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HomeMy WebLinkAboutCity Council Resolution 1984-821RESOLUTION NO. 84- 821 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, TO PROVIDE FUNDS FOR INDUSTRIAL DEVELOPMENT PROJECT FOR BANNER ENGINEERING CORP. BE IT RESOLVED by the City Council of the City of. Plymouth, Minnesota (the "City"), as follows: 1. Authority. The City is, by the Constitution and Laws of the State o Minnesota, including Chapter 474, Minnesota Statutes, as amended (the "Act"), authorized to issue and sell its revenue bonds for the purpose of financing the cost of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of Project; Documents Presented. The Borrower described below has proposed to the City that the City issue and sell its City of Plymouth Industrial Development Revenue Bonds (Banner Engineering Corp. Project) Series 1984, in substantially the form set forth in the hereinafter -mentioned Trust Indenture (the "Bonds") pursuant to the Act and lend the proceeds thereof to Banner Engineering Corp., a Minnesota corpo- ration (the "Borrower"), to finance the costs of the acquisition, construction and equipping of an approximately 30,000 square foot addition to and expansion of the Borrower's existing manufacturing facility at 9714 -10th Avenue North in the City, for use as a manufacturing facility, and to provide for such site improvements as may be necessary (the "Project"), to be owned and operated by the Borrower. Forms of the following documents relating to the Bonds and the Project have been submitted to the City Council and are now on file in the office of the City Clerk: (a) Loan Agreement (the "Loan Agreement") dated as of November 1, 1984, between the City and the Borrower whereby the City agrees to make a loan to the Borrower and the Borrower agrees to complete the Project and to pay amounts sufficient to provide for the full and prompt payment of the principal of, premium, if any, and interest on the Bonds; (b) Trust Indenture (the "Trust Indenture") dated as of November 1, 1984, between the City and Norwest Bank Minneapolis, National Association, as Trustee, pledging the revenues to be derived from the Loan Agreement as security for the Bonds, and setting forth proposed recitals, cove- nants and agreements relating thereto; (c) Standby Letter of Credit and Reimbursement Agree- ment (the "Reimbursement Agreement"), dated as of Novem- ber 1, 1984, between the Borrower and Norwest Bank Minneapolis, National Association (the "Bank") whereby the Borrower agrees to reimburse the Bank for amount .drawn under the hereinafter mentioned Letter of Credit and makes certain covenants (this document not to be executed by the City); (d) Irrevocable Standby Letter of Credit (the "Letter of Credit"), dated November 1, 1984, from the Bank to the Trustee, providing for payment by the Bank to the Trustee of the sum needed for payment of principal of, premium, in the event of a Determination of Taxability (as defined in the Trust Indenture), and up to two hundred eighty-five days' interest on the Bonds (this document not to be executed by the City); (e) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage"), dated as of November 1, 1984, from the Borrower to the Trustee, by which the Borrower grants to the Trustee a third mortgage lien on and security interest in the Mortgaged Property, as defined therein, as further security for the payment of the Bonds and the performance of the Borrower's obligations under the Loan Agreement (this document not to be executed by the City); (f) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Bank Mortgage"), dated as of November 1, 1984, from the Borrower to the Bank, by which the Borrower grants to the Bank a fourth mortgage lien on and security interest on the Project and Project Facilities as security for the performance of the Borrower's obliga- tions under the Reimbursement Agreement (this document not to be executed by the City); (g) Assignment of Rents and Leases (the "Assignment"), dated as of November 1, 1984, from the Borrower to the Trustee, by which the Borrower grants to the Trustee an assignment of rents and leases of the Project Facil'.ties (this document not to be executed by the City); (h) Assignment of Rents and Leases (the "Bank Assign- ment"), dated as of November 1, 1984, from the Borrower to the Bank, by which the Borrower grants to the Bank an assignment of rents and leases of the Project Facilities (the document not to be executed by the City); (i) Bond Purchase Agreement (the "Bond Purchase Agreement") to be dated November 20, 1984, among Piper, Jaffray & Hopwood, Incorporated (the "Underwriter"), the Borrower and the City, providing for the purchase of the - 2 - Bonds by the Underwriter and setting the terms and conditions of purchase; and i - (j) Preliminary Official Statement, dated October 29, 1984, describing the offer of the Bonds, certain terms and provisions of the foregoing documents, and certain information concerning the Bank and the Borrower as deemed material by the Underwriter, the Bank and the Borrower, which Preliminary Official Statement, when revised and completed to the satisfaction of the Underwriter, the Borrower and the Bank, will be published as the Official Statement for the offer of the Bonds (together, the Preliminary Official Statement and Official Statement are herein referred to as the "Official Statement"). 3. Findings. It is hereby found, determined and declared that: (a) The Project, as described in paragraph 2 above and in the Loan Agreement, constitutes a project authorized by and described in Section 474.02, Subdivision 1, of the Act. (b) The purpose of the Project is and the effect thereof will be to promote the public welfare by: preventing the emergence of blighted and marginal lands and areas of chronic unemployment; preventing economic deterioration; the development of sound industry and commerce to use the available resources of community, in order to retain the benefit of the community's existing investment in educational and public service facilities; halting the movement of talented, educated personnel to other areas and thus pre- serving the economic and human resources needed as a base for providing governmental services and facilities; and increasing the tax base of the City and the county and school district in which the Project is located. Based on the representations of the Borrower, it is hereby found and determined that the Project, as proposed, would not be undertaken but for the availability of industrial develop- ment bond financing. (c) At the request of the Borrower, the City Council, on September 17, 1984, after due publication of notice of public hearing in the official newspaper and newspaper of general circulation_ in the City at least 15 days but not more than 30 days prior thereto, held a public hearing with respect to the Project and the issuance of bonds therefor and duly adopted a resolution giving preliminary approval to the Project and issuance of bonds therefor pursuant to the Act. - 3 - (d) The Minnesota Energy and Economic Development Authority approved the Project on October 31, 198A, as tending to further the purposes and policies of the Act. (e) It is desirable that the Bonds be issued by the City upon the terms set forth in the Trust Indenture, under the provisions of which the City's interest in the Loan Agreement will be pledged to the Trustee as security for the payment of principal of, premium, if any, and interest on the Bonds. (f) The Loan Agreement provides for payments by the Borrower to the Trustee for the account of the City of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The Loan Agreement obligates the Borrower to provide for the payment of operation and maintenance expenses, including adequate insurance, taxes and special assessments. (g) Under the provisions of Section 474.10, Minnesota Statutes, and as provided in the Loan Agreement and Trust Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement, the Letter of Credit and moneys in the funds and accounts held by the Trustee which are pledged to the payment thereof; the City is not subject to any liability thereon; no holders of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City and each Bond issued under the Trust Indenture shall recite that the Bond, includ.:ng interest thereon, shall not constitute nor give rise to a charge against the general credit or taxing powers of the City and does not grant to the owner or holder of any Bond the right to have the City levy taxes or appropriate any funds for the payment of principal thereof or the interest or premium, if any, thereon, and that the Bond is not a general obligation of the City or individual officers or agents thereof. 4. Approval and Execution of Documents. The forms of Loan Agreement, Trust Indenture, Reimbursement Agreement, Letter of Credit, Mortgage, Bank Mortgage, Assignment, Bank Assignment and Bond Purchase Agreement referred to in paragraph 2 are approved. The Loan Agreement and Trust Indenture shall be executed in the name and on behalf of the City by the Mayor and the City Manager or other appropriate City officials authorized to execute documents on their behalf, in substantially the form on file, but with all such changes therein, not inconsistent with - 4 - • the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof, and then shall be delivered to the Trustee. The Bond Purchase Agreement shall be signed by one or more officers of the City, as provided therein. Copies of all docu- ments shall be delivered and filed as provided therein. 5. Approval, Execution and Delivery of Bonds. The City shall proceed forthwith to issue the Bonds, to be dated November 1, 1984, in the aggregate principal amount of $2,500,000, in the form and upon the terms set forth in the Trust Indenture, which terms are for this purpose incorporated in this resolution and made a part hereof. The Underwriter has agreed pursuant to the Bond Purchase Agreement to purchase the Bonds at a purchase price of $2,426,875 plus accrued interest to the date of delivery, and said purchase price is hereby found to be favorable and is hereby accepted. The Mayor and City Manager of the City are authorized and directed to prepare and execute the Bonds as prescribed in the Trust Indenture and to deliver them to the Trustee, together with a certifieC copy of this Resolution and the other documents required by Section 2.08 of the Trust Indenture, for authentication and delivery to the purchaser. As provided in the Trust Indenture, each Bond shall contain a recital that it is issued pursuant to the Act, and such recital • shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Official Statement. The City hereby consents to the use by the Un erwriter of t e Official Statement in offering the Bonds for sale; provided, however, that the City has not reviewed the Official Statement and takes no responsibility for, and makes no representations or warranties as to, the accuracy or completeness of any information contained therein. 7. $10 Million Election. The City hereby elects that the $10 million election with respect to the Bonds and certain capital ej:�penditures for the Project, as provided under Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, shall apply to the Bonds and the Project. 8. Certificates, etc. The Mayor, City Manager, City Clerk and other officere of the City are authorized and directed to prepare and furnish to bond counsel and the purchaser of the Bonds, when issued, certified copies of all proceedings and records of the City relating to the Bonds, and Such other affida- vits 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 City as to the truth of all statements contained therein. 2&= • 9. Authorization. The City Clerk is authorized and directed to deliver as cert fed copy of this Bond Resdlution to -he County Auditor, together with such other information as such runty Auditor may require, and obtain the certificate of the .junty Auditor as to entry of the Bonds on his bond register as required by the Act and Section 475.63, Minnesota Statutes. Adopted: November 19th , 1984. Attest City Clerk Approved Mayor - 6 -