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80-2873 CITY OF HOPKINS Hennepin County, Minnesota RESOLUTION NO. 80-2873 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF REVENUE BOND PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, TO PROVIDE FUNDS TO BE LOANED JOHN B. STANDAL FOR INDUSTRIAL DEVELOPMENT PROJECT BE IT RESOLVED by the City Council of the City of Hopkins, Minnesota, as follows: 1 . Authority. The City is, by the Constitution and Laws of the State of 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 construc- tion of authorized projects, to issue and sell bonds to evidence temporary loans to be repaid from the proceeds of revenue bonds when issued and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act and to pledge revenues of the project and otherwise secure such bonds . 2 . Authorization of Bond and Series of Bonds . The City Council hereby determines that it is necessary and expedient to authorize, and the City Council does hereby authorize, the issuance of revenue bonds of the City in the aggregate principal amount of Seven Hundred Thousand Dollars ($700, 000) pursuant to the Act to provide money to be loaned to John B. Standal, an individual residing in Eden Prairie, Minnesota (the "Borrower" ) , to finance costs of acquiring, constructing and equipping a commercial building (the "Project Building" ) to be owned by the Borrower and leased to various tenants, together with necessary equipment (the "Project Equipment" ) to be located permanently in and become a part of the Project Building or the site thereof (the "Project Site" ) and necessary site improvements' (collectively the "Project" as more fully defined in the Loan Agreement herein- after mentioned) . In anticipation of the issuance of the revenue bonds authorized by this paragraph and in order to provide temporary financing for the Project, the City shall issue and sell its $700, 000 City of Hopkins Industrial Development Revenue Bond (Standal Project) (the "Bond" ) . 3 . Documents Presented. Forms of the following docu- • ments relating to the Bond and the Project have been submitted to and examined by the City Council and are now on file in the office of the City Clerk: (a) Loan and Purchase Agreement (the "Loan Agree- ment" ) , dated as of August 1, 1980, by and among the City, the Borrower and the First National Bank of Hopkins (the "Bank" ) whereby, among other things, the City agrees to sell and the Bank agrees to purchase the Bond, the City agrees to make a loan to the Borrower of the proceeds of the sale of the Bond and the Borrower covenants to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of and interest on the Bond; (b) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage" ) dated as of August 1, 1980, by and between the Borrower and the Bank, whereby the Borrower mortgages the Project Site, the Project Building and the Project Equipment (the "Project Facilities" ) as security for the Bond (this document not to be executed by the City) ; and (c) Loan Agreement Assignment (the "Assignment" ) dated as of August 1, 1980, whereby the City assigns to the Bank all of its interest in the Loan and Purchase Agreement and Loan Repayments of the Borrower thereunder (except its rights under Sections 5 . 02, 7 .01, 8 . 04 and 8 . 05 ) , for the purpose of securing the Bond; and (d) Assignment of Rents and Leases (the "Lease Assignment" ) dated as of August 1, 1980 from the Borrower to the Bank whereby the Borrower assigns the rents and leases of the Project to the Bank as security for the Bond (this document not to be executed by the City) . 4. Findings. It is hereby found, determined and declared that: (a) The Project, as described in the Loan Agree- ment, constitutes a project authorized by and described in Section 474.02, Subd. la 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 the 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 preserving the economic and human resources needed as a base for providing governmental services and facilities; adding to the tax • base of the City and the county and school district in which the Project Facilities will be located. (c) The Project has been approved by preliminary resolution of the Council duly adopted April 15, 1980, and by the Commissioner of Securities of the State of Minnesota as tending to further the purposes and policies of the Act. -2- (d) The issuance and sale of the Bond, the execu- tion and delivery of the Loan Agreement and the Assign- ment and the performance of all covenants and agreements of the City contained in the Bond, the Loan Agreement and the Assignment and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bond, Loan Agreement and the Assignment valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (e) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the Project or to the Bond or Loan Agree- ment, or questioning the organization of the City or its power or authority to issue the Bond or execute and deliver the Loan Agreement and the Assignment. (f) The execution, delivery and performance of the City' s obligations under the Bond, the Loan Agree- ment and the Assignment have been fully authorized by all requisite action and do not and will not violate any law, any order of any court or other agency of government, or any indenture, agreement or other instru- ment to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (g) The Loan Agreement provides for payments by the Borrower to the Holder of the Bond for the account of the City of such amounts as will be sufficient to pay the principal of and interest on the Bond when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Borrower to provide for the operation and maintenance of the Project Facil- ities, including adequate insurance, taxes and special assessments . (h) Under the provisions of Section 474. 10 of the Act, and the Bond shall recite that, the Bond is not to be payable from nor charged upon any funds other than amounts payable by the Borrower pursuant to the Loan Agreement which are pledged to the payment thereof, and, in event of default, moneys derived from foreclo- sure or other enforcement of the Lease Assignment or • the Mortgage; the City is not subject to any liability thereon; no Holder of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the interest thereon, nor to enforce payment thereof against any property of the City; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of -3- the City; and such Bond does not constitute an indebt- edness of the City within the meaning of any constitu- tional or statutory limitation. (i ) No member of the City Council (i ) has a direct or indirect interest in the Project, the Loan Agreement, the Lease Assignment, the Assignment or Bond, (ii ) owns any capital stock of or other interest in the Project or the Bank, (iii ) will be involved in supervising the completion of the Project on behalf of the Borrower, or (v) will receive any commission, bonus or other remuneration for or in respect of the Project, the Loan Agreement or the Bond. 5 . Approval and Execution of Documents . The forms of Mortgage, Loan Agreement, the Lease Assignment, and Assignment referred to in paragraph 3 are approved. The Loan Agreement and Assignment shall be executed in the name and on behalf of the City by the Mayor and the City Manager, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the Mayor, City Manager or City Attorney, which approval shall be conclusively evidenced by the execution thereof. The Mortgage and the Lease Assignment may contain such revisions as may be approved by the Bank and the Borrower. 6. Approval of Terms and Sale of Bond. The City shall proceed forthwith to issue its City of Hopkins Industrial Develop- ment Revenue Bond (Standal Project) , in the authorized principal amount of $700, 000 substantially in the form, maturing, bearing interest, payable in the installments and otherwise containing the provisions set forth in the form of Bond attached hereto as Exhibit 1, which terms and provisions are hereby approved and incorporated in this Bond Resolution and made a part hereof. A single Bond, substantially in the form of Exhibit 1 to this Bond Resolution, shall be issued and delivered to the Bank in the authorized principal amount of $700, 000• and as auth- orized by the Act, principal of and interest on the Bond shall be payable at the office of the Bank in Hopkins, Minnesota. The proposal of the Bank to purchase such Bond at a price of up to $700, 000 (100% of par value) is hereby found and determined to be reasonable and is hereby accepted. Pursuant to the Loan Agreement the Bank has agreed to pay the purchase price of the Bond in installments up to the authorized principal amount of the Bond to provide funds to be loaned by the City to the Borrower to pay Project Costs, as defined in the Loan Agreement, then due. 7 . Execution, Delivery and Endorsement of Bond. The Bond may be in typewritten or printed form and shall be executed by the manual signatures of the Mayor and City Manager and the official seal of the City shall be affixed thereto. When so prepared and executed, the Bond shall be delivered to the Bank upon payment of all or part of the purchase price, and upon -4- receipt of the signed legal opinion of Messrs . Faegre & Benson, of Minneapolis, Minnesota, bond counsel, pursuant to the Loan Agreement. At the time of delivery of the Bond (the "Initial Closing" ) the Authorized Borrower Representative shall endorse and acknowledge receipt on Annex A to the Bond the part of the total purchase price paid by the Bank at the Initial Closing and loaned by the City to the Borrower pursuant to the Loan Agreement at the Initial Closing. At each Subsequent Closing, the Autho- rized Borrower Representative shall endorse and acknowledge receipt on Annex A to the Bond the part of the total purchase price paid by the Bank at such Subsequent Closing and loaned by the City to the Borrower at such Subsequent Closing. The Bond shall bear interest only on the amount so paid, loaned and endorsed on Annex A, from time to time, and remaining unpaid. The 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. 8. Registration Records . The City Clerk, as bond registrar, shall keep a bond register in which the City shall provide for the registration of the Bond and for transfers of the Bond. The principal of and interest on the Bond shall be paid to the Bank for the account of the Holder entitled thereto in Federal or other immediately available funds. The City Clerk is autho- rized and directed to deliver a certified copy of this Bond Resolution to the County Auditor of Hennepin County, together with such other information as the County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bond on his bond register as required by the Act and Section 475 .63, Minnesota Statutes. 9. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond is mutilated, lost, stolen or destroyed, the City may execute and deliver to the Holder a new Bond of like amount, date, number and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Bond, there shall be first furnished to the City and the Borrower evidence of such loss, theft or destruction satis- factory to the City and the Borrower, together with indemnity satisfactory to them. The City and Borrower may charge the Holder with their reasonable fees and expenses in replacing any mutilated, lost, stolen or destroyed Bond. 10. Transfer of Bond; Person Treated as Holder. The Bond shall be transferable by the Owner on the bond register of • the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as bond regis- trar, accompanied by a written instrument of transfer in form satisfactory to the City Clerk and the City Attorney, duly exe- cuted by the Owner or its attorney duly authorized in writing. The Owner seeking to transfer ownership of the Bond shall also give written notice thereof to the Borrower. The Bond shall continue to be subject to successive transfers at the option of -5- the Owner of the Bond. No service charge shall be made for any such transfer, but the City Clerk may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The person in whose name the Bond shall be issued or, if transferred, shall be registered from time to time shall be deemed and regarded as the absolute Holder thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the Holder thereof, or its attorney duly authorized in writing, and neither the City, the City Clerk, the Borrower, nor the Bank shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and dis- charge the liability upon the Bond to the extent of the sum or sums so paid. The Bond shall be initially registered in the name of the Bank. 11 . Amendments, Changes and Modifications to Loan Agreement, Assignment and Bond Resolution. Except pursuant to Section 9.03 of the Loan Agreement, the City shall not enter into or make any change, modification, alteration or termination of the Loan Agreement, Assignment or this Bond Resolution. 12 . Pledge to Holder. Pursuant to the Assignment, the City shall pledge and assign to the Bank and its successor Holders of the Bond all interest of the City in the revenues of the Project and the Project Facilities, including all Loan Repayments to be made by the Borrower under the Loan Agreement and moneys derived from enforcement of the Lease Assignment and the Mortgage. All collections of moneys by the City in any proceeding for enforcement of the obligations of the Borrower under the Loan Agreement shall be received, held and applied by the City for the benefit of the Holder of the Bond. 13 . Covenants with Holders; Enforceability. All pro- visions of the Bond and of this Bond Resolution and all repre- sentations and undertakings by the City in the Loan Agreement are hereby declared to be covenants between the City and the Bank and its successor Holders of the Bond and shall be enforceable by the Bank or any Holder in a proceeding brought for that purpose. 14. Definitions and Interpretation. Terms not other- wise defined in this Bond Resolution but defined in the Loan Agreement shall have the same meanings in this Bond Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in Section 9. 01 of the Loan Agreement. In case any provision of this Bond Resolution is for any reason • illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the remaining provisions of this Bond Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not con- tained herein. -6- 15. Certifications. The Mayor, City Manager and other officers of the City are authorized and directed to prepare and furnish to Messrs. Faegre & Benson, bond counsel, to the Borrower, to the Bank and to counsel for the Borrower and the Bank, certified copies of all proceedings and records of the City relating to the Project and the Bond, and such other affidavits 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. Signed:. / ///i , Attest: City Clerk -7-