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HomeMy WebLinkAbout1982-217 CCRMember Rich Theis introduced the following resolution and moved its adoption: RESOLUTION NO. 82 -217 RESOLUTION RELATING TO A $1,600,000 COMMERCIAL DEVELOPMENT REVENUE NOTE (SHINGLE CREEK ELEVE14 PROJECT); AMENDING RESOLUTION NO. 81 -15 AND AUTHORIZING THE EXECUTION, ISSUANCE AND DELIVERY OF AN AMENDED AND RESTATED NOTE BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota (the City) as follows: Section 1. Recitals. The City has previously issued its Commercial Development Revenue Note (Shingle Creek Eleven Project) (the Note) dated February 6, 1981, in the principal amount of up to $1,600,000, under the provisions of Minnesota Statutes, Chapter 474 (the Act), to temporarily finance a project under the Act consisting of the acquisition, construction and equipping of an office/ warehouse building (the Project) on behalf of Shingle Creek Eleven, a Minnesota general partnership (the Partnership). The acquisition, construction and equipping of the Project has been completed. The Note was authorized and issued by the City pursuant to Resolution No. 81 -15, adopted by this Council on January 12, 1981. The Note was sold by the City to First National Bank of Minneapolis, a national banking association (the Lender). The Note is presently registered in the name of the Lender, is outstanding in the principal amount of $1,600,000 and matures on December 1, 1982. Representatives of the Partnership have requested that the City extend the maturity of the Note to December 1, 1985 and revise the interest rate on the Note. Section 2. Approval of Documents. There has been prepared and presented to this Council copies of the following, all of which are now, or shall be, placed on file in the office of the City Clerk: (a) First Amendment to Loan Agreement between the City and the Partnership (First Amendment to Loan Agreement); (b) First Amendment to Pledge Agreement between the City and the Lender (First Amendment to Pledge Agreement); F1 -1- RESOLUTION NO. 82 -217 (c) First Amendment to Assignment of Rents and Leases, from the Partnership to the Lender (First Amendment to Assignment of Rents and Lea,-Qs); (d) First Amendment to Mortgage and Security Agreement from the Partnership to the Lender (First Amendment to Mortgage); (e) First Amendment to the Guaranty Agreement from the Guarantors (as defined in Resolution No. 81 -15) to the Lender (First Amendment to Guaranty); and (f) First Amendment to Construction Loan Agreement, among the Lender, the Partnership and the City (First Amendment to Construction Loan Agreement). The forms of documents listed in (a) through (f) above are approved with such variations, insertions and additions as are deemed appropriate by the parties and approved by the -City Attorney and City Manager. Section 3. Authority and Authorization. Under the Act the City has the Authority to issue revenue bonds to refund obligations previously issued by the City under the Act. The City hereby agrees to extend the maturity of the Note to December 1, 1985 and revise the interest rate thereof, and in evidence thereof hereby agrees to issue an amended and restated Note to the Lender in exchange for the Note. The Note as so amended and restated is hereinafter referred to as the "Amended Note." Unless otherwise specifically provided for herein the provisions of Resolution, No. 81 -15 shall apply to the Amended Note. Section 4. Amendment of Section 5.01 of Resolution No. 81 -15. Section 5.01 of Resolution No. 81 -15 is hereby amended to read as follows; 5.01. Form and Authorized Amount. The Amended Note shall be issued in substantially the form hereinafter set forth, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions of this Section, in the total principal amount of $1,600,000. -2- a RESOLUTION N0. 82 -217 UNITED STATES OF AMERICA STATE OF MINNESQTA COUNTY OF HENNEPIN CITY OF BROOKLYN CENTER Amended and Restated Commercial Development Revenue Note (Shingle Creek Eleven Project) R-1 $1,600,000 The City of Braoklyn Center, Minnesota, a municipal corporation of the State of Minnesota (the "City"}, for value received, hereby promises to gay to the order of FIRST NATICNAL BANK OF MINNEAPOLIS, or assigns (the "Holder"}, at its principal office in Minneapolis, Minnesota, or at such other place as the Fiolder may designate in writing, from the source and in the manner, �nd with i,nterest thereon as-hereinafter provided, the principal sum of ONE MILLION SIX HUNDRED THOUSAND DOLLARS ($1,600,OQ0), on December 1, 1985, and to pay interest on the unpaid principal amount, from the date hereof until this Note is fully paid, at the rate per annum equal to F 85� of the 3-month C.D. rate (secondary market) as released from time to time by the Board of Governors of the Federal Reserve System (presently Federal Reserve Statistical Release, Form H.9 (511), entitled "WeeKly Summary of Banking and Credit Measures, Average of Daily Figures"} for the week ended nearest the date of such release {the "Tax Exempt Rate") or at such higher or lower rate as hereinafter grovided, in_any coin or currency which at the time or times of payment is legal tender for the payment.of public or private debts in the United StateS of AmericG, in accordance with the terms hereinafter set forth. The Tax Exempt Rate shall never be less than 2� per annum or exceed 30� per annum. The Tax Exempt Ra�e will be�adjusted weekly, if necessary, effective as.o� the date of such release of the Board of Governors of tne Federal Reserve System specified above. Interest on thi�s Note shalZ accrue from and after the date of each and every advance hereunder so made by the Holder and shall be payable on the first day of the month next succeeding the date on which the first advance is made and on the first day of each and every month -3- RESOLUTION NO. 82 -217 thereafter, with a final payment of accrued interest to be made on December 1, 1985. The principal of and interest on this Note is payable in lawful money of the United States of America. Notwithstanding the foregoing, in'the event that the interest on this Note becomes subject to federal income taxation pursuant to a Determination of Taxability as defined in the Loan Agreement, of even date herewith (the "Loan Agreement between the City and Shingle Creek Eleven, a Minnesota general partnership (the "Partnership as amended by a First Amendment to Loan Agreement, dated November 1982, between the City and- the Partnership (the Loan Agreement, as so amended, is hereinafter referred to as the "Amended Loan Agreement the interest rate on this Note shall be immediately adjusted, from the Date of Taxability as defined in the Amended Loan Agreement, to a rate per annum which is equal to two percent in excess of the rate of interest publicly announced from time to time by First National Bank of Minneapolis, a national banking association (the "Lender as its Prime Rate (which rate shall change on the day of the effective date of any change in such Prime Rate), (the "Taxable Rate provided that the Taxable Rate shall never be less than 11 per annum or exceed 39% per annum. E-.ch monthly installment thereafter payable shall be accordingly adjusted. In addition. the City shall pay to the Holders of the Note and to any prior Holder the aggregate difference between (A) the amounts actually paid between the Date of Taxability and the date of such payment and (B) the amounts that would have been paid to the Holder and any prior Holder during such period at such increased interest rate. In the event the City shall fail to make when due any interest payments or principal and interest payments required under this Note, the interest payment or principal and interest payment so in default shall continue as an obligation of the City until the interest payment or principal and interest payment in default shall have been dully paid, and, to the extent permitted by law, the City agrees to pay interest thereon at the rate of interest per annum borne on this Note. The principal of this Note may be prepaid either in whole or in part, on any date upon payment of a price equal to the principal being so prepaid plus accrued interest to the date of prepayment. -4- RESOLUTION NO. 82 -217 The Holder hereof shall have the right to declare due and payable and require the full and prompt payment of the principal balance of this Note, in whole but not in part, with interest thereon to the date of payment on December 1, 1981 as provided in Section 2.2 of a Construction Loan Agreement, of even date herewith (the "Construction Loan Agreement by and among the City, the Partnership and the Lender. In the event the Holder exercises this right, the payment shall not be subject to any prepayment premium or penalty. In the event the Holder shall elect to exercise this right, it shall provide written notice thereof to the City and the Partnership in the manner and at the address provided in the Amended Loan Agreement on or before November l,, 1981. This Note constitutes an issue in the total authorized face amount of $1,600,000. This Note is issued by the City pursuant to the authority granted by Minnesota Statutes, Chapter 474, as amended (the "Act for the purpose of providing funds for a Project, as defined in Minnesota Statutes,'Section 474.026, Subdivision la, consisting of certain real estate and improvements thereon, and paying necessary expenses incidental thereto, such funds to be loaned by the City to the Partnership pursuant to a Resolution adopted by the City Council on January 12, 1981 (the "Resolution as amended by a Resolution adopted by the City Council on November 22,, 1982 (the Resolution, as so amended is hereinafter referred to as the "Amended Resolution the Construction Loan Agreement and the Amended Loan Agreement, thereby assisting activities in the public interest and for the public welfare of the City. This Note is further secured by a (i) Pledge Agreement, of even date herewith (the "Pledge Agreement between the City and the Lender, as amended by a First Amendment to Pledge Agreement, dated November _,.1982, between the City and the Lender (the Pledge Agreement, as so amended, is hereinafter referred to as the "Amended Pledge Agreement (ii) a Mortgage and Security Agreement, of even date herewith (the "Mortgage given by the Partnership in favor of the Lender, as amended by a First Amendment to Combination Mortgage, Security Agreement and Fixture Financing Statement, dated November 1982, given by the Partnership in favor of the Lender (the Mortgage, as so amended, is hereinafter referred to as the "Amended Mortgage (iii) an Assignment of Rents and Leases, of even date herewith (the "Assignment given by the Partnership in favor of the Lender, as amended by a First Amendment to Assignment of Rents and Leases, dated November 1982, given by the Partnership to the Lender -5- RESOLUTION '40. 82 -217 (the Assignment, as so amended, is hereinafter referred to as the "Amended Assignment and (iv) a Guaranty Agreement, of even date herewith (the "Guaranty given by Charles E. Sameluk, a Minnesota resident,'Robert B. May, a resident of Winnepeg, Manitoba, Panis Holdings Ltd., a Manitoba, Winnipeg corporation, Panis Inc., a Minnesota corporation, Rokar Investments Ltd., a Manitoba, Canada corporation, and Rokar Holdings Inc., a Minnesota corporation (the "Guarantors in favor of the Lender, is amended by a First Amendment to Guaranty Agreement, dated November 1982, given by the Guarantors to the Lender (the Guaranty, as so amended, is hereinafter referred to as the "Amended Guaranty As provided in the Amended Resolution, the City will cause to be kept at the office of the City Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration or transfer of ownership of this Note. This Note is transferable upon the books of the City at the office 'of the City Clerk, by the Holder hereof in person or by its attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the Holder or its duly authorized attorney. Upon such transfer the City Clerk will note the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank appearing below. Alternatively, the City will at the request of the Holder issue new notes in an aggregate principal amount equal to the unpaid principal balance of this Note, and of like tenor except as to number, principal amount and the amount of the monthly installments payable thereunder, and registered in the name of the registered Holder or such transferee as may be designated by the Holder. The City may deem and, treat the person in whose name this Note is last registered upon the books of the City with such registration noted on the Note as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance or interest and for all other purposes, and all such payments so made to the Holder or upon its order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. All of the agreements, conditions, covenants, provisions and stipulations contained in the Amended Resolution, the Amended Loan Agreement, the Construction -6- RESOLUTION 1:0. 82 -217 Loan Agreement, the Amended Mortgage, the Amended Assignment, the Amended Guaranty and the Amended Pledge Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein if the City should fail to make any monthly installment of interest or principal and interest when due, which failure shall continue for ten (10) days, or if an Event of Default occurs under the Amended Loan Agreement, the Construction Loan Agreement, the Amended Mortgage or the Amended Assignment, then the Holder may at its right and option, by written notice to the City and the Partnership, declare immediately due and payable the principal balance of this Note and interest accrued thereon to the date of declaration of such default, together with any attorney's fees incurred by the Holder in collecting or enforcing payment of interest or principal of this Note, without notice to or consent of any party. This Note shall not be payable from nor charged upon any funds of the City other than the revenue under the Amended Loan Agreement pledged to the payment Thereof, nor shall the City be subject to any liability thereon. No Holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest thereon, nor to enforce payment thereof against any property of the City except revenue under the Amended Loan Agreement pledged to the payment thereof, other than to the extent payable out of the proceeds received by the City, from the sale of revenue bonds to be issued by the City pursuant to the Act and the property subject to the Amended Mortgage and the Amended Assignment should the City ever acquire title to it. This Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the revenue.under the Amended Loan Agreement pledged to the payment thereof and the property subject to the Amended Mortgage and the Amended Assignment should the City ever acquire title to it. This Note, including interest thereon, is payable solely from the revenue under the Amended Loan Agreement pledged to the payment thereon, proceeds received from the sale or other disposition of the property subject to the Amended Mortgage and the Amended Assignment. This Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, however, nothing contained in this paragraph shall impair the rights of the Holder of'this' Note to enforce covenants made for the security thereof as provided under the provisions of Minnesota Statutes, Section 474.11. -7- RESOLUTION NO. 82 -217 The Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the City has caused this Note to be duly executed by its duly authorized officers and its corporate seal affixed, all as of the 6th day of February, 1981. CITY OF BROOKLYN CENTER, Ate. And Cgy ager (SEAL) N,INNES TA By Mayor PROVISIONS AS TO REGISTRATION The ownership of the unpaid principal balance of this Note and the interest accruing thereon'is registered on the books of the City in the name of the registered holder last noted below. Date of Name and Address of Signature of Registration Registered Holder City Clerk First National Bank of Minneapolis First Bank Place Minneapolis, Minnesota 55480 RESOLUTION NO. 82 -217 Section 5. Amendment of Section 5.02 of Resolution No. 81 -15. Section 5.02 of Resolution No. 81 -15 is hereby amended to read as follows: 5.02. Note Terms. The Note shall be designated Amended and Restated Commercial Development Revenue Note (Shingle Creek Eleven Project), and shall: (a) be dated February 6, 1981; (b) be in the total principal amount of $1,600,000; 1 r' (c) mature on December 1, 1985 and bear interest on the unpaid principal balance advanced from time to time from date of issue until paid or discharged as herein provided, payable on the first day of the month next succeeding the date of which the first advance is made under the Note and on the first day of each and every month thereafter, with a final payment of accrued interest to be made on December 1, 1985, at a rate per annum equal to 85% of the 3 month C. D. rate (secondary market) as released from time to time by the Board of Governors of the Federal Reserve System (presently Federal Reserve Statistical Release, Form H.9(511), entitled "Weekly Summary of Banking and Credit Measures, Average of Daily Figures for the week ended nearest the date of such release, or at such higher rate as herein provided; provided, that the rate of interest per annum borne on the Note shall never be less than 2% per annum or exceed 30% per annum. Notwithstanding anything in this Resolution to the contrary, in the event the interest on the Note becomes subject to federal income taxation pursuant to a "Determination of Taxability" as defined in the Amended Loan Agreement, the interest rate on the Note shall be immediately adjusted to a rate which is equal to two percent in excess of the rate of interest per annum publicly announced from time to time by the Lender as its Prime Rate (which rate shall change on the day of the effective date of any change in such Prime Rate), provided, that such increased rate shall never be less than 3% per annum or exceed 39% per WE RESOLUTION NO. 82 -217 annum, from the Date of Taxability, as defined in the Amended Loan Agreement, all as provided in the form of the Note contained in Section 5.01 hereof. The rate of interest borne on the Note prior to a Determination of Taxability will be adjusted weekly, if necessary, on the date of such release of the Board of Governors of the Federal Reserve System specified above. (d) be subject to redemption and prepayment in whole or in part on any date upon payment of a price equal to the principal being so prepaid plus accrued interest to the date of prepayment. (e) be subject to redemption and prepayment at the option of the Holder, in whole but not in part, on December 1, 1981, at the price and upon the terms set forth in the Note and the Construction Loan Agreement. Section 6. Execution of Amended Note. The Amended 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 Amende6 Note shall cease to be such officer before the delivery thereof, such signature shall nevertheless be valid and sufficient for all purposes. Section 7. Execution of Documents. Upon the completion of the First Amendment to Loan Agreement, the First Amendment to Construction Loan Agreement and the First Amendment to Pledge Agreement, approved in Section 2 hereof, the execution of the First Amendment to Loan Agreement, the First Amendment to Construction Loan Agreement and First Amendment to Pledge Agreement by the Partnership 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 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 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 be deemed the conclusive evidence of the approval and authorization by the City and the Council of the instrument or document so executed. Section 8. Disability of Officers. In the absence or disability of the Mayor, the Amended Note and any of the documents authorized by this resolution to be executed, shall be executed by the acting Mayor, and in -10- RESOLUTION 20. 82 -217 the absence of the City Manager by such officer of the City who, in the opinion of the City Attorney, may execute the Amended Note and such documents. Section 9. Delivery of Amended Note. Prior to delivery of the Amended Note, the documents referred to below shall be completed and executed in form and substance as approved by the City Attorney._ The City shall execute and deliver to the Lender the Amended Note upon the delivery of the Note to the City for cancellation, together with the following: (a) a duly certified copy of this Resolution; (b) original, executed counterparts of the First Amendment to Loan Agreement and the First Amendment to Pledge Agreement; and (c) such closing certificates, opinions and related documents as are required by bond counsel. Section 10. Registration. The City Clerk is hereby authorized and directed to file a certified copy of this resolution with the County Auditor of Hennepin County, together with.such other information as he shall require, and -_o obtain from the County Auditor a certificate that the Amended Note has been entered in his bond register as required by law. Section 11. Certification of Proceedings. The officers of the City and the County Auditor of Hennepin County are directed to prepare and furnish to the Lender, and to the attorneys rendering an opinion as to the legality of the issuance of the Amended Note, certified copies of all proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality of the Amended Note as the same appears from the books and record's under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representatives of the City as to the facts stated therein. Section 12. Statement of Election. The principal amount of the Amended Note being in excess of $1,000,000, the City Manager is hereby authorized and directed on behalf of the City to execute and file with the Internal Revenue Service a statement of election to issue its obligations in excess of $1,000,000 as provided -11- RESOLUTION NO. 82 -217 by Section 103 (b)(6)(D) of the Internal Revenue Code of 1954, as amended, and Section 1.103 (b)(2)(vi) of the Regulations promulgated thereunder. Section 13. Permanent Financing of Project. The issuance of the Amended Note satisfies the obligation of the City to issue the Bonds authorized by Section 3.03 of Resolution No. 81 -15. The City Council acknowledges that the Partnership has represented that the issuance of the Amended Note constitutes a continuation of temporary financing for the Project and that it intends to request the City to issue obligations under the Act at or before the maturity of the Amended Note to provide permanent financing for the Project. November 22, 1982 7 Date Mayor ATTEST: -few 7 The motion for the adoption of the foregoing resolution was duly seconded by member Celia Scott and upon vote being taken thereon, the following voted in favor thereof: Dean Nyquist, Celia Scott, Bill Hawes, and Rich Theis; and the following voted against the same: Gene Lhotka, whereupon said resolution was declared duly passed and adopted. 1 -12-