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HomeMy WebLinkAboutResolution 82-08Resolution No. 82 - 08 RESOLUTION RELATING TO A $810,000 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 Columbia Heights, Minnesota, as follows: Section 1. Definitions. 1.0i. 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; Assignment: the Assignment of Rents and Leases to be given by the Borrower to the Lender; Borrower: Ruvelson & Associates, Incorporated, a Minnesota corporation, its successors and assigns; City: the City of Columbia Heights, Minnesota, its successors and assigns; Guarantor: James J. Ruvelson, an individual residing in the State of Minnesota; Guaranty: the Guaranty to be given by the Guarantor to the Lender; Holder: any holder of the Note; Improvements: the approximately 20,160-square foot office building and related facilities and improvements which have been acquired and constructed on the Land by the Borrower; ~and: the real estate located in the County of Anoka, State of Minnesota, and legally described in Exhibit A to the Mortgage; Lender: Unionmutual Stock Life Insurance Co. of America, a Maine corporation, its successors and assigns; -2- Loan Agreement: the Loan Agreement to be entered into between the City and the Borrower; Mortgage: the Mortgage and Security Agreement and Fixture Financing Statement to be entered into between the Borrowerf as mortgagor, and the Lender, as mortgagee; Note: the $810,000 Commercial Development Revenue Note (Ruvelson & Associates, Incorporated 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: (±) A copy of the Articles of Incorporation of the Borrower, and a Certificate of Good Standing of the Borrower, both certified to by the Secretary of State of the State of Minnesota. (ii) (iii) A copy of the Bylaws of the Borrower, certified by the Secretary of Borrower. A copy of corporate resolutions adopted by the Directors of the Borrower, and certified to by the Secretary of the Borrower~ authorizing the execution, delivery and perfomance of the documents referred to in Section 3.03 hereof. (iv) An opinion or opinions of counsel reasonably acceptable to the Lender indicating that each of the documents referred to in Section 3.03 of this Resolution have been duly executed and delivered and are legal and binding obligations of the Borrower, the Guarantor and the City, as the case may be, enforceable in accordance with their terms. Pledge Agreement: the Pledge Agreement to be given by the City to the Lender; Prior Issue: the $775,000 City of Columbia Heights, Minnesota Commercial Development Revenue Note (Ruveison & Associates, Incorporated Project), Series 1981; -3- Project: the Land and the Improvements, as they may at any time exist; pro~ect costs: those costs defined as Project Costs in Section !.01 of the Loan Agreement; and Resolution: this resolution of the City. Section 2. declared that: Findinss. It is hereby found and (a) based upon representations made to the City by representatives of the Borrower as to the nature of the Project, the real property and improvements described in the Loan Agreement and the Mortgage comprising the Project 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 unemptoyment~ the retention of industry to use the available resources of the community in order to retain the benefit of its existing investment in educational and public service facilities; halting the movement of talented, educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; and more intensive development of 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 Improvements add to the tax base of the City, and accordingly are of direct benefit to the taxpayers of the City; (d) the Project has been approved by the Commissioner of Securities and Real Estate of the State of Minnesota; (e) the financing of the acquisition and construction of the Project, payment of the outstanding principal amount of the Prior Issue, the issuance and sale of the Note, the execution and delivery of the Loan Agreement and the Pledge -4- Agreement, and the performance of all covenants and agreements of the City contained in the Note, the Loan Agreement and the Pledge Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Note, the Loan Agreement and the Pledge Agreement valid and binding obligations of the City in accordance with their terms, are authorized by the Act; (f) it is desirable that the Note in the amount of $810,000 be issued by the City upon the terms set forth herein, and that the City pledge its interest in the Loan Agreement and grant a security interest therein to the Lender as security for the payment of the principal of, premium and late charges, if any, and interest on the Note~ (g) the loan payments contained in the Loan 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, premium and late charges, if any, and interest on the Note when due, and the Loan Agreement also provides that the Borrower 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 Project and payable during the term of the Loan Agreement; (h) under the provisions of Minnesota Statutes, Section 474.10, 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 other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement; the Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement; and the Note shall recite that the No~:e, including interest thereon, is payable solely from the revenue pledged to the payment thereof and shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; and -5- (i) payment of the outstanding principal amount of the Prior Issue with the proceeds of the Note is authorized by the Act. 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, and to pay the principal amount of temporary bonds issued to finance such projects pursuant to Minnesota Statutes ~474.07. 3.02. Preliminary City Approval. By preliminary ordinance duly adopted by the Council on September $, 1950~ after a public hearing held on that date, this Council approved the sale of a revenue obligation pursuant to the Act and the loan of the proceeds to the Borrower for the acquisition and construction of the Project suitable and designed for use as an office building and authorized the preparation of such documents as may be appropriate to the Project. 3.03. Approval of Documents. Pursuant to the foregoing, there have been prepared and presented to the Council copies of the following documents, all of which are now, or shall be, placed on file in the office of the City Clerk: (a) Assignment; (b) Guaranty; (c) Loan Agreement; (d} Mortgage; and (e) Pledge Agreement. The forms of the documents listed in (a) through (e) above are approved, in substantially the form of the documents as are now on file and before the Council on the date hereof. Section 4. Authorizations. Upon the completion of the Loan Agreement and the Pledge Agreement approved in Section 3.03 hereof and the execution thereof by the -6- Borrower and the Lender, as the case may be, the Mayor and the City Manager shall execute the same on behalf of the City and shall execute the Note in substantially the form approved in paragraph 5.01 hereof on behalf of the City, and shall affix thereto the corporate seal of the City, and shall execute such other certifications, documents or instruments as bond counsel or counsel for the Lender shall require, subject to the approval of the City Attorney, and 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 document so executed. Section 5. The Note. 5.01. Form and Authorized Amount. The Note shall be issued substantially in the form presented to the Council and set forth as Exhibit A to this Resolution with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, in the total principal amount of $810,000. The terms of the Note are set forth therein, and such terms, including but not limited to provisions as to interest rate, dates and amount of payment of principal and interest and prepayment privileges, are incorporated by reference herein. 5.02. Execution. The Note shall be executed on behalf of the City by the signatures of the Mayor and the City Manager 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. 5.03. 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 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 the City of such loss or destruction. -7- 5.04. ~egistration. The Note shall be registered on the books of the City, subject to the conditions set forth in the form of the Note attached hereto as Exhibit A. 5.05. Delivery and Use of Proceeds. Prior to delivery of the Note, the documents referred to in Section 3.03 hereof shall be completed and executed in form and substance as approved by the City Attorney and an original, executed counterpart of each such document shall be delivered to the Lender, together with the Organizational Documents. The City shall thereupon deliver to the Lender the Note in the total principal amount of $810~000, together with a copy, duly certified by the City Clerk, of this Resolution and such closing certificates as are required by bond counsel. Upon delivery of the Note and the above items to the Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note to the Borrower in reimbursement of, or to its order for payment of, Project Costs pursuant to the provisions of the Loan Agreement. The Borrower 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 Loan Agreement or the Pledge Agreement or any other documents referred to in Section 3.03 hereof, 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 nor charged upon any funds other than the revenue pledged to the payment thereof, and the City shall not be subject to any liability thereon, and 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~ or to enforce payment thereof against any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement, and the Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement. The agreement of the City to perform the covenants and other provisions contained in this Resolution or the Note, the Loan Agreement or the Pledge Agreement and the other documents listed in Section 3.03 hereof shall be subject at all times to the availability of revenues furnished by the Borrower -8- sufficient to pay all costs of such performance or the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon other than as stated above. Adopted: February 22, 198~-~ . /./Secretary to the Council -9- The motion for the adoption of the foregoing resolution was offered by Member Norber,q , and was duly seconded by Member Hent§es , and, upon vote being taken thereon~ the following voted in favor thereof: Hovland, Pe~koff. Norberg, Hentges, Nawrocki and the following voted against the same: None whereupon said resolution was declared duly passed and adopted and was signed by the Mayor which was attested by the Secretary of the Council. -10-