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HomeMy WebLinkAboutResolution - HRA 2003-03 - Approval Memorial Blood Centers Project; Series 2003 Revenue Note - 07/15/2003 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE COUNTY OF HENNEPIN STATE OF MINNESOTA H.R.A. RESOLUTION NO. 2003-03 A RESOLUTION GIVING APPROVAL TO A PROJECT ON BEHALF OF MEMORIAL BLOOD CENTERS AND ITS FINANCING UNDER THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT FOR APPROVAL; AND PROVIDING FOR THE ISSUANCE AND SALE OF$3,100,000 COMMERCIAL DEVELOPMENT REVENUE NOTE, SERIES 2003 (MEMORIAL BLOOD CENTERS PROJECT)AND EXECUTION OF RELATED DOCUMENTATION BE IT RESOLVED by the Commissioners (the "Commissioners") of the Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota(the "Authority"), as follows: SECTION 1 Recitals and Findings 1.1. The Commissioners have received a proposal that the Authority,pursuant to Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act"), issue its revenue note for the purpose of financing a portion or all of the cost of a proposed project (the "Project") on behalf of Memorial Blood Centers, a Minnesota nonprofit corporation (the "Corporation"), consisting of(i) the acquisition of a 26,722 gross square foot office building (the "Facilities") and 92,780 square feet of associated land from Braun Intertec and (ii) conversion of the Facilities from an office building and engineering laboratory to a central operating facility for the Corporation. 1.2. At a public hearing, duly noticed and held on the date hereof, in accordance with Section 469.154, Subdivision 4 of the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, on the proposal to undertake and finance the Project, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance such project and interested persons were given the opportunity to submit written comments to the Executive Director before the time of the hearing. 1.3. The Authority hereby finds the following: a) Based on the public hearing, such written comments (if any) and such other facts and circumstances as the Commissioners deem relevant, the Commissioners find that it would be desirable and would further the purposes of Minnesota Statutes, Section 469.152, for the Authority to finance the costs of the Project under the provisions of the Act in the maximum aggregate face amount of$3,300,000, by issuing its Commercial Development Revenue Note, Series 2003 (Memorial Blood Centers Project) (the"Note")pursuant to the provisions of the Act. The Authority is authorized to issue the Note. b) The Project would not be undertaken but for the availability of Industrial Development bond financing under the Act. c) The loan payments or other amounts payable by the Corporation to the Authority under the Loan Agreement, as hereinafter defined, shall be sufficient to pay the principal of, and interest and redemption premium, if any, on, the Note as and when the same shall become due and payable d) There is no litigation pending or, to the best of its knowledge, threatened, against the Authority relating to the Project or the Note or the Note Documents, as hereinafter defined, or questioning the organization of the Authority or its power or authority to issue the Note or to execute and deliver the Note Documents required to be executed by the Authority. e) The execution and delivery of, and the performance of the Authority's obligations under, the Note and the Note Documents do not and will not violate any material order of any court or other agency of government, or any material provision of any indenture, agreement or other instrument to which the Authority is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. f) No Commissioner(i)has a direct or indirect interest in the Project, the Note Documents or the Note, (ii)has a direct or indirect interest in the Corporation, or (iii) has received or will receive any commission, bonus or other remuneration for or in respect of the Project, the Note Documents or the Note. SECTION 2 Determination To Proceed with the Project and Its Financinu 2.1. Award. The sale of the Note is hereby awarded to Wells Fargo Brokerage Services, LLC (the "Purchaser"), and the Chair and Executive Director are hereby authorized and directed on behalf of the Authority to execute the Note to the Purchaser, subject to the conditions provided in Section 2.2 hereof, upon the terms and in the form provided herein. 2.2. Conditions to Issuance. a) All details of the Note and the provisions for payment thereof shall be subject to final approval of the Project by the Minnesota Department of Employment and Economic Development (the"Department") and may be subject to such further conditions as the Authority may specify. 2 b) The approval of the Project and the financing thereof are subject to the approval of the City Council of the City of Eden Prairie, Minnesota (the "City"). 2.3. Qualified Tax-Exempt Obligation. The Note is hereby designated a"qualified tax- exempt obligation"within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986 (the "Code"). The Note is to be issued on behalf of an organization described in Section 501(c)(3) of the Code and is to be issued as a"qualified 501(c)(3)bond"under Section 145 of the Code. The Authority, together with all subordinate entities thereof, does not reasonably expect to issue tax-exempt obligations, including the Note (other than private activity bonds not constituting"qualified 501(c)(3)bonds")the sum of which, with all such obligations heretofore issued by the Authority or such subordinate entities in calendar year 2003, exceeds $10,000,000. 2.4. Limited Liability. No covenant, provision or agreement of the Authority herein or in the Note, the Note Documents or in any other document executed by the Authority in connection with the issuance, sale and delivery of the Note, or any obligation herein or therein imposed upon the Authority or breach thereof, shall give rise to a pecuniary liability of the Authority or a charge against its general credit or taxing powers or shall obligate the Authority financially in any way except with respect to the Loan Agreement, as hereinafter defined, and the application of revenues therefrom and the proceeds of the Note. No failure of the Authority to comply with any term, condition, covenant or agreement herein or therein shall subject the Authority to liability for any claim for damages, costs or other financial or pecuniary charges except to the extent that the same can be paid or recovered from the Loan Agreement or revenues therefrom or proceeds of the Note. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the Authority. In making the agreements, provisions and covenants set forth herein and in the Note Documents, the Authority has not obligated itself except with respect to the Loan Agreement and the application of revenues thereunder and the proceeds of the Note. The Note constitutes a special obligation of the Authority, payable solely from the revenues pledged to the payment thereof pursuant to the Loan Agreement, and does not now and shall never constitute an indebtedness or a loan of the credit of the Authority, the City, the State of Minnesota or any political subdivision thereof or a charge against the Authority's general taxing powers within the meaning of any constitutional or statutory provision whatsoever. The Note shall also not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority, except upon the revenues specifically pledged to the payment thereof 3 SECTION 3 Approval of Documentation 3.L Approval of Note Documents. Forms of the following documents relating to the issuance of the Note (the "Note Documents") have been submitted to the Commissioners and are now on file in the office of the Executive Director: (a) a Loan Agreement, dated as of July 1, 2003 (the "Loan Agreement"),between the Authority and the Corporation, whereby, among other things, the Authority has agreed to sell the Note to provide funds to be loaned to the Corporation to pay the costs of the Project, and the Corporation has agreed to make loan repayments sufficient to pay debt service on the Note when due, and to pay related costs, expenses and fees of the Authority; (b) a Pledge Agreement, dated as of July 1, 2003 (the "Pledge Agreement'),between the Authority and the Purchaser; (c) an Escrow Agreement, dated as of July 1, 2003 (the"Escrow Agreement'), between the Corporation and the Purchaser, providing for disbursement to the Corporation of the proceeds of the Note; (d) The Note, a form of which is attached hereto as Exhibit A, from the Authority to the Purchaser. The forms of Note Documents referred to above are approved. The rate of the Note shall not exceed 4.99%. The Note Documents required to be executed by the Authority shall be executed in the name and on behalf of the Authority by the Chair and the Executive Director in substantially the form on file, but with such changes therein, not inconsistent with the Act or other law or this Resolution, as may be approved by the City Attorney and the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. The Chair and the Executive Director are also authorized and directed to execute such closing certificates and other documents as may be necessary to complete the issuance and delivery of the Note upon approval thereof by the City Attorney, which approval shall be conclusively evidenced by the execution thereof. 3.2. Approval of Application. The Application to the Department (the"Application"), with attachments, is hereby approved, and the Chair and Executive Director are authorized to execute said documents on behalf of the Authority. In accordance with Section 469.154, Subdivision 3 of the Act, the Chair and Executive Director are hereby authorized and directed to cause the Application to be submitted to the Department for approval of the Project. The Chair and Executive Director and other officers, employees and agents of the Authority are hereby authorized and directed to provide the Department with any information needed for this purpose. 4 SECTION 4 General 4.1. Execution and Delivery of Note. The Note shall be executed by the facsimile signatures of the Chair and the Executive Director, and the Note shall be delivered to the Purchaser upon payment of the agreed purchase price therefor, and upon receipt by the Purchaser of the signed legal opinion of Dorsey& Whitney LLP, of Minneapolis, Minnesota, bond counsel, and the other documents required by the Note Documents and the Authority. 4.2. Information Required. The Chair, Executive Director and other officers of the Authority are authorized and directed to prepare and furnish to Dorsey& Whitney LLP, bond counsel, the Corporation, and the Purchaser certified copies of all proceedings and records of the Authority relating to the Project and the Note, 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 representations of the Authority as to the truth of all statements contained therein. 4.3. Costs. The Corporation has agreed to pay directly or through the Authority any and all costs incurred by the Authority in connection with the Project whether or not the Project is carried to completion and whether or not the Note or Note Documents are executed. 4.4. Ongoing Compliance. The Chair and Executive Director are directed, if the]Vote is issued and sold, thereafter to comply with the provisions of Section 469.154, Subdivisions 5 and 7 of the Act. Adopted this 15th day of July, 2003. Ron Case, Acting Chair ATTEST: S eal Exe uti e Dir &tor 5 EXHIBIT A FORM OF NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE Commercial Development Revenue Note, Series 2003 (Memorial Blood Centers Project) $3,100,000 FOR VALUE RECEIVED, the HOUSING AND REDEVELOPMENT AUTHORITY in and for the CITY OF EDEN PRAIRIE, MINNESOTA (the "Authority") hereby promises to pay WELLS FARGO BROKERAGE SERVICES, LLC, in Minneapolis, Minnesota, its successors or registered assigns (the "Lender"), from the source and in the manner hereinafter provided, the principal sum of THREE MILLION ONE HUNDRED THOUSAND DOLLARS ($3,100,000), or so much thereof as remains unpaid from time to time (the "Principal Balance"), with interest thereon from the date hereof until paid or otherwise discharged at the rate of % per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 1. The Principal Balance and accrued interest hereon shall be amortized and paid in the semiannual installments set forth on Appendix I attached hereto, commencing on , and thereafter through and including (the "Final Maturity Date"), at which time any remaining Principal Balance and accrued interest thereon shall be paid in full. Payments shall be applied first to interest due on the Principal Balance and thereafter to reduction of the Principal Balance. 2. In any event, the payments hereunder shall be sufficient to pay all principal and interest due, as such principal and interest becomes due, and to pay any Premium (as defined in the Loan Agreement described below) or service charge, at maturity, upon redemption, or otherwise. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. 3. Principal and interest and Premium or service charge, if any, due hereunder shall be payable at the principal office of the Lender, or at such other place as the Lender may designate in writing. This Note is issued by the Authority to provide funds for a project(the"Project"), as defined in Minnesota Statutes, Section 469.153, consisting of(i) the acquisition of a 26,722 gross square foot office building(the "Facilities") and 92,780 square feet of associated land from Braun Intertec and (ii) conversion of the Facilities from an office building and engineering laboratory to a central operating facility for Memorial Blood Centers, a Minnesota nonprofit corporation (the 'Borrower"). The proceeds of the Note will be loaned to the Borrower pursuant to a Loan Agreement dated as of July 1, 2003 by and between the Authority and the Borrower (the "Loan Agreement"), and this Note is further issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152 to 469.1651 and pursuant to a resolution of the Commissioners of the Authority duly adopted on July 15, 2003 (the "Resolution") and a resolution of the City Council of the City of Eden Prairie (the "City") duly adopted on July 15, 2003 approving the issuance of the Note following a public hearing thereon. 4. This Note is secured by a Pledge Agreement of even date herewith between the Authority and the Lender (the "Pledge Agreement") and by a Mortgage, Security Agreement, Assignment of Leases and Rents, and Fixture Financing Statement, dated as of July 1, 2003 (the "Mortgage") between the Borrower and the Lender, wherein the Borrower has granted to the Lender a mortgage lien on and security interest in certain real and personal properties owned by the Borrower, including the Facilities, subject to Permitted Encumbrances, as defined in the Mortgage. 5. The Authority, for itself, its successors and assigns, hereby waives demand, presentment, protest and notice of dishonor, and to the extent permitted by law, the Lender may extend the due date of interest and/or principal of or any service charge or Premium due on this Note, including the Final Maturity Date, or release any part or parts of the property and interest subject to any security document from the same, all without notice to or consent of any party liable hereon or thereon and without releasing any such party from such liability and whether or not as a result thereof the interest on the Note is no longer exempt from the federal or state income tax. In no event, however, may the Final Maturity Date of the Note be extended beyond thirty(30) years from the date hereof. 6. This Note may be prepaid in whole, but not in part, at the option of the Borrower, on any payment date commencing on or after , at a price equal to the payment then due plus the "After Payment Termination Value" set forth on Appendix 1 attached hereto. 7. Upon the occurrence of an Event of Default, as defined in the Loan Agreement, the Lender may declare the Principal Balance and accrued interest on the Note to be immediately due and payable. 8. In the event of prepayment of this Note, the Lender shall apply any such prepayment against the accrued interest on the Principal Balance and then against the final principal amounts due under the Note plus the "After Payment Termination Value." The monthly payments due under paragraph 1 hereof shall continue to be due and payable in full until the entire Principal Balance, accrued interest and any Premium due on this Note have been paid. 7 9. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the Authority at the office of the Executive Director of the Authority, by the Lender in person or by its agent duly authorized in writing, at the Lender's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Executive Director, duly executed by the Lender or its duly authorized agent. Upon such transfer the Executive Director will note the date of registration and the name and address of the new registered owner in the registration blank appearing below. The Authority may deem and treat the person in whose name the Note is last registered upon the books of the Authority with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on the account of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Lender or upon his order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the Authority shall not be affected by any notice to the contrary. 10. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Escrow Agreement, the Loan Agreement, the Mortgage and the Pledge Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. 11. This Note and interest thereon and any service charge or Premium, if any, due hereunder are payable solely from the revenues and proceeds derived from the Loan Agreement, the payment of which is secured by the Mortgage, and do not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation, are not payable from or a charge upon any funds of the Authority other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the Authority or any of its officers, agents or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the Authority to pay this Note or the interest thereon, or to enforce payment thereof against any property of the Authority, and this Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority, and the agreement of the Authority to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds furnished for such purpose in accordance with the Loan Agreement, sufficient to pay all costs of such performance or the enforcement thereof. 12. If an Event of Default (as that term is defined in the Loan Agreement) shall occur, then the Lender shall have the right and option to declare, upon ten (10) days written notice, the Principal Balance and accrued interest thereon, immediately due and payable, whereupon the same, plus any Premiums or service charges, shall be due and payable, but solely from sums made available under the Loan Agreement. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. In addition, the Lender shall have the remedies as provided in the Mortgage. 13. The remedies of the Lender, as provided herein and in the Loan Agreement, the Pledge Agreement and the Mortgage, are not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the 8 Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 14. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and, then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. 15. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. The Authority acknowledges that the Lender intends to enter into a participation agreement with one or more sophisticated investors. 16. This Note has been designated by the Authority as a"qualified tax-exempt obligation"pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986. THE NOTE, INTEREST THEREON, AND ANY PENALTY, CHARGE, OR PREMIUM OR ANY AMOUNTS PAYABLE THEREUNDER, OR HOWEVER DESIGNATED (Hereinafter referred to throughout as the "Note") IS A SPECIAL LIMITED OBLIGATION OF THE AUTHORITY PAYABLE SOLELY FROM THE REVENUES AND PROCEEDS PLEDGED THERETO AND SECURED BY THE MORTGAGE. THE NOTE AND THE INTEREST THEREON DO NOT CONSTITUTE NOR GIVE RISE TO A PECUNIARY LIABILITY, GENERAL OR MORAL OBLIGATION OR A PLEDGE OF THE FULL FAITH AND CREDIT OR TAXING POWER OF THE AUTHORITY, THE STATE OF MINNESOTA, OR ANY POLITICAL SUBDIVISION OF THE STATE OF MINNESOTA WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATIONS AND ARE NOT PAYABLE FROM OR A CHARGE UPON ANY FUNDS OF THE AUTHORITY OTHER THAN THE REVENUES AND PROCEEDS PLEDGED BY THE AUTHORITY TO THE PAYMENT THEREOF AND DO NOT GIVE RISE TO A PECUNIARY LIABILITY OF THE AUTHORITY NOR OF ANY OF ITS OFFICERS, AGENTS OR EMPLOYEES AND NO HOLDER OF THE NOTE SHALL EVER HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE AUTHORITY OR THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS TO PAY THE NOTE OR TO ENFORCE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE AUTHORITY. THE NOTE DOES NOT CONSTITUTE A CHARGE, LIEN OR ENCUMBRANCE, LEGAL OR EQUITABLE UPON ANY PROPERTY OF THE AUTHORITY, AND THE AGREEMENT OF THE AUTHORITY TO PERFORM OR CAUSE THE PERFORMANCE OF THE COVENANTS AND OTHER PROVISIONS HEREIN REFERRED TO SHALL BE SUBJECT AT ALL TIMES TO THE AVAILABILITY OF REVENUES OR OTHER FUNDS FURNISHED FOR SUCH PURPOSE IN ACCORDANCE WITH THE LOAN AGREEMENT, SUFFICIENT TO PAY ALL COSTS OF SUCH PERFORMANCE OR THE ENFORCEMENT THEREOF. NEITHER THE STATE OF MINNESOTA NOR ANY POLITICAL SUBDIVISION OF THE STATE OF MINNESOTA 9 NOR THE AUTHORITY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE NOTE, THE INTEREST THEREON OR OTHER COSTS INCIDENT THERETO EXCEPT FROM REVENUES PLEDGED THEREFOR UNDER THE LOAN AGREEMENT AND THE PLEDGE AGREEMENT, AS MORE FULLY SET FORTH IN THOSE DOCUMENTS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER, IF ANY, OF THE AUTHORITY, THE STATE OF MINNESOTA, NOR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF THE NOTE OR THE INTEREST THEREON OR OTHER COSTS INCIDENT THERETO. THE NOTE IS NOT A DEBT OF THE UNITED STATES OF AMERICA OR ANY OTHER AGENCY THEREOF AND IS NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF THE UNITED STATES OF AMERICA. THE NOTE IS NEITHER A MORAL NOR AN ANNUAL APPROPRIATION OBLIGATION OF THE AUTHORITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. THE PROVISIONS OF THIS PARAGRAPH SHALL, FOR PURPOSES OF THE NOTE, BE CONTROLLING AND SHALL BE GIVEN FULL FORCE AND EFFECT, ANYTHING ELSE TO THE CONTRARY IN THE NOTE NOTWITHSTANDING. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist to happen and to be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. 10 IN WITNESS WHEREOF, the Authority has caused this Note to be duly executed in its name by the manual signatures of the Chair and Executive Director, the corporate seal having been intentionally omitted as permitted by law, and has caused this Note to be dated as of July_, 2003. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE, MINNESOTA Chair Attest: Executive Director S-1 PROVISIONS AS TO REGISTRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the Housing and Redevelopment Authority in and for the City of Eden Prairie in the name of the holder last noted below. Date of Name and Address Registration Registered Owner Signature of Executive Director Wells Fargo Brokerage Services, LLC 608 Second Avenue South MAC N9303-094 2003 Minneapolis, MN 55479 S-2 APPENDIX 1 Total Interest Principal After After Pmt Payment Payment Payment Payment Payment Payment Due Due Due Due Principal Termination Date Balance Value $3,100,000.00 1 $ $ $ $ $ 2 $ $ $ $ $ 3 $ $ $ $ $ 4 $ $ $ $ $ 5 $ $ $ $ $ 6 $ $ $ $ $ 7 $ $ $ $ $ 8 $ $ $ $ $ 9 $ $ $ $ $ 10 $ $ $ $ S-3