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HomeMy WebLinkAbout09-093 - ADMIN Resolution - City Council - 2009/07/06RESOLUTION NO. 09-093 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK, MINNESOTA, AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS EDUCATIONAL FACILITY REVENUE NOTES (GROVES ACADEMY PROJECT), SERIES 2009; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE NOTES AND THE RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE NOTES WHEREAS, the City of St. Louis Park, Minnesota (the "City"), is a home rule city and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152-469.165, as amended (the "Act"), the City is authorized to carry out the public purposes described therein and contemplated thereby by issuing its revenue bonds or other obligations to make a loan to finance or refinance a revenue producing enterprise, including the financing of the costs of the construction of an expansion to and remodeling of an existing educational facility; and WHEREAS, the City received a request from Groves Academy, a Minnesota nonprofit corporation (the "Borrower"), that the City issue its revenue obligations to finance the renovation, expansion, and improvement of its independent co-educational day school facilities located at 3200 Highway 100 South in the City (the "Project"); and WHEREAS, the Borrower has proposed that the City issue its Educational Facility Revenue Notes (Groves Academy Project), Series 2009 (the "Notes"), in the original aggregate principal amount not to exceed $3,500,000; and WHEREAS, the City has prepared an Application to the Minnesota Department of Employment and Economic Development ("DEED") for approval of the Project pursuant to the requirements of Section 469.154 of the Act. WHEREAS, a notice (the "Public Notice") of a public hearing (in which a general, functional description of the Project was provided, as well as the maximum aggregate face amount of the obligations to be issued with respect to the Project, the identity of the initial owner, operator, or manager of the Project, and the location of the Project by street address) was published in a newspaper circulating generally in the City at least fifteen (15) days before the regularly -scheduled meeting of the City Council of the City on July 6, 2009, the City Council has conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the proposed issuance of the Notes, and the location and nature of the Project; and WHEREAS, certain accredited investors and financial institutions (collectively, the "Lenders") have agreed to purchase the Notes through a private placement facilitated by Stifel Nicolaus in minimum denominations of $100,000 in a manner consistent with the policies of the City relating to the issuance and sale of non -rated conduit bonds; and Resolution No. 09-093 -2- WHEREAS, the proceeds derived from the sale of the Notes are proposed to be loaned to the Borrower under the terms of a Loan Agreement, dated on or after July 1, 2009 (the "Loan Agreement"), between the City and the Borrower, and applied by the Borrower, together with other funds of the Borrower, to finance the Project; and WHEREAS, the loan repayments required to be made by the Borrower under the terms of the Loan Agreement will be assigned to the Lenders under the terms of an Assignment of Loan Agreement, dated on or after July 1, 2009 (the "Assignment"), between the City and the Lenders; WHEREAS, the obligations of the Borrower under the terms of the Loan Agreement will be secured by a Combination Mortgage, Security Agreement, and Fixture Financing Statement and Assignment of Leases and Rents, dated as of July 1, 2009 (the "Mortgage"), executed by the Borrower in favor of the Lenders; and WHEREAS, the Notes and the interest on the Notes: (i) shall not constitute general or moral obligations of the City and shall be payable solely from the revenues pledged therefor; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; and (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Project and the Loan Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK, MINNESOTA, AS FOLLOWS: 1. The publication of the Public Notice is hereby ratified and approved in all respects. 2. The City Manager is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to prepare and submit the application to DEED required by the terms of the Act and to take all other actions related thereto and required by any other applicable laws and regulations. 3. The City acknowledges, finds, determines, and declares that the issuance of the Notes is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Notes and the other actions of the City under this Resolution, the Notes, the Loan Agreement, and the Assignment constitute a public purpose and are in the best interests of the City. 4. The City understands that the Borrower will pay directly or through the City any and all costs incurred by the City in connection with the issuance of the Notes and in connection with the Project, whether or not the Project is completed, and whether or not the Notes are issued. 5. In order to apply all or a portion of the proceeds of the Notes to reimburse the Borrower for Project expenditures paid prior to the date of issuance of the Notes, Treasury Regulations, Section 1.150-2 (the "Regulations"), require that the City adopt a statement of official intent to reimburse such original expenditures not later than sixty days after payment of the original expenditures. The Regulations also generally require that the Notes be issued and the reimbursement allocation made from the proceeds of the Notes occur within eighteen months after the later of: (i) the date the expenditure is paid; or (ii) the date the Project is placed in service or Resolution No. 09-093 -3- abandoned, but in no event more than three years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of' issuance of the Notes. The City expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Notes in an estimated maximum aggregate principal amount not to exceed $3,500,000 after the date of payment of all or a portion of the costs of the Project. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Notes, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. 6. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Notes in one or more series in the maximum aggregate principal amount not to exceed $3,500,000. The Notes shall bear interest at a rate not to exceed 4.50 percent per annum (as adjusted in accordance with the terms of the Notes). The Notes shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are set forth in the forms of the Notes now on file with the City, with the amendments referenced herein. The City hereby authorizes the Notes to be issued as "tax-exempt bonds" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Notes, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Notes shall be substantially in the forms on file with the City, which forms are hereby approved, with such necessary and appropriate variations, omissions and insertions (including changes to the aggregate principal amount of the Notes, the stated maturities of the Notes and the maturity dates, the interest rates on the Notes, and the terms of redemption of the Notes) as the Mayor and the City Manager (the "Mayor" and "City Manager"), in their discretion, shall determine. The execution of the Notes with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Notes by the City shall be conclusive evidence of such determination. 7. The Notes shall be special limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement, and other security pledged by the Borrower to the Lenders. 8. The Mayor and City Manager are hereby authorized and directed to execute and deliver the Loan Agreement and the Assignment. All of the provisions of the Loan Agreement and the Assignment, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement and the Assignment shall be substantially in the forms on file with the City which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. 9. The Notes shall be revenue obligations of the City the proceeds of which shall be disbursed pursuant to the terms of the Loan Agreement and a Disbursing Agreement, dated on or after July 1, 2009 (the "Disbursing Agreement"), between the Borrower, the Lenders, and Resolution No. 09-093 -4- Commercial Partners Title, LLC, and the principal, premium, and interest on the Notes shall be payable solely from the revenues derived from the Loan Agreement, and the property, revenues and assets mortgaged, pledged and assigned by the Borrower under the terms of the Mortgage. 10. The Mayor and City Manager of the City are hereby authorized to execute and deliver, on behalf of the City, such other documents as are necessary or appropriate in connection with the issuance, sale, and delivery of the Notes, including the Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Notes. The City hereby approves the execution and delivery by the Borrower of the Mortgage, the Disbursing Agreement, and the Tax Exemption Agreement and- all other instruments, certificates, and documents prepared in conjunction with the issuance of the Notes that require execution by the Borrower. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel of the City, to prepare, execute, and deliver its approving legal opinion with respect to the Notes. 11. The City has not participated in the preparation of any disclosure documents relating to the offer and sale of the Notes (the "Disclosure Documents"), and has made no independent investigation with respect to the information contained therein and the City assumes no responsibility for the sufficiency, accuracy, or completeness of any such information. 12. Except as otherwise provided in this resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council of the City, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Notes shall be liable personally on the Notes or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant or agreement contained in the aforementioned documents, the Notes or in any other document relating to the Notes, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement and the Assignment which are to be applied to the payment of the Notes, as provided therein. 13. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City or any owner of the Notes issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City and any owner from time to time of the Notes issued under the provisions of this resolution. • • r Resolution No. 09-093 -5- 14. In case any one or more of the provisions of this resolution, or of the aforementioned documents, or of the Notes issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Notes, but this resolution, the aforementioned documents, and the Notes shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 15. The Notes, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Notes and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Notes, and to the execution of the aforementioned documents to happen, exist and be performed precedent to the execution of the aforementioned documents have happened, exist and have been performed as so required by law. 16. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Notes for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Notes, the aforementioned documents and this resolution. In the event that for any reason the Mayor of the City is unable to carry out the execution of any of the documents or other acts provided herein, any other member of the City Council of the City shall be authorized to act in his capacity and undertake such execution or acts on behalf of the City with full force and effect, which execution or acts shall be valid and binding on the City. If for any reason the City Manager of the City is unable to execute and deliver the documents referred to in this Resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of the City Manager, with the same force and effect as if such documents were executed and delivered by the City Manager of the City. 17. The City shall not designate the Notes as "qualified tax-exempt obligations" under Section 265(6)(3) of the Internal Revenue Code of 1986 (the "Code"), as amended by Section 1502 of the American Recovery and Reinvestment Tax Act of 2009, but it is expected that the Borrower will designate the Notes as "qualified tax-exempt obligations" pursuant to such amended provisions f t : Code. Revi for This resolution shall be in full force and effect from and after its passage. dministration: Ci Attest: d,s,i t r -- City Clerk Adopted by th City Council July 6, 2009 i i )1(4 Mayo