Loading...
HomeMy WebLinkAboutCity Council Resolution 1979-680Member Spaeth introduced the following resolution and moved its adoption: RESOLUTION NO. 79-680 RESOLUTION AUTHORIZING THE SALE AND ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS UNDER. THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPME14T ACT TO FINANCE A PROJECT THEREUNDER, SECURED BY PAYMENTS TO BE RECEIVED PURSUANT TO A LOAN AGREEMENT AND A PLEDGE AND ASSIGCPwENT OF THE MUNICIPALITY'S INTEREST IN THE LOAN AGREEMENT AND PAYMENTS THEREUNDER TO A TRUSTEE, AND AUTHORIZING THE EXECUTION OF DOCUMENTS BE IT RESOLVED by the City Council of the City of Plymouth, Minnesota (the Municipality), as follows: Section 1. Authorization and Recitals. 1.01 General Authority. The Municipality 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 Juran s Moody, Inc. (the Underwriter), and Versatile Parts Inc. (the Company), a North Dakota corporation, have proposed that the Municipality acting under and pursuant to the Act, issue and sell to the Underwriter, its $675,000 Industrial Development Revenue Bonds (Versatile Parts, Inc. Project) Series 1979 (the Bonds) for the purpose of defraying the costs of constructing and equipping a warehouse and office building (the Project). Pursuant to the proposal the proceeds of the Bonds will be loaned by the Municipality to the Company and the Company agrees to make payments sufficient to pay the principal of and interest on the Bonds and will secure payment pursuant to a Mortgage Agreement (as hereinafter defined). Versatile Cornat Corporation (the Guarantor) will guarantee the full and prompt payment of the principal, premium, if any, and interest on the Bonds pursuant to a Guaranty Agreement (as hereinafter defined). The Municipality will assign its interest in the Loan Agreement (as hereinafter defined) to the Trustee (as hereinafter defined). 1.03 Prior Approval. On August 6, 1979, this Council adopted a resolution giving preliminary approval to the Project and authorizing preparation of necessary documents. 1.04 Project Cost. The Company and the Underwriter have advised this Council and this Council hereby finds that the estimated costs of the Project at the present time are approximately as follows: Construction costs $ 562,000 Racking and Bins 70,000 Legal, Underwriting and Miscellaneous 43,000 TOTAL COST $ 675,000 All costs of the Project in excess of the proceeds of the Bonds available therefor are required to be paid by the Company. 1.05 Documentation Forms of the following documents relating to the Project ,:ave been prepared and submitted to this Council and are hereby directed to be filed with the City Clerk. (a) a Loan Agreement (the Loan Agreement), to be dated as of October 1, 1979, proposed to be.-nade and entered into between the Municipality and the Company pursuant to which the Municipality loans the proceeds of the Bonds to the Company; (b) an Indenture of Trust (the Indenture), to be dated as of October 1, 1979, proposed to be made and entered into between the Munici;,Ai.ty and First Trust Company of Saint Paul, as trustee (the Trustee), creating and authorizing the issuance of and establishing the terms and conditions of the Bonds; (c) a Mortgage Agreement (the Mortgage), to be dated as of October 1, 1979, proposed to be executed by the Company as Mortgagor, and the Trustee, as Mortgagee, pursuant to which the Company secures payment of the Bonds; of the principal, premium, if any, and interest on the Bonds; (e) a Bond Purchase Agreement (the Bond Purcnase Agreement) proposed to be executed by the Company, the Guarantor, the Municipality and the Underwriter, pursuant to which the Underwriter agrees to purchase the Bonds; and (f) an Official Statement (the Official Statement) proposed to be used by the Underwriter in offering the Bonds for sale. 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, Subdivision la of the Act; (b) the purpose of the Project is and the effect thereof will be to promote the public welfare by encouraging retaining the location, retention and developemnt of economically sound industry and commerce within the Municipality 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 of 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 available in the Municipality 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 within the Municipality, at a site which is readily accessible to employees residing within the Municipality and the surrounding areas; (d) the Project when completed will add to the tax base of the Municipality and overlapping taxing jurisdictions; (f) the financing of the Project, the issuance and sale of the bonds in the principal amount of $675,000 and 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 Municipality 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 to make the Loan Agreement, the Indenture, the Bond Purchase Agreement and the bonds valid and binding obligations in accordance with their terms, are authorized by the Act; (g) it is desirable that a series of Industrial Development Revenue Bonds in the amount of $675,000 be issued by the Municipality upon the terms set forth in the Indenture, under the provision of which the Municipality's interest in the Loan Agreement and the payment thereunder will be pledged to the Trustee as security for the payment of the principal, premium, if any, and interest on the Bonds; (h) the loan payments contained in the Loan 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 and interest on all Bonds issued under the Indenture 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 with respect to the Project Site and payable during the term of the Loan Agreement and pursuant to the Mortgage the Company has mortgaged and granted a security interest in certain described facilities comprising the Project, as defined in the Mortgage; (i) under the provisions of Section 474.10 of the Act and as provided in the Loan Agreement and Indenture, the Bonds are not to be payable from nor charged upon any funds of the Municipality other than the revenue pledged to the payment thereof; the Municipality is not subject to any liability thereon and no holders of the Bonds shall every have the right to compel any exercise of the taxing powers of the Municipality to pay any of the Bonds or the interest thereon nor to enforce payment thereof against any property of the Municipality; -4 the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Municipality except its interest in the Loan Acreement; each Bond issued under the Indenture shall recite that the Bonds, includinc interest thereon, are pavable solely from the revenues pledged to the payment thereof; and no Bond shall constitute a debt of the Municipality within the meaning of any constitutional or statutory limitation. Section 3. Authorization and Approval of the Project, Loan Agreement, Indenture, Mortgage and Guaranty. The Municipality is hereby authorized to provide for the construction and equipping of the Project and pledge and assign the revenues therefrom and its interest in the Loan Agreement, all as provided in the Loan Agreement and the Indenture. The forms of Loan Agreement, Indenture, Mortgage, Guaranty and Bond Purchase Agreement 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, which approval shall be conclusively evidenced by execution of the Loan Agreement, the Bond Purchase Agreement, the Indenture 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 Bond Purchase Agreement upon execution thereof by the Company, the Guarantor and the Underwriter, and the Indenture upon execution thereof by the Trustee. Copies of all 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 transaction herein contemplated. Section 4. Official Statement. The Underwriter proposes to offer the Bonds for sale by means of an Official Statement (the Official Statement) dated October 1, 1979, which has been prepared and presented to this Council, has been reviewed and is hereby approved. The Council hereby consents to the use of the Official Statement by the Underwriter in the offer and sale of the Bonds, if necessary. Section 5. The Bonds; Terms, Sale and Execution. 5.01 Authorization and Sale. In anticipation of the collection of revenues of the Project, the Municipality shall proceed forthwith to issue its Bonds dated as of October 1, 1979, in the form and upon the terms set forth -5- in the Indenture and this resolution. It is hereby determined that the offer of the Underwriter to purchase the Bonds at a price of $675,000 plus accrued interest, and upon the further terms and conditions set forth in the Bond Purchase Agreement is reasonable and is hereby accepted. 5.02 Terms. The bonds shall be in the denomination of $5,000 each and shall be numbered consecutively from 1 to 135, inclusive. The Bonds shall mature, bear interest and be subject to redemption as provided in the Indenture and approved pursuant to 5.01 hereof. 5.03 Execution. The Mayor and City Manager are hereby aut orifi z 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 Indenture, and such other certificates, documents and instruments as may be appropriate to effect the transactions herein contemplated. Mayor Attest: City Clerk (SEAL) The motion for the adoption of the foregoing resolution was duly seconded by Member Hoyt;. upon vote being taken thereon, the following voted in favor thereof: aHunCouncilmembrsTavenortHotNeilsMaohe and Spaeth n tfo owing , voted against the same: None whereupon said resolution was declared duly passed and adopted. -6-