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80-6339R94 RESOLUTION N0. 633'9 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF INDUSTRIAL DEVELOPPQEIQT'REVENUE BONDS UNDER THE MINNESOTA MUNICIPAI, INDUSTRIAL DEVELOPMENT ACT TO FINANCE A PROJECT THEREUNDER SECURED BY A SECURITY INTEREST IN CERTAIN REVENUES AND PAYMENTS UNDER A LOAN .AGREEMENT AND BY A MORTGAGE OF THE PROJECT, AND AUTHORIZING THE EXECUTION OF DOCUMENTS BE LT RESOLVED By the City Council of the City of Richfield, Minnesota (the City), as follows: Section 1. Authorization and Recitals.- 1.01. General Authority. 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 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 Miller & Schroeder Municipals, Inc.-(the Underwriter), and The S & M Company, a Minnesota corporation (the Company), have proposed- that the City, acting under and pursuant to the Act, issue and sell to the Underwriter its $1,500,000 Industrial Development Revenue Bonds (The S & M Company Project - Lyndale Hardware, Co., Lessee), Series 1980 (the Bonds), for the purpose of defraying the costs of a project under the Act consisting of the acquisition of certain land within the City and the acquisition, enlarging, remodeling and equipping of an existing building thereon (the Project) to be leased to Lyndale Hardware Co., its wholly owned subsidiary. Pursuant to the proposal the proceeds of the Bonds will be loaned by the City to the Company and the Company agrees to make payments sufficient to pay the principal of, premium if any, and. interest on the Bonds. As securit;~.for the payment of the principal of, premium, if any, and int;~rest on the Bonds the City will grant a security interest in certain revenues and payments to be received by the City under the Loan Agreement (as hereinafter defined) to a Trustee (as hereinafter defined), and the Company will grant a mortgage on and security interest in the Project to the Trustee pursuant to a Combination Mortgage and Security Agreement (as hereinafter defined). 1.03. Prior Approval... This Council by Resolution No. 6281 adopted August 25, 1980', gave preliminary approval to the Project and the issuance of revenue bonds under the Act to finance the Project, .following a public hearing duly noticed and held by this Cou~cil on July. 28, 1980. .Such prior approval is hereby ratified, confirmed and affirmed. as the date hereof on behalf of!~the Company. 1.04. Project Cost. A~'~11 costs of the Project in excess of the proceeds of th,e Bonds available therefor are required to be paid by the Company. 1.05. Documentation. ';Forms of the following documents relating to the Project havebeen prepared and submitted to. this Council and are hereby~idirected to be filed with the. ..City Clerk: ~ (a) a Loan Agreement. (the Loan Agreement), to be - dated as of November l,' 1980, proposed to be made and entered into by and among the City and the Company; (b) an Indenture~of Trust (the Indenture)..., to be dated as of November l,'I 1980, proposed to be made and entered into between tYie City and the National City Bank of Minneapolis, a,national banking association, as trustee (the Trustee);!i (c) a Combination,. Mortgage and Security Agreement (the Mortgage), to be dated as of November 1, 198-0, proposed to be made and entered into between the. Company and the Trustee;. ', (d) a Bond Purchase Agreement (the Bond Purchase Agreement), proposed tq be made and entered into among the Underwriter, the City and. the Company; and (e) a Preliminary Official Statement, dated November 25, 1980 and an Official Statement {collectively, the Official Statement} to be used in connection with the sale of the Bonds. Section 2. Findings. It is hereby found, determined and declared that.: (a) the Project,'', as defined herein and in the Loan Agreement, constitutes a project authorized by Section 474.02, Subdiviision la of the Act; (b) the purpose bf the Project is and the effect thereof will be to promote the public welfare by encouraging and retaining the location, retention and development of economically sourid industry and-.commerce. within the City 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; by discouraging the movement. of talented, educated personnel to mature age to other areas, 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 is to be located in the City, at a site which is readily accessible to employees residing within the. City and the surrounding community; (d} the Project when completed will add to the tax base of the City and overlapping taxing jurisdictions; (e) the Project will assist the City in attaining its development goals for the Lyndale-Hub-Nicollet Redevelopment Project; ~ (f) the Project has been approved by the Commissioner of Securities of the State of Minnesota, as tending to further the purposes and policies of the Act; (g) the financing of the Project, the issuance and sale of the. Bonds in the principal amount of $1,500,00.0, the execution and delivery of the Loan Agreement,~the Indenture and the Bond Purchase Agreement and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Indenture and the Bond Purchase Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota and the Charter of the City to make the Loan. Agreement, the Indenture and the Bond Purchase Agreement and the Bonds valid and binding obligations in accordance with their terms, are authorized by the Act; (h) it is desirable that a series of Industrial Development Revenue Bonds in the amount of $1,500,000 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; (i) the loan paymE Agreement are fixed, any time to time as.necessa~ revenue sufficient to p3 of and interest on all ~ when due; and. the Loan ~ .Company is required'to ~ maintenance of the ProjE limitation, adequate in: against all liability fc arising from the operat: special. assessments 1ev_ Project site and payablE (j ) under the pro' and as provided in the Bonds are not to be pay. of the City other thane the payment thereof; the thereon and no holders right to compel any exe. City to pay any of the enforce payment thereof except the revenues and pledged to the payment City ever acquire title stitute a charge, lien upcn any property of th payments under the Loan thereof and the Project to it; each Bond issued that the Bonds, includi solely from the revenue thereof; and no Bond sh within the meaning of a. statutory limitation; p contained in this parag the holders of the Bond made for. the security o .premium, if any, and in nts contained in the Loan are required to be revised from y, so us to produce income and oxide for prompt payment of ;principal onds issued under the Indenture greement also provides that the ay all expenses of the operation and ct, including, but without urance thereon and insurance- r injury to persons or property orn thereof, and all taxes and ed upon or with respect to the during the term of the Loan Agreement; isions of Section 474.10 of the Act oan Agreement and-Indenture, the ble from nor charged upon any funds he revenues and payments pledged to City is not subject to any liability f the Bonds shall ever have the cise of the taxing powers of the_ onds or the interest thereon nor to against any property of the City, payments under. the Laan Agreement hereof and the Project should the to it; the. Bonds shall not con- r encumbrance, legal or equitable, City, except the. revenues and . Agreement pledged to the payment should the City ever acquire title under the Indenture shall recite g interest thereon, are payable and payments pledged to the payment 11 constitute a debt of the City y constitutional, charter or ovided, however, that nothing aph (i) shall impair the rights of or the Trustee to enforce covenants the payment of principal of, Brest on the Bonds. Section 3. Authorization and A__pproval of the Project, Loan_ Agreement and Indenture.. j The City is authorized to provide for the acquisition, 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 Mortgage, the Bond Purchase Agreement, and the 'Indenture referred to in Section 1.05 are approved subject to such modifications as are deemed appropriate and approved by the City Attorney and the Mayor pursuant to Section 5..03 hereof, which approval shall be conclusively evidenced by execution of the Loan Agreement, the Indenture, the Bond Purchase Agreement and the Bonds by the Mayor and City Manager. The Mayor and City Manager are directed to execute the Loan Agreement upon execution thereof by the Company; the Indenture upon execution thereof by the Trustee; and the Bond Purchase Agreement.. upon execution thereof by the Underwriter, the Company.. Copies of all of the documents shall be delivered, filed and recorded as provided therein. The Mayor and City Manager are also authorized and directed to execute such other instruments as may be required to give effect to the transactions. herein contemplated.. Section 4. Official Statement. The City hereby consents to the distribution of the Official Statement by the Underwriter to prospective purchasers of the Bonds and hereby ratifies the distribution thereof prior to the date hereof.. The City has not participated in the preparation of the Official Statement and has made no independent investigation with respect to the information contained therein or in any appendix thereto, and the City assumes no responsibility for the sufficiency, accuracy or completeness of such information. Section 5.. The. Bonds; Terms, :;ale and Execution. 5.01. Authorization. In anticipation of the collection of revenues of the Project, the City shall proceed forthwith to issue the Bonds, dated November 1,1980, in the form and upon the terms set forth in the Indenture and this resolution. .The Bonds are hereby sold to the Underwriter at the prices and upon the terms specified in the Bond Purchase Agreement. The Bonds shall bear interest at the coupon rates set by the Underwriter and as set forth in the Official Statement, provided however that the net effective interest rate on the Bonds may not exceed 12.750 per annum.. 5.02. Execution. The Mayor and City .Manager are hereby authorized and directed to execute the Bonds as prescribed herein and in the Indenture and to deliver them to the Trustee, together with a certified copy of this resolution, the other documents required in the Ind.entu.re, and such other certificates, documents and instruments as may be appropriate to effect the transaction herein contemplated. The Trustee is hereby appointed authenticating agent pursuant to Minnesota Statutes, Section 475.55, Subdivision. 1. ..~ 5.03. Modifications, Ab~c~nce of Officers. The approval hereby given to the various documents referred to above includes an approval'of such modifications thereto, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney and the I~tayor prior to the. execution of the documents. The execution of any .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 by.such officer of the City. who, in the opinion of the City Attorney,-may. execute. such documents. Section 6. .Authentication of Proceedings. The Mayor, City Manager and .City. Clerk and other officers of the City are authorized and directed to furnish to the Underwriter and bond counsel-certified copies ofallproceedings 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 office_r.'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. Section 7. Statement of'E].ection. The principal. amount of the-Bonds being in excess of $1,000,000, the City Maaager as 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 provided by Section 103(b)(6)(D) of the Internal... Revenue Code of 1954, as amended,'.and Section 1.10.3(b)(2)(v.i) of the Regulations promulgated thereunder. Passed by the City Council of'the City of Richfield this 24th day of November., 1980. ~ ~ ._ ', onald J. Prieb Mayor ATTEST: ff ~L Syly' K. Bergh, Acting C.it leek