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HomeMy WebLinkAboutCity Council Resolution 1998-719City of Plymouth, Minnesota RESOLUTION NO. 98-719 RESOLUTION APPROVING FIRST AMENDMENT TO DEVELOPMENT AGREEMENT AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $500,000 TAXABLE LIMITED REVENUE TAX INCREMENT NOTES (TAX INCREMENT FINANCING DISTRICT NO. 7-4, PLYMOUTH TECHNOLOGY PARK) BE IT RESOLVED BY THE CITY COUNCIL (THE "COUNCIL") OF THE CITY OF PLYMOUTH, MINNESOTA (THE "CITY") AS FOLLOWS: Section 1. Authorization; Award of Sale. 1.01. The TIF District. The City has heretofore established Tax Increment Financing District No. 7-4 (the "TIF District'), a redevelopment district, in order to assist the Developer (as hereinafter defined) with grading and demolition costs (the "Tax Increment Assisted Costs") associated with the constriction of new commercial and light industrial facilities in the City (the "Improvements"), all pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "Tax Increment Act'), and has adopted a tax increment financing plan for said District (the "TIF Plan"). To finance the Tax Increment Assisted Costs with respect to the Improvements, the City has entered into, or will enter into prior to the issuance of the Notes (as hereinafter defined), a Development Agreement, dated as of August 1, 1995, as amended by a First Amendment to Development Agreement, dated as of December 2, 1998 (collectively, the "Development Agreement'), under which the City has pledged certain tax increment from the TIF District to reimburse Plymouth Partners II, a Minnesota general partnership (the "Developer"), for payment of the Tax Increment Assisted Costs. 1.02. Authorization. Pursuant to the Tax Increment Act, the City is authorized to issue and sell its notes for the purpose of financing the Tax Increment Assisted Costs. Such notes are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the notes. The City hereby finds and determines that it is in the best interests of the City that it issue and sell its $500,000 principal amount of Taxable Limited Revenue Tax Increment Notes (the "Notes") for the purpose of financing the City's obligations under the Development Agreement. 1.04. Issuance, Sale and Terms of Notes. The City hereby authorizes issuance of the Notes in accordance with terms set forth in this resolution at a price of par. The Notes shall be dated, shall bear interest and shall mature, shall be subject to prepayment and shall have such other terms and conditions as are set forth in the form of Note provided in Section 2.01 hereof. Resolution 98-719 Page 2 Section 2. Form of Notes. The Notes to be issued pursuant to this Resolution shall be in substantially the following form, with blanks to be filled in and the payment schedule adjusted as of the date of issue: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF PLYMOUTH TAXABLE LIMITED REVENUE TAX INCREMENT NOTE Interest Rate: 6.50% Date of Original Issue: December 1998 Principal Amount: Registered Owner The City of Plymouth, Minnesota (the "City"), for value received, certifies that it is indebted and hereby promises to pay to the registered owner specified above or registered assigns (the "Owner"), but solely from the sources hereinafter identified, the principal amount specified above together with interest on the outstanding principal sum from time to time at the interest rate specified above, payable on each January 1 and July 1 (each a "Scheduled Payment Date"), commencing July 1, 1999 and continuing through July 1, 2001, in the amounts set forth in Attachment A hereto. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the City. Payments on this Note are payable in any coin or currency of the United Sates of America which, on each Scheduled Payment Date, is legal tender for the payment of public and private debts. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue specified above. Interest shall be computed on the basis of a year of 365 days and charged for actual days principal is unpaid. Notwithstanding the foregoing, no amounts shall be due and payable hereunder after July 1, 2001 and in the event that the entire principal amount of this Note and interest accrued hereon has not been paid from Available Tax Increment (as herein defined), then the payment of such amounts is forgiven and the City shall thereafter have no fiurther obligation to make any payments on this Note. Further, the City shall have no obligation to make any payment if an Event of Default as defined in the Development Agreement by and between the City and Plymouth Partners II, a Minnesota general partnership (the "Developer"), dated as of August 1, 1995, as amended by a First Amendment to Development Agreement, dated as of December 2, 1998 (collectively, the "Development Agreement") has occurred and is continuing under the Development Agreement. Reference is made to the Development Agreement for a fill description of the respective rights and obligations of the City and the Developer thereunder. Resolution 98-719 Page 3 This Note is a special and limited and not a general obligation of the City, which has been issued by the City pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, and a resolution duly adopted by the City Council on December 2, 1998 (the "Resolution"), to provide fiends to pay certain Tax Increment Assisted Costs (as defined in the Development Agreement) incurred by the Developer within and for the benefit of the City's Tax Increment Financing District No. 7-4 (the "TIF District"). THIS NOTE IS NOT A DEBT OF THE STATE OF MINNESOTA (THE "STATE") OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE CITY OF PLYMOUTH, MINNESOTA, EXCEPT THAT THE CITY SHALL BE OBLIGATED TO MAKE PAYMENTS FROM AVAILABLE TAX INCREMENT, AS DEFINED BELOW, AND NEITHER THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE CITY, SHALL BE LIABLE ON THIS NOTE, EXCEPT FOR THE CITY'S OBLIGATION TO MAKE PAYMENTS FROM AVAILABLE TAX INCREMENT, AS DEFINED BELOW, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The payment of principal of and interest on this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the City shall have received, as of such Scheduled Payment Date, Available Tax Increment with respect to the property located within the TIF District. "Available Tax Increment" means 95% of the tax increment payments received by the City from the Hennepin County Auditor with respect to the TIF District since the last Scheduled Payment Date (or, in the case of the first Scheduled Payment Date, since the date of issuance of this Note). In the event an Event of Default has occurred and is continuing under the Development Agreement, the City may suspend payment on this Note. To the extent that on any Scheduled Payment Date the City is unable to make the total payment of principal and interest due on such date as a result of its having received, as of such date, insufficient Available Tax Increment, such failure shall not constitute a default by the City under this Note or the Development Agreement and the amount available shall be applied first to interest due under this Note with any remainder being applied to the reduction of principal and any principal amount remaining unpaid shall continue to accrue interest at the stated rate of this Note until fiilly paid or until the termination of the City's obligation to make payments pursuant to this Note. This Note shall not be payable from or constitute a charge upon any fiends of the City, and the City shall not be subject to any liability hereon or be deemed to have obligated itself to pay this Note from any fiends except Available Tax Increment, and then only to the extent and in the manner herein and in the Development Agreement specified. The City shall have the right to prepay this Note in fill or in part at any time without any prepayment penalty. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the City or of any other public body, or the appropriation of general fiends of the City or any other public body, to pay the principal of and interest on this Note and neither the City nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration thereof or otherwise. Resolution 98-719 Page 4 This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the City kept for that purpose at the principal office of the Finance Officer, 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 City, 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 City 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. This Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the City has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the City, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. 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 have happened, and to be performed precedent to and in the issuance of this Note in order to make this Note a valid and binding limited obligation of the City according to its terms have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional or statutory or charter limitation thereon. This Note shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been manually signed by the Registrar. IN WITNESS WHEREOF, the City of Plymouth, Minnesota, by action of its City Council, has caused this Note to be executed by the manual signatures of its Mayor and City Manager, and has caused this Note to be dated , 199. Date of Authentication: THE CITY OF PLYMOUTH, MINNESOTA By Its Mayor By Its City Manager Note Registrar's Authentication Certificate This is one of the Notes described in the within mentioned Resolution. City Finance Director, as Note Registrar Resolution 98-719 Page 5 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Note and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Note on the books kept for registration of the within Note, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. The Note Registrar will not effect transfer of this Note unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Note is held by joint account.) Please insert social security or other identifying number of assignee: Resolution 98-719 Page 6 ATTACHMENT A Payments and Payment Dates Payment Date Principal Interest Total Payment July 1, 1999 $69,500 $17,452.05 $86,952.05 January 1, 2000 731000 14,106.25 87,106.25 July 1, 2000 110,500 11,586.92 122,086.92 January 1, 2001 114,000 8,093.48 122,093.48 July 1, 2001 133,000 4,286.97 137,286.97 Resolution 98-719 Page 7 Section 3. Terms, Execution and Delivery. 3.01. Registered Form. The Notes shall be issuable only in frilly registered form. Principal of and interest on the Notes shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates, Interest Payment Dates. The Notes shall be authenticated as of the last interest payment date preceding the date of authentication to which interest on the Notes has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case such Notes shall be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date on such Note, in which case such Note shall be dated as of the date of delivery. The interest on the Note shall be payable to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 3.03. Registration. The City hereby appoints the Finance Director of the City of Plymouth to perform the functions of registrar, transfer agent, paying agent and authenticating agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Re ig ster. The Registrar shall keep at its office a register in which the Registrar shall provide for the registration of ownership of the Notes and the registration of transfers and exchanges of the Note. The Registrar shall maintain a record of the outstanding principal amount of the Notes as it exists from time to time. (b) Transfer of Note. Upon surrender for transfer of any 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. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such payment date. (c) Cancellation. The Notes surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (d) Improper or Unauthorized Transfer. When the Notes are 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. Resolution 98-719 Page 8 (e) Persons Deemed Owners. The City and the Registrar may treat the person in whose name the Notes are 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 City 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 Notes, 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. (g) Mutilated, Lost, Stolen or Destroyed Notes. 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 fiirnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the City 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 City. 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 Notes shall be prepared under the direction of the City Manager of the City and shall be executed on behalf of the City by the signatures of the Mayor and City Manager, provided that said signatures may be printed, engraved, or lithographed facsimiles thereof. The seal of the City shall be omitted from the Notes as permitted by law. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Notes shall cease to be such officer before the delivery of the Notes, 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 Notes 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 Notes has been duly executed by the manual signature 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 Notes have been so executed and authenticated, they shall be delivered by the Finance 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. Resolution 98-719 Page 9 3.05. Certificates. Unless litigation shall have been commenced and be pending questioning the Notes, revenues pledged for payment of the Notes, or the organization of the City or incumbency of its officers, at the closing, the Mayor and City Manager shall execute and deliver to the registered owner a suitable certificate as to the absence of material litigation, and a certificate as to payment for and delivery of the Notes. 3.06. Private Placement Memorandum. The Private Placement Memorandum relating to the Notes on file with the City Clerk is hereby approved, and the furnishing thereof to prospective buyers of the Notes is hereby ratified and approved; provided that City has not participated in the preparation of the Private Placement Memorandum and assumes no responsibility for the accuracy or completeness thereof or the sufficiency thereof for the purposes of the purchaser or purchasers of the Notes. Section 4. Security Provisions. 4.01. Pledge. The City hereby pledges to the payment of the principal of and interest on the Notes all Available Tax Increment. The term "Available Tax Increment" means, as of each Scheduled Payment Date (as defined in the Note), ninety five percent (95%) of the tax increment (as defined in the Tax Increment Act) generated from the TIF District and received by the City since the last Scheduled Payment Date. The City covenants that it will not take any action to remove all or any portion of the existing property 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 City of Available Tax Increment. Notwithstanding anything to the contrary herein or in the Notes, any tax increment that is attributable to the TIF District during the six-month period before a relevant Scheduled Payment Date but is actually received by the City after the relevant Scheduled Payment Date, shall be Available Tax Increment. Tax increments attributable to the TIF District during any period other than the periods described in this paragraph and in the Notes shall not be deemed Available Tax Increment and are not pledged to the Notes. 4.02. Project Fund. (a) General Provisions. Pursuant to Minnesota Statutes, Section 469.177, subd. 5, the City has heretofore created a special fiend for segregating the tax increment received with respect to the TIF District, said fiend being referred to herein as the "TIF District Project Fund." Said TIF District Project Fund shall continue to be held and administered by the City separate and apart from all other fiends of the City until all obligations of the City pursuant to the Development Agreement and the Notes have been discharged. (b) Note Proceeds. The City appropriates to the TIF Distict Project Fund the Resolution 98-719 Page 10 proceeds of the sale of the Notes in the amount of $500,000, and shall promptly, upon receipt thereof, pay over said proceeds to the Developer as reimbursement for a similar amount of the Tax Increment Assisted Costs. (c) Existing Balance. As provided in the Development Agreement, the City presently has on hand in the TIF District Project Fund a balance not less than $134,500 which shall be set aside in an escrow account within the TIF District Project Fund and paid over to the Developer upon the conditions set forth in Section 4.3 of the First Amendment to Development Agreement. (d) Deposit of Tax Increments. All tax increment revenues received by the City with respect to the TIF District shall be deposited as received into the TIF District Project Fund. Transfers shall be made from time to time to the Debt Service Account for the Notes as provided in Section 4.03 below. (e) Investment Earnings and Disposition of Remaining Funds. All income received from investment of amounts on deposit in the Project Fund shall be retained in and credited to the Project Fund. Upon payment of all obligations of the City pursuant to the Development Agreement and the Notes, or upon termination of the City's obligation to disburse any further amounts pursuant to the Development Agreement and the Notes, any fiend balance remaining in the TIF District Project Fund shall be paid over as required by the Tax Increment Act and the TIF Plan. 4.03. Debt Service Fund. So long as the Notes are outstanding and any principal thereof or interest thereon remain unpaid, the City shall maintain a separate Taxable Limited Revenue Tax Increment Notes Debt Service Account (the "Debt Service Account") within the TIF District Project Fund to be used for no purpose other than the payment of the principal of and interest on the Notes. The Debt Service Account, including all fiinds deposited therein pursuant to this Resolution, is hereby pledged to the payment of principal of and interest on the Notes. All income received from the investment of amounts on deposit in the Debt Service Account shall be retained in and credited to such account. Promptly upon the receipt by the City of an installment of tax increments for the TIF District from Hennepin County, the Finance Director shall deposit ninety five percent (95%) of said amount into the Debt Service Account. The Finance Director shall also deposit into the Debt Service Account any amounts received from the Developer for deposit into the Debt Service Account and any other fiinds appropriated to payment of principal of and interest on the Notes. 4.04. Additional Obligations. While the Notes are outstanding, the City shall not pledge or permit the pledge of all or any portion of the fiinds on deposit in the Debt Service Account to the payment of principal of or interest on any obligations of the City other than the Notes or any obligations issued to refiind the Notes, unless and to the extent such pledge is subordinate to the pledge to the Notes. Resolution 98-719 Page 11 4.05. First Amendment to Development Agreement Approved. The City approves the First Amendment to Development Agreement (the "Amendment') in the form substantially on file with the City, subject to modifications approved by the Mayor and City Manager, whose execution of said document shall be conclusive evidence of their approval. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the City are hereby authorized and directed to prepare and furnish to the purchaser of the Notes certified copies of all proceedings and records of the City, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Notes 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 City as to the facts recited therein. 5.02. Effective Date. This resolution shall take effect and be in force from and after its approval. Section 6. Continuing Disclosure. The continuing disclosure requirements of Rule 15c212 promulgated by the Securities and Exchange Commission under the Securities 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 City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Notes. Adopted by the Plymouth City Council on December 2, 1998.