall be delivered and filed as provided therein. 5. The City shall proceed forthwith to issue its City of Eden Prairie Industrial Development Revenue Bonds (McGlynn -4- Bakeries, Inc. Project) , Series 1980, dated as of March 1, 1980, in the principal amount of $1,300,000 in the form and upon the terms set forth in the Trust Indenture, which terms are for this purpose incorporated in this resolution and made a part hereof. The proposal of Cronin & Marcotte, Inc. (the "Underwriter") to purchase such Bonds at a price of $1,248,000 plus accrued interest, upon the terms and conditions set forth in the Bond Purchase Agreement is hereby found and determined to be reasonable and is hereby approved. The Mayor and City Manager are authorized and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee, together with a certified copy of this Resolution and the other documents required by Section 2.09 of the Indenture, for authentication and delivery to the purchaser. As provided in the Indenture, each 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. The City hereby consents to the use of the Offering Statement, provided that the Offering Statement shall always recite that the Offering Statement and Appendix has been prepared by the Lessee and Underwriter and that the City has made no independent investigation with respect to the information con- tained in the Offering Statement or Appendix thereto. 7. The Mayor, City Manager, City Clerk and other • officers of the City are authorized and directed to prepare and furnish to the purchasers of the Bonds, when issued, certified copies of all proceedings and records of the City relating to the Bonds, 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 certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representa- tions of the City as to the truth of all statements contained therein. S. The City hereby elects that $10,000,000 limitation of capital expenditures set forth in Section 103(b)(6) of the Internal Revenue Code shall be applicable to the Project and the Bonds, and the City Manager or City Clerk shall execute and file on behalf of the City the form of election required by said Section and the Regulations thereunder. Approved ayo Attest ity rk -5-