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HomeMy WebLinkAboutResolution - 83-303A83-303B - Relating to $81,950 2nd Mortgage Commercial Development Revenue Bond - LukeRelating to $400,000 1st Mortgage Commercial Development Revenue Bond - Luke - 12/20/1983 -3 s Member introduced the following resolution and moved its adoption : RESOLUTION RELATING TO A $400 , 000 FIRST MORTGAGE COMMERCIAL DEVELOPMENT REVENUE BOND (L. DEAN AND DIANE J . LUKE PROJECT ) ; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA 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 Borrowers to the Lender ; Bond : the $400 , 000 First Mortgage Commercial Development Revenue Bond ( L. Dean and Diane J. Luke Project) to be issued by the City pursuant to this Resolution; Borrowers : L. Dean Luke and Diane J . Luke , husband and wife , individuals residing in the State of Minnesota, and their permitted successors and assigns ; City: the City of Eden Prairie , Minnesota , its successors and assigns ; Escrow and Disbursing Agreement : the Escrow and Disbursing Agreement to be entered into among the City, the Lender , the Borrowers and Title Insurance Company of Minnesota ; Holder : the Lender or any person to whom the Bond has been assigned pursuant to Section 5 . 04 of this Resolution ; Improvements : the approximately 6 , 000-square foot 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 : First National Bank of Minneapolis , a national banking association , its successors and assigns ; Loan Agreement : the Loan Agreement to be entered into between the City and the Borrowers ; Mortgage : the Mortgage and Security Agreement to be entered into between the Borrowers , as mortgagors , and the Lender , as mortgagee ; Pledge A r�eem�ent : 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 Borrowers in accordance with the terms of the Loan Agreement and Escrow and Disbursing 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 Borrowers 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 yr' 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 Minnesota Energy and Economic Development Authority; (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, the Escrow and Disbursing Agreement and the Pledge Agreement, and the performance of all covenants and agreements of the City contained in the Bond, the Loan Agreement, the Escrow and Disbursing 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 , the Escrow and Disbursing 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 $400 ,000 be issued by the City upon the terms set forth herein, and that the City pledge its interest in the Loan Agreement 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 Borrowers are 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 . 10 , 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 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 -3- 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 Escrow and Disbursing 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 Escrow and Disbursing Agreement , the Pledge Agreement or the Bond by reason of the existence of any facts contrary to this finding ; i ( 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 tt,a execution , delivery or validity of the Loan Agreement , the Escrow and Disbursing 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 Borrowers ; ( k ) all acts and things required under the Constitution and the laws of the State of Minnesota to make the Loan Agreement, the Escrow and Disbursing 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 Escrow and Disbursing Agreement , the Pledge Agreement and the Bond , provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Loan Agreement , the Escrow and Disbursing Agreement , the Pledge Agreement or the Bond by reason of the existence of any facts contrary to this finding ; and -4- ( 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 6 , 1963 , 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 Borrowers for the acquisition and construction of the Project suitable and designed for use as a Montessori school 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 ) Escrow and Disbursing Agreement; ( c ) Loan Agreement; ( d ) Mortgage; and ( e ) Pledge Agreement. The forms of the documents listed in ( b) , ( c ) and (e ) 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, the Escrow and Disbursing Agreement and the Pledge Agreement approved in Section 3 .03 hereof and the execution thereof by the Borrowers 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 Ir -5- 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 Attorney, 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 $400 , 000 . 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. become 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. 5 . 04 Registration and Bond . The City Clerk shall act as Bond Registrar and as such shall maintain a Bond Register for purposes of recording the names and addresses of the owner or owners of the Bond . The Bond shall initially be registered in the name of the Lender . The Bond shall be transferable by the registered owner or its attorney duly authorized in writing upon presentation thereof to the City Clerk together with a -6- written instrument of transfer satisfactory to the City Clerk duly executed by the registered owner or its attorney . The following form of assignment shall be sufficient for said purpose : For value received hereby sells, assigns and transfers unto the within Bond of the City of Eden Prairie, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Bond on the books of said City with full power of substitution in the premises . Dated : Registered Owner Such transfer shall also be noted on the Bond. 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 s 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 amount of $400 , 000 , 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 Borrowers in reimbursement of , or to their order for payment of, Project Costs pursuant to the provisions of the Loan Agreement and the Escrow and Disbursing Agreement. The Borrowers 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 , the Escrow and Disbursing Agreement or the Pledge Agreement or any other documents referred to in Section 3 .03 hereof, the Bond shall no-t 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 ti7c -7- 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 this Resolution or the Bond, the Loan Agreement, the Escrow and Disbursing Agreement or the Pledge Agreement and the other documents listed in Section 3 . 03 hereof shall be subject at all times to the availability of revenues furnished by the Borrowers sufficient to pay all costs of such 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 20 , 1983 . IJ4ayor Attest• �-- C y Clerk _go