1t. Final Approval of the Sale of Industrial Revenue Bonds for Building Management Group1
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TO:
FROM:
DATE:
SUBJ:
CITY OF
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
Action by City Administrator
Endorsed Z.7�A
Modiiisd —
Don Ashworth, City Manager Rejecte - , —
fl L2 -=--�w lam_
J4— Date submitted to CommissiOn
Todd Gerhardt, Assistant City Manager
NMI r ':tt'ld to f wA
December 6, 1995 12- - t r
Final Approval of Sale of Industrial Revenue Bonds for Building Management
Group (Control Products)
The city council must consider giving final approwaI x�
revenue bonds to Building Management Group (Conn
approval is a Resolution Authorizing the Issuance and
Industrial Development Revenue Bonds, Series 1995 I
Project/Control Products) for the construction of a 35,
Again, the council should be aware that the city is not
obligations to this issue.
RECOMMENDATION
Staff would recommend
$1,275,000 of Variable l
Building Management C
ATTA
1
the transaction for the sale of industrial
1 Products). Attached for the council's
;ale of $1,275,000 Variable Rate Demand
Wilding Management Group
DO sq. ft. office /manufacturing facility.
to repay the bonds or any other
- owing the Resolution Authorizing the Issuance and Sale of
Demand Industrial Development Revenue Bonds, Series 1995 to
MEMORANDUM
RESOLUTION NO. 95 -
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF
$1,275,000 VARIABLE RATE DEMAND INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1995 (BUILDING MANAGEMENT GROUP
PROJECT) TO FINANCE A PROJECT
BE IT RESOLVED by the City Council of the City of
Chanhassen, Minnesota (the "Issuer "), as follows:
1. The Issuer has received a proposal from the Building
Management Group (the "Company ") that the Issuer undertake to
finance a certain Project as herein described, and pursuant to
Minnesota Statutes, Sections 469.152 through 469.1651 (the "Act ") ,
through issuance by the Issuer of its $1,275,000 Variable Rate
Demand Industrial Development Revenue Bonds, Series 1995 (Building
Management Group Project) (the "Bonds ").
2. It is proposed that, pursuant to a Loan Agreement
dated as of December 1, 1995, between the Issuer and the Company
(the "Loan Agreement "), the Issuer loan the proceeds of the Bonds
to the Company to finance the acquisition of land located on Lake
Drive West, Chanhassen, Minnesota, and construction and equipping
thereon of an approximately 35,000 sq. ft. manufacturing facility
(the "Project ") which is leased by the Company to Control Products,
Inc. The basic payments to be made by the Company under the Loan
Agreement are fixed so as to produce revenue sufficient to pay the
principal of, premium, if any, and interest on the Bonds when due.
It is further proposed that the Issuer assign its rights to the
basic payments and certain other rights under the Loan Agreement to
First Trust National Association, in St. Paul, Minnesota (the
"Trustee ") as security for payment of the Bonds under an Indenture
of Trust dated as of December 1, 1995 (the "Indenture "). Payment
of the Bonds is initially secured by an irrevocable Letter of
Credit to be issued by Norwest Bank Minnesota, National Association
in favor of the Trustee in an amount equal to the principal amount
of the Bonds plus a certain amount of interest thereon. The Bonds
are intended to be privately placed with accredited investors by
Norwest Bank Minnesota, National Association (the "Placement
Agent ") in accordance with a Bond Placement Agreement dated as of
closing among the Issuer, the Company and the Placement Agent (the
"Placement Agreement ") and pursuant to a Private Placement
Memorandum dated as of the date of closing (the "Memorandum ").
3. Pursuant to the preliminary approval of the Issuer,
forms of the following documents have been submitted to the Issuer
for approval:
737828.1
(a) The Loan Agreement,
(b) The Indenture, and
(c) Placement Agreement.
The use of the Memorandum is hereby approved, but the Issuer takes
no responsibility for any of the information contained therein.
4. It is hereby found, determined and declared that:
(a) it is desirable that the Bonds be issued by the
Issuer upon the terms set forth in the Indenture;
(b) the basic payments under the Loan Agreement are
fixed to produce revenue sufficient to provide for the prompt
payment of principal of, premium, if any, and interest on the
Bonds issued under the Indenture when due, and the Loan
Agreement and Indenture also provide that the Company is
required to pay all expenses of the operation and maintenance
of the Project, including, but without limitation, adequate
insurance thereon and insurance against all liability for
injury to persons or property arising from the operation
thereof, and all taxes and special assessments levied upon or
with respect to the Project Premises and payable during the
term of the Loan Agreement and Indenture; and
(c) under the provisions of Minnesota Statutes,
Section 469.155, and as provided in the Loan Agreement and
Indenture, the Bonds are not to be payable from or charged
upon any funds other than the revenue pledged to the payment
thereof; the Issuer is not subject to any liability thereon;
no holder of any Bonds shall ever have the right to compel any
exercise by the Issuer of its taxing powers to pay any of the
Bonds or the interest or premium thereon, or to enforce
payment thereof against any property of the Issuer except the
interests of the Issuer in the Loan Agreement which have been
assigned to the Trustee under the Indenture; the Bonds shall
not constitute a charge, lien or encumbrance, legal or
equitable upon any property of the Issuer except the interests
of the Issuer in the Loan Agreement which have been assigned
to the Trustee under the Indenture; the Bonds shall recite
that the Bonds are issued without moral obligation on the part
of the state or its political subdivisions, and that the
Bonds, including interest thereon, are payable solely from the
revenues pledged to the payment thereof; and, the Bonds shall
not constitute a debt of the Issuer within the meaning of any
constitutional or statutory limitation.
5. Subject to the final approval of Issuer's counsel
the forms of the Loan Agreement, Indenture and Placement Agreement
and exhibits thereto are approved substantially in the form
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submitted. The Loan Agreement, Indenture and Placement Agreement
are directed to be executed in the name and on behalf of the Issuer
by the Mayor and the City Manager. Any other documents and
certificates necessary to the transaction described above shall be
executed and delivered by the appropriate Issuer officials. Copies
of all of the documents necessary to the transaction herein
described shall be delivered, filed and recorded as provided herein
and in the Loan Agreement, Indenture and Placement Agreement.
6. The Issuer shall proceed forthwith to issue its
Bonds, in the form and upon the terms set forth in the Indenture.
The offer of the Placement Agent to place the Bonds for sale to
accredited investors at par plus accrued interest to the date of
delivery at the interest rate or rates specified in the Indenture
as of the date of issuance of the Bonds at a rate not to exceed 100
per annum is hereby accepted. The Mayor and City Manager are
authorized and directed to prepare and execute the Bonds as
prescribed in the Indenture and to deliver them to the Trustee for
authentication and delivery to the Placement Agent.
7. The Mayor and City Manager and other members of the
City are authorized and directed to prepare and furnish to the
Placement Agent certified copies of all proceedings and records of
the Issuer relating to the Bonds, and such other affidavits and
certificates as may be required to show the facts relating to the
legality of the Bonds as such facts appear from the books and
records in the officers' custody and control or as otherwise known
to them; and all such certified copies, certificates and
affidavits, _ncluding any heretofore furnished, shall constitute
representations of the Issuer as to the truth of all statements
contained therein.
8. The approval hereby given to the various documents
referred to above includes approval of 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 Issuer's counsel and the
officials authorized herein to execute said documents prior to
their execution; and said officials are hereby authorized to
approve said changes on behalf of the Issuer. The execution of any
instrument by the appropriate officer or officers of the Issuer
herein authorized shall be conclusive evidence of the approval of
such documents in accordance with the terms hereof. In the absence
737828.1 3
of the Mayor or City Manager, any of the documents authorized by
this resolution to be executed may be executed by the acting Mayor
or designee of the City Manager, respectively.
Adopted: December 11, 1995
Attest
Clerk
(SEAL)
Mayor
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STATE OF MINNESOTA
COUNTIES OF HENNEPIN AND CARVER
CITY OF CHANHASSEN
I, the undersigned, being the duly qualified and acting
Clerk of the City of Chanhassen, Minnesota, DO HEREBY CERTIFY that
I have compared the attached and foregoing extract of minutes with
the original thereof on file in my office, and that the same is a
full, true and complete transcript of the minutes of a meeting of
the City Council of said City of Chanhassen duly called and held on
the date therein indicated, insofar as such minutes relate to the
authorization of the issuance of the $1,275,000 Variable Rate
Demand Industrial Development Revenue Bonds, Series 1995 (Building
Management Group Project).
WITNESS my hand and the seal of said City of Chanhassen
this day of December, 1995.
Clerk
(SEAL)
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