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HomeMy WebLinkAbout1991-108 CCR Councilmember Philip Cohen introduced the following resolution and moved its adoption: RESOLUTION NO. 91 -108 RESOLUTION RELATING TO COMMERCIAL DEVELOPMENT REFUNDING REVENUE BONDS (BROOKDALE ASSOCIATES LIMITED PARTNERSHIP PROJECT); AUTHORIZING THE ISSUANCE AND SALE THEREOF AND AUTHORIZING THE EXECUTION OF VARIOUS NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota (the City), as follows: Section 1. Authorization and Recitals 1.01. General Authority By the provisions of Minnesota Statutes, Sections 469.152 469.165, as amended (the "Act the City is authorized to sell revenue bonds or obligations and to enter into revenue agreements to finance projects as defined therein, and to refund bonds issued for such purposes. 1.02. Outstanding Bonds The City, pursuant to the Act, issued its Commercial Development Revenue Bonds (Brookdale Three Limited Partnership Project), Series 1985 in the principal amount of $8,900,000 (the "Prior Bonds for the purpose of financing the acquisition of land and the construction of an approximately 111,000 square foot commercial office building (the "Project on behalf of Brookdale Three Limited Partnership, a Minnesota limited partnership. Acquisition, construction and equipping of the Project has been completed but, due primarily to slower than anticipated rentals in the commercial real estate market, the Prior Bonds are in default and have been declared due and payable by the trustee for the holders of the Prior Bonds (the "Prior Bonds Trustee 1.03. Proposed Refunding Bonds Pursuant to a settlement negotiated by Brookdale Three Limited Partnership with the Prior Bonds Trustee, Brookdale Associates Limited Partnership (the successor to Brookdale Three Limited Partnership, hereafter referred to as the 'Borrower has proposed that the City, acting under and pursuant to the Act, issue and sell its Commercial Development Refunding Revenue Bonds (Brookdale Associates Limited Partnership Project), Series 1991, in the principal amount of $5,100,000 (the 'Bonds for the purpose of refunding the Prior Bonds. Pursuant to the proposal, the proceeds of the Bonds will be loaned by the City to the Borrower to refund the Prior Bonds, and the Borrower will agree to make loan repayments sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The Borrower will also grant a mortgage lien on the Project to the Trustee designated for the Bonds. Repayment of the -2- i RESOLUTION NO. 91 -108 Borrower's loan obligation, and the Bonds, would be guaranteed by Northwestern National Life Insurance Company. 1.04. Documentation Drafts of the following documents relating to the Project and the Bonds have been prepared and submitted to this Council and are hereby directed to be filed in the office of the City Clerk: (a) a Mortgage Loan Agreement (the "Loan Agreement to be dated as of March 1, 1991 proposed to be entered into by the City and the Borrower; (b) an Indenture of Trust (the "Indenture to be dated as of March 1, 1991, proposed to be entered into by the City and the American National Bank and Trust Company, as trustee (the "Trustee relating to the Bonds; (c) a Guaranty Agreement (the "Guaranty to be dated as of March 1, 1991, proposed to be executed by Northwestern National Life Insurance Company "NWNL in favor the Trustee; (d) an Assignment of Rents and Leases (the "Assignment to be dated as of March 1, 1991, proposed to be executed by the Borrower in favor of the Trustee; (e) a Bond Purchase Agreement (the "Bond Purchase Agreement to be dated as of March 1,1991, proposed to be executed by the Borrower, NWNL, the City and Merrill Lynch, Pierce, Fenner Smith, Incorporated (the "Purchaser (f) a Remarketing Agreement (the "Remarketing Agreement to be dated on or about March 1, 1991, proposed to be executed by the Borrower, NWNL, the Trustee and Juran Moody, Inc., St. Paul, Minnesota as remarketing agent. Section 2. Findings It is hereby found, determined and declared that: (a) the refinancing of the Project, the authorization of the Bonds in the principal amount of $5,100,000, the execution and delivery of the Loan Agreement, the Indenture and the Bond Purchase Agreement and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Indenture and the Bond Purchase Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Loan Agreement, the Indenture, the Bond Purchase -3- s RESOLUTION NO. 91 -108 Agreement and the Bonds valid and binding special obligations in accordance with their terms, are authorized by the Act; (b) to assure the continued operation of the Project for the benefit of the residents and tax base of the City, it is desirable that the Bonds in the aggregate principal amount of $5,100,000 be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City assigns to the Trustee under the Indenture its interests in certain revenues and payments to be received by the City under the Loan Agreement, and the mortgage lien granted to the City by the Borrower pursuant to the Loan Agreement, as security for the payment of the principal of, premium, if any, and interest on the Bonds; (c) the loan repayments contained in the Loan Agreement are fixed, and are 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 and interest on the Bonds when due; and the Loan Agreement also P rovides 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 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 Loan Agreement; (d) the execution and delivery of the Loan Agreement, the Bond Purchase Agreement and the Indenture will 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; (e) no litigation is pending or, to the best knowledge of the members of this 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 Bonds, or otherwise questioning the validity of the Bonds or the execution, delivery or validity of the Loan Agreement, the Bond Purchase Agreement or the Indenture or questioning the appropriation of revenues to payment of the Bonds as provided therein or the right of the City to loan the proceeds of the Bonds to the Borrower to refund the Prior Bonds; and (f) all acts and things required under the Constitution and the laws of the State of Minnesota to make the Bonds, the Loan Agreement, the Bond Purchase Agreement and the Indenture the valid and binding special -4- RESOLUTION NO. 91 -108 obligations of the City in accordance with their terms will have been done upon adoption of this Resolution and execution of the Loan Agreement, the Bond Purchase Agreement and the Indenture. Section 3. Approval of Documents The forms of the Loan Agreement, the Bond Purchase Agreement and the Indenture referred to in Section 1.04 are approved, subject to such modifications as are deemed appropriate and approved by the officers of the City executing the same and legal counsel to the City, which approval shall be conclusively evidenced by such execution. The Mayor and City Manager are authorized and directed to execute said documents on behalf of the City. Copies of all of the documents shall be delivered, filed and recorded as provided therein. The Mayor and City Manager are also authorized and directed to execute such other instruments and closing certificates as may be required to give effect to the transactions herein contemplated. Section 4. The Bonds; Terms, Sale and Execution 4.01. Authorization The City hereby authorizes the issuance of the Bonds in the aggregate principal amount of $5,100,000, in the form and upon the terms set forth in the Indenture and this resolution, said Bonds to mature on December 1, 2007 and to bear interest at an initial rate of 6.75% per annum, subject to adjustment as provided in the Loan Agreement and Indenture. The Bonds shall be sold to the Purchaser at a price of par plus accrued interest to the date of closing in accordance with the terms of the Bond Purchase Agreement. 4.02. Execution The Mayor and City Manager are hereby authorized and directed to execute the Bonds as prescribed herein and in the Indenture and to deliver them to the Trustee, together with a certified copy of this resolution, the other documents required in the Indenture and such other certificates, documents and instruments as may be appropriate to effect the transactions herein contemplated. The Trustee is hereby appointed authenticating agent for the Bonds pursuant to Minnesota Statutes, Section 475.55, Subdivision 1. Section 5. Authentication of Proceedings The Mayor, City Manager, City Clerk and other officers of the City are authorized and directed to furnish to the Underwriter and bond counsel certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality and marketability of the Bonds as such facts appear from the books and records in the officer's custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, -5- RESOLUTION NO. 91 -10 shall constitute representations of the City as to the truth of all statements contained therein. Section 6. Limitations of the City's Obligations. Notwithstanding anything contained in the Bonds, the Loan Agreement, the Bond Purchase Agreement or the Indenture, the Bonds 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 revenues pledged to the payment thereof, and no holder of the Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Bonds or 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 payment thereof, and the Bonds 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 payment thereof. The agreement of the City to perform the covenants and other provisions contained in this resolution or the Bonds, the Loan Agreement, the Bond Purchase Agreement or the Indenture shall be subject at all times to the availability of the revenues furnished by the Borrower or others 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. Passed this 25th day of March, 1991. Approved: Todd Paulson, Mayor Attest: Deputy City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Celia Scott and, upon vote being taken thereon, the following voted in favor thereof: Todd Paulson, Celia Scott, Jerry Pedlar, Dave Rosene, and Philip Cohen; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted. -6-