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01-821r I I I 6 RESOLUTION NO. 821 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE, SERIES 2001A. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield as follows: Section 1. Authorization: Award of Sale. 1.01. Authorization. The Authority and City of Richfield ("City") have heretofore approved the establishment of the Urban Village Tax Increment Financing District (the 'TIF District") within the Richfield Redevelopment Project ("Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Increment Revenue Note, Series 2001A (the "Note") in a maximum principal amount of $4,750,000 for the purpose of financing certain public costs of the Project. 1.02. Issuance. Sale. and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with that certain Amended and Restated Contract for Private Redevelopment between the Authority and Richfield State Agency, Inc. ("Redeveloper") dated , 2001 (the "Agreement"). The Note shall be sold to Marquette Capital Bank, N.A. (the "Owner") at a price of par. The Note shall be dated as of the date of delivery thereof, shall bear interest at the rate of 5.6% per annum to the earlier of maturity or prepayment, subject to adjustment as provided in the Note, and shall be payable in installments of principal on the dates ("Payment Dates") set forth in Schedule A attached to the Note. The Note is not subject to prepayment or redemption before maturity except as otherwise provided in Section 4 of this Resolution or as permitted under the terms of the Agreement. The Executive Director is authorized to approve the original principal amount of the Note up to the maximum stated in Section 1.01, the principal amounts payable (the "Scheduled Payments") on each Payment Date, and other changes to the terms of the Note (excluding the rate of interest and terms of adjustment thereof), all to the extent agreed by the Redeveloper and the Owner. Delivery of the executed Note will be conclusive evidence that the Executive Director has approved any changes in the form of the Note. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule inserted as of the date of issue: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD I No. R-1 $ TAX INCREMENT REVENUE NOTE SERIES 2001A Date of Oriqinallssue The Housing and Redevelopment Authority in and for the City of Richfield (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Marquette Capital Bank, N.A., its endorsees, successors and assigns (the "Holder"), solely from the sources and to the extent and in the manner hereinafter provided, the original principal amount of this Note, being $5,000,000 or I such lesser amount advanced herein under the Agreement hereinafter described, together with interest on the principal balance of this Note outstanding from time to time (the "Principal Balance") at the rate of interest hereinafter set forth. The principal of this Note is payable in installments on the dates (the "Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and in the amounts stated thereon (the "Scheduled Payments"). Interest accruing on the Principal Balance from the date of this Note, shall be paid on each August 1 and February 1, commencing August 1, 2001, to and including February 1, 2026 (the "Maturity Date"), when the entire Principal Balance and all accrued and unpaid interest shall be due and payable. The interest rate on this Note shall be 5.60% per annum from the date of original issue to and including February 1, 2006. The interest rate shall be reset as of February 1, 2011, February 1, 2006, and February 1, 2021 (each a "Reset Date") to equal the Moody's Municipal AAA Bond Curve for five-year obligations as most recently published prior to each such Reset Date plus 150 basis points or, if such index is no longer published, then a comparable index mutually agreed by the Authority and the Holder. Any payments on this Note shall be applied first to accrued interest and then to the Principal Balance. Each payment on this Note is payable in any coin or currency of the United I States of America which on the date of such payment is legal tender for public and I I I private debts and shall be made by check or draft made payable to the Holder and mailed to the Holder at its postal address within the United States which shall be designated from time to time by the Holder. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority to provide funds to defray certain public redevelopment costs of a project pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and is issued pursuant to resolution of the Authority approved May 21,2001 ("Resolution") and Minnesota Statutes, Section 469.178. THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE REVENUES PLEDGED PURSUANT TO THE RESOLUTION. The principal and interest due on any Payment Date are payable solely from and only to the extent that the Authority shall have received as of such Payment Date "Available Tax Increment" together with any other amounts pledged to the Debt Service Fund under the Resolution, the terms of which are incorporated as if fully set forth herein. For the purpose of this Note, "Available Tax Increment" means seventy-five percent (75%) of the tax increment attributable to the portion of the Urban Village Tax Increment Financing District ("TIF District") described in Schedule B that is received by the Authority from Hennepin County as of any Payment Date and not previously applied to any previous payment under this Note. The Principal Balance of this Note shall be prepaid on each Reset Date, without premium or penalty, from and to the extent of any amounts deposited in the Prepayment Fund, as described in the Resolution. Any prepayments of principal shall be applied to the last maturing installments of principal on Schedule A without affecting the amount or timing of any remaining Scheduled Payment. This Note shall not otherwise be subject to prepayment or redemption except to the extent provided otherwise in the Amended and Restated Contract for Private Redevelopment between the Authority and Richfield State Agency dated , 2001 (the "Agreement"). This Note shall not be payable from or constitute a charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments and other funds pledged to the payment of the Note under the Resolution, and then only to the extent and in the manner specified in the Resolution. The Holder shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other public body, and neither the Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield; nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, this Note shall be transferable upon the books of the Authority kept for that purposes at the principal office of the Registrar, by the Owner hereof in person or by such owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. The Note shall be transferred or assigned only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser of an investment letter substantially in the form described in the Resolution. The Board of Commissioners has designated the Note as a "qualified tax exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the Code) relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield has caused this Note to be executed with the manual signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above. Housing and Redevelopment Authority in and for the City of Richfield Executive Director Chair REGISTRATION PROVISIONS I I I I I I The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Reaistration Manaaer Signature of City Finance Registered Owner Marquette Capital Bank, N.A. Date of Authentication: Note Registrar's Authentication Certificate This is one of the Notes described in the within mentioned Resolution. Note Registrar By Authorized Signature Section 3. Terms. Execution and Deliverv. 3.01. Denomination. Payment. The Note shall be issued as a single typewritten note numbered R-1 in the denomination of the original principal amount of the Note. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Manager to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall be transferred only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser to the Registrar of an investment letter substantially in the form of Schedule C hereto. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. I I I I I I (g) Mutilated. Lost Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director of the Authority and shall be executed on behalf of the Authority by the signatures of the Chair and the Executive Director, provided that said signatures may be printed, engraved, or lithographed facsimiles thereof. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such offer had remained in office until delivery. Notwithstanding such execution, the Note shall not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. The executed certificate of authentication on each Note shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Note has been so executed and authenticated, it shall be delivered by the Executive Director to the purchaser thereof upon payment of the purchase price, and the purchaser shall not be obligated to see to the application of the purchase price. Section 4. Security Provisions. 4.01. Creation of Funds: Priority of Payments. There are hereby created special funds designated as the "Project Fund," the "Debt Service Fund," the "Reserve Fund," and the "Prepayment Fund," to be held and administered by the Authority separate from other funds or accounts of the Authority. The Authority hereby pledges Available Tax Increment (as defined in the Note) to the following funds or uses in the following order of priority: First to the Debt Service Fund, with respect to Available Tax Increment received as of any August 1 Payment Date, the amount, together with amounts then on deposit in the Debt Service Fund, necessary to pay the principal and interest due on that August 1 and the next following February 1; and with respect to the Available Tax Increment received as of any February 1 Payment Date, the amount together with amounts then on deposit in the Debt Service Fund, necessary to pay the principal and interest due on that February 1; Second to the Reserve Fund in the amount necessary to bring the balance therein to the Reserve Requirement (hereinafter defined); Third to the registrar for the Taxable Tax Increment Revenue Note, Series 2001 B (the "Series 2001 B Note"), for deposit in the debt service fund established in the resolution approving issuance of the Series 2001 B Note; and Fourth to the Prepayment Fund. 4.02. Proiect Fund. The Authority appropriates to the Project Fund proceeds of the Note, less the amount deposited in the Reserve Fund under Section 4.04. Moneys in the Project Fund shall be used to pay costs of issuance of the Note and certain Public Redevelopment Costs in accordance with the terms of the Agreement. Upon completion and payment of all public costs financed with the proceeds of the Note deposited in the Project Fund, any balance remaining in the Project Fund shall be credited and paid to the Debt Service Fund hereinafter created. Interest earnings on amounts in the Project Fund will be credited to the Project Fund. 4.03. Debt Service Fund. The Debt Service Fund together with all funds deposited therein pursuant to this Resolution are hereby pledged to the payment of principal of and interest on the Note and shall be used for no other purpose. To the extent that on any Payment Date the Authority is unable to pay the full Scheduled Payment and accrued interest due because of insufficient revenues on hand in the Debt Service Fund after making the deposits required under Sections 4.01 and 4.04 hereof, such deficiency shall be deferred and paid on the next Payment Date on which the Authority has received Available Tax Increment (after making the deposit required under Section 4.01 second) in excess of the amount needed to pay the principal and interest due on that Payment Date. Any Available Tax Increment remaining in the Debt Service Fund shall be transferred to the Authority's account for the TIF District upon the payment of all principal and interest to be paid with respect to the Note. Interest earnings on amounts in the Debt Service Fund will be credited in the same manner as Available Tax Increment. 4.04. Reserve Fund. The Authority appropriates to the Reserve Fund proceeds of the Note in an amount equal to the lesser of: (i) the maximum principal and interest due on the Note in any succeeding one year period commencing on August 2 or (ii) 125% of the average annual debt service payable on the Note in the succeeding one year periods commencing on August 2 or (iii) ten percent of the proceeds of the Note (such lesser amount being referred to as the "Reserve Requirement"). If on any Payment Date the amount on deposit in the Debt Service Fund is insufficient to pay the principal and interest due on such date, the Finance Manager shall transfer from the Reserve Fund to the Debt Service Fund an amount equal to such deficiency. In the determining the balance on hand in the Reserve Fund for purposes of this Section, investments shall be valued at their fair market value as of the date of such valuation, which shall be at least annually. Interest I I I I I I earnings on amounts in the Res~rve Fund will be credited in the same manner as Available Tax Increment. Amounts in the Reserve Fund shall be applied, together with amounts in the Prepayment Fund and the Debt Service Fund, to the final Scheduled Payment on the Note. 4.05. Prepayment Fund. There is hereby created a special fund designated as the "Prepayment Fund" to be held and administered by the Authority. Amounts in the prepayment fund will be applied on each Reset Date (as defined in the Note) to prepay in part, without premium or penalty, the outstanding principal balance of the Note. Any such prepayment will be applied to the last maturing installments of principal on Schedule A attached to the Note without affecting the amount or timing of any remaining Scheduled Payment. Interest earnings on amounts in the Prepayment Fund will be credited in the same manner as Available Tax Increment. 4.06. Additional Obligations. While the Note is outstanding, the Authority shall not pledge or permit the pledge of all or any portion of the Available Tax Increment to the payment of principal of or interest on any obligations of the Authority or City other than the Note except (i) the subordinate pledge of Available Tax Increment to the Series 2001 B Note, and (ii) any pledge approved in writing by the Holder (as defined in the Note). 4.07. Covenants Reoarding TIF District and Agreement. The Authority covenants for the benefit of the Holder that while the Note is outstanding: (a) it will not take any action to remove all or any portion of the property described in Schedule A attached to the Note from the TIF District or alter or impair the collection of Available Tax Increment including without limitation any modification of the TIF District in such a manner that would materially affect the amount or timing of receipt by the Authority of Available Tax Increment, and (b) it will enforce the Agreement to the extent consistent with the covenants in Section 6 hereof, except to the extent of any Redeveloper obligations that have no material bearing on the collection of Available Tax Increment. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Tax Covenant. 6.01. The Authority covenants and agrees with the holders from time to time of the Note that it will not take or permit to be taken by any of its officers, employees or agents I any action which would cause the interest on the Note to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Note. 6.02. The Authority will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Note under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Note, and the rebate of excess investment earnings to the United States. 6.03. The Authority further covenants not to use the proceeds of the Note or to cause or permit them or any of them to be used, or cause the Note to be paid or secured, in such a manner as to cause the Note to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. In order to qualify the Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Note is not a "private activity bond" as defined in Section 141 of the Code; I (b) the Authority hereby designates the Note as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are not qualified 501 (c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the Authority) during calendar year 2001 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2001 have been designated for purposes of Section 265(b )(3) of the Code. 6.05. The Authority will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Continuing Disclosure. The continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities I I I I Exchange Act of 1934 (the "Rule") ,do not apply to the Notes, because the offering is exempt from such requirements under Section 15c2-12(d)(1)(i). Consequently, the Issuer will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Note. Section 8. Effective Date. This resolution shall take effect and be in force from and after its approval. Adopted by the Housing and Richfield this 21 st day of May, 2001. thority in and for the City of Thomas E. Harms, Chair