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HomeMy WebLinkAboutResolution - 84-141 - Relating to $3,600,000 MIDB's - James Refrigeration - 05/29/1984 ^Member Bentley introduced the following resolution and moved its adoption : RESOLUTION NO . 84-141 RESOLUTION RELATING TO $3 , 600 , 000 COMMERCIAL DEVELOPMENT REVENUE BONDS ( JAMES REFRIGERATION COMPANY PROJECT ) ; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES , CHAPTER 474 , AS AIMENDED , AND AUTHORIZING THE EXECUTION OF DOCUh1 NTS BE IT RESOLVED by the City Council of the City of Eden Prairie , Minnesota (the City) , as follows : Section 1 . Authorization and recitals . 1 . 01 . General Aut horit . The City is authorized by Minnesota Statutes , Chapter 474 , as amended ( the Act ) , to issue its revenue bonds and to make secured or unsecured loans to finance the acquisition of real property and the acquisition or construction of buildings and improvements on such real i property and the installation of machinery and equipment of any and all kinds and any other personal properties deemed necessary in connection with a project , as defined in the Act . 1 . 02 . Proposed Project and Bonds . Representatives of James Refrigeration Company , ( the Company) , an Iowa corporation, have proposed that the City, acting under and pursuant to the Act , issue and sell its $3 , 600 , 000 Commercial Development Revenue Bonds ( James Refrigeration Company Project ) ( the Bonds ) for the purpose of defraying the costs of a project under the Act consisting of the acquisition of land within the City at the southwest corner of the intersection of Shady Oak Road and Highway 169 and the construction thereon of an approximately 38 , 440 scruare foot office building and related parking facilities (the Project ) . Pursuant to the proposal the Bonds will be issued by the Citv pursuant to an Indenture of Trust , dated as of May 1 , 1984 ( the Indenture) , between the City and American. National Bank and Trust Company, a national barking association , as trustee ( the Trustee ) , and the proceeds of the Bonds will be loaned by the City to the Companv pursuant to a Loan Agreement , dated as of May 1 , 1984 ( tine Loan Agreement ) , between the Citv and the Company, to pay the costs of the Project . Under the Loan Agreement the Company agrees to make payments sufficient to pay the principal of and interest on the Bonds . By the Indenture the City will grant a security interest in certain revenues and payments to be received by the City under the Loan Agreement to the Trustee . To secure the Bonds _idelity Bank and Trust Company , a r1, 4_nnesota state bank , ( _he wank ) , wJ 11 issue an revocable Standbv Letter of Credit he L rtr.er of Credit ) in favor of the _ rustee for the account of the Company under which it will agree to pay the principal of and a spec=.f ied amount cf interest on e 3cnds upon the terms therein provided , To further secure the Bonds , the Companv and the Trustee will execute and deliver a Combination Mo rrgage , Security Agreement and Fixture ;ir.anc ira Statement , datea as of May 1 , 1984 ( the Mortgage ) and an Assignment of Rents and Leases , dated as of May 1, 1984 ( the Assignment ) . The proceeds of the Bonds will be disbursed pursuant to a Construction Loan Agreement , dated as of May 1 , 1984 ( the Construction Loan Agreement ) , by and among the City , the Trustee , the Company, the Bank and American National Bank and Trust Company , a national banking association, as original purchaser of the Bonds ( the Original Purchaser ) . 1 . 03 . Prior Approval . By preliminary resolution duly adopted by this Council on November 15 , 1983 , this Council approved the sale of revenue obligations pursuant to the Act and the loan of the proceeds to the Company 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 . A public hearing on the proposal to undertake and finance the Project was duly noticed and held on November 15 , 1983 . 1 . 04 . _Documentation . Forms of the following documents relating to the Project and the Bonds have been prepared and submitted to this Council and are hereby directed to be filed with the City Clerk : ( a) the Loan Agreement ; (b) the Indenture ; ( c ) the Letter of Credit ; ( d) the Mortgage ; ( e) the Assignment ; and ( f ) the Construction Loan Agreement . Section 2 . Findings . It is hereby found, and declared that : ( a ) Based upon representations made to the City by representatives of the Company as to the nature of the Project , the real property and improvements described in tine scan Agreement as comprising -the Project , constitute a reject authorized by the ` ct ; ( b ) the purpose cf 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 , so far as possible , the emergence of blighted and marginal lands and areas of chronic unemployment ; by promoting the use of available resources of the community thereby retaining 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 by encouraging more intensive development of land in the City to provide an adequate and better balanced tax base to finance the increase in the amount and cost of governmental services ; ( 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 Project is located; ( d ) the Project ha.s 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 Bonds , the execution and delivery of the Loan Agreement , the Indenture and the Construction Loan Agreement , and the performance of all covenants and agreements of the City contained in the Loan Agreement , the Indenture and the Construction Loan Agreement and of all other acts and things required under the Constitution and 'Laws of the State of Minnesota to make the Loan Agreement , the Indenture , the Construction Loan Agreement and the Bonds valid and binding obligations in accordance with their terms , are authorized by the Act ; ( f ) it is desirable that Bonds in the amount of $3 , 600 , 000 be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City grants to the Trustee a security interest in certain revenues and payments to be received by the City under the Loan Agreement as security for the payment of the principal , premium , if any, and interest on the Bonds and i `he Citv has not heretofore pledged , assigned or otherwise encumbered its interest in the Loan Agreement ; J ( g) the loan payments contained in the Lcan Agreement are fixed , and are 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, if any, and. interest on the Bonds when due; and the Loan Agreement also provides that the Company is required to pay all expenses of the operation and maintenance of the Project , including, but without limitation , adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof , and all taxes and special assessments levied upon or .,,ith respect to the Project site and payable during the term of the Loan Agreement ; ( h) under the provisions of Minnesota Statutes , Section 474 . 10 , the Bonds are not to be payable From nor charged upon any funds of the City other than the revenues and payments pledged to the payment thereof ; -�:he City is not subject to any liability thereon ; no holders of the Bonds shall ever have the right to compel any exercise of the taxing powers of the City to pay any of the Bonds or the interest thereon nor to enforce payment thereof against any property of the City, except the revenues and payments r under the Loan Agreement pledged to the payment thereof ; the Bonds shall not constitute a charge , lien or encumbrance , legal or equitable , upon any property of the City, except the revenues and payments under the Loan Agreement pledged to the payment thereof ; each Bond issued under the indenture shall recite that the Bonds , including interest thereon , are payable solely from the revenues and payments pledged to the payment thereof ; and no Bond shall 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 Indenture, the Construction Loan Agreement and the Bonds 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 o-ner instrument to which the City is subject or is a party cr -v which it is bound; provided that this finding is made sclely for the purpose of estopping the City from denying the validity of the Loan Agreement , the Indenture , the Construction Loan Agreement or the Bonds by reason of the existence of any facts contrary to this finding ; ( j ) no litigation is pending or , to she -test knowledge of the members of this Council , threatened against the City questioning the organizatic_: Cr boundaries i -4 - of the City or the right of any ofricer of the City to hold his or her office , or in any manner uuestioning the right and power of the City to execute and deliver the Bonds , or otherwise questioning the validity of the Bonds or the execution, delivery or validity of the Loan Agreement , the Indenture or the Construction Loan agreement , or questioning the appropriation_ of re,.,venues to payment of the Bonds or the right of the City to car_ the proceeds of the Bonds to the Company; ( k) all acts and things required under the Constitution and the laws of the State of Minnesota to make the Loan Agreement , the Indenture , the Construction Loan r_greement and. the Bonds 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 Indenture, the Construction Loan Agreement and the Bonds ; provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Loan Agreement , the Indenture , the Construction Loan Agreement or the Bonds by reason of the existence of anv facts contrary to this funding ; 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 Bonds in accordance with the Act . 3 . Authorization and Approval of the Project , Loan �cxreement, Indenture and Letter of Credit . The City is authorized to provide for the acquisition and construction and equipment of the Project and to grant a security interest in certain revenues and payments to be received by the City under the Loan Agreement , all as provided in the Loan Agreement and the Indenture . The forms of the Loan Agreement , the Indenture and the Construction Loan Agreement referred to in Section 1 . 04 hereof are approved subject to such modifications as are deemed appropriate and app-roved by the City Attorney . The Mayor and City Manager are directed to execute the Loan Agreement upon execution thereof by the Company, to execute the Indenture upon e:.ecut ioLn thereof by the Trustee and to execute the Construction :,can Agreement upon execution thereof by the Bank , the Trustee , the Company and the Original Purchaser . Copies of ail of the documents shall be delivered , filed and recorded as provided therein . The Mayor , City Manager and City Clerk are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemnlated , subject to approval of the City Attorney . -5- 4 . The Bonds ; Terms , Sale and E--ecut. ion . 01 -uthorizat2on and Sale . The City iierebv auu�crizes the _ E7�'._ance of she Bonds in amount cf Zl—) , 600 , 000 in t:.r f or r and -.zpor_ the terins set forth in The ;ncentur e and this rescluti.oil . The Bonds are herebv sold to the Orici-nal Purchaser- at a price equal to the principal amount therecf . 4 . 02 . execution . The Mayor , City Manager and City Clerk are hereby authorized and directed to execute the Bonds as prescr iced herein and in the Indenture and to deliver them to the Trustee , together with a certified copy of this resolution, the o-her documents required in the Indenture , and such other certificates , documents and instruments as may be appropriate to ef_`ect the transaction herein contemplated . The Trustee is herebti' appointed authenticating agent pursuant to Minnesota Statutes , Section 475 . 55 , Subdivision 1 . 4 . 03 . Modifications , Absence of officers . The approval hereby, Given to the various documents referred to above incluces an approval of such modifications thereto , deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney . The execution of an,,- instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof . In the absence or disability of the Mayor , any of the documents authorized by this resolution to be executed , may be executed by the acting Mayor and in the absence or disability of the City Manager or City Clerk by such officer of the City who , in the opinion of the City Attorney, may execute such documents . Section 5 . Authentication of Proceedings . The Mayor , City Manager and City Clerk and other officers of the City are authorized and directed to furnish to the Trustee , the Company, the original Purchaser , the Bank and bond counsel 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 relating to the legality and marketability of the Bonds as such facts appear from the books and records in the off icer ' s 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 . -6- Section 6 . Statement of Election . The principal amount of the Bonds being in excess of $ 1 , 000 , 000 , the City Manager is hereby authorized and directed on behalf of the City to execute and file with the Internal Revenue Service a statement of election to issue its obligations in excess of $ 1 , 000 , 000 as orovided by Section 103 (b ) ( 6) ( D) of the Internal Revenue Code of 1954 , as amended , and Section 1 . 103 (b ) ( 2 ) (vi ) of the Regulations promulgated thereunder . Section 7 . Bending Legislation_ . This Council is aware that legislation , including the Tax Reform Act of 1984 , hR 4170 , is pending before Congress thaz would restrict the terms and conditions upon which industrial development bonds may be issued after January 1 , 1984 and bear interest exempt from federal income taxation . In approving the issuance of the Bonds by this resolution, this Council does not intend to use , and specifically disclaims using , any portion of an allocation to issue private activity bonds or industrial development bonds that may be granted or available to the City under such pending legislation . The Company will acknowledge in the Loan Agreement the pendency of such legislation and the provisions of this Section 7 . Section 8 . Limitations of the City_s Obligations . Notwithstanding anything contained in the Bonds , the Loan Agreement , the Indenture , the Construction Loan Agreement or any other documents referred to in Section 1. . 04 hereof , the Bonds shall not constitute a debt of the City witain 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 Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Bonds or the interest thereon, or to enforce payment thereof against any property of the City other than those rights and interests of the City ,ender the Loan Agreement which have been pledged to the Trustee by the Indenture , and the Bonds 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 Trustee by the Indenture . The agreement of the City to perform the covenants and other provisions contained in 7his Resolution , the Bonds , the Loan Agreement , the Construction Loan Agreement or the Indenture and the other documents listed in Section 1 . 04 -7- hereof shall be subject at all times to the availability of revenues furnished by the Corporation 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 . Passed and Adopted this 15th day of,,-,May, 1984 ._ ,i" Mayor Attest : f � C ity Clerk _ 'The motion for the adoption of the foregoing Resolution was duly seconded by Richard Anderson, and upon vote being taken thereon the following voted in favor thereof : Penzel , Anderson , Bentley , Redpath and the following voted against or abstained : Tange n Whereupon said resolution was declared duly passed and adopted . t -8-