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HomeMy WebLinkAbout2002.02.19 RESO 2002-0003CITY OF HUGO, MINNESOTA RESOLUTION NO. 2002 - 3 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX, INCREMENT REVENUE NOTE (HUGO LAND DEVELOPMENT, LLC PROJECT), SERIES 2002, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $610,535 BE IT RESOLVED BY the City Council ("Council") of the City of Hugo, Minnesota (the "City") as follows: Section 1. Authorization: Award of Sale. 1.01. Authorization. The City has heretofore authorized the establishment of a municipal development district- designated as Development District No. 1 (the "Development District") pursuant to Minnesota Statutes, Sections 469.124-469.134, as amended. The City has heretofore approved the establishment of Tax Increment Financing District No. I 1 (the "TIF District"), pursuant to Minnesota Statutes, Sections 469.174-469.179, as amended (the "Tax Increment Act"), within the Development District, and has adopted a tax increment financing plan for the purpose of financing certain improvements within the Development District. Pursuant to Minnesota- Statutes, Section 469.176, the City is authorized to issue and sell its bonds for the purpose of financing a portion of the capital and administration costs of the Development District. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The City hereby finds and determines that it is in the best interests of the City that it issue and sell its Taxable Tax Increment Revenue Note (Hugo Land Development, LLC Project), Series 2002 (the "Note"), in the original aggregate principal amount of $610,535, for the purpose of financing certain capital and administration costs of the Development District. 1.02. Issuance, Sale, and Terms of the Note. The Note is issued in accordance with that certain Amended and Restated Development Agreement between the City and Hugo Land Development, LLC, a Minnesota limited liability company (the "Developer') dated February , 2002 (the "Agreement"). The Developer has retained Miller Johnson Steichen Kinnard, Inc. (the "Placement Agent') to arrange the sale of the Note. The City hereby authorizes issuance of the Note in accordance with terms set forth in this Resolution to the purchaser designated by Placement Agent, at a price of par. The Note shall be dated as of the date of delivery thereof and shall bear interest at the rate of 7.25% per annum to maturity. The Note shall be payable in semi-annual installments of principal and interest in the amounts and on the dates (the "Payment Dates") set forth in the form of the Note attached to this Resolution. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in as of the date of issue: (The remainder of this page is intentionally left blank.) 2 No. R-1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF HUGO, MINNESOTA TAXABLE TAX INCREMENT REVENUE NOTE (HUGO LAND DEVELOPMENT, LLC PROJECT), SERIES 2002 Interest Rate Maturity Date Date of Original Issue 7.25% February 1, 2019 February 1, 2002 Registered Owner. $610,535 The City of Hugo, Minnesota (the "City"), for value received, certifies that it is indebted and hereby promises to pay to the registered owner set forth above or its assigns (the "Registered Owner"), but solely from Available Tax Increment (defined below) the principal sum of $610,535 and to pay interest thereon at the interest rate set forth above, as and to the extent set forth herein. 1. Payments, Interest shall accrue on this Note from the Date of Original Issue set forth above, to but not including, February 1, 2007, at the interest rate set forth above and thereafter at the adjusted interest rate as provided in Section 2 of this Note, payable on August 1, 2002 and each February 1 and August .l thereafter (the "Payment Dates"). The principal amount of this Note is due on the Maturity Date as defined below. Principal of this Note is subject to mandatory redemption and prepayment in accordance with the terms of Section 5 of this Note. In the event Available Tax Increment as defined below is not sufficient to pay all principal of this Note (whether pursuant to mandatory redemption or maturity) and accrued interest due on this Note on any Payment Date, Available Tax Increment shall be applied first to accrued and unpaid interest, and then to principal. The term "Maturity Date" means the earlier of (a) the date all principal and accrued interest on this Note have been paid in full; (b) the date the aggregate of all Payments equals $ ; (c) the date the Note is terminated in accordance with Section 7 hereof; or (d) February 1, 2019. Payments are payable by mail to the address of the Registered Owner as set forth in the Authorization and Registration Provisions of this Note, or such other address as the Registered Owner may designate upon thirty (30) days written notice to the City. Payments on this Note are 3 payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the Date of Original Issue, set forth above, until the Purchase Date (defined below) when this Note is tendered by the Registered Owner. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. On the Purchase Date, the interest rate on this Note shall be adjusted to an interest rate per annum which, in the Remarketing Agent's judgment, having due regard for prevailing secondary market conditions and the yields at which comparable securities are then being sold, is the interest rate appropriate to enable theRemarketing Agent to arrange remarketing of the required aggregate principal amount of the Note at par in accordance with the terms of the Remarketing Agreement, dated as of February 1, 2002 (the "Remarketing Agreement"), between, the City, the Developer, and Miller Johnson Steichen Kinnard, Inc. (the "Remarketing Agent" and the "Tender Agent"). 3. Available Tax Increment. Payments on this Note are payable on each Payment Date solely from Available Tax Increment (defined below) together with a portion of proceeds of the Note deposited in the Debt Service Fund as capitalized interest in an amount which will be sufficient to pay interest due from the original date of issue through the August 1, 2004 Payment Date. As defined in the Amended and Restated Development Agreement, dated as of February 2002 (the "Agreement'), between the City and Hugo Land Development, LLC a Minnesota limited liability company (the "Developer"), the term "Available Tax Increment" means, on each Payment Date, the lesser of Fifty -Two Thousand Seventy -Four Dollars ($52,074.00) or 80% of the Tax Increment derived from the Development Property (as defined in the Agreement and hereinafter referred to as "Tax Increment"), and received by the City in the six months preceding the Payment Date. Notwithstanding the foregoing, Available Tax Increment shall not include any Tax Increment after the aggregate Payments of Tax Increment made hereunder equal $ . In the case of an Event of Default under Section 10.1 of the Agreement, the City may suspend or terminate its obligation to pay Available Tax Increment in accordance with Section 10.2 of the Agreement, which is incorporated herein by reference. The City shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment or capitalized interest and the failure of the City to pay all or any portion of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the City pays principal and interest hereon to the extent of Available Tax Increment and capitalized interest. If on any Payment Date the balance of funds in the Debt Service Fund created under the Resolution (defined below) is insufficient to make the Payment due on that date, the deficiency will be deferred and paid, without interest thereon, to the extent possible on any subsequent Payment Date on which the City has available funds in the Debt Service Fund in excess of the Payment due on such date. The City shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the Maturity Date. The City makes no warranty or representation that Available Tax Increment will be sufficient to pay all or any portion of the principal or interest on this Note. 4 4. Mandatory Tender. This Note is subject to mandatory tender for purchase on February 1, 2007 (the "Purchase Date"). The purchase price of this Note on the Purchase Date is equal to the then outstanding principal amount of this Note plus accrued interest hereon to the Purchase Date (the "Purchase Price"). The Tender Agent shall deliver or mail a written notice of mandatory tender to the Registered Owner of this Note at its address as then shown on the Bond Register, which notice shall be deemed duly given when so mailed, not less than thirty days prior to the Purchase Date. The Registered Owner shall be required to tender this Note (together with an appropriate instrument of transfer executed in blank) to the Tender Agent for purchase by 12:00 o'clock noon, Central Time, on the business day prior to the Purchase Date. The Registered Owner will be deemed to have tendered this Note for purchase on the Purchase Date, at the Purchase Price, whether or not such Note is actually delivered for purchase. NOTWITHSTANDING FAILURE BY THE REGISTERED OWNER OF THIS NOTE TO DELIVER THIS NOTE ON OR PRIOR TO THE PURCHASE DATE, THE REGISTERED OWNER SHALL NOT BE ENTITLED TO PAYMENT OF INTEREST TO ACCRUE SUBSEQUENT TO THE PURCHASE DATE OR ANY OTHER PAYMENT EXCEPT THE PURCHASE PRICE FOR THIS UNDELIVERED NOTE, AND ANY SUCH NOTE SHALL NO LONGER BE ENTITLED TO THE RIGHTS OF THE REGISTERED OWNER OF THIS NOTE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE PURCHASE PRICE. The Purchase Price of this Note shall be paid solely from proceeds derived from the remarketing of this Note under the terms of the Remarketing Agreement and from Available Tax Increment. 5. Mandatory Redemption of Note. This Note, maturing on February 1, 2019, is subject to scheduled mandatory redemption by the City at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, on the dates and in the principal amounts set forth below: (The remainder of this page is intentionally left blank.) 5 Redemption Date Prindpal Amount Redemption Date Prindpal Amount August 1, 2002 $0 February 1, 2011 16,482.50 February 1, 2003 $0 August 1, 2011 18,105.75 August 1, 2003 $0 February 1, 2012 18,762.08 February 1, 2004 $0 August 1, 2012 20,498.74 August 1, 2004 6,838.67 February 1, 2013 21,241.81 February 1, 2005 7,086.57 August 1, 2013 23,100.06 August 1, 2005 _. 7,343.46 February 1, 2014 23,937.43 February 1, 2006 7,609.66 August 1, 2014 25,926.04 August 1, 2006 8,770.34 February 1, 2015 26,865.86 February 1, 2007 9,088.26 August 1, 2015 28,994.25 August 1, 2007 10,329.09 February 1, 2016 30,045.29 February 1, 2008 10,703.52 August 1, 2016 32,323.56 August 1, 2008 12,030.23 February 1, 2017 33,495.29 February 1, 2009 12,466.33 August 1, 2017 35,934.31 August 1, 2009 13,885.11 Febnmy 1, 2018 37,236.93 February 1, 2010 14,388.44 August 1, 2018 39,848.32 August 1, 2010 15,905.91 Febnrary 1, 2019* 41,291.20 * Maturity 6. Optional Redemption of Note. This Note shall be subject to redemption after August 1, 2002, on any Payment Date, without prior notice, in whole or in part, at a redemption price of one hundred percent (100%) of the principal amount thereof to be redeemed plus interest accrued to the date of redemption, without premium from the following sources: (i) Available Tax Increment in excess of the Available Tax Increment applied to the required Payments under this Note on any Payment Date; and (ii) the proceeds of any refunding obligation of the City. 7. Termination. Except as otherwise provided in Section 10.2 of the_ Agreement, at the City's option, this Note shall terminate and the City's obligation to make any payments under this Note shall be discharged upon the occurrence of an Event of Default on the part of the Developer as defined in Section 10.1 of the Agreement, but only if the Event of Default has not been cured in accordance with Section 10.2 of the Agreement. 8. Nature of Obligation. This Note is one of an issue in the total principal amount of $610,535 issued to aid in financing certain capital and administration costs of a Development District undertaken by the City pursuant to Minnesota Statutes, Sections 469.124 through 469.134, as amended, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the City on February 19, 2002 and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes. Sections 469.174 to 469.179, as amended. This Note is a limited obligation of the City which is payable solely from Available Tax Increment and capitalized interest pledged to the payment hereof under the 6 Resolution. This Noteand the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 9. Registration and Transfer. This Note is issuable only as a fully registered note without coupons to one (1) Registered Owner. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the City kept for that purpose at the principal office of the City, by the Registered Owner hereof in person or by such Registered Owners attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the City, duly executed by the Registered Owner. Upon such transfer or exchange and the payment by the Registered Owner of any tax, fee, or governmental charge required to be paid by the City with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person, . other than the Developer or any guarantor of the principal and interest payments on the Note, unless the City has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the City, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. 10. Additional Obliag_tions. The City shall issue no obligation secured in whole or in part by Available Tax Increment, unless the pledge to such obligation is subordinate to the pledge to the Note issued under the Resolution, or the Registered Owner gives its written consent to the issuance of such obligation. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the City according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. (The remainder of this page is intentionally left blank.) [I IN WITNESS WHEREOF, the City Council of the City of Hugo has caused this Note to be executed with the manual or facsimile signatures of its Mayor and City Clerk, all as of the Date of Original Issue specified above. city c & 6/ AUTHENTICATION AND REGISTRATION PROVISIONS This is the Note described in the within mentioned Resolution. The ownership of the unpaid balance of the within Note is registered in the bond register of the City Clerk, in the name of the person last listed below. Date of Registration . Registered Owner Minnesota Tax I.D. No. Signature of City Clerk (The remainder of this page is intentionally left blank.) Section 3. Terms. Execution and Delivery. 3.01. Denomination. Payment The Note shall be issued as one (1) typewritten note numbered R-1 in an amount of $610,535. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reastration. The City hereby appoints the City Clerk to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and flee rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Reg_ster. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the Registered Owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the Registered Owner thereof or by an attorney duly authorized by the Registered Owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person, other than the Developer or any guarantor of the principal and interest payments on the Note, unless the City has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the City, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The City and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such 9 payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the City upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen, or destroyed 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. 3.04. E nation and Delivery. The Note shall be prepared under the direction of the City Clerk and shall be executed on behalf of the City by the signatures of its Mayor and City Clerk. 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 such officer had remained in office until delivery. Notwithstanding such execution, the Note shall not be valid or obligatory for any purpose or entitled to any security cr benefit under this Resolution unless and until a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Note certificates need not be signed by the same representative. The executed certificate of authentication on each Note shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Note has been so executed and authenticated, it shall be delivered by the City Clerk to the Owner upon payment of the purchase price therefor, and the Owner shall not be obligated to see to the application of the purchase price. Section 4. Security Provisions. 4.01. Pled¢e. The City hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be deposited in the Debt Service Fund in accordance with Section 4.03 hereof and applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this Resolution. 10 4.02. Proiect Fund There is hereby created a special fund designated as the Taxable Tax Increment Note (Hugo Land Development, LLC Project) Series 2002 Project Fund (the "Project Fund'), to be held and administered by the City separate and apart from all other funds of the City. The City appropriates to the Project Fund the proceeds of the sale of the Note, except capitalized interest from the date of issue through the August 1, 2004 Payment Date, which is deposited in the Debt Service Fund Within the Project Fund, the City shall maintain a subaccount designated as the Cost of Issuance Account, to which the City hereby appropriates from proceeds of the sale of the Note an amount equal to all costs of issuance of the Note, (currently estimated to be $49,421.00) to be applied to the payment thereof, including any Placement Agent fee. The balance of funds in the Project Fund will be used to reimburse the Developer for a portion of the cost of the Development Property in accordance with the Agreement. All income received from investment of amounts on deposit in the Project Fund shall be credited to the Debt Service Fund Any balance of the proceeds of the Note remaining in the Project Fund after disbursements described herein shall be credited and paid to the Debt Service Fund 4.03. Debt Service Fund So long as the Note is outstanding and any principal thereof or interest thereon remains unpaid, the City shall maintain a separate Taxable Tax Increment Revenue Note (Hugo Land Development, LLC Project) Series 2002 Debt Service Fund (the "Debt Service Fund") to be used for no purpose other than the payment of the principal of and interest on the Note. The City appropriates and irrevocably pledges to the Debt Service Fund: (a) capitalized interest from proceeds of the Note, in the amount necessary to pay interest due from the date of original issue through the August 1, 2004 Payment Date; (b) Available Tax Increment pledged pursuant to Section 4.01 of this Resolution; (c) all funds remaining the Project Fund after .disbursements in accordance with Section 4.02 of this Resolution; (d) all investment earnings on funds held in the Project Fund and the Debt Service Fund; and (e) any other funds appropriated to the Debt Service Fund. The Debt Service Fund and all moneys deposited therein pursuant to this Resolution are hereby pledged to the payment of principal of and interest on the Note. 4.04. Capitalized Interest. The City hereby authorizes the transfer of an amount from the Debt Service Fund to an account held by the Remarketing Agent which will be sufficient to make the payments of interest from the date of issue through the August 11 2004 Payment Date. The Remarketing Agent will make the payments of the capitalized interest from the date of issue through the August 1, 2004 Payment Date to the Registered Owner according to the terms of the Note and the Remarketing Agreement. All amounts held by the Remarketing Agent to pay capitalized interest will be invested in accordance with applicable law. Interest and income earned from the amount held by the Remarketing Agent for the payment of the capitalized interest will be applied to -the payments required under the Note. 4.05. Investment of Funds. All amounts held in the Project Fund and Debt Service Fund will be invested in accordance with the provisions of Minnesota Statutes, Chapter 118A, governing the investment of fiords of governmental entities. Section 5. Amendment and Restatement of Development Agreement. The Mayor and the City Clerk are hereby authorized, on behalf of the City, to negotiate and execute the Agreement. The Agreement is a revised an updated version of the Development Agreement, 11 dated and executed as of May 31, 2001, between the City of Hugo, Minnesota and Hugo Land Development, LLC. Section 6. Certification of Proceedings. 6.01. Certification of Proceedings. The officers of the City are hereby authorized and directed to prepare and furnish to the Registered Owner of the Note certified copies of all proceedings and records of the City, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore fiunished, shall be deemed representations of the City as to the facts recited therein. Section 7. Continuing Disclosure. The continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") do not apply to the Note, because the offering is exempt from such requirements under Section 15c2-12(dxlxi). Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Note. Section 8. Effective Date. This Resolution shall take effect and be in force from and after its approval and publication. (The remainder of this page is intentionally left blank.) 12 P Adopted this 19th day of February, 2002. Mayor ATTEST: City C JH280-21(BWJ) 210202v1 13