Loading...
80-028 RES CITY COUNCIL III OF THE CITY OF ELK RIVER, MINNESOTA Resolution No. 82-28 A RESOLUTION OF THE CITY OF ELK RIVER, SHERBURNE COUNTY, MINNESOTA, AUTHORIZING THE ISSUANCE OF $400 ,000 AGGREGATE PRINCIPAL AMOUNT CITY OF ELK RIVER, MINNESOTA, INDUSTRIAL DEVELOPMENT REVENUE BONDS (ELK RIVER POST OFFICE PROJECT) , SERIES 1982, I WHICH BONDS AND THE INTEREST AND ANY PREMIUM4; THEREON SHALL BE PAYABLE SOLELY FROM THE REVENUES DERIVED PURSUANT TO THE LOAN AGREEMENT OR OTHER '; 3 DISPOSITION OF THE MORTGAGED PROPERTY; PRESCRIBING I' °ni>'q' THE FORM OF AND AUTHORIZING THE EXECUTION AND DE- �" 4�>Vr LIVERY OF AN INDENTURE OF TRUST; AUTHORIZING THE { � EXECUTION AND SALE OF THE BONDS AND DIRECTING THE , r ; ', ; 41,` AUTHENTICATION AND DELIVERY THEREOF; PRESCRIBING j,] : 441J2: ',•� THE FORM OF AND AUTHORIZING THE EXECUTION AND DE- ' � ,�. ', 1 t LIVERY OF A LOAN AGREEMENT, BY AND BETWEEN THE C� OF ELK RIVER, MINNESOTA, AND EUGENE P. DONAHUE, AN ; Iy _ ; ° INDIVIDUAL RESIDING IN THE STATE OF MINNESOTA AS 71- �d "' � BORROWER; AUTHORIZING THE CONFIRMATION AND ACCEPT- - ' 1 ` 'i . 'k ANCE OF THE BOND PURCHASE AGREEMENT; AND PROVIDING •¢ "+ ; ' ;(`1R '� ` FOR THE SECURITIES, RIGHTS AND REMEDIES OF THE ' t , ' ' HOLDERS OF SAID BONDS. `w' 14 ' '`' :Y?$ ',ate' 1p ` • i v i k 4 S �..liel;4 } , ' k ii WHEREAS, the Municipal Industrial Development Act, A�e ,f , ,1 „,% amended and supplemented, constituting Minnesota Statute , i= ; f , . Chapter 474 (the "Act") , finds, declares and prow es ,fit ; ��v �",ii the welfare of the State of Minnesota (the "State' ) requires � 0 , active promotion, attraction, encouragement and develot ,...,,,,t-.1= — } _# of economically sound industry and commerce through govern. it ijt, mental action to prevent, so far as possible, a rgence0 t . °w' ,r,1, TT blighted lands and areas of chronic unemployment, and it le x, .a the policy of the State to facilitate and encourage actin 4 ' 44 by local government units to prevent the economic deteriora- ;��.• tion of such areas to the point where the process can be . �{° ' III reversed only by total redevelopment through the use of W' y % a a• , R 4. • local, state and federal funds derived from taxation with the attendant necessity of relocating displaced persons and of duplicating public services in other areas; and WHEREAS, the Act further finds and declares that such governmental action is required by technological change that has caused a shift to a significant degree in the area of opportunity for educated youth to processing , transporting, marketing, service and other industries , and unless existing and related industries are retained and new industries are developed to use the available resources in each community, a large part of the existing investment of the community and of the State as a whole in educational and public service facilities will be lost , and the movement of talented, edu- cated personnel of mature age to areas where their services may be effectively used and compensated and the lessening attraction of persons and businesses from other areas for the purposes of industry, commerce and tourism will deprive the community and the State of the economic and human re- sources needed as a base for providing governmental services and facilities for the remaining population; and WHEREAS, the Act further finds and declares that such governmental action is required by the increase in the amount and cost of governmental services and the need for more intensive development and use of land to provide an adequate tax base to finance these costs; and WHEREAS, the City of Elk River , Sherburne County, Minne- sota (the "Issuer" ) , is authorized by the Act to enter into a revenue agreement with any person, firm or public or pri- vate corporation or federal or state governmental subdivi- sion or agency in such manner that payments required thereby to be made by the contracting party shall be fixed and revised from time to time as necessary so as to produce income and revenues sufficient to provide for the prompt payment of the principal of, premium, if any, and interest on all bonds issued under the Act when due, and the revenue agreement shall also provide that the contracting party shall be required to pay all expenses of the operation and maintenance of a project, including , but without limitation, adequate insurance thereon and insurance against all liabil- ity for injury to persons or property arising from the oper- ation thereof and all taxes and special assessments levied upon or with respect to the project and payable during the term of the revenue agreement; and WHEREAS, the Act further authorizes the Issuer to issue revenue bonds, in anticipation of the collection of revenues of a project, to finance , in whole or in part, the cost of acquisition, construction, installation, completion, recon- struction, improvement , betterment or extension of any such project; and - 2 - WHEREAS, Eugene P. Donahue, an individual residing in 111' the State of Minnesota (the "Borrower") , proposes to acquire certain land within the corporate limits of the Issuer , construct thereon an addition to and the renovation of an existing facility, acquire and install therein certain equipment and make certain other improvements , including, but not limited to , landscaping and the construction of a parking facility (the "Project") , all to be owned by the Borrower and leased to the United States Postal Service, a United States ' government-owned corporation (the "Tenant") , for use as a United States Postal Service facility, and the Issuer desires to finance said Project upon the terms and conditions as required by the Act and as in the Agreement (as hereinafter defined) set forth ; and WHEREAS, the Issuer proposes to undertake said facili- ties as a project authorized under the Act and to finance the cost thereof by the issuance of revenue bonds of the Issuer under the Indenture (as hereinafter defined) ; and WHEREAS, the Issuer proposes to enter into an Indenture of Trust , dated as of December 1, 1982 (the "Indenture") , with First National Bank of Minneapolis , in Minneapolis, Minnesota (the "Trustee") , to provide , among other things , for the issuance of the City of Elk River , Minnesota, Indus- trial Development Revenue Bonds (Elk River Post Office Project) , Series 1982, in the aggregate principal amount of $400 , 000 (the "Bonds") , by the Issuer , and the Issuer and the Borrower have proposed to enter into a Loan Agreement, dated as of December 1, 1982 (the "Agreement") , so as to, among other things, loan the proceeds of the Bonds to the Borrower to be used to acquire , construct and install the Project , and the Borrower and the Trustee have proposed to enter into a Mortgage and Security Agreement and Fixture Financing Statement, dated as of December 1, 1982 (the "Mortgage") , so as to secure the performance of the Bor- rower 's obligations under the Agreement, and the Borrower and the Trustee have proposed to enter into an Assignment of Rents and Leases, dated as of December 1, 1982 (the "Assign- ment") , whereby the Borrower assigns , grants and transfers to the Trustee all of the Borrower 's right, title and inter- est in and to any present and future rents, leases, sub- leases or agreements covering all or any part of the Mort- gaged Property (as defined in the Mortgage) as further secu- rity for the payment of the principal of, premium, if any, and interest on the Bonds and the performance of the Bor- rower 's obligations under the Agreement; and WHEREAS, the Bonds issued under the Indenture will be secured by a pledge and assignment of the loan repayments to be paid to the Issuer by the Borrower as required by the - 3 - Agreement (the "Loan Repayments") and other revenues derived by the Issuer from the Mortgaged Property and the Issuer 's rights (except certain rights as to indemnification and reimbursement of expenses) under the Agreement and the Mort- gaged Property under the Mortgage (the "Mortgaged Prop- erty") , and , pursuant to the Assignment , all rents, leases, subleases and profits of the Mortgaged Property, and the principal of, premium, if any, and interest on the Bonds shall be payable solely from the revenues pledged therefor , and the Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limi- tation nor shall constitute or give rise to a pecuniary liability of the Issuer or a charge against the Issuer 's general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable , upon any property of the Issuer other than its interest in said Mort- gaged Property; and WHEREAS, the Issuer proposes to loan the proceeds of the Bonds to the Borrower to acquire , construct and install the Project, and the Borrower desires to borrow the proceeds from the Issuer to finance the Project upon the terms and conditions as required by the Act and as set forth in the Agreement ; and WHEREAS, under the Agreement, the Borrower is to pay to the Issuer sufficient moneys each year to pay the principal of, premium, if any, and interest on the Bonds issued to finance the Project , and the Borrower is to provide the cost of maintaining the Mortgaged Property in good repair , the cost of keeping the Mortgaged Property properly insured and any payments required for taxes ; and WHEREAS, Eugene P. Donahue and Mary H. Donahue, individ- uals residing in the State of Minnesota, jointly and sever- ally, as Guarantors , their heirs , legal representatives, successors and assigns shall , pursuant to the terms of the Guaranty Agreement, dated as of December 1, 1982 (the "Guar- anty") , guarantee the payment of the principal of, premium, if any, and interest on said Bonds; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA, THAT: Section 1. The City Council of the Issuer acknowledges, finds , determines and declares that the welfare of the State requires active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental action to prevent, so far as possible, emergence of blighted lands and areas of chronic unemploy- ment , and it is the policy of the State to facilitate and 411 encourage action by local government units to prevent the - 4 - 1111111111e. ��■���■■ • • economic deterioration of such areas to the point where the Ilk process can be 'w;ersed only by total redeve Lopnent through the use of local, state and federal funds derived from taxa- tion with the attendant necessity of relocating displaced perscns and of duplicating public services in other areas. Section 2. The City Council of the Issuer further finds, determines and declares that such governmental action is required by technological change that has caused a shift to a significant degree in the area of opportunity for edu- cated youth to processing, transporting, marketing, service and other industries , and unless existing and related in- dustries are retained and new industries are developed to use the available resources in the community, a large part of the existing investment of the community and of the State as a whole in educational and public service facilities will be lost , and the movement of talented , educated personnel of mature age to areas where their services may be effectively used and compensated and the lessening attraction of persons and businesses from other areas for purposes of industry, commerce and tourism will deprive the community and the State of the economic and human resources needed as a base for providing governmental services and facilities for the remaining population. Section 3 . The City Council of the Issuer further • finds , determines and declares that such governmental action is required by the increase in the amount and cost of gov- ernmental services and the need for more intensive develop- ment and use of land to provide an adequate tax base to finance these costs . Section 4 . The City Council further finds, determines and declares that the existence of the Project within the corporate limits of the Issuer shall provide for more in- tensive development and use of land to increase the tax base of the Issuer and overlapping taxing authorities and main- tain and provide for additional opportunities for employment for residents of the Issuer and that, based upon representa- tions of the Borrower , conventional, commercial financing to pay the capital cost of the Project is available at such costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but that with the aid of municipal financing and its resulting lower borrowing cost , the Project is economically more feasible. Section 5 . The loan to the Borrower under the Agreement to finance the acquisition, construction and installation of the Project , which consists of the acquisition of the Land, the construction of the Addition to and the renovation of • the Existing Facility and the acquisition and installation - 5 - of the Equipment (as such terms are defined in the Agree- ment) , be and the same is hereby authorized. Section 6. For the purpose of financing the cost of the acquisition, construction and installation of the Project, there is hereby authorized the issuance of $400,000 aggre- gate principal amount City of Elk River , Minnesota, Indus- trial Development Revenue Bonds (Elk River Post Office Proj- ect) , Series 1982 . The Bonds shall be issued in coupon form, registrable as to principal only , shall be in such denominations , shall be numbered, shall be dated, shall mature , shall be subject to redemption prior to maturity, shall be in such form and shall have such other details and provisions as are prescribed by the Indenture . Due to the inability to obtain printed bonds at this time, the Bonds shall initially be issued as a single bond , which shall be exchanged for printed bonds as soon as is practicable , all as provided in Section 203 of the Indenture . Interest rates on the Bonds shall not exceed thirteen percent (13%) per annum, and the rates of interest shall be approved by the Mayor and the Administrator-Clerk. The Bonds may also be issued in bearer form. Section 7 . The Bonds shall be special obligations of the Issuer , payable solely from the revenues received by the Issuer from the Agreement, in the manner provided in the Indenture. As security for the payment of the principal of, premium, if any, and interest on the Bonds, pro rata and without preference of any one Bond over any other Bond, the City Council of the Issuer hereby authorizes and directs the Mayor to execute and the Administrator-Clerk to attest under the corporate seal of the Issuer the Indenture and to de- liver to the Trustee the Indenture and does hereby authorize and direct the execution of the Bonds by the Mayor and the Administrator-Clerk and does hereby provide that the Inden- ture shall provide the terms and conditions, covenants, rights , obligations , duties and agreements of the holders of the Bonds , the Issuer and the Trustee as set forth therein. All of the provisions of the Indenture, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Indenture shall be substantially in the form on file in the office of the Administrator-Clerk with such necessary and appropriate variations , omissions and inser- tions as permitted or required or as the Mayor , in his dis- cretion, shall determine , and the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 8 . The Mayor and the Administrator-Clerk are 410 hereby authorized and directed to execute , attest and de- . - 6 - liver the Agreement by and between the Issuer and the Bor- All rower . All of the provisions of the Agreement , when exe- cuted and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Agreement shall be substantially in the form on file in the office of the Administrator-Clerk with such necessary and appropriate variations , omissions and inser- tions as permitted or required or as the Mayor , in his discretion, shall determine , and the execution thereof by the Mayor shall be conclusive evidence of such determina- tion. Section 9 . The Mayor is hereby authorized and directed to accept and confirm the Bond Purchase Agreement, dated December 6 , 1982 (the "Bond Purchase Agreement") , from Dougherty, Dawkins , Strand & Yost Incorporated, as Under- writer (the "Underwriter" ) and accepted by the Issuer , the Borrower and the Guarantors . All of the provisions of the Bond Purchase Agreement, when accepted and confirmed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorpo- rated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bond Purchase Agreement shall be in the form on file in the • office of the Administrator-Clerk. Section 10. All covenants , stipulations , obligations and agreements of the Issuer contained in this resolution and contained in the Indenture, the Agreement and the Bond Purchase Agreement shall be deemed to be the covenants, stipulations , obligations and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants, stipulations , obligations and agreements shall be binding upon the Issuer , but no failure of the Issuer to comply with any term, condition, covenant or agreement herein shall subject the Issuer to any liability or claim for damages , costs or other financial or pecuniary charge except to the extent that the same may be paid or recovered from the Project or the proceeds of the Bonds and except to the extent that the revenues derived by the Issuer under the Loan Agreement are pledged or assigned by the Issuer for the payment of the Bonds. Except as otherwise provided in this resolution, all rights , powers and privileges conferred and duties and liabilities imposed upon the Issuer or the City Council thereof by the provisions of this resolution or the Indenture , the Agreement or the Bond Purchase Agreement shall be exercised or performed by the Issuer or by such members of the City Council or by such officers, board, body or agency thereof as may be required by law to exercise such 410 powers and to perform such duties. - 7 - mirMOMMONMEMMEMMNI - A • No covenant, stipulation, obligation or agreement herein contained or contained in the Indenture, the Agreement or the Bond Purchase Agreement shall be deemed to be a cove- nant, stipulation, obligation or agreement of any member of the City Council or any officer , agent or employee of the Issuer in that person ' s individual capacity, and neither the City Council of the Issuer nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Section 11 . Except as herein otherwise expressly pro- vided, nothing in this resolution or in the Indenture , ex- press or implied, is intended or shall be construed to con- fer upon any person or firm or corporation other than the Issuer , the holders of the Bonds issued under the provisions of this resolution and the Indenture and the Trustee any right , remedy or claim, legal or equitable , under and by reason of this resolution or any provision hereof or of the Indenture or any provision thereof; this resolution, the Indenture and all of their provisions being intended to be and being for the sole and exclusive benefit of the Issuer and the holders from time to time of the Bonds issued under the provisions of this resolution and the Indenture. 410 Section 12. In case any one or more of the provisions of this resolution, the Indenture , the Agreement, the Bond Purchase Agreement or any of the Bonds and any coupons ap- purtenant thereto issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, the Indenture, the Agreement , the Bond Purchase Agreement or the Bonds or coupons , but this resolution, the Indenture , the Agreement, the Bond Purchase Agreement and the Bonds and any coupons shall be construed and endorsed as if such illegal or invalid provision had not been contained therein. The terms and conditions set forth in the Indenture , the Agree- , ment and the Bond Purchase Agreement, the pledge of revenues and other sums payable under the Agreement, the creation of the funds provided for in the Indenture, the provisions relating to the handling of the proceeds derived from the sale of the Bonds pursuant to and under the Indenture and the handling of said revenues and other moneys are all com- mitments , obligations and agreements on the part of the Issuer contained in the Indenture , and the invalidity of the Indenture, the Agreement and the Bond Purchase Agreement shall not affect the commitments , obligations and agreements on the part of the Issuer to create such funds and to handle said revenues , other moneys and proceeds of the Bonds for the purposes , in the manner and according to the terms and 41/ conditions fixed in the Indenture , it being the intention - 8 - n � ,Fatit r> hereof that such commitments on the part of the Issuer are as binding as if contained in this resolution separate and 110 apart from the Indenture , the Agreement and the Bond Pur- chase Agreement . Section 13 . The Bonds shall contain a recital that the Bonds are issued pursuant to the Act , and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof , and all acts , conditions and things required by the laws of the State relating to the adoption of this resolution, to the issuance of the Bonds and to the execution of the Indenture , the Agreement, the Assignment , the Guaranty, the Mortgage and the Bond Purchase Agreement to happen, to exist and to be performed precedent to and in the enactment of this resolution and precedent to the issuance of the Bonds and precedent to the execution of the Indenture, the Agreement, the Assignment, the Guaranty, the Mortgage and the Bond Purchase Agreement have happened, do exist and have been performed as so required by law. Section 14 . The officers of the Issuer , attorneys, engineers and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by or in connection with this resolution, the Indenture, the Agreement and the . Bond Purchase Agreement for the full, punctual and complete performance of all the terms , cove- • nants and agreements contained in the Bonds, the Indenture, the Agreement , the Bond Purchase Agreement and this resolu- tion. Section 15 . The Trustee is hereby appointed as Paying Agent for the Bonds pursuant to Section 702 of the Inden- ture . Section 16 . The City Administrator-Clerk is hereby designated and authorized to act on behalf of the Issuer as the Issuer Representative (as defined in the Agreement) . Section 17 . This resolution shall be in full force and effect from and after its passage. PASSED AND APPROVED ON DECEMBER 6 , 1982. [SEAL] 42:1-41 chard Hinkle, Mayor ATTEST: • obert C. Middaugh City Administrato - lerk - 9 - T A • Council Member Toth moved that the foregoing reso- lution be adopted as introduced and read, which motion was seconded by Council Member Engstrom and upon roll call, the "Ayes, " "Abstains" and "Nays" were as follows : AYES ABSTAINS NAYS Mayor Hinkle None None Councilmember Toth Councilmember Engstrom Councilmember Schuldt The Mayor thereupon declared said motion carried and adopted. 410 • - 10 -