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HomeMy WebLinkAbout2002.02.19 RESO 2002-0004Extract of Minutes of a Meeting of the City Council of the City of Hugo, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Hugo, Minnesota, was duly held at the City Hall in said City on Tuesday, the 19th day of February, 2002, at 7: 00 P.M. The following members were present: Mike Granger, Chudk Haas, Becky Petryk, Fran Miron and the following were absent: Frank Puleo adoption: Member Chuck Haas introduced the following resolution and moved its RESOLUTION NO. 2002-4 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $6,550,000 INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS, SERIES 2002 (MINNESOTA UNION BUILDERS PROJECT) TO FINANCE A PROJECT The motion for the adoption of the foregoing resolution was duly seconded by member Mike Granger . , and. after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof. Granger, Haas, Petryk, Miron and the following voted against the same: NONE whereupon said resolution was declared duly passed and adopted. 13752530 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $6,550,000 INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 2002 (MINNESOTA UNION BUILDERS PROJECT) TO FINANCE A PROJECT BE IT RESOLVED by the City Council of the City of Hugo, Minnesota (the "Issuer"), as follows: 1. The City Council has received a proposal from Hugo Land Development, LLC, a Minnesota limited liability company (the "Company"), that the Issuer undertake to finance a certain Project as herein described, pursuant to Minnesota Statutes, Sections 469.152 through 469.1651 (the "Act"), through issuance by the Issuer of its $6,550,000 Industrial Development Revenue Refunding Bonds, Series 2002 (Minnesota Union Builders Project) (the "Bonds"). ON , the Issuer held a public hearing with respect to the Project. 2. It is proposed that, pursuant to a Loan Agreement between the Issuer and the Company (the "Loan Agreement"), the Issuer loan the proceeds of the Bonds to the Company to refund the Issuer's outstanding $6,550,000 Industrial Development Revenue Bonds, Series 2001 (Minnesota Union Building Project) (the "Prior Bonds") the proceeds of which were used to finance the acquisition of land, the construction and equipping of an approximately 94,000 square foot manufacturing facility for the manufacture of custom modular and panelized homes to be located in the Bald Eagle Industrial Park in the City of Hugo, Minnesota (the "Project"). 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 U.S. Bank National Association in St. Paul, Minnesota (the "Trustee"), as security for payment of the Bonds under an Indenture of Trust (the "Indenture"). Payment of the Bonds will be secured by a Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage") and an Assignment of Leases and Rents (the "Assignment") both from the Company to the Trustee and a Guaranty from James Boo to the Trustee (the "Guaranty"). The Bonds will be purchased by Miller Johnson Steichen Kinnard, Inc. (the "Purchaser") pursuant to an Official Statement (the "Official Statement") and in accordance with a Bond Purchase Agreement among the Issuer, the Company and the Purchaser (the "Purchase Agreement"). 3. Forms of the following documents (the "Bond Documents") have been submitted to the City Council for approval: (a) The Loan Agreement, (b) The Indenture, (c) The Purchase Agreement, (d) The Mortgage (not executed by the Issuer), (e) The Guaranty (not executed by the Issuer), 1375253x1 (t) The Assignment (not executed by the Issuer), and (g) The Official Statement used by the Purchaser to market the Bonds 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, Mortgage 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, including interest thereon, are payable solely fiiom 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. The forms of the Bond Documents and exhibits thereto shall be subject to the review and approval of the City Attorney and Bond Counsel and are otherwise approved substantially in the form submitted. The Loan Agreement, Indenture and Purchase Agreement are directed to be executed in the name and on behalf of the Issuer by the Mayor and the Clerk - Treasurer lerkTreasurer. Any other documents and certificates necessary to the transaction described above shall be executed and delivered by the appropriate officers of the Issuer. 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 Purchase Agreement. 6. The Issuer has not prepared nor made any independent investigation of the information contained in the Preliminary or final Official Statement used by the Purchaser to sell the Bonds and the Issuer takes no responsibility for any information contained in the Preliminary or final Official Statement. 7. 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 Purchaser to purchase the Bonds at par plus accrued interest to the date of delivery at the interest rate or rates specified in the Indenture (not 137525301 2 ,1 exceeding 10% per annum) as of the date of issuance of the Bonds, is hereby accepted. The Mayor and the Clerk -Treasurer are authorized and directed to confirm the interest rate or rates and prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee for authentication and delivery to the Purchaser. 8. The Mayor and the Clerk -Treasurer and other officers of the Issuer are authorized and directed to prepare and furnish to the Purchaser 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, including any heretofore fimushed, shall constitute representations of the Issuer as to the truth of all statements contained therein. 9. 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 Bond Counsel and the Issuer officials authorized herein to execute said documents prior to their execution; and said Issuer 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 of the Mayor or the Clerk -Treasurer, any of the documents authorized by this resolution to be executed may be executed by an acting or duly designated official. Adopted: February 19, 2002 or Attest: L2G✓ (_/ City C1 reasurer 1375253x1 3