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79-012 RES Member Engstrom introduced the following resolution and moved its adoption: RESOLUTION NO. 79-12 RESOLUTION RELATING TO A $320, 000 COMMERCIAL DEVELOPMENT REVENUE NOTE; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows : Section 1. Definitions. 1. 01. In this Resolution the following terms have the following respective meanings unless the context hereof or use herein clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Agreement: the Loan Agreement to be executed by and between the City and Plaisted; • Assignment of Rents and Leases : the Assignment of Rents and Leases to be given by Plaisted to the Lender ; City: the City of Elk River, Minnesota, its successors and assigns; Construction Loan Agreement: the Construction Loan Agreement to be executed by and among the City, Plaisted and the Lender; Facilities : the Land and the Project, as they may at any time exist; Fixtures : those items defined in Section 1-1 of the Mortgage; Guaranty: the Guaranty Agreement to be given by Plaisted and accepted by the Lender; Land: the real estate described in Exhibit A to • the Mortgage with all additions thereto and substitutions therefor; Lender: First National Bank in Anoka, its successors and assigns; Loan Agreement Assignment : the Pledge Agreement between the City and the Lender ; Mortgage : the Combination Mortgage and Security Agreement and Fixture Financing Statement to be given by Plaisted to the Lender; Note : the $320, 000 Commercial Development Revenue Note (John Plaisted Project) to be issued by the City pursuant to this Resolution; Organizational Documents: the following documents, each of which shall be in form and substance acceptable to the Lender: (i) An opinion or opinions of Counsel for Plaisted and for the City reasonably acceptable to the Lender indicating that each of the documents referred to in Section 3. 03 of this resolution has been duly executed and delivered and is a legal and binding obligation of Plaisted and the City, as the case may be, enforceable in accordance with their terms ; and (ii) Financial statements of Plaisted. Plaisted : John Plaisted, an individual residing in Elk River, Minnesota, his heirs and assigns; Project: the 20, 000 square-foot office and warehouse facility to be constructed by Plaisted on the Land ; Project Costs : those costs defined in Section 1. 01 of the Agreement; and Resolution: this resolution of the City, adopted June 18 , 1979, authorizing the issuance of the Note. Section 2. Findings. It is hereby found and declared that: -2- • , • (a) based upon representations made to the City as to the nature of the Project and the anticipated use of the proceeds of the Note, the real property and improve- ments described in the Agreement and the Mortgage constitute • a Project authorized by the Act; (b) the purpose of the Project is , and the effect thereof will be to promote the public welfare by the attraction , encouragement and development of economically sound industry and commerce so as to prevent the emergence of or to rehabilitate, so far as possible, blighted and marginal lands and areas of chronic unemployment; to retain industry' s use of the available resources of the community in order to retain the benefit of its existing investment in educational and public service facilities ; to halt the movement of talented, educated personnel of mature age to other areas and thus preserve the economic and human resources needed as a base for providing governmental services and facilities; to more intensively develop land available in the community to provide an adequate and better balanced tax base to finance the increase in the amount and cost of governmental services; (c) the Project when completed will add to the tax base of the City, and will accordingly be of direct benefit to the taxpayers of the City as well as those of the County and School District in which the City is • located ; (d) 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; (e) the financing of the Project, the issuance and sale of the Note, the execution and delivery of the Construction Loan Agreement, of the Agreement, and of the Loan Agreement Assignment, and the performance of all covenants and agreements of the City contained in the Construction Loan Agreement, the Agreement, and the Loan Agreement Assignment and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Construction Loan Agreement, the Agreement, the Loan Agreement Assignment, and the Note valid and binding obligations of the City in accordance with their terms , are authorized by the Municipal Industrial Development Act; (f) it is desirable that the Commercial Development Revenue Note in the amount of $320, 000 be issued by the City upon the terms set forth herein, and that the City assign its interest in the Agreement and • -3- 1 grant a security interest therein to the Lender as • security for the payment of the principal of and interest and premium, if any, on the Note; (g) the loan payments contained in the Agreement are fixed, and 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 the Note issued under this Resolution when due, and the Agreement also provides that Plaisted is required to pay all expenses of the operation and maintenance of the Project including, but without limitation, adequate insurance thereon and all taxes and special assessments levied upon or with respect to the Facilities and payable during the term of the Agreement; and (h) under the provisions of Minnesota Statutes, Section 474. 10, and as provided in the Agreement and the Mortgage, the Note is not to be payable from nor charged upon any funds of the City other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon; no holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon nor to enforce payment thereof against any property of the City; the Note shall not constitute a charge , lien or • encumbrance, legal or equitable, upon any property of the City; the Note issued hereunder shall recite that the Note, including interest thereon, is payable solely from the revenue pledged to the payment thereof ; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. Section 3. Authorization and Sale. 3. 01. Authorization. The City is authorized by the Act to issue revenue bonds and loan the proceeds thereof to business enterprises to finance the acquisition and construction of "projects" as defined in the Act, and to make all contracts, execute all instruments, and do all things necessary or convenient in the exercise of such authority. 3. 02. Preliminary City Approval. By preliminary resolution duly adopted by the Council on May 7, 1979, the Council approved the sale of a revenue note pursuant to the Act and the loan of the proceeds to Plaisted for the acquisition, construction and installation on the Land of -4- the Project suitable and designed for use as an office and • warehouse facility, and authorized the preparation of such documents as may be appropriate to the Project. 3. 03. Approval of Documents. Pursuant to the above, copies of the following documents, all of which are now or shall be placed on file in the office of the Clerk, have been prepared and presented to this Council : (a) Construction Loan Agreement; (b) Agreement; (c) Assignment of Loan Agreement ; (d) Mortgage; (e) Assignment of Rents and Leases; and (f) Guaranty Agreement. The forms of the documents listed in (a) through (f) above are approved, with such variations, insertions and additions as are deemed appropriate by the parties and approved by the City Attorney. • Section 4 . Authorization. Upon completion of the Construction Loan Agreement, the Agreement, and the Loan Agreement Assignment, approved in Section 3. 03 hereof, and the execution thereof by Plaisted and the Lender, as the case may be , the Mayor and City Clerk shall execute the same, the Note (in substantially the form set forth in Section 5. 01 hereof) , and such other certifications, documents or instruments as bond counsel or counsel for the Lender shall require, on behalf of the City, subject to the approval of the City Attorney. All certifications , recitals and representations therein shall constitute the certifications, recitals and representations of the City. Execution of any instrument or document by one or more appropriate officers of the City shall constitute and shall be deemed the conclusive evidence of the approval and authorization by the City and the Council of the instrument or documents so executed. Section 5. The Note. 5. 01. Form and Authorized Amount. The Note shall be issued substantially in the form hereinafter set forth, with such appropriate variations , omissions and insertions as are permitted or required by this • -5- Resolution, and in accordance with the further provisions of this Section , in the total principal amount of 411 $320, 000: • • -6- • UNITED STATES OF AMERICA 410 STATE OF MINNESOTA COUNTY OF SHERBURNE CITY OF ELK RIVER Commercial Development Revenue Note (John Plaisted Project) No. R-1 $320, 000 FOR VALUE RECEIVED, The CITY OF ELK RIVER, MINNESOTA, a municipal corporation of the State of Minnesota (the "City" ) , hereby promises to pay to the order of FIRST NATIONAL BANK IN ANOKA, a national banking association, or registered assign (the "Holder") , at its principal office in Anoka, Minnesota, or such other place as the Holder may designate in writing, from the source and in the manner, and with interest thereon as herein- after provided, the principal sum of THREE HUNDRED TWENTY THOUSAND DOLLARS ($320, 000) , or so much thereof as may be advanced, with interest on the unpaid principal amount at the rate of eight and seven-eighths percent (8-7/8%) per annum, in any coin or currency which at the time or times for payment is legal tender for the payment of public or private debts in the United States of America. This Note . is payable in installments due as follows: (a) From and after the date hereof until the Completion Date (as hereinafter defined) , the City shall pay interest only on the amount of principal that shall from time to time be advanced hereunder. Interest shall accrue from and after the date of each and every advance so made by the Holder and shall be payable on the first day of the month next succeeding the date on which the first advance is made, and on the first day of each and every month thereafter, with a final payment of accrued interest to be made on the Completion Date. (b) Commencing on the first day of the month following the Completion Date, the principal balance hereof , together with interest thereon, shall be due and payable in 264 consecutive monthly installments each in the amount of Two Thousand Seven Hundred Sixty-one and 39/100 Dollars ($2 ,761. 39) , except that monthly 41/0 • installments shall not extend beyond November 1, 2001, on which date all principal and interest remaining unpaid shall be paid in full. All interest hereon shall be computed on the basis of the actual number of days elapsed and on the assumptions that each month contains thirty (30) days and each year contains three hundred sixty (360) days. All payments shall be applied first to interest on the unpaid principal balance and the remainder to reduction of principal. As used herein, the term "Completion Date" shall mean the first day of November, 1979 . In the event that interest payable pursuant to this Note becomes subject to federal or state income taxation pursuant to a Determination of Taxability, as defined in Section 1. 01 of that certain Loan Agreement (the "Loan Agreement") of even date herewith between the City and John Plaisted, an individual residing in Elk River, Minnesota ("Plaisted") , the rate of interest hereon shall be automatically increased to eleven percent (11%) per annum effective as of the Date of Taxability. Further, in the event of a Determination of Taxability the City shall, within ninety (90) days thereafter, pay to the Holder the difference between ( i) the amounts actually paid hereunder between the Date of Taxability and the effective date of such rate increase and (ii) the amounts which would have been paid to such Holder during such period if the increased rate had been in effect. Prior to the expiration of the first ten (10) loan years, no principal payments other than the required monthly installment payments above provided for may be made. Beginning with the eleventh (11th) loan year, additional principal payments may be made provided that such additional principal payments shall be subject to a prepayment premium equal to five percent (5%) of such amount prepaid, which premium shall decrease one percent (1%) during every loan year thereafter to a minimum of par during the sixteenth (16th) loan year and every loan year thereafter. As used herein the term "loan year" shall mean a year consisting of twelve (12) calendar months, the first day of such first loan year being the date on which the City is obligated to make its first required installment payment of principal and interest as set forth in paragraph (b) above. Any prepayments shall be made on at lease thirty (30) days' advance written notice to the Holder, shall be made on a regu- larly scheduled installment payment date and shall not suspend or reduce required installment payments. 411 The proceeds of this Note are to be disbursed in part pursuant to the terms and conditions of that certain Construction Loan Agreement of even date herewith by and among the City, Plaisted and the First National Bank in Anoka (the "Construction Loan Agreement") . This Note constitutes an issue in the total authorized face amount of $320, 000. This Note is issued by the City pursuant to the authority granted by Minnesota Statutes , Chapter 474, as amended (the "Act") , for the purpose of providing funds for a Project, as defined in Minnesota Statutes , Section 474. 02, Subdivision la, consisting of certain real estate and construction of improvements thereon, and paying necessary expenses incidental thereto, such funds to be loaned by the City to Plaisted pursuant to a Resolution, adopted June 18 , 1979 , by the City (the "Resolution") , the Loan Agreement and the Construction Loan Agreement, thereby assisting activ- ities in the public interest and for the public welfare of the City of Elk River. This Note is secured by a Combination Mortgage and Security Agreement and Fixture Financing Statement, of even date herewith (the "Mortgage") , between Plaisted, as Mortgagor, and the Holder, as Mort- gagee, a Pledge Agreement, of even date herewith, between the City and the Holder, and an Assignment of Rents and Leases, of even date herewith, from Plaisted to the Holder. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the office of the City Clerk , by the registered Holder hereof in person or by his attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the registered Holder or his duly authorized attorney. Upon such transfer the City Clerk will note the date of registration and the name and address of the new registered Holder upon the books of the City. The City may deem and treat the person in whose name this Note is last registered upon the books of the City as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes, and all such payments so made to the registered Holder or upon its order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. 411 . All of the agreements, conditions, covenants , provisions and stipulations contained in the Mortgage, Resolution, Construction Loan Agreement, Pledge Agree- ment and Assignment of Rents and Leases are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. If a default occurs under this Note, or under the Mortgage, Loan Agreement, Construction Loan Agree- ment, Pledge Agreement or Assignment of Rents and Leases , then the Holder may at its right and option declare imme- diately due and payable the principal balance of this Note and interest accrued thereon to the date of declaration of such default, together with any attorneys' fees incurred by the Holder in collecting or enforcing payment thereof, whether suit be brought or not, and all other sums due hereunder or under the Mortgage, Construction Loan Agree- ment, Assignment of Rents and Leases , Loan Agreement or Pledge Agreement, anything to the contrary therein not- withstanding, and payment thereof may be enforced and recovered in whole or in part, at any time by one or more of the remedies provided in the Mortgage, in this Note, in the Construction Loan Agreement, Assignment of Rents and Leases, Pledge Agreement or in the Loan Agreement. The Holder may extend the time of payment of interest or con- sent of any party liable hereon, and without releasing any • such party. This Note and the interest thereon shall never constitute a debt of the City within the meaning of any constitutional provision or statutory limitation, and shall never constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers . This Note and the interest hereon are payable solely from the revenues pledged to the payment thereof pursuant to the Loan Agreement and the Construction Loan Agreement and secured by the provisions of the Mortgage, the Assignment of Rents and Leases and the Pledge Agreement, and the Holder of this Note shall never have the right to enforce payment thereof against any property of the City, and this Note does not consti- tute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues from the Loan Agreement, the Construction Loan Agreement, the Assignment of Rents and Leases, the Pledge Agreement or from the Mort- gage, sufficient to pay all costs of such performance or the enforcement thereof. 411 • The remedies of the Holder, as provided herein, and in the Mortgage, the Construction Loan Agreement, the Assignment of Rents and Leases, the Pledge Agreement and the Loan Agreement, shall be cumulative and concurrent and may be pursued singly, successively or together, and, except as provided in the Mortgage, at the sole discre- tion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exer- cise any such right or remedy shall in no event be con- strued as a waiver or release thereof. The Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen and be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the City has caused this Note to be duly executed under its seal this 25th day of June, 1979. CITY OF ELK RIVER, MINNESOTA By: Mayor (Seal) Attest : City Clerk 411 1 - - PROVISIONS AS TO REGISTRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the City of Elk River in the name of the holder last noted below: Date of Name and Address Signature of Registration Registered Owner City Clerk First National Bank in Anoka Anoka, Minnesota 55303 411 • • • 5. 02. Note Terms. The Note shall be designated the Commercial Development Revenue Note (John Plaisted Project) and shall : (a) be dated as of the date of delivery thereof to, and payment therefor , by the Lender ; (b) be in the total principal amount of $320, 000 ; (c) bear interest on the unpaid principal balance from date of issue until paid or discharged as herein provided at the rate of eight and seven-eighths percent (8-7/8%) or in the event that interest on the Note should become subject to federal or state income taxation bear interest at the rate set forth in the Note; (d) be payable in installments as follows : (1) From and after the date of the Note until the Completion Date (as defined in the Agreement) , the City shall pay interest only on the amount of principal Ill that shall from time to time be advanced. Interest shall accrue from and after the date of each and every advance so made and shall be payable on the first day of the month next succeeding the date on which the first advance is made, and on the first day of each and every month thereafter, with a final payment of accrued interest to be made on the Completion Date. (2) Commencing on the first day of the month following the Completion Date, the principal balance of the Note, together with interest thereon, shall be due and payable in 264 consecutive monthly installments each in the amount of Two Thousand Seven Hundred Sixty-one and 39/100 Dollars ($2 , 761. 39) , except that monthly install- ments shall not extend beyond November 1, 2001, on which date all principal and interest remaining unpaid shall be paid in full. 411 -13- (e) be payable as to both principal and interest to the registered holder thereof at the address shown on the Note Register; and (f) be subject to prepayment by the City from funds supplied by Plaisted at the times and prices set forth in Section 5. 01 of the Agreement. The redemption price having been so deposited and notice of redemption having been given if required under the provisions of said Section 5. 01, the principal amounts prepaid shall, after such date , cease to bear interest. 5. 03. Execution. The Note shall be executed on behalf of the City by the signatures of the Mayor and City Clerk and shall be sealed with its corporate seal. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery thereof, such signature shall nevertheless be valid and sufficient for all purposes. 5. 04. Mutilated, Lost and Destroyed Note. In case the Note shall become mutilated or be destroyed or lost, the City shall cause to be executed and delivered a 410 new note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated note, or in lieu of and in substitution for such note destroyed or lost, upon the holder' s paying the reasonable expenses and charges of the City in connection therewith, and, in case the note is destroyed or lost, its filing with the City evidence satisfactory to it. 5. 05. Registration of Transfer. The City will cause to be kept at the office of the City Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be transferable upon the Note Register by the holder thereof in person or by its attorney duly authorized in writing , upon surrender of the Note together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the holder or its duly authorized attorney. Upon such transfer the City Clerk shall note the date of registration and the name and address of the new holder in the Note Register. The City may deem and treat the person in whose name each note is last registered in the Note Register as the absolute owner 111 -14- v ' thereof , whether or not the principal balance or any part thereof is overdue, for the purpose of receiving payment of or on account of the principal balance , redemption price or interest and for all other purposes. 5. 06. Delivery and Use of Proceeds. Prior to delivery of the Note, the documents referred to below shall be completed and executed in form and substance as approved by the City Attorney. The City shall execute and deliver to the Lender the Note in the total principal amount of $320, 000, together with the following : (a) a copy, duly certified by the Clerk , of this Resolution; (b) original , executed counterparts of the Construction Loan Agreement, the Agreement, the Loan Agreement Assignment, the Mortgage , the Assignment of Rents and Leases, and the Guaranty; (c) Organizational Documents; and (d) such closing certificates as are required by . bond counsel . Upon delivery of the Note and the above items to 410 the Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note to Plaisted in reimbursement of Project Costs pursuant to the provisions of the Construction Loan Agreement. The Lender or Plaisted shall provide the City with a full accounting of all funds disbursed for Project Costs. Section 6. Limitations of the City' s Obligations . Notwithstanding anything contained in the Note, the Construction Loan Agreement, the Agreement, the Loan Agreement Assignment, or any other documents referred to in Section 3. 03, the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation and shall not be payable from or charged upon any funds other than the revenue pledged to the payment thereof, and the City shall not be subject to any liability thereon. No holder of such Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon or to enforce payment thereof against any property of the City, and the Note shall not constitute a charge , lien or encumbrance, legal or equitable, upon any property of the City. The agreement of the City to perform the covenants 411 -15- y�. and other provisions contained in the Note , the Construc- tion Loan Agreement, the Agreement, or the Loan Agreement Assignment, and the other documents listed in Section 3. 03 shall be subject at all times to the availability of revenues furnished by Plaisted sufficient to pay all costs of such performance by the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. Adopted June 18, 1979 . M a yes Attest : City C k 3 The motion for the adoption of the foregoing resolution was duly seconded by Member Duitsman , and upon vote being taken thereon, the following voted in favor thereof: Councilmembers Engstrom, Duitsman, Otto, Toth and the following voted against the same : None whereupon said resolution was declared duly passed and adopted. 4 411 -16-