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HomeMy WebLinkAboutResolution No. 023-10 Extract of Minutes of a Meeting of the Common Council of the City of Rochester, Minnesota Pursuant to due call and notice thereof, a regular meeting of the Common Council of the City of Rochester, Minnesota, was duly held at the Council/Board Chambers in the Government Center on January 4, 2009, commencing at 7:00 p.m. The following members were present: President Dennis Hanson, Councilmembers Mark Bilderback, Ed Hruska, Sandra Means, Bob Nowicki, Bruce Snyder, Michael ldojcik and the following were absent: None Member Means introduced the following resolution and moved its adoption: CITY OF ROCHESTER COUNTY OF OLMSTED • STATE OF MINNESOTA RESOLUTION NO.a-10 RESOLUTION APPROVING THE ISSUANCE AND SALE OF A COMMERCIAL DEVELOPMENT REVENUE NOTE, SERIES 2010 (GOODWILL INDUSTRIES PROJECT)AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO WHEREAS, (a) The purpose of Minnesota Statutes, Chapter 469.152 to 469.1651 (the "Act"), as found and determined by the legislature, is to promote the welfare of the state by the active attraction and encouragement and development of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment; (b) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land use which will provide an adequate tax base to finance these increased costs and the need for access to employment opportunities for such population; • 2443279v1 (c) The Common Council of the City of Rochester, Minnesota (the "City") has received from Goodwill Industries, Inc., a Minnesota nonprofit corporation organized under the laws of the State of Minnesota(the 'Borrower"), a proposal that the City assist in financing a Project hereinafter described through the issuance of a revenue note, referred to in this resolution as the "Revenue Note" or "Note", pursuant to the Act; (d) The City desires to facilitate the selective development of the community, retain and improve the tax base and help to provide the range of services and employment opportunities required by the population; and the Project will assist the City in achieving those objectives and will enhance the image and reputation of the community; (e) The Project to be financed by the Revenue Note is the acquisition of land and the existing building thereon located at 239 28t' Street SE in the City for use by the Borrower in its retail sales activities (the "Project"). The Project will be owned and operated by the Borrower; (f) The City has been advised by representatives of the Borrower that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced; (g) No public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project; and (h) A public hearing on the Project was held on the date hereof, after notice was published and materials made available for public inspection at the City Hall, all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, at which public hearing all those appearing who desired to speak were heard and written comments were accepted. BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota (the "City"), as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findings. The City hereby finds, determines and declares as follows: (a) The City is a political subdivision of the State of Minnesota and is authorized under the Act to assist the revenue producing project herein referred to, and to issue and sell the Note, as hereinafter defined, for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution. (b) Subject to the approval of the Project by the Commissioner of the Department of Employment and Economic Development, the issuance and sale of the Commercial Development Revenue Note, Series 2010 (Goodwill Industries Project) (the • "Note") in an aggregate amount not to exceed $3,800,000 is hereby approved, and the City hereby determines to sell the Note to Bremer Bank, National Association (the 2443279v1 2 "Lender"), as provided herein. The City will loan the proceeds of the Note (the "Loan") to the Borrower to finance the Project. (c) The City staff is hereby directed to submit an application for approval of the Project to the Minnesota Department of Employment and Economic Development. (d) Pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the City and the Borrower, the Borrower has agreed to make loan repayments in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the maintenance and operation of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the City, the Lender and the Borrower deem necessary or desirable for the financing of the Project. A draft of the Loan Agreement has been submitted to the Common Council. (e) Pursuant to a Pledge Agreement (the "Pledge Agreement") to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the Common Council. (f) Pursuant to a Mortgage, Security Agreement and Fixture Financing • Statement (the "Mortgage") to be executed by the Borrower in favor of the Lender, the Borrower has secured payment of amounts due under the Loan Agreement and Note by granting to the Lender a mortgage and security interest in the property described therein. A draft of the Mortgage has been submitted to the Common Council. (g) Pursuant to an Assignment of Leases and Rents (the "Assignment") to be executed by the Borrower in favor of the Lender, the Borrower has secured payment of amounts due under the Loan Agreement and Note by granting to the Lender an assignment of leases and rents in the property described therein. A draft of the Assignment has been submitted to the Common Council. (h) The Note will be a special limited obligations of the City. The Note shall not be payable from or charged upon any funds other than the revenues pledged to the payment thereof, nor shall the City be 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 shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (i) On the basis of information available to this Council it appears, and the Council hereby finds, that the Project constitutes properties, real and personal, used or useful in connection with one or more revenue producing enterprises within the meaning of Subdivision 2(b) of Section 469.153 of the Act; that the Project furthers the purposes stated in Section 469.152; that the availability of the financing under the Act and 2443279v1 3 • willingness of the City to furnish such financing will be a substantial inducement to the Borrower to undertake the Project, and that the effect of the Project, if undertaken,will be to assist in the prevention of the emergence of blighted and marginal land, to help prevent chronic unemployment, to help the surrounding area retain and eventually improve the tax base, to provide the range of service and employment opportunities required by the population, to help provide necessary health care facilities, to help prevent the movement of talented and educated persons out of the state and to areas within the State where their services may not be as effectively used, and to promote more intensive development and use of land within the City and surrounding communities. (j) It is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the costs of the Project. 1.2 Authorization and Ratification of Project. The City has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, to provide for the acquisition of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction and acquisition of other municipal facilities; and the City hereby ratifies, affirms, and approves all actions heretofore taken by the Borrower consistent with and in anticipation of such authority. SECTION 2. THE NOTE. • 2.1 Authorized Amount and Form of Note. The form of the Note is hereby approved in substantially the form attached hereto as Exhibit A, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution and delivery of the Note, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions hereof. The total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $3,800,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall bear interest at a rate equal to the 5 year LIBOR (London Interbank Offering Rate) plus three percent (3.00%) but in no event shall the interest rate be less than six percent (6%)per annum. The interest rate on the Note shall be reset every five years. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and shall be subject to such other terms and conditions as are set forth therein. 2.3 Execution. The Note shall be executed on behalf of the City by the signatures of its Mayor and Clerk and shall be sealed with the seal of the City; provided that the seal may be intentionally omitted as provided by law. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if had remained in office until delivery. In the event of the absence or disability of the Mayor or the Clerk such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the Common Council execute and deliver the Note. 4 2443279v1 • 2.4 Delivery of Initial Note. Before delivery of the Note there shall be filed with the City and the Lender the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Mortgage; (d) the Assigrunent; (2) an opinion of Counsel for the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income taxation under Section 501(c)(3) of the Code; • (5) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Proceeds of the Note. Upon delivery of the Note to Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note for payment of Project Costs in accordance with the terms of the Loan Agreement. 2.6 Registration of Transfer. The City will cause to be kept at the office of the City Clerk Note Register for the Note in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Lender and shall be transferable upon the applicable 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 satisfactory to the City Clerk, duly executed by the Lender or its duly authorized agent. The following form of assignment shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the City of Rochester, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the • Note. 2443279A 5 • Dated: Registered Owner Upon such transfer the City Clerk shall note the date of registration and the name and address of the new Lender in the applicable Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroyed Note. In case any Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number, series and tenor in exchange and substitution for and upon cancellation of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownership of Note. The City may deem and treat the person in whose name the Note are last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption-price or interest and for all other purposes • whatsoever, and the City shall not be affected by any notice to the contrary. 2.9 Limitation on Note Transfers. The Note will be issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except to not more than 35 persons each of whom have knowledge and experience in financial business matters and that are capable of evaluating the merits and rules of the investment in the Note and are not purchasing for more than one account or with a view to distributing the Note or their interest therein. Any such sale, assignment or participation shall also be (i) in full good faith compliance with all applicable securities registration, broker, anti-fraud and other provisions of the applicable state and federal laws, (ii) with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s), and (iii) under effective federal and state registration statements (which neither the City nor the Borrower shall in any way be obligated to provide) or under exemptions from such registrations. 2.10 Issuance of a New Note. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Lender, issue a new note, in aggregate outstanding principal amount and series equal to that of the Note surrendered, 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 Lender or such transferee as may be designated by the Lender. 2443279v1 6 I • SECTION 3. MISCELLANEOUS. 3.1 Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 3.3 Authorization to Execute Agreements. The forms of the proposed Loan Agreement, the Pledge Agreement, the Mortgage and Assignment are hereby approved in substantially the form heretofore presented to the Common Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, • deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and Clerk of the City are authorized to execute the Loan Agreement and the Pledge Agreement in the name of and on behalf of the City and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or.disability of the Mayor or the Clerk such officers of the City as, in the opinion of the City Attorney, may act on their behalf, shall without further act or authorization of the Common Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The motion for the adoption of the foregoing resolution was duly seconded by member Nowicki and, after full discussion thereof and upon a vote being taken thereon,the following voted in favor thereof: President Hanson, Councilmembers Bilderback, Hruska, Means, Nowicki, Snyder, Wojcik and the following voted against the same: None Whereupon said resolution was declared duly passed and adopted. • 2443279v1 7 • PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS 4th DAY OF JANUARY, 2010. Qi--, RESIDENT OF SAID COMMON COUNCIL ATTEST: CITY CLERK Approved this 4th day of January, 2010. 000,<4 (Seal of the City of Rochester, Minnesota) MAYOR OF SAID CITY • i i • 2443279v1 8 a _a • CERTIFICATION I, the undersigned City Clerk of the City of Rochester, Minnesota, do hereby certify the following: The foregoing is true and correct copy of a Resolution on file and of record in the offices of the City, which Resolution relates to giving preliminary approval to a project on the program for the Goodwill Industries Project. Said Resolution was duly adopted by the Rochester Common Council at a regular or special meeting of the Council held on the date therein indicated. Said meeting was duly called and regularly held-and was open to the public and was held at the place at which meetings of the Council are regularly held, a quorum of the Council being present and acting throughout. Councilmember Means moved the adoption of the Resolution, which motion was seconded by Councilmember Nowicki A vote being taken on the motion, the following members of the Council voted in favor of the Resolution: President Dennis Hanson, Councilmembers Mark Bilderback, Ed Hruska, Sandra Means, Bob Nowicki, Bruce Snyder, Michael Wojcik and the following voted against the same: None Whereupon said Resolution was declared duly passed and adopted. -The Resolution is in full force and effect and no action has been taken by the Council which would in any way alter or • amend the Resolution. WITNESS MY HAND officially as the City Clerk of the City of Rochester, Minnesota,this 6TH day of January, 2010. ity Cler ` City of Rochester, Minnesota . I 2443279v1 9