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HomeMy WebLinkAboutResolution No. 043-20 - Approving EDA Lease Revenue Bonds and Associated Lease Purchase Agreements with the EDA RESOLUTION NO. ______ CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE AND A LEASE-PURCHASE AGREEMENT, AND APPROVING AND AUTHORIZING ISSUANCE OF LEASE REVENUE BONDS AND EXECUTION OF RELATED DOCUMENTS BE IT RESOLVED by the Common Council (the “Council”) of the City of Rochester, Minnesota (the “City”), as follows: Section 1. Recitals. 1.01. The City is authorized by Minnesota Statutes, Section 465.71, as amended, to acquire real and personal property under lease-purchase agreements. 1.02. The Rochester Economic Development Authority (the “EDA”) is authorized by Minnesota Statutes, Sections 469.001 to 469.047 and 469.090 to 469.1082, and Chapter 475, as amended (collectively, the “Act”), and specifically Sections 469.034, 469.035, and 469.103 and thereof, to issue revenue bonds for any of its corporate purposes and to pledge thereto income and revenues of the EDA, and pursuant to Minnesota Statutes, Sections 469.091, Subdivision 1, the EDA has the powers of a housing and redevelopment authority under Minnesota Statutes, Sections 469.001 to 469.047. 1.03. Pursuant to the Act, the EDA has formed Economic Development District No. 75 (the “Development District”) and has adopted an Economic Development Plan (the “Development Plan”) for the Development District which sets forth development objectives for the Development District. A major objective of the Development District is to foster the development of adequate public facilities necessary to serve the Development District and the City as a whole. 1.04. The City has acquired certain property legally described on Exhibit A attached hereto (the “Property”) located in the EDA’s Development District. 1.05. The City and the EDA propose that pursuant to a Ground Lease dated as of March 1, 2020 (the “Ground Lease”), the EDA will acquire a leasehold interest in the Property (the “Leased Premises”) from the City, and the EDA will lease such Leased Premises, together with the buildings, structures or improvements now or hereafter located thereon (consisting of the Site and the Facilities as defined therein), to the City pursuant to a Lease-Purchase Agreement dated as of March 1, 2020 (the “Lease”). 1.06. Pursuant to a Trust Indenture dated as of March 1, 2020 (the “Indenture”) between the EDA and U.S. Bank National Association, as trustee (the “Trustee”), the EDA will issue its Lease Revenue Bonds (City of Rochester, Minnesota Lease Obligation), Series 2020A (the “Series 2020A Bonds”) in a principal amount not to exceed $22,500,000. 1.07. Under the Indenture, proceeds of the Series 2020A Bonds will be used to pay costs of acquisition, construction and equipping of the City’s police station and development services center facility to be referred to as the North Station and Development Services and Infrastructure Center (the “Facilities”) and the Series 2020A Bonds will be secured by and payable from the lease payments under the Lease (the “Lease Payments”). A-1 632056v3RC110-102 1.08. Forms of the Ground Lease, the Lease, the Indenture, the Official Statement for the Series 2020A Bonds and a Continuing Disclosure Certificate of the EDA and the City dated on or after March 1, 2020 (the “Continuing Disclosure Certificate”), have been prepared and submitted to this Council and are on file with the City. Section 2. Findings. On the basis of information given the City to date, it is hereby found, determined and declared that: (a) it is desirable and in the best interest of the City to enter into the Ground Lease, the Lease and the Continuing Disclosure Certificate. (b) the terms of the Ground Lease, the Lease, the Indenture, and the Continuing Disclosure Certificate are found to be advantageous to the City and the form and terms thereof are hereby approved. (c) The Site and the Facilities described in the Lease constitute government property necessary in connection with the operation of the City’s police station and development services center, and the City presently intends to appropriate all Lease Payments under the Lease for the term of the Lease; however, the obligations of the City under the Lease are not to be payable from nor charged upon any funds of the City other than the funds appropriated annually to the payment thereof, and the Lease shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except its interest in the Lease and in the Site and the Facilities under the Lease. Section 3. Authorization of Documents. The Ground Lease, the Lease, the Indenture, and the Continuing Disclosure Certificate, together with any other documents or certifications necessary in connection with the issuance of the Series 2020A Bonds, are hereby approved (collectively, the “Financing Documents”). The Mayor and the City Clerk are authorized and directed to execute and deliver the Financing Documents to which the City is a party, on behalf of the City, substantially in the forms on file, but with all such changes therein as shall be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all of the Financing Documents shall be delivered, filed and recorded as provided therein. The Mayor and the City Clerk of the City are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. Section 4. Official Statement. The Official Statement, as completed and supplemented, and its distribution to potential purchasers of the Series 2020A Bonds, is hereby approved. The Mayor and City Clerk are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Series 2020A Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. Section 5. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Series 2020A Bonds; however, any bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 6. Approval of Issuance and Sale of Series 2020A Bonds. The issuance and sale by the EDA of the Series 2020A Bonds as described in the Official Statement and the Indenture are hereby approved in all respects. The City will pay, from proceeds of the Series 2020A Bonds or from other City funds, the costs of issuance of the Series 2020A Bonds. The City hereby authorizes and requests that the EDA issue the Series 2020A Bonds in accordance with the terms of a resolution of the Board of Commissioners of the EDA adopted on the date hereof as further set forth in the Indenture. Section 7. Payment of Lease Payments. The City will pay to the Trustee, promptly when due, all of the Lease Payments and other amounts required by the Lease. To provide moneys to make such payments, the City will include in its annual budget, for each Fiscal Year during the term of the Lease, commencing with the Fiscal Year ending on December 31, 2020, moneys sufficient to pay and for the purpose of paying all Lease Payments, a reasonable estimate of Additional Lease Payments, and other amounts payable under the Lease. The agreement of the City in this Section is subject to the City’s right to terminate the Lease at the end of any Fiscal Year, as set forth in Section 5.6 of the Lease. Section 9. Miscellaneous. 9.01. Not Arbitrage Bonds. The City covenants and agrees with the holders from time to time of the Series 2020A Bonds that the investment of proceeds of the Series 2020A Bonds, including the investment of any revenues pledged to the Lease Payments which are considered proceeds under applicable regulations, and accumulated sinking funds, if any, shall be limited as to amount and yield in such manner that the Series 2020A Bonds shall not be “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable regulations thereunder (the “Regulations”), and that the City shall comply with all other applicable requirements of Section 148. On the basis of the existing facts, estimates and circumstances, including the foregoing findings and covenants, the City hereby certifies that it is not expected that the proceeds of the Series 2020A Bonds will be used in such manner as to cause the Series 2020A Bonds to be “arbitrage bonds” under Section 148 and any regulations thereunder. 9.02. Not Private Activity Bonds. No action shall be taken or authorized to be taken in connection with the application or investment of the proceeds of the Series 2020A Bonds which would cause the Series 2020A Bonds to be or become “private activity bonds” within the meaning of Section 141 of the Code and the applicable Regulations. The City shall take all such actions as may be required under the Code and applicable Regulations to ensure that interest on the Series 2020A Bonds is not includable in gross income for federal income tax purposes. The Site, the Facilities, and the proceeds of the Series 2020A Bonds will likewise be used in such manner that the Series 2020A Bonds will not be “private activity bonds” under Section 141 of the Code and the Regulations. 9.03. 8038. The City covenants that it will file (or cause the EDA to file) with the Internal Revenue Service the information required under Section 149(e) of the Code. 9.04. Definitions. Capitalized terms used herein and defined in the Lease or the Indenture have the meanings given in the Lease or the Indenture. 9.05. Bond Transcript. The officers of the City are authorized and directed to prepare and furnish to the original purchaser of the Series 2020A Bonds, and to the attorneys approving the Series 2020A Bonds, certified copies of all proceedings and records of the City relating to the power and authority of the City to enter into the Financing Documents within their knowledge or as shown by the books and records in their custody and control, and such certified copies and certificates shall be deemed representations of the City as to the facts stated therein. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2020. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2020. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) EXHIBIT A LEGAL DESCRIPTION