HomeMy WebLinkAbout$810,000 Comm.Dev.Revenue Note
HOLMES & GRAVEN
CHARTERED
470 Pillsbury Center, Minneapolis, Minnesolll 55402
City of Columbia Heights, Minnesota
$810,000 Commercial Development Revenue Note
(Ruvelson & Associates, Incorporated Project)
We have acted as Bond Counsel with respect to the authorization, issuance and sale
by the City of Columbia Heights, Minnesota (the "City") of its Commercial
Development Revenue Note (Ruvelson & Associates, Incorporated Project) (the
"Note"). The Note is a special obligation of the. City, dated as of the date hereof
and issued pursuant to the Municipal Industrial Development Act, Minnesota
Statutes, Chapter 474, as amended (the "Act"), and a resolution adopted by the city
council of the City on February 22, 1982, (the "Note Resolution"). The Note is
payable solely from the revenues derived by the City from the Loan Agreement,
dated as of the date hereof and executed by James J. Ruvelson & Associates,
Incorporated (the Developer) and the City (the "Loan Agreement"). We have
examined such laws, certified proceedings and other documents, materials and
papers as deemed necessary to render this opinion.
We have also examined the Note as executed, an executed copy of the Loan
Agreement, dated as of March 4, 1982, made and entered into by the City and the
Developer; the Pledge Agreement, dated as of March 4, 1982, executed by the City
and the Lender; the Mortgage and Security Agreement and Fixture Financing
Statement, dated as of March 4, 1982, executed by the Developer; and the other
instruments and documents relative to the permanent financing of the acquisition,
construction and equipping of an office facility in the City by the Developer (the
"Project").
Based upon such examinations, we are of the opinion, as of the date hereof as
folio ws:
1. The City is a home rule charter city and political subdivision of the
State of Minnesota with the power and authority to issue, sell and deliver the Note,
ancl the Note is a valid and legally binding special obligation of the City,
enforceable in accordance with its terms, payable as to principal and interest from
and secured by valid and enforceable liens on and pledge of the revenues derived
from the Loan Agreement, all in the manner provided in the Loan Agreement.
2. The Loan Agreement and Pledge Agreement have been duly
authorized, executed and delivered by the city, constitute. valid and legally binding
agreements by the parties thereto, enforceable in accordance with their terms
(assuming due authorization and execution by all parties), and all right, title and
interest of the City under and pursuant to the Loan Agreement (except for certain
rights to indemnity and reimbursement for expenses thereunder) have been duly and
legally assigned and pledged by the City to the Lender, in accordance with the
Pledge Agreement, as further security for the Note.
The foregoing opinions are qualified to the extent that the enforceability of the
Note, the Note Resolution, the Loan Agreement and Pledge Agreement may be
limited by laws affecting remedies and by bankruptcy or insolvency or other laws
affecting creditors' rights. With respect to due authorization, execution and
delivery of the Loan Agreement by the Developer, we have relied upon the opinion
of William J. Keefer, counsel to the Developer, dated as of the date hereof.
3. Based on certain representations of the Developer as to the applica-
tion of the proceeds of the Note and as to prior small issues of industrial
development bonds, under existing statutes, court decisions, rulings and regula-
tions, interest on the Note is exempt from federal income taxation, and from
taxation as income by the state of Minnesota and its subdivisions and municipalities
(except for Minnesota corporate excise taxes measured by income and Minnesota
bank excise taxes measured by income), except that no opinion is expressed as to
the exemption from federal or state income taxation of interest on the Note for
any period during which the Note is held by a pel'son who, within the mflaning of
Section 103(b)(10) of the Internal Revenue Code of 1954, as amended, is a
substantial user of the Project, or a related person.
4. The Note is not an arbitrage bond as defined in Section 103(c) of the
Internal Revenue Code of 1954, as amended.
5. The Note is not required to be registered under the Securities Act of
1933, as amended, or the securities laws of the State of Minnesota, in connection
with the sale thereof by the City to Unionmutual Stock Life Insurance Co. of
America. The Note constitutes a "municipal security" within the meaning of the
Securities Exchange Act of 1934, as amended.
6. The Trust Indenture Act of 1939, as amended, does not apply to the
Note, the Loan Agreement, the Pledge Agreement, the Assignment, the Guaranty,
or the Mortgage, or the transactions contemplated hereby.
It is to be understood that the rights of the holders of the Note and the
enforceability thereof may be subject to the exercise of judicial discretion in
accordance with general principles of equity, to the valid exercise of the
constitutional powers of the United States of America and of the sovereign powers
or state or other governmental units having jurisdiction, and to bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditor's rights
heretofore or hereafter enacted.
Dated this 1- th day of March, 1982.
HO~/S & GRAVEN, Chartered
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