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HomeMy WebLinkAbout85-228 - ADMIN Resolution - City Council - 1985/12/16RESOLUTION NO. 85-228 RESOLUTION AWARDING THE SALE OF $6,500,000 VARIABLE RATE DEMAND GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1985; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT. BE IT RESOLVED by the City Council (the "Council") of the City of St. Louis Park, Minnesota (the "City"), as fol- lows: 1. Recitals and Findinqs. (a) The Housing and Redevelopment Authority in and for the City of St. Louis Park, Minnesota (the "Authority"), has undertaken or will undertake the following public improvements (the "Improvements") within or for the benefit of Authority's Excelsior Boulevard Redevelopment District and Project, as amended, pursuant to and in full conformity with Minnesota Statutes, and Sections 462.411 et sec. and 273.71 to 273.78, inclusive: Construction (Parking Facilities and Related Improvements) Capitalized Interest Discount/Issuance Costs Debt Service Reserve Total Bond Issue $4,584,196 1,220,804 195,000 500,000 $6,500,000 (b) The Authority has requested that the City issue its general obligation bonds to assist the Authority in financing the Improvements. (c) The Council hereby finds and determines that, for the purpose of financing the Improvements, it is necessary for the City to issue its $6,500,000 Variable Rate Demand General Obli- gation Tax Increment Bonds, Series 1985 (the "Bonds"), and, since (i) the Bonds shall, unless and until converted to fixed rate obli- gations pursuant to the terms of the Indenture (hereinafter defined), bear interest at a rate varying periodically, (ii) the City has a population of more than 10,000,�and (iii) the - 2 - Bonds will at issuance be rated A or better by Fitch Investor Service, Inc., a nationally recognized securities rating agency located in New York, New York, the City is authorized to negotiate the sale of the Bonds without public sale or competitive bidding pursuant to the provisions of Minnesota Statutes, Section 4715.60, Subdivision 2(5). (d) In connection with the issuance of the Bonds, there have been presented to the City and placed on file in the City offices copies of certain agreements, all dated as of December 1,1 1985, and including particularly a Trust Indenture (the "Indenture") between the City and First Trust Company, Inc., St. Paul, Minnesota (the "Trustee"); a Reimbursement Agreement (the "Credit Agreement") between the City and National Australia Bank Limited, New York Branch (the "Bank"); a Custody, Pledge and Security Agreement (the "Pledge Agree- ment") between the City and the Bank; a Remarketing Agreement (the "Remarketing Agree- ment") between the City and Miller & Schroeder Financial, Inc., Minneapolis, Minnesota, and The First National Bank of Saint Paul, St. Paul, Minnesota (collectively, the "Remarket- ing Agent"); a Tender Agent Agreement (the "Tender Agent Agreement") between the City, the Trustee, and J. Henry Schroeder Bank & Trust Company of New York, New York, New York (the "Tender Agent"); and an Investment Agree- ment (the "Investment Agreement") between the City, the Trustee, and Manufacturers Hanover Trust Company, New York, New York (the "Investment Agent"). I (e) Pursuant to the Credit Agreement, the Bank agrees to issue its letter of credit (the "Letter of Credit") to secure certain payments which may be made on the Bonds (hereinafter defined) pursuant to the Indenture. Pursuant to Ithe Credit Agreement and the Pledge Agree- ment, the City would agree to compensate the Bank for providing the Letter of Credit and for the making of any draws thereon. Prior to thelRelease Date, as defined in the Indenture, the proceeds of the Bonds, net of the costs of issuance thereof, would be invested by the Investment Agent pursuant to the Investment Agreement. Pursuant to the Tender Agent Agreement, the Tender Agent would agree to - 3 - serve in such capacity pursuant to the appli- cable terms of the Indenture, and the Trustee, pursuant to the Indenture, would agree to act as Trustee thereunder. Under the Remarketing Agreement, the Remarketing Agent would agree to use its best efforts to remarket Bonds which had been tendered for purchase in accor- dance with their terms. (f) Any capitalized but undefined term used in this Resolution shall have the same meaning given to such term in the Indenture. (g) The mandatory sinking fund redemptions of the Bonds, as set forth in Section 3.07 of the Indenture, are hereby combined with the maturities of all the other outstanding general obligation debt of the City, and the Council hereby finds that such combined maturity schedule conforms to the requirements of Minnesota Statutes, Section 475.54, Sub- division 1. 2. Authorization of Issuance of Bonds. The City shall issue and sell the Bonds, which shall be dated, shall mature, shall be subject to optional redemption and manda- tory sinking fund redemption, shall bear interest at such variable rates (or, following the Conversation Date, upon the prior election of the City, at the Fixed Interest Rate), and shall be subject to the additional terms and conditions provided in the Indenture and in the forms of variable rate and fixed rate Bonds attached as Exhibits A and B, respec- tively, to the Indenture. 3. Acceptance of Offer to Purchase Bonds. The offer of Miller & Schroeder Financial, Inc., and The First National Bank of Saint Paul (the "Purchaser") to purchase the Bonds is hereby accepted, such bid being to purchase the Bonds at a price of $6,402,500 plus accrued interest, if any, to date of delivery, the Bonds to bear interest, to mature in the years and amounts, and to be subject to such other terms and conditions as provided in this Resolution and in the Indenture. 4. Form of Bonds. The Bonds shall be in substantially the form provided in Exhibit A of the Indenture, except that upon conversion to a Fixed Interest Rate, the Bonds shall be in substantially the form provided in Exhibit B of the Indenture. 5. Bond Counsel Opinion. The City Clerk shall obtain a copy of the proposed approving legal opinion of bond coun- - 4 - sel, O'Connor I Hannan, of shall be complete except as such opinion to be filed in shall cause said opinion to together with a certificate signature of the City Clerk form: Minneapolis, Minnesota, which to dating thereof, shall cause the offices of the City, and appear on each of the Bonds, to be signed by the facsimile in substantially the following I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion exe- cuted by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile signature) City Clerk City of St. Louis Park, Minnesota 6. Execution and Delivery of Bonds. As provided in the Indenture, the Bonds shall be executed on behalf of the City by the facsimile or manual signatures of the Mayor and the City Manager and shall be duly authenticated by the manual signature of an authorized representative of the Trustee (or in ;the case of Tendered Bonds, of the Tender Agent), as provided in the Indenture. The Bonds, when fully executed, shall1be delivered to the Purchaser upon receipt of the purchaselprice, and the Purchaser shall not be obli- gated to see to;the proper application thereof. 7. Debt Service, Reserve and Project Accounts. i (a) Debt Service Account. There is hereby created on the official.books and records of the City an account designated as $6,500,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, Debt Ser- vice Account (the "Debt Service Account"), which shall be held in trust by the City for the benefit of the Owners from time to time of the Bonds, as hereinafter provided. Until the principal of, interest, and pre- mium, if any, on all of the Bonds are paid, or until all of the Bonds are otherwise discharged as hereinafter provided, there shall be credited to and maintained in the Debt Service Account (1) first, those tax increments (the "Tax Increments") which are received by the City pursuant to that certain Tax Increment Pledge Agreement, dated as of December 1, 1985, between the City and the Housing and Redevelopment Authority in and for the City of St. Louis Park, Minnesota, in amounts, but only in MIM such amounts, which will be sufficient to pay, when due, the Regularly Scheduled Debt Service (hereinafter defined) on the Bonds and, to the extent that the Letter of Credit is unavailable or the Bank has dishonored a drawing thereon for any reason, the Purchase Price of Bonds; and (2) second, the proceeds of any general ad valorem taxes hereafter levied by the City for the pur- pose of paying the principal of, interest, and premium, if any, on the Bonds. The aforesaid funds in the Debt Service Account shall be used only and exclusively for, and are hereby pledged to, the payment of the Bonds in accordance with their terms. If any such payment shall become due when there are not sufficient funds in the Debt Service Account or the Reserve Account to pay the same, the City Finance Director shall pay such amounts from the general fund or other available fund of the City, and such fund shall (but only if at the time there are no deficiencies in the Debt Service Account or the Reserve Account) be reimbursed for such advances from the proceeds of the Tax Increments or of any general ad valorem taxes hereafter levied for such purposes, when collected. (b) Reserve Account. There is hereby created on the official books and records of the City an account designated as $6,500,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, Debt Ser- vice Reserve Account (the "Reserve Account"), which shall be held in trust by the City for the benefit of the Owners from time to time of the Bonds, as herein- after provided. From the proceeds of the Bonds, on the Release Date there shall be credited to the Reserve Account the sum of $500,000 as hereinafter provided. The City agrees that it will maintain in the Reserve Account from time to time on and after the Release Date the lesser of (1) $500,000 and ( 2 ) 15% of the the Out- standing principal amount of the Bonds (the "Minimum Reserve Level"); further, the City pledges to use any amounts in excess of the Minimum Reserve Level, except earnings on said funds, either to effect a permitted optional prepayment of the Bonds or to'pay the Regularly Scheduled Debt Service thereon, at the City's option. Moneys up to the Minimum Reserve Level in the Reserve Account shall be used exclusively for, and are hereby pledged to, the payment of the Bonds in accordance with their terms, when due, whether pursuant to accrued interest payable on any Interest Payment Date, upon the maturity of the Bonds, or upon the mandatory sinking fund redemptions thereof (collectively the "Regularly Scheduled Debt Service") or whether pursuant to a failure of the Purchase Price thereof to be paid from the Letter of Credit. If, at any time, the funds main- tained in the Debt Service Account are insufficient to pay the Bonds in accordance with their terms, the City shall pay to the Trustee from the Reserve Account for such purposes the amount of such deficiency. All earn- ings derived from the investment of funds held in the Reserve Account shall, when and as received and credited to the Reserve Account, be applied as follows: (i) for deposit into the Debt Service Account to the extent of (A) any current deficiency in said Account or (B) any anticipated deficiency in said Account coming due in the year following the date of receipt of such earnings; (ii) to the extent not applied as provided in (i) above, such earnings shall be retained in the Reserve Account to the extent that at the time such earnings are received, the balance in the Reserve Account is less than the Minimum Reserve Level; (iii) to the extent such earnings are not needed for the purposes enumerated in (i) and (ii) above, the same shall be transferred to the Project Account. (c) Project Account. All proceeds of the Bonds not deposited in the Reserve Account as hereinabove provided shall be maintained in a project account or 44 accounts to be used to finance the making of the Improvements (the "Project Account"). (d) Payments to Trustee. The City shall timely pay or cause to be timely paid to the Trustee all re- quired payments to the Owners of the Bonds, out of draw- ings on the Letter of Credit in accordance with its terms, the Debt Service Account, the Reserve Account (if applicable) or from other available funds of the City. (e) Junior Pledge to Credit Agreement. The monies in the Debt Service Account and the Reserve Account shall not be used and are not hereby pledged to make any purchase of a Tendered Bond pursuant to Section 3.01 of the Indenture or to make a mandatory purchase of Bonds on the Conversion Date or upon the Expiration of the Letter of Credit, unless and to the extent that the Bank shall have failed to fund such purchases pursuant to a draw on the Letter of Credit; provided, however, that upon the occurrence and during the continuation of an Event of Default, as defined in the Credit Agreement, no earnings on the Reserve Account shall be transferred to the Project Account pursuant to paragraph 7(b)(iii) of this Resolution; and provided further that when all - 7 - Bonds have been discharged as provided in paragraph 16 of this Resolution and Article VII of the Indenture, all pledges made to the Owners of the Bonds in this Resolu- tion with respect to the payment thereof shall to the same extent then secure the payment of all obligations of the City to the Bank arising pursuant to the Credit Agreement and such pledge shall continue until such obligations are discharged by the City in full. 9. Bonds are General Obligations. The full faith and credit and taxing powers of the City are hereby pledged to the payment of the principal of, interest, and premium, if any, on the Bonds, including the payment of the Purchase Price thereof, and in the event of any currrent or antici- pated deficiency of funds pledged to such purposes pursuant to the Indenture and this Resolution and needed to make any such payment, when due, the City Council shall levy ad valorem taxes on all taxable property in the City in the amount of such deficiency. 10. Execution of Documents Authorized. The Council hereby authorizes the Mayor and City Manager to execute and deliver on behalf of the City the Indenture, the Credit Agreement, the Pledge Agreement, the Remarketing Agreement, the Tender Agent Agreement, and the Investment Agreement, all substantially in the respective forms thereof as have 10 been presented to the Council and placed on file in the offices of the City, with, however, such amendments, dele- tions, and insertions thereto as may be desirable and neces- sary, upon the recommendation and approval of Bond Counsel (as evidenced by Bond Counsel's issuance of a legal approv- ing opinion on the Bonds), and as evidenced by said City officials' execution of such agreements. 11. Credit Agreement A General Obligation. Pursuant to Minnesota Statutes, Section 475.54, Subdivision 5a, the City hereby pledges to the payment of the City's obligations which arise and may arise under the Credit Agreement the same security as the City has hereby pledged to the payment of the Bonds, provided, however, that with respect to such pledge, the Bank's interest in and right to such pledged assets shall be junior to the rights and interest therein of the Owners of the Bonds; but provided further, however, that to the payment of the City's obligations to the Bank under the Credit Agreement, the City hereby specifically pledges its full faith and credit, including its ad valorem taxing powers, and in the event that the funds otherwise pledged hereby to the payment of the City's obligations under the Credit Agreement are ever insufficient for such purposes, if necessary, the City hereby agrees to levy ad valorem taxes for such purposes and, prior to the receipt of such taxes, agrees to use any other available funds of the City to satisfy said obligations. To the extent that the City sat- isfies its obligations under the Credit Agreement from other funds of the City, the City shall reimburse said funds from the proceeds of any ad valorem taxes levied for such pur- poses, when collected. 12. Debt Service Coverage. It is hereby determined that the Tax Increments will be in the principal amount of at least 20% of the cost of the Improvements, that the esti- mated collections of Tax Increments and the funds antici- pated to be available in the Reserve Account will produce at least 5% in excess of the amount needed to meet, when due, the Regularly Scheduled Debt Service (at the Maximum Interest Rate, being 10% per annum) on the Bonds, and that no tax levy is needed at this time. The City Clerk is directed to file a certified copy of this Resolution with the Director of Property Taxation of Hennepin County, and to obtain said official's certificate of filing the same, as required by Minnesota Statutes, Section 475.63. 13. City Proceedings and Records. The officers of the City are hereby authorized and dir�ed to prepare and fur- nish to the Purchaser, the Bank and to the attorneys approv- ing the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial con- dition and affairs of the City, and to furnish such other certificates, affidavits, and transcripts as may be required to show facts within their knowledge or as shown by the books and records in their custody and under their control relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, shall be deemed representations of the City as to the facts stated therein. 14. Certification of Official Statement. The Mayor, the City Manager, the City Finance Director, and/or the City Clerk are hereby authorized to certify that they have examined the official statement or prospectus prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief said official statement is a complete and accurate repre- sentation of the facts and representations made therein as they relate to the City. 15. General Tax Covenant. The City covenants and agrees with the Owners from time to time of the Bonds that the City will not take or permit to be taken by any of its officers, employees, or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1954, as amended, and regulations issued thereunder, as now existing or as here- after amended or proposed and in effect at the time of such action. 16. Discharge. When any Bond has been discharged as provided in Article VII of the Indenture, all pledges, cove- nants, and other rights granted by this Resolution to the Owner(s) of such Bond shall cease, and such Bond shall no longer be deemed to be outstanding under this Resolution. 17. Tax Increment Pledge Agreement. The City Council hereby approves and authorizes the Mayor and City.Manager to execute the Tax Increment Pledge Agreement attached hereto and proposed to be entered into between the City and the Authority, with such modifications, if any, as such officers shall approve, as evidenced by their signatures thereof. Adopted by the St. Louis Park City Council on December 16, 1985. V"• Mayor ATTEST: b ", g k,.J qitytClerk Approved as to Form and Legality= Reviewed for Administration: City Manager - 10 - A�� "'K_ &�� City Attorn y TAX INCREMENT PLEDGE AGREEMENT This Tax Increment Pledge Agreement (the "Agreement") is dated as of December 1, 1985; is by and between the City of St. Louis Park, Minnesota (the "City"), and the Housing and Redevelopment Authority in and for the City of St. Louis Park, Minnesota (the "Authority"); and provides as follows: WHEREAS, the City Council has adopted a resolution (the "Bond Resolution") awarding the sale of the City's $6,500,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 1, 1985 (the "Bonds"), to provide financing for certain public redevelop- ment improvements (the "Improvements") made or to be made with respect to the Authority's Excelsior Boulevard Redevel- opment District, and WHEREAS, to provide funds sufficient for the timely payment of the debt' service on the Bonds, it is necessary for the Authority and the City to enter into this Agreement: NOW, THEREFORE, in consideration of the covenants and agreements hereof between the City and the Authority, and pursuant to Minnesota Statutes, Section 273.77(a), the City and the Authority hereby agree as follows: 1. The Bonds (unless and until converted to a Fixed Interest Rate as defined in the Trust Indenture respecting the Bonds) are subject to mandatory sinking fund redemption or mature on February 1 in the years and amounts as follows: YEAR AMOUNT 1988 $ 50,000 1989 25,000 1990 220,000 1991 230,000 1992 245,000 1993 265,000 1994 280,000 1995 300,000 1996 315,000 1997 340,000 1998 360,000 1999 385,000 2000 410,000 2001 435,000 2002 465,000 2003 495,000 2004 525,000 2005 560,000 2006 595,000 - 1 - 2. In order to pay the principal of, interest, and premium, if any, on the Bonds, and, if necessary, the Pur- chase Price (as defined in said Indenture) of Bonds, when due, the Authority hereby pledges to the City, for deposit in the Debt Service Account or the Reserve Account (to the extent necessary to maintain the Minimum Reserve Level in accordance with the Bond Resolution) established by the Bond Resolution for the payment of the Bonds, and the Authority shall pay to the City, those tax increments (1) which are derived by the Authority from the portion of its Excelsior Boulevard Redevelopment District described in Exhibit A attached hereto and (2) which represent tax increments generated over and above the 1985 payable 1986 base for such property (the "Tax Increments"), in amounts sufficient to pay such principal, interest, and premium, if any, when due, and, to the extent such tax increments are ever insufficient for such purposes, and the City, pursuant to the Bond Reso- lution, advances City funds to provide prompt and full pay- ment of the Bonds, the Authority agrees to reimburse the City for such advances from such tax increments, when collected by the Authority. --With respect to such tax incre- ments received by the Authority in any calendar year, the Authority shall pay the same over to the City pursuant to this Agreement on the assumption that the Bonds bear inter- est at the rate of 10% per annum, but to the extent that the foregoing assumption results in excess increments for inter- est on said Bonds in the Debt Service Account at the conclu- sion of said calendar year, the amount of tax increments required to be paid to the City in the following year pur- suant to this sentence shall be reduced by said amount. 3. In addition to the foregoing, the City and the Authority agree that the Tax Increments shall be applied pursuant to the provisions of Section 6.5 of that certain Restated Contract for Private Development by and between the Authority and Excelsior Partners 100 Limited Partnership, et al., and dated December 1985. 4. An executed copy of this Agreement shall be filed with the -Director of Property Taxation of Hennepin County, as required by Minnesota Statutes, Section 273.77(a). 5. This Agreement shall become effective upon the actual issuance and delivery of the Bonds. IN WITNESS WHEREOF, the City and the Authority have caused this Agreement to be duly executed as of the day and year first above written. CITY OF ST. LOUIS PARK, MINNESOTA By Its Mayor ATTEST: By Its City Manager City Clerk (SEAL) HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ST. LOUIS PARK, MINNESOTA By Its Chairman By Its Executive Director - 3 -