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HomeMy WebLinkAbout10-062 - ADMIN Resolution - City Council - 2010/06/07RESOLUTION NO. 10-062 RESOLUTION GIVING PRELIMINARY APPROVAL TO THE PROPOSED ISSUANCE OF REVENUE BONDS UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.165 WHEREAS, the City of St. Louis Park, Minnesota (the "City") is a home rule city, duly organized and existing under its Charter, the Constitution and laws of the State of Minnesota. WHEREAS, under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152-469.165, as amended (the "Act"), each home rule charter or statutory city of the State of Minnesota, including the City of St. Louis Park, Minnesota (the "City"), is authorized to issue revenue bonds to finance, in whole or in part, the costs of the acquisition, construction, improvement, or extension of a revenue producing enterprise, whether or not operated for profit; and WHEREAS, under the terms of the Act, each home rule charter or statutory city, including the City, may issue revenue bonds to refund, in whole or in part, bonds previously issued by the home rule charter or statutory city under the Act and interest on them; and WHEREAS, on July 15, 2009, the City issued its Educational Facility Revenue Notes (Groves Academy Project), Series 2009 (the "Series 2009 Notes"), in the original aggregate principal amount of $3,500,000, and loaned the proceeds derived from the sale of the Series 2009 Notes to Groves Academy, a Minnesota nonprofit corporation (the "Borrower"), under the terms of a Loan Agreement, dated as of July 1, 2009 (the "Prior Loan Agreement"); and WHEREAS, the proceeds of the loan made pursuant to the Prior Loan Agreement were applied by the Borrower to the financing of: (i) the renovation, expansion, and improvement of Groves Academy, an independent co-educational day school facility owned by the Borrower and located at 3200 Highway 100 South in the City (the "Project"); and (ii) the costs of issuing the Series 2009 Notes; and 'WHEREAS, the Borrower has requested that the City issue an additional series of revenue bonds (the "Bonds") and loan the proceeds derived from the sale of the Bonds to the Borrower, pursuant to the terms of a Loan Agreement, to be dated on or after June 1, 2010 (the "Loan Agreement"); and WHEREAS, the proceeds of the loan made pursuant to the Loan Agreement are proposed to be applied by the Borrower to the financing of: (i) the completion of the renovation, expansion, and improvement of the Project; and (ii) the redemption and prepayment of the Series 2009 Notes; and (iii) at the option of the Borrower, payment of a portion of the costs of issuing the Bonds; and WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder, requires that prior to the issuance of the Bonds, this Council approve the Bonds after conducting a public hearing thereon, preceded by publication of a notice of public hearing (in the form required by Section 147(f) of the Code and applicable regulations) in a newspaper of general circulation at least fourteen (14) days prior to the public hearing date; and Resolution No. 10-062 -2- WHEREAS, under Section 469.154 of the Act, this Council is required to conduct a public hearing on the proposal to undertake and finance a portion of the Project and such public hearing must be preceded by a notice of the time and place of the hearing, to be published not less than fourteen (14) days and not more than thirty (30) days prior to the date fixed for the hearing, in the official newspaper and a newspaper of general circulation of the City; NOW, THEREFORE, BE IT RESOLVED THAT: Public Hearing. Pursuant to the Act and the Code, a notice of public hearing in the form required by the Act and Section 147(e of the Code was published in the Sun Sailor, the official newspaper of the City and a newspaper of general circulation of the City, on Thursday, May 20, 2010. At the meeting of June 7, 2010, the Council conducted a public hearing on the issuance of the Bonds as requested by the Borrower, 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 Bonds, and the location and nature of the Project. Preliminary Approval. 1. The City hereby grants preliminary approval for the issuance of the Bonds for the purposes referenced in this resolution and in an aggregate principal amount not to exceed $4,590,000, subject to the approval of the portion of the Project to be financed with the proceeds of the Bonds by the Minnesota Department of Employment and Economic Development ("DEED"), as required by the Act, and subject to the mutual agreement of the City, the Borrower, and the initial purchaser of the Bonds as to the details of the Bonds and provisions for their payment. In all events, it is understood, however, that the Bonds shall not constitute a pecuniary liability or charge, lien or encumbrance, legal or equitable, upon any funds, assets, taxing power, or any other property of the City except the City's interest in the Loan Agreement; and the Bonds, when, as, and if issued, shall recite in substance that the Bonds, including interest thereon, are payable solely from the revenues received from the Loan Agreement and other property pledged to the payment thereof, and shall not constitute general or moral obligations of the City. 2. In accordance with Section 469.154 of the Act, the City may cooperate with the Borrower in submitting the proposal for the financing of the Project to DEED, including the execution of necessary documentation by City officials. 3. As requested by the Borrower, the law firm of Kennedy & Graven, Chartered shall serve as Bond Counsel and assist in the preparation and review of necessary documents relating to the Project and the Bonds to be issued in connection therewith. 4. The Borrower shall pay to the City any and all costs incurred by the City in connection with the Bonds or the financing of the Project, whether or not the financing of the Project is approved by DEED, whether or not the financing is carried to completion, and whether or not the Bonds or operative instruments are executed and delivered. The Borrower shall also comply with the City's deposit and fee policies respecting such revenue bond issues. • Resolution No. 10-062 -3- 5. All commitments of the City expressed herein are subject to the condition that by June 7, 2011, the City and the Borrower will have agreed to mutually acceptable terms and conditions of the Loan Agreement, the Bonds, and of the other instruments and proceedings relating to the Bonds and their issuance and sale. If the events set forth herein do not take place within the time set forth above, or any extension thereof, and the Bonds are not sold within such time, this resolution will expire and be of no further effect. 6. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Bonds as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Bonds, or issue the Bonds in an amount less than the amount referred to herein, should the City at any time prior to issuance thereof determine not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in paragraph 1 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction 7. With respect to eligible costs of the Project which may be paid by the Borrower prior to the issuance of the Bonds and reimbursed to the Borrower from the proceeds of the Bonds, this resolution is intended to be a reimbursement resolution and declaration of intent to issue reimbursement bonds under Treasury Regulations, Section 1.150-2, as amended. Effective Date. This Resolution shall be in full force and effect from and after its passage. 411 A.6• pted , y the City Council of the City of St. Louis Park, Minnesota on this 7th day of June, 2010. Revie for Administration: AIM City% r a-;er W Attest: Adopted }by the City Council June 7, 2010 / I 1 � r b 1L 7,/ Mayor'' �/ / i