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HomeMy WebLinkAboutResolution - 81-252 - MIDB's - $62,884 - Spencer Dean, Sr. - 12/15/1981 Member introduced the following resolution and moved its adoption : RESOLUTION RELATING TO A $62 , 884 SECOND MORTGAGE COMMERCIAL DEVELOPMENT REVENUE BOND ( SPENCER DEAN, SR. PROJECT) ; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MiNNLSOTA STATUTES, CHAPTER 474 BE IT RESOLVED by 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 meanings unless the context hereof or use herein clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474 , as amended; Assignment: the Assignment of Rents and Leases to be given by the Borrower to the Lender ; Bond : the $62 , 884 Second Mortgage Commercial Development Revenue Bond (Spencer Dean, Sr. Project) to be issued by the City pursuant to this Resolution; Borrower : Spencer Dean, Sr . , an individual residing in the State of Minnesota , and his permitted successors and assigns; City: the City of Eden Prairie , Minnesota , its successors and assigns; Holder: the Lender or any person to whom the Bond has been assigned pursuant to Section 5. 04 of this Resolution; Improvements : the approximately 4, 500-square foot office building and related facilities and improvements to be acquired and constructed on the Land; Land: the real estate located in the County of Hennepin, State of Minnesota, and legally described in Exhibit A to the Mortgage; Lender : Ryan Development, In.c. , a Minnesota corporation , its successors and assigns; Loan Agreement: the Loan Agreement to be entered into between the City and the Borrower ; Mortgage: the Mortgage and Security Agreement to be entered into between the Borrower , as mortgagor , and the Lender , as mortgagee; Pledge Agreement: the Pledge Agreement to be given by the City to the Lender ; Project: the Land and the Improvements to be acquired and constructed by the Borrower in accordance with the terms of the Loan Agreement; Project Costs: those costs defined as Project Costs in Section 1 . 01 of the Loan Agreement; and Resolution: this resolution of the City. Section 2 . Findings . It is hereby found and declared that: ( a) based upon representations made to the City by representatives of the Borrower as to the nature of the Project, the real property and improvements described in the Loan Agreement and the Mortgage comprising the Project 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, so far as possible, blighted and marginal lands and areas of chronic unemployment; the retention of industry to use the available resources of the community in order to retain the benefit of its existing investment in educational and public service facilities; halting the movement of talented , educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; and more intensive development of land 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; -2- (c ) the Project when completed will add to the tax base of the City , and will accordingly be of direct benefit to the taxpayers of the City as well as those of the County of Hennepin and the school district in which the City is located ; ( d ) the Project has been approved by the Commissioner of Securities of the State of Minnesota; (e ) the financing of the acquisition and construction of the Project, the issuance and sale of the Bond , the execution and delivery of the Loan Agreement and the Pledge Agreement, and the performance of all covenants and agreements of the City contained in the Bond , the Loan Agreement and the Pledge Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bond , the Loan Agreement and the Pledge Agreement valid and binding obligations of the City in accordance with their terms , are authorized by the Act; (f ) it is desirable that the Bond in the amount of $62, 884 be issued by the City upon the terms set forth herein, and that the City pledge its interest in the Loan Agr.eenent and grant a security interest therein to the Lender as security for the payment of the principal of, premium, taxes and late charges, if any , and interest on the Bond; and the City has not heretofore pledged, assigned or otherwise encumbered its interest in the Loan Agreement; (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, premium, taxes and late charges, if any, and interest on the Bond 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 Project and payable during the term of the Loan Agreement; (h) under the provisions of Minnesota Statutes, Section 474 .1 0 , the Bond is not to be payable from nor charged upon any funds 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 -3- Bond shall ever have the right to compel any 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 other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement ; the Bond shall not constitute a charge , lien or encumbrance , legal or equitable, upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement ; and the Bond shall recite that the Bond , including interest thereon, is payable solely from the revenue pledged to the payment thereof and 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 Pledge Agreement and the Bond 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 Loan Agreement, the Pledge Agreement or. the Bond 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 Bond , or otherwise questioning the validity of the Bond or the execution , delivery or validity of the Loan Agreement or the Pledge Agreement , or questioning the appropriation of revenues to payment of the Bond or the right of the City to loan the proceeds of the Bond to the Borrower ; ( k ) all acts and things required under the Constitution and the laws of the State of Minnesota to make the Loan Agreement, the Pledge Agreement and the Bond 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 Pledge Agreement and the Bond , provided that this finding is made solely for the purpose of i -4- estopping the City from denying the validity of the Loan Agreement, the Pledge Agreement or the Bond 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 Bond 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 loan the proceeds thereof to business enterprises to finance the acquisition 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 City Approval. By preliminary resolution duly adopted by the Council on October 31 , 1981 , after a public hearing held on that date , this Council approved the sale of a revenue obligation pursuant to the Act and the loan of the proceeds to the Borrower for the acquisition and construction of the Project suitable and designed for use as an office building and authorized the preparation of such documents as may be appropriate to the Project. 3 . 03 . Approval of Documents. Pursuant to the foregoing, there have been prepared and presented to the Council copies of the following documents , all of which are now, or shall be, placed on file in the office of the City Clerk : ( a) Assignment; (b) Loan Agreement; (c ) Mortgage; and (d ) Pledge Agreement. 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. Section 4. Authorizations. Upon the completion of the Loan Agreement and the Pledge Agreement approved in -5- Section 3 . 03 hereof and the execution thereof by the Borrower and the Lender , as the case may be , the Mayor and the City Manager shall execute the same on behalf of the City and , together with the City Clerk , shall execute the Bond in substantially the form approved in Section 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 Attozney, and all certifications , recitals and representations therein shall constitute the certifications , 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 Bond. 5 . 01 . Form and Authorized Amount. The Bond shall be issued substantially in the form presented to the Council and set forth as Exhibit A to this Resolution with such appropriate variations, omissions and insertions as are permitted or required by this Resolution , in the total principal amount of $62 , 884 . The terms of the Bond 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 Bond 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 and attested by the City Clerk. In case any officer whose signature shall appear on the Bond 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 Bond shall became mutilated or be destroyed or lost, the City shall cause to be executed and delivered a new Bond of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated Bond , or in lieu of and in substitution for such Bond destroyed or lost, upon the Holder ' s paying the expenses and charges of the City in connection therewith, and, in case the Bond is destroyed or lost, its filing with the City evidence satisfactory to it of such loss or destruction. -6- 5 . 04 . Assignment. The Bond may be assigned by the Holder , from time to time , by endorsement thereon or by separate written instrument ; provided that notice of any such assignment shall be given in writing to the City and the Borrower. At the request of the Holder , the Bond shall be registered on the books of the City , subject to the conditions set forth in the form of the Bond attached hereto as Exhibit A. 5 . 05. Delivery and Use of Proceeds . Prior to delivery of the Bond , 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 Bond in the total principal arnount of $62 , 884, together with a copy, duly certified by the City Clerk , of this Resolution and such closing certificates as are required by bond counsel and are approved by the City Attorney . Upon delivery of the Bond and the above items to the Lender , the Lender shall , on behalf of the City, disburse the proceeds of the Bond to the Borrower in reimbursement of , or to its order for payment of , Project Costs pursuant to the provisions of the Loan Agreement. The Borrower shall provide the City with a full accounting of all funds disbursed for Project Costs. Section 6 . Limitations of the City' s Obligations . Notwithstanding anything contained in the Bond, the Loan Agreement or the Pledge Agreement or any other documents referred to in Section 3 . 03 hereof, the Bond shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, and shall not be payable from nor charged upon any funds other than the revenue pledged to the payment thereof , and the City shall not be subject to any liability thereon, and no Holder of the Bond shall ever have the right to compel any exercise of the taxing power of the City to pay the Bond or the interest, thereon, or to enforce payment thereof against any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement, and the Bond shall not constitute a charge, lien or encumbrance , legal or equitable , upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement. The agreement of the City to perform the covenants and other provisions contained in -7- this Resolution or the Bond , the Loan Agreement or the Pledge Agreement and the other doc-uments listed in Section 3 . 03 hereof shall be subject at all times to the availability of revenues furnished by the Borrower sufficient to pay all costs of sucl performance or the enforcement thereof , and the City shall not be subject to any personal or pecuniary liability thereon other than as stated above . Adopted : December 15 , 1.9;8) i l/ / Mayor Attest: ity Clerk -8- i The motion for the adoption of the foregoing resolution was duly seconded by Member , and , upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted and was signed by the Mayor which was attested by the City Clerk . -9- EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE Second MDrtgage Commercial Development Revenue Bond (Spencer Dean, Sr . Project) No . R-1 $62 , 884 The City of Eden Prairie, Minnesota , a municipal corporation of the State of Minnesota ( the City ) , for value received hereby promises to pay to the order of Ryan Development, :Inc . , a Minnesota corporation, or its assigns ( the Holder ) , at its principal office in Grand Rapids , Minnesota, or such other place as the Holder may designate in writing , solely from the source and in the manner hereinafter provided , the principal sum of SIXTY-TWO THOUSAND EIGHT' HUNDRED EIGHTY--FOUR DOLLARS ( $62 ,884 ) , or so much thereof as may be advanced from time to time in accordance with the Loan Agreement hereinafter referred to , with interest on the unpaid principal balance at the rate of fifteen percent (15% ) per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public and private debts in the United States of America. The principal of and interest on this Bond are payable in installments due as follows ( a ) On or before January 1 , 1982 , and on or before the first day of each calendar month thereafter, to and including December 1 , 1986 , an amount equal to the accrued and unpaid interest on the unpaid principal balance hereof. ( b ) On or before April 1 , 1987 , an amount equal to the unpaid principal balance of this Bond together with all accrued ama unpaid interest thereon. All payments of principal and interest pursuant to the foregoing paragraph ( b) shall be applied first to interest due on the outstanding principal balance and thereafter in reduction of said principal balance. All interest hereon shall be computed on the assumption that each year contains three hundred sixty ( 360 ) days and is composed of twelve (12 ) thirty-day months. i If any payment of principal and/or interest on this Bond is not paid when due, each and every such delinquent payment, including the entire principal balance and accrued interest in the event of an acceleration of this Bond , shall bear interest to the extent permitted by law at the rate of fifteen percent ( 15 % ) per annum from its due date until payment. Tax Call If the Holder receives notice of a Determination of Taxability ( as defined in Section 4 . 08 ( 2 ) of the Loan Agreement ) , the Holder may, at any time, by written notice to the City and the Borrower hereinafter referred to , declare the unpaid principal balance of this Bond , together with any other indebtedness hereunder , due and payable as of the £first day of any month commencing no less than one hundred twenty ( 120 ) days after receipt by the City and the Borrower of such notice ( the Tax Call Date ) , in which event the unpaid principal balance of this Bond , together with accrued interest thereon and any other indebtedness hereunder , shall be due and payable on the Tax Call Date. In any event, the City shall pay to the current and any pre.wious Holder of this Bond , in addition to the other amounts set forth in this paragraph and within thirty (30 ) days of receipt of a notice setting forth such amounts , the amounts of additional federal income taxes , including penalties and interest thereon, which such Holder or Holders estimate they will incur by reason of such Determination of Taxability for or with respect to their current and past tax years for the period of time between (1 ) the Date of Taxability ( as defined in Section 4 . 08 of the Doan Agreement) , or the date of the most recent such notice, as the case may be, and (2 ) the Tax Call Date or , if the Holder does not declare the unpaid principal balance of this Bond due, the date of the notice then being given. The provisions of this paragraph shall survive the payment of this Bond. Prepayment The City may, upon sixty ( 60 ) days ' prior written notice to the Holder, prepay the unpaid principal balance hereof, in whole or in part, on any installment payment date, without premium. The Holder shall apply any such prepayment against the unpaid principal amounts due hereunder , and no partial prepayment shall postpone, defer or reduce the amount of the monthly installment payments otherwise due hereunder . -2- in the event the Holder applies the net proceeds of insurance or condemnation awards upon the occurrence of certain events of damage , destruction or condemnation of the property subject to the Mortgage and Security Agreement hereinafter referred to to the payment of this Bond , as provided in Sections 5-1 and 5-2 of said Mortgage, such application shall be made without any prepayment penalty or premium. Purpose and Security This Bond is issued by the City for the purpose of providing funds to be loaned to Spencer Dean, Sr . , an irdiv4dual residing in the State of Minnesota ( the Borrower ) , pursuant to the terms of a Loan Agreement, of even date herewith ( the Loan Agreement) , to be used to pay a portion of the cost of a project, within the meaning of Minnesota Statutes, Section 474. 02, Subdivision 1 ( a) , consisting of the acquisition of certain land located in the City and the acquisition and construction thereon of an approximately 4 , 500-square foot office building and related facilities and improvements ( the Project) . The Project will be owned by the Borrower and leased to Communications Marketing , Inc. , a Minnesota corporation. This Bond is secured by a Pledge Agreement , of even date herewith , by the City to Ryan Development , Inc. , a Minnesota corporation ( together with its successors and assigns , the Lender ) , by a Mortgage and Security Agreement, of even date herewith ( the Mortgage) , between the Borrower , as mortgagor, and the Lender , as mortgagee, and by an Assignment of Rents and Leases , of even date herewith ( the Assignment ) , from the Borrower to the Lender . The disbursement of the proceeds of this Bond is subject to the terms and conditions of the Loan Agreement . This Bond is being issued contemporaneously with a First Mortgage Commercial Development Revenue Bond ( Spencer Dean, Sr. Project) , of even date herewith ( the First Mortgage Bond ) , issued by the City in the principal amount of $314 , 420 to finance a portion of the cost of acquisition and construction of the Project. The First Mortgage Bond is secured by a mortgage lien on and security interest in the Project, as well as an assignment of rents and leases with respect thereto, which are prior to the lien - and interests granted by the Mortgage and Assignment. This Bond is issued pursuant to and in full compliance with the Constitution and laws of the State of -3- Minnesota, including Minnesota Statutes , Chapter 474 , and pursuant to a resolution duly adopted by the City Council on December 15 , 1981 ( the Resolution) , and , together with interest hereon and any premiums, taxes, penalties , late charges or other amounts payable hereunder , however designated , are special obligations of the City payable solely from payments to be received by the City pursuant to the Loan Agreement and from disposition of the property which secures payment of this Bond . This Bond , the interest hereon and any premiums, taxes, penalties , late charges or other amounts payable hereunder , however designated, shall never constitute a debt of the City within the meaning of any constitutional provision or statutory limitation and shall never constitute or give rise to a charge against its general credit or taxing powers , and are not payable fron nor a charge upon any funds of the City other than the revenues pledged to the payment thereof . This Bond , the interest hereon and any premiums , taxes , penalties , late charges or other amounts payable hereunder , however designated , do not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City , except the revenues to be received by the City under the Loan Agreement , and the agreement of the City to perform or cause th_e performance of the covenants and other provisions herein referred to shall be limited at all times to the availability of revenues from the Loan Agreement , the Assignnent and the Mortgage , sufficient to pay all costs of such performance or the enforcement thereof. The provisions of this paragraph shall , for all purposes of this Bond , be controlling and be given full force and effect, anything else to the contrary in this Bond notwithstanding . All of the agreements, conditions , covenants , provisions and stipulations contained in the Mortgage, the Resolution, the Loan Agreement and the Assignment are hereby made a part of this Bond to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Bond. If a default occurs in any payment due under this Bond and is not cured within ten (10 ) days after the date such payment is due, or if any Event of Default shall occur under the Mortgage or the Loan Agreement, then the Bolder may at its right and opt ion declare immediately due and payable without notice the principal balance of this Bond and interest accrued thereon, together with any reasonable attorneys ' fees incurred by the Holder in collecting or enforcing payment thereof , whether suit be -4- f brought or not , and all other sums due hereunder or under the Mortgage, the Loan Agreement or the Assignment, 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 this Bond , the Mortgage, the Loan Agreement or the Assignment . The Holder may extend the time of payment of interest and/or principal of this Bond , without notice to or consent of any party liable hereon and without releasing any such party. The remedies of the Holder , as provided herein and in the Mortgage, the Loan Agreement and the Assignment , shall be cumulative and concurrent; may be pursued singly , successively or together and 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 release thereof . The City, for itself, its successors and assigns, subject to limitation of the City ' s liability, hereby guarantees payment of this Bond and waives diligence, demand, presentment, protest and notice of dishonor and suretyship defenses generally , and agrees that without any notice, the Holder hereof and any present or future owner or owners of any property and interests covered by the Mortgage or any other document given to secure this Bond , or executed in connection with this Bond , may from time to time extend , renew , or otherwise modify the date or dates or amount or amcunts of payment above recited; or , the Holder hereof may from time to time release any part or parts of the property and interests subject to said Mortgage or to any such other document from the same, with or without consideration. In any such case, the City, subject to limitation of the City ' s liability, shall continue liable to pay the unpaid balance of the indebtedness evidenced hereby as so extended , renewed or modified and notwithstanding any such release. Negotiation and Registration As provided in the Resolution, this Bond 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 Borrower . Subject to the conditions set forth herein, the City will , upon request of the Holder , register this Bond -5- r upon its books. LJpon such registration, this Bond shall be transferable only by the Holder hereof in person or by its attorney duly authorized in writing by registration hereon and on the books of the City kept for that purpose at the office of the City Clerk and upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk , duly executed by the Holder or its duly authorized attorney. Upon such transfer , the City Clerk will note the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank appearing below. The City may deem and treat the person in whose name this Bond is last registered upon the books of the City, with such registration also noted on this Bond , as the absolute owner hereof , whether or not overdue, for the purpose of receiving payment of or on account of the principal hereof , interest hereon or any other sums payable hereunder , and for all other purposes , and all such payments so made to the Holder or upon its order shall be valid and effectual to satisfy P.nd discharge the liability on this Bond to the extent of the sum or sums so paid , and the City shall not be affected by any notice to the contrary. t Separability If any term of this Bond, or the application thereof to any person or circumstances, shall , to any extent , be invalid or unenforceable , the remainder of this Bond, or the application of such term to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby , and each term of this Bond shall be valid and enforceable to the fullest extent permitted by law. Successors in Interest This Bond applies to, inures to the benefit of , and is binding not only on the parties hereto, but on their successors and assigns. The term "Holder" shall mean the holder and owner of this Bond, whether or not named as Holder herein. Modifications This Bond may not be amended, modified or ch-anged nor shall any waiver of any provision hereof be effective, except only by an instrument in writing and signed by the party against whom enforcement of any waiver, amendment, change, modification or discharge is sought. -6- E It is intended that this Bond is made with reference to and shall be construed as a Minnesota contract and governed by the laws thereof . 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 Bond do exist , have happened and have been performed in regular and due form, time and manner as required by law. IN WITNESS WHEREOF, the City has caused this Bond to be duly executed by its duly authorized officers and its corporate seal to be affixed hereto , all as of this day of December , 1981 . CITY OF EDEN PRAIRIE , MINNESOTA B y �� _ ( SEAL) / (J Mayor Attest : Countersigned : City Clerk City Manager r -7- { Certificate of Registration It is hereby certified that , at the request of the Holder of the within Bond , the City of Eden Paririe , Minnesota , has this day registered it as to principal and Interest , in the name of such Holder , as indicated in the registration blank below, on the books kept by the undersigned for such purpose : Name of Authorized Registered Date of Signature Owner Registration of City Clerk Ryan Development. , December , 1981 Inc . _g_