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HomeMy WebLinkAboutResolution - 80-235 - Providing for Issuance and Making of an Industrial Development Revenue Note to Provide Funds to be Reloaned to Braun-Kaiser and Company - 12/02/1980 RESOLUTION OF THE CITY OF EDEN PRAIRIE • PROVIDING FOR THE ISSUANCE AND MAKING OF AN INDUSTRIAL DEVELOPMENT REVENUE NOTE PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, TO PROVIDE FUNDS TO BE RELOANED TO BRAUN- KAISER AND COMPANY, FOR A PROJECT AS DEFINED IN MINNESOTA STATUTES, SECTION 474.02, SUBDIVISION la. AND APPROVING COLLATERAL DOCUMENTS. RESOLVED, BY THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE: 1. Statutory Powers. Pursuant to Chapter 474, Minnesota Statutes, as amended , ("Act"), the City is authorized to issue and sell its revenue bonds ("Industrial Development Revenue Note"), in anticipation of the collection 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 agree- ments which it may deem proper and feasible for or concerning the construction and financing of an authorized project. 2. Issuance of Industrial Development Revenue Note. The City shall issue and sell its Industrial Development Revenue Note, Series 1980 (Braun-Kaiser and Company, Lessor/Braun's Fashions, Inc., Lessee, Project), substantially in the form on file in the office of the City Clerk ("Note"), pursuant to the Act and shall reloan the proceeds of the Note to Braun-Kaiser and Company, a Minnesota general partnership (hereinafter referred to as "Borrower"), to pay the cost of construction and installation of an industrial warehouse and office building facility on and acquiring the real property described in Exhibit "A" 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 econom- ically sound industry and commerce, will help to prevent the emergence of blighted and marginal lands and areas of chronic unemployment, will assist in preventing economic deterioration of the area, will further put to use available resources in the community including the existing investment of the community in education and public service facilities, will help stop the movement of talented, educated personnel of mature age to other areas, will result in an increase to the tax base of the City, County and School District in which the Project is located, and will further promote the purposes stated in Minn. Stat. §474.01. (b) The Commissioner of Securities for the State of Minnesota has given approval to the Project by letter dated September 11, 1980 to Mayor Penzel. (c) Under the terms of the Note and the collateral documents described in Paragraph 4. below and as provided in Minnesota Statutes Section 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 as hereinafter defined, which are pledged to the payment of the Note 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 power of the City to pay the principal, interest and -1- premium, if any, on the Note, 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 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. The Note shall further recite that it is issued for a project defined in Section 474.02, Subd. la. (d) The Note is to be issued and sold to First National Bank of Minneapolis, a national banking association ("Interim Lender") and provides for a definite and certain, but variable, rate of interest, as more fully set forth therein, for as long as Interim Lender is the holder and for a fixed rate of interest commencing on the date that the Note is sold to another party not yet identified ("Permanent Lender"). In the event that the Note is not sold to a Permanent Lender on or before three years from the date of.issuance, then Interim Lender, at its option exerciseable in writing not later than two years after the date of issuance, may declare the balance of principal and accrued interest on the Note to become due and payable. in full three years from the date of issuance. The Borrower may not be able to find a party to become the Permanent Lender, who will purchase the Note, due to the rate of interest thereon to take affect on the date of such purchase, which may be below the current market rate of interest at such time. In such an event and, if Interim Lender has exercised its option to require payment of the Note in full if the Note has not been purchased within three years from the date of issuance, the City recognizes that the Borrower may request that it agree to an amendment changing the interest rate on the Note to a market rate or, alternatively, that the City issue a new revenue bond at a market rate of interest to refinance the Note. The City views any such future request as a • part of an overall plan of financing for the Project and any such refinancing in the future as currently futhering and promoting the purposes stated in Minn. Stat. §474.01. The City has a present intention in its issuance and sale of the Note to enter into any such requested amendment or issuance of new revenue bonds to refinance the Note, if then permitted under the Act; provided, however, the City is not hereby obligated under any circumstance whatsoever to enter into any such amendment or issue any such new revenue bonds, the City reserving to itself, in its sole discretion, the right to decide at that time whether or not to do so based upon its review of a specific request. 4. Collateral Documents. The following proposed documents relative to th Note and the Project have been submitted to the City: (a) Loan Agreement between the City and Borrower in the form on file in the office of the City Clerk, whereby the City agrees to reloan the proceeds of the Note to the Borrower; (b) Mortgage and Security Agreement and Fixture Financing Statement in the form on file in the office of the City Clerk, whereby the Borrower grants to First National Bank of Minneapolis ("Interim Lender"), a mortgage lien on the property as security for the Note; (c) Assignment of Lease in the form on file in the office of the City Clerk, whereby the Borrower assigns all of the rents and leases from all or any part of the project as additional security for the Note; -2- (d) Disbursing Agreement in the form on file in the office of the City Clerk, between Borrower, City, Interim Lender and Title Insurance Company of Minne sota which sets forth the terms of disbursing the proceeds of the Note during . construction of the Project; (e) Sell Agreement between Interim Lender and Borrower, in the form on file in the office of the City Clerk, whereby Interim Lender agrees to sell, to such party as Borrower shall direct, the Note upon completion of the project; (f) Pledge Agreement in the form on file in the office of the City Clerk, whereby the City pledges and assigns its interest in the Loan Agreement to Interim Lender; all of which documents are sometimes referred to herein as the "Collateral Documents". The form of the Note and the Collateral Documents are hereby approved. The City shall execute the Note, Loan Agreement, Disbursing Agreement and Pledge Agreement, all of which shall be executed in the name of and on behalf of the City by the Mayor and City Manager and attested to by the City Clerk,.but the Loan Agreement, Disbursing Agreement and only upon execution thereof by the other parties thereto. The Note, Loan Agreement and Pledge Agreement shall be substantially in the form on file in the office of the City Clerk, 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. Pledge Agreement. The City shall assign and pledge its rights under the Loan Agreement to Interim Lender, and does hereby consent to the reassign- ment of such rights to any subsequent holder of the Note; however, such assignment and consent shall not operate to limit or otherwise affect the City's rights under the following Sections of the Loan Agreement: Sections 3.4; 4.1; 4.4; 4.7; 5.4 and 6.8. 6. Execution of the Note. The City shall issue and make its Indus- trial Development Revenue Note, Series 1980 (Braun-Kaiser and Company, Lessor/ Braun's Fashions, Inc., Lessee, Project) to be dated the date of delivery, in the principal amount of Two Million Thee Hundred Thousand and no/100 ($2,300,000.00) Dollars substantially in the form on file in the office of the City Clerk. The Note shall be executed by the Mayor and City Manager, and attested to by the City Clerk and the official seal of the City shall be affixed thereto. When executed, the Note shall be delivered to Interim Lender, 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 Disbursing Agreement, and that the City has no liability thereon and upon receipt of the 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. 7. Certified Copies. The Mayor, City Manager and City Clerk and other City officers are authorized and directed to prepare and furnish Interim Lender, -3- ' Borrower and any subsequent holder of the Note, certified copies of the 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, certificates and affidavits, including any previously furnished, shall constitute representations of the City as to the truth and accuracy of all statements contained therein. 8. Registration of Note. The City Clerk, as Note Register, shall provide for the registration of transfer or exchange of the Note. Principal and interest due on the Note shall be payable to the registered holder or registered assigns thereof. 9. Statement of Election. The City shall file a Statement of Election To Issue Industrial Development Notes In An Aggregate Amount Exceeding $1,000,000.00 But Not Exceeding $10,000,000.00 with the Internal Revenue Service Pursuant to Section 103(b)(6)(D) of the Internal Revenue Code of 1954 ("Code"), electing to apply paragraph (D) of Section 103(b)(6) of the Code to the issue of the Note. 10. City Representative. Roger Ulstad, the City Manager, or in his absence John Frane, City Clerk, is appointed and designated as the representative on behalf of the City, to act on behalf of the City, and shall execute all documents as required or provided in the Loan Agreement. 11. No Litigation. No litigation of any nature has been commenced against the City by service of process upon the City regarding, restraining, or enjoining the issuance, sale and making of the Note, nor contesting the statutory powers granted by Minnesota Statutes, Chapter 474, in connection with the issuance of the Note, nor regarding the organizational and boundaries of the City • or the right of the City Councilmen or officers to their respective offices. To the best of the City's knowledge, there is no action, suit, proceeding, 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 transactions contemplated by or the validity of the Note, this Resolution, the Construction Loan Agreement, Loan Agreement or Pledge Agreement. 12. Authority. The execution and delivery and performance of Loan Agreement, Disbursing Agreement and Pledge Agreement and the issuance of the Note do not violate any law, regulation, or agreement or any court order or judgment in any litigation to which the City is a party or by which it is bound, provided this finding is made solely for the purpose of estopping the City from denying the validity of the Note or any of the documents referred to in this paragraph by reason of any facts contrary to this finding. 13. No Conflict of Interest. To the best of the City's knowledge and belief, no council member of the City, and no other elected or appointed official who is authorized to take part in the entering into of the Loan Agreement, Disbursing Agreement and Pledge Agreement or the issuance of the Note, is directly or indirectly interested therein, the Project, or any contract, agreement or job contemplated to be entered into or undertaken for completion of the Project. -4- 14. City Expense. All costs and expenses incurred by or on behalf of the City in connection with issuing and selling the Note shall be the sole obligation and responsibility of the Borrower, including but not limited to 1 al fees. . SIGNATUR ROV MAYOR ATTEST: W-A� CITY CLERK i -5-