RES 1983-76 - 00005773154
A RESOLUTION OF THE CITY OF FRIDLEY, AUTHORIZING THE
ISSUANCE OF $lr300,000 AGGREGATE PRINCIPAL AMOUNT
INDUSTRIAL DEVELOPMENT REVENUE BONDS - OWCZARZAR
RWES`ffMU COMPANY PROTECT (ECA ENGINEE[; UUr INC.)
' WHEREAS, the Municipal Industrial Development Actr Minnesota Statutes, Chapter
474, as amended (the "Act ") , declares that the welfare of the State of
Minnesota (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 unemployment, and it is the policy of the State to
facilitate and encourage action by local government units to prevent the
economic deterioration of such areas to the point where the process can be
reversed only by total redevelopment through the use of 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, 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 the 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; 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 Fridley, Anoka County, Minnesota (the "issuer ") is
authorized by the Act to enter into a revenue agreement with any person, firm
or public or private corporation or federal or state governmental subdivision
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 liability for injury to persons or
property arising from the operation 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
;d
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15
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,
reconstruction, improvement, betterment or extension of any such project; and
WHEREAS, Cwczarzak Investment Company, a general partnership duly formed and
existing under the laws of the State of Minnesota (the "Borrower "), proposes
to acquire land and to construct a manufacturing and warehouse facility
thereon (the "Project ") to be owned by the Borrower, 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 facilities 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
September 1, 1983 (the "Indenture "), with Fidelity Bank and Trust Company, in
Minneapolis, Minnesota (the "Trustee "), to provide, among other things, for
the issuance by the City of Fridley, Minnesota, of its Industrial Development
Revenue Bonds (Owczarzak Investment Company Project), dated as of September 1,
1983, in the aggregate principal amount of $1,300,000 (the "Bonds "), and the
Issuer and the Borrower have proposed to enter into a Loan Agreement, dated as
of September 1, 1983 (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 Fidelity Bank and Trust Company (the
"Bank ") have proposed to enter into a Standby Letter of Credit and
Reimbursement Agreement, dated as of September 1, 1983 (the "Letter of Credit
Agreement"), relating to repayments of moneys drawn under the Letter of Credit
(as hereinafter defined), and the Borrower and the Bank have proposed to enter
into a Combination Mortgage, Security Agreement and Fixture Financing
Statement, dated as of September 11 1983 (the "Letter of Credit Mortgage "), so
as to secure the performance of the Borrower's obligations under the Letter of
Credit, and the Borrower and the Bank have proposed to enter into an
Assignment of Leases and Rents, dated as of September 1, 1983 (the "Letter of
Credit Assignment "), whereby the Borrower assigns, grants and transfers to the
Bank all of the Borrower's right, title and interest in and to any present and
future leases and rents or agreements covering all or part of the Mortgaged
Property (as hereinafter defined) as security for the performance of the
Borrower's obligations under the Letter of Credit (as hereinafer defined), and
the Borrower and the Trustee have proposed to enter into a Combination
Mortgage, Security Agreement and Fixture Financing Statement, dated as of
September 1, 1983 (the "Mortgage "), so as to secure the performance of the
Borrower's obligations under the Agreement, and the Borrower and the Trustee
have proposed to enter into an Assignment of Leases and Rents, dated as of
September 1, 1983 (the "Assignment "), whereby the Borrower assigns, grants and
transfers to the Trustee all of the Borrower's right, title and interest in
and to any present and future leases and rents or agreements covering all or
any part of the Mortgaged Property (as hereinafter defined) as further
security for the payment of the principal of, premium, if any, and interest on
the Bonds and the performance of the Borrower's obligations under the
Agreement; and
Page 3 — Resolution No. 75 - 1983
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 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 Mortgaged Property under the Mortgage (the "Mortgaged
Property "), and, pursuant to the Assignment, all present and future leases,
rents, 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 its Home Rule Charter or within the meaning of any
constitutional or statutory limitation 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 Project; 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 said Project in good repair, the cost of keeping the Project
properly insured and any payments required for taxes; and
WHEREAS, as an inducement to Piper, Jaffray & Hopwood (the "Underwriter "), in
Minneapolis, Minnesota, to purchase the Bonds, there will be issued an
Irrevocable Standby Letter of Credit, dated as of September 1, 1983 (the
"Letter of Credit "), by the Bank, in favor of the Borrower, to secure payment
of the principal. of (not premium) and up to one hundred thirty -five (135)
days' interest on the Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY,
MINNESOTA, THAT:
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
throught governmental action to prevent, so far as possible, emergence of
blighted lands and areas of chronic unemployment, and it is the policy of the
State to facilitate and encourage action by local government units to prevent
the economic deterioration of such areas to the point where the process can be
reversed only by total redevelopment through the use of local, state and
federal funds derived from taxation with the attendant necessity of relocating
displaced persons and of duplicating public services in other areas.
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 educated youth to
processing, transporting, marketing, service and other industries, and unless
existing and related industries are retained and new industries are developed
e5 6
Page 4 — Resolution No. 75 - 1983
157
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.
' 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
governmental services and the need for more intensive development and use of
land to provide an adequate tax base to finance these costs.
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 intensive development and use of land to increase the tax base of the
Issuer and overlapping taxing authorities and maintain and provide for
additional opportunities for employment for residents of the Issuer and that
while conventional, commercial financing to pay the capital cost of the
Project is available at such costs of borrowing that the econonic feasibility
of operating the Project would be significantly reduced, with the aid of
municipal financing and its resulting lower borrowing cost, the Project is
economically more feasible.
5. The loan to the Borrower under the Agreement to finance the acquisition,
construction and installation of the Project, which consists of the Land and
the Building (as such terms are defined in the Agreement) , be and the same is
hereby authorized.
6. For the purpose of financing the cost of the acquisition, construction and
installation of the Project, there is hereby authorized the issuance of
$1,300,000 aggregate principal amount City of Fridley, Minneosta, Industrial
Develonent Revenue Bonds (Owczarzak Investment Company Project), dated as of
Spetember 1, 1983 (the "Bonds "). The Bonds shall be issued in fully
registered form, 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. The interest rate on the Bonds shall not exceed
twelve percent (12.00 %) per annum, and the rate of interest shall be approved
by the Mayor, the City Clerk- Treasurer and the City Manager.
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 and the City Manager to execute and the City Clerk- Treasurer
to attest under the corporate seal of the Issuer the Indenture and to deliver
to the Trustee the Indenture and does hereby authorize and direct the
execution of the Bonds by the facsimile signatures of the Mayor and the City
Manager and does hereby provide that the Indenture 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.
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158
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 City
Clerk- Treasurer with such necessary and appropriate variations, omissions and
insertions 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 determination.
' 8. The Mayor, the City Manager and the City Clerk- Treasurer are hereby
authorized and directed to execute, attest and deliver the Agreement by and
between the Issuer and the Borrower. All of the provisions of the Agreement,
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 Agreement shall be substantially in the form on file in
the office of the City Clerk- Treasurer with such necessary and appropriate
variations, omissions and insertions 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 determination.
9. The Mayor, the City Manager and the City Clerk- Treasurer are hereby
authorized and directed to accept and confirm the Bond Purchase Agreement,
dated as of September 1, 1983 (the "Bond Purchase Agreement ") , from Piper,
3affray and Hopwood, as Underwriter, and accepted by the Issuer and the
Borrower. 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 incorporated 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 City Clerk- Treasurer.
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. 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 powers and to perform such duties.
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 covenant, 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.
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159
11. Except as herein otherewise expressly provided, nothing in this
resolution or in the Indenture, express or implied, is intended or shall be
construed to confer 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.
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
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, but this resolution, the Indenture, the Agreement, the Bond Purchase
Agreement and the Bonds 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 Agreement 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
commitments, 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 conditions fixed in the Indenture, it
being the intention hereof that such commitments on the part of the Issuer are
as binding as if contained in this resolution separate and apart from the
Indenture, the Agreement and the Bond Purchase Agreement.
' 13. The Bonds shall contain a recital that the Bonds are issued pusuant 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 Horne Rule Charter of the Issuer, the Constitution and
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 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 and
the Bond Purchase Agreement have happened, do exist and have been performed as
so required by law.
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, covenants and agreements contained in the Bonds,
the Indenture, the Agreement, the Bond Purchase Agreement and this resolution.
Page 7 — Resolution No. 75 - 1983
1 61 q 0
15. The Issuer hereby approves the form of the preliminary Official
Statement, dated August 25, 1983, on file in the office of the City
Clerk- Treasurer, and hereby ratifies and confirms its use and distribution by
Piper, Jaffray & Hopwood, the Underwriter, in connection with the sale of the
Bonds and consents to the distribution of the final Official Statement to
prospective purchasers of the Bonds; however, the Issuer assumes no
responsibility for the contents of said Official Statement,
16. The Trustee is hereby designated as the paying, authenticating and
transfer agent and registrar for the Bonds.
17. The City Manager of the Issuer is hereby designated and authorized to act
on behalf of the Issuer as the Issuer Representative (as defined in the
Agreement) . The City Clerk- Treasurer of the Issuer is hereby designated and
authorized to act on behalf of the Issuer as an alternate Issuer
Representative.
18. This resolution shall be in full force and effect from and after its
passage.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 129H DAY OF
SEPTEMBER, 1983.
ATTEST:
SIDNEY C. INMAN - CITY CLERK
V ` �
WILLIAM J. - MAYOR