RES 1985-60 - 00005188RESCLUTIM AUTHORIZING THE ISSUANCE OF THE CITY'S $720,000
COMMERCIAL DEVELOPMENT REVENUE NOTE (PASCM PRCJECT)
BE IT RESCLVED by the City Council of the City of Fridley, Minnesota, as
follows:
' Section 1. Definitions.
1.01. In this Resolution, the following terms have the following respective
meanings:
%Qt" means the Minnesota Municipal Industrial Developnent Act, Minnesota
Statutes, Chapter 474, as amended,
"Agreement" means the Loan Agreenent, dated as of June 1, 1985, between
the City and the Borrower;
"Assicymment" means the Assignment of Rents and Leases, dated as of June 1,
1985, given by the Borrower in favor of the Lender;
"Borrower" means Gerald W. Paschke, his successors and permitted assigns;
"Building" means the Building as defined in the Agreement;
"City" means the City of Fridley, Minnesota, its successors and assigns;
"Costs of Contstruction" means those costs defined as Costs of
Construction in the Agreement;
"Disbursement Agreement" means the Disbursement Agreement, dated as of
June 11 1985, by and between the City, the Borrower, Northstar Title,
Inc., a Minnesota corporation, as agent for Ticor Title Insurance Company,
a California corporation, and the Lender;
""irment" means the Equipment as that term is defined in the Agreenent;
"Holdeg" means the Lender and any subsequent owner(s) of the Note;
"Land" means the real property described in the Mortgage;
"Lender" means First Bank Robbinsdale, National Association, in
Robbinsdale Minnesota, its successors and assigns;
"Mortgage" means that certain Mortgage, Security Agreement and Fixture
Financing Statement, dated as of June 1, 1985, given by the Borrower in
favor of the Lender;
"Note" means the $720,000 principal amount Cammercial Develoment Revenue
Note (Paschke Project), dated as of the date of delivery thereof, issued
by the City to the Lender pursuant to the Resolution;
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"Pledge Agreement" means the Pledge Agreement, dated as of June 1, 1985,
between the City and the Lender;
"Prof t" means the Building and the Equipment to be aoguired, constructed
and installed upon the Land, as defined in the Agreement;
"Reference Rate" means the Reference Rate of First National Bank of
Minneapolis, as further defined in the Agreement; and
I "Resolution" means this resolution of the City Council.
Section 2. Findings.
2.01. it is hereby found and declared that:
(a) based upon representations made to the City by representatives of
the Borrower as to the nature of the Project as described in the Agreement,
the Project constitutes a project authorized by the Act;
(b) the purpose of the Project is and the effect thereof shall be to
promote the public welfare by the attraction, encouragement, and development
of econanically 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, 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 oommunity;
(c) the financing of the Project, the issuance and sale of the Note, the
execution and delivery of the Agreement, the Pledge Agreement, and the
Disbursement Agreement, and the performance of all covenants and agreements of
the City contained in the Note, the Agreement, the Pledge Agreement, and the
Disbursement Agreement and of all other acts and things required under the
Hone Rule Charter (the "Charter ") of the City and the Constitution and laws of
the State of Minnesota to make the Note, the Agreement, the Pledge Agreement,
and the Disbursement Agreement valid and binding obligations of the City in
acoordance with their terms are authorized by the Act;
(d) it is desirable that the Note in the principal amount of $720,000 be
issued by the City upon the terms set forth herein and that the City pledge
its interest in the Agreement and grant a security interest therein to the
Lender as security for the payment of the principal of, premium, if any, and
interest on the Note;
(e) the Loan Repayments provided in the Agreement are fixed and are
required to be revised from time to time as necessary, so as to produce inoome
and revenue sufficient to provide for prompt payment of the principal of,
premium, if any, and interest on the Note when due, and the Agreement also
provides that the Borrower is required to pay all expenses of the operation
and maintenance of the Land and the Project, including, but not limited to,
adequate insurance thereon and all taxes and special assessments levied upon
or with respect to the Land and payable during the term of the Agreement;
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Page 3 — Resolution No. 60 - 1985
(f) 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; the
Note, premium, if any, and the interest thereon shall not constitute an
indebtedness of the City within the meaning of any constitutional, Charter or
statutory limitation and shall not constitute or give rise to a pecuniary
liability of the City or a charge against its general credit or taxing powers
and shall not constitute a charge, lien, or encumbrance, legal or equitable,
upon any property of the City other than its interest in the Project;
(g) the execution and delivery of the Note, the Agreement, the Pledge
Agreement, and the Disbursement Agreement shall not conflict with or
constitute, on the part of the City, a breach of or a default under any
existing agreement, indenture, mortgage, lease, or other instrument to which
the City is subject or is a party or by which it is bound; provided that this
finding is made solely for the purpose of estopping the City from denying the
validity of the Note, the Agreement, the Pledge Agreement, or the Disbursement
Agreement by reason of the existence of any facts contrary to this finding;
(h) no litigation is pending or, to the best knowledge of the members of
this City Council, threatened against the City questioning the organization or
boundaries of the City or the right of any officer of the City to hold his or
her office or in any manner questioning the right and power of the City to
execute and deliver the Note or otherwise questioning the validity of the Note
or the execution, delivery, or validity of the Agreement, the Pledge
Agreement, or the Disbursement Agreement or questioning the pledge of revenues
to payment of the Note or the right of the City to loan the proceeds of the
Note to the Borrower;
(i) all acts and things required under the Charter and the Constitution
and the laws of the State of Minnesota to make the Note, the Agreement, the
Pledge Agreement, and the Disbursement Agreement the valid and binding
obligations of the City in accordance with their terms shall have been done
upon adoption of this Resolution and execution of the Note, the Agreement, the
Pledge Agreement and the Disbursement Agreement;
(j) the City, a municipal corporation and political subdivision of the
State of Minnesota, is duly organized and existing under its Charter and the
Constitution and the laws of the State of Minnesota and is authorized to issue
the Note in accordance with the Act; and
(k) the City shall allocate $720,000 of its bonding authority to the
issuance of the Note and further certifies that the allocation of bonding
authority to the Note was not made in consideration of any bribe, gift,
gratuity, or direct or indirect contribution to any political campaign.
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, construction, and installation of facilities constituting a
"project ", 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.
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Page 4 — Resolution No. 60 - 1985
3.02. Preliminary City proval. By resolution duly adopted by the City
Council on May 6, 1985, after a public hearing held on that date, this City
Council gave preliminary approval to financing the acquisition, construction,
and installation of the Project through the issuance of the Note.
3.03. Approval of Documents. Pursuant to the foregoing, there have been
prepared and presented to the City Council copies of the following documents,
all of which are now or shall be placed on file in the office of the City
Clerk- Treasurer:
I(a) the Agreement;
(b) the Mortgage and the Assignment;
(c) the Pledge Agreement; and
(d) the Disbursement Agreement
The forms of the documents listed in (a) through (d) above are approved, and
the officers of the City are hereby authorized to execute the same with such
variations, insertions, and additions as are deemed appropriate by such
officials, as evidenced by their execution thereof. The documents listed in
(b) above, being documents to which the City is not a party, will not be
executed by the City.
Section 4. Authorizations.
4.01. Upon the completion of the Agreement, the Pledge Agreement, and
the Disbursement Agreement approved in Section 3.03 hereof and the execution
thereof, the City officials are authorized to execute and deliver the Note, in
substantially the form approved in paragraph 5.01 hereof, and the officers of
the City are authorized to execute such other certifications, documents, or
instruments as Bond Counsel shall require, and all certifications, recitals,
and representations therein shall oonstitute the certificates, 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
City Council of the instrument or document so executed.
Section 5. The Note.
5.01. Form and Authorized Amount. The note is hereby authorized to be
issued and shall be issued substantially in the form presented to the City
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 principal amount of $720,000. The offer of the Lender to
purchase the note at a price of par is found reasonable and is hereby
accepted. 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. The Note shall in all events contain a
recital that it is issued pursuant to and in accordance with the Act.
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5.02. Execution. The Note shall be executed on behalf of the City by the
manual signatures of the Mayor and the City Manager, which shall be attested
by the manual signature of the City Clerk- Treasurer, and shall be sealed with
the City's corporate seal, and the Certificate of Registration shall be signed
by the Note Registrar. 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. Mutilate& Lost. and Destroved Note. In case the Note shall become
mutilated or be lost or destroyed, 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 lost or destroyed, 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, filing with the City
evidence satisfactory to it of such loss or destruction.
5.04. Assignment. The Lender is hereby designated as Note Registrar (the
"Note Registrar ") and shall keep a Note Register in which, subject to such
reasonable regulations as it may prescribe, the Note Registrar shall provide
for the registration of transfer of ownership of the Note. The Note shall be
initially registered in the name of the Lender and shall be transferable upon
the Note Register by the Lender in person or by its agent duly authorized in
writing, upon surrender of the Note together with a written instrument of
transfer duly executed by the Lender or its duly authorized agent in the
following form:
For value received _hereby sells, assigns and
transfers unto the within Note of the City of Fridley,
Minnesota, and does hereby irrevocably constitute and appoint
attorney to transfer said Note on the books of the Note
Registrar with full power of substitution in the premises. The
undersigned certifies that the transfer be made in accordance with the
provisions of the Note Resolution of the City.
' Upon such transfer the Note Registrar shall note the date of registration and
the name and address of the new Holder of the Note in the Note Register and in
the registration blank appearing on the Note.
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,
and an original, executed counterpart of each such document shall be delivered
to the Lender. The City shall thereupon deliver to the Lender the Note in the
principal amount of $720,000 together with a cop,, duly certified by the City
Clerk- Treasurer, 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 proceeds
of the Note shall be deposited in a Construction Fund hereby created, to be
maintained by the Lender, and disbursement of such proceeds shall be made to
the Borrower in reimbursement of or to its order, for payment of costs of
Construction pursuant to the provisions of the Agreement and the Disbursement
Agreement.
P.ny surplus in the Construction Fund shall be applied toward prepayment
of the Note as provided in the Agreement and shall not be invested to produce
a yield greater than the yield on the Note as required by Internal Revenue
Service Revenue Procedures 79-5 and 81 -22 and any regulations amendments or
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Page 6 — Resolution No. 60 - 1985
modifications thereto; provided that if the Lender receives an opinion of Bond
Counsel that the exemption from federal income taxation of the interest on the
Note will not be jeopardized, the surplus funds may be invested at a yield
greater than the yield on the Note.
5.06. Issuance of New Note. The City shall, at the request and expense of
the Lender, issue new Notes, in an aggregate outstanding principal amount
equal to that of the Note surrendered, and of like tenor except as to number,
principal amount, and the amount of the monthly payment payable thereunder,
and be registered by the Note Registrar in the name of the Lender or such
transferee as may be designated by the Lender.
Section 6. Limitations of the City's Obligations.
6.01. Notwithstanding anything contained herein or in the Note, the
Agreement, the Pledge Agreement, or the Disbursement Agreement or any other
documents referred to in Section 3.03 hereof, the Note, the principal thereof,
prenium thereon, if any, and interest thereon and the Agreement, the Pledge
Agreement, and the Disbursement Agreement shall not constitute any
indebtedness of the City within the meaning of any constitutional, Charter, or
statutory limitation and shall not constitute or give rise to a pecuniary
liability of the City or a charge against its general credit or taxing powers
and shall not constitute a charge, lien, or encumbrance, legal or equitable,
upon any property of the City other than its interest in the Project, and no
Owner 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 its interest in
the Project. The agreenent of the City to perform the covenants and other
provisions contained in this Resolution or the Note, the Agreement, the Pledge
Agreement, or the Disbursement 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 sufficient to pay all costs of such
performance or the enforcement thereof, and neither the City nor any of its
officers, employees, or agents shall be subject to any personal or pecuniary
liability thereon.
Section 7. City Representative.
7.01. The City Clerk- Treasurer and the City Manager of the City are
hereby designated and authorized to act on behalf of the City as the City
Representative and alternate City Representative, respectively (as def fined in
the Agreement).
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 1ST DAY OF
JULY, 1985
ATTEST:
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WILLIAM J. MAYOR
T.F
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