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HomeMy WebLinkAboutResolution 2004-64 - Authorizing Execution of Ground Lease and A Lease-Purchase Agreement RESOLUTION NO. 2004-64 COPC _ )001. RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE AND A LEASE-PURCHASE AGREEMENT, AND APPROVING AND AUTHORIZING ISSUANCE OF PUBLIC PROJECT LEASE REVENUE BONDS AND EXECUTION OF RELATED DOCUMENTS BE IT RESOLVED by the City Council of the City of Corcoran, Minnesota, as follows: Section 1. Recitals. 1.01. The City is authorized by Minnesota Statutes, Section 465.71, as amended, to acquire real and personal property under lease-purchase agreements. 1.02. The City has agreed with the Corcoran Economic Development Authority (the "Authority")that pursuant to a Ground Lease dated as of September , 2004(the"Ground Lease"), the Authority will acquire certain property from the City, and the Authority will lease such property, together with the improvements now or hereafter located thereon, to the City pursuant to a Lease- Purchase Agreement dated as of September_, 2004(the"Lease"). 1.03. Pursuant to a Bond Resolution adopted August 12, 2004 (the "Bond Resolution"), the Authority will issue its Public Project Lease Revenue Bonds, Series 2004 (the "Bonds") in an aggregate principal amount of$325,000. 1.04. Under the Bond Resolution, proceeds of the Bonds will be used to pay costs of improvements to the Facilities described in the Lease. 1.05. Forms of the Ground Lease and the Lease for the Bonds has been prepared and submitted to this Council and are on file with the City. Section 2. Findings. On the basis of information given the City to date, it is hereby found, determined and declared that: (a) it is desirable and in the best interest of the City to enter into the Ground Lease and the Lease. (b) the terms of the Ground Lease and the Lease are found to be advantageous to the City and the form and terms thereof are hereby approved. (c) The Site and the Facilities described in the Lease constitute essential government property, and the City presently intends to appropriate all Lease Payments under the Lease for the term of the Lease; however, the obligations of the City under the Lease are not to be payable from nor charged upon any funds of the City other than the funds appropriated annually to the payment thereof and the Lease shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except its interest in the Lease and in the Site and the Facilities under the Lease. 251425(ME) CR 100-9 Section 3. Authorization of Documents. The Mayor and the Administrator are authorized and directed to execute and deliver the Ground Lease and the Lease on behalf of the City, substantially in the forms on file, but with all such changes therein as shall be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all of the transaction documents shall be delivered, filed and recorded as provided therein. The Mayor, the Administrator, and other City officers are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. Section 4. Approval of Issuance and Sale of Bonds. The issuance and sale by the Authority of the Bonds as described in the Bond Resolution is hereby approved in all respects, provided that the true interest cost of the Bonds shall not exceed % per annum. The City will pay, from proceeds of the Bonds or from other City funds,the costs of issuance of the Bonds. Section 5. Payment of Lease Payments. The City will pay to the Bond Registrar, promptly when due, all of the Lease Payments and other amounts required by the Lease. To provide moneys to make such payments, the City will include in its annual budget, for each Fiscal Year during the term of the Lease, commencing with the Fiscal Year ending on December 31, 2005, moneys sufficient to pay and for the purpose of paying all Lease Payments, a reasonable estimate of Additional Lease Payments, and other amounts payable under the Lease. The agreement of the City in this Section is subject to the City's right to terminate the Lease at the end of any Fiscal Year, as set forth in Section 5.6 of the Lease. Section 6. Miscellaneous. 6.01. The City covenants and agrees with the Owners from time to time of the Bonds that the investment of proceeds of the Bonds, including the investment of any revenues pledged to the Lease Payments which are considered proceeds under applicable regulations, and accumulated sinking funds, if any, shall be limited as to amount and yield in such manner that the Bonds shall not be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder, and that the City shall comply with all other applicable requirements of Section 148. On the basis of the existing facts, estimates and circumstances, including the foregoing findings and covenants,the City hereby certifies that it is not expected that the proceeds of the Bonds will be used in such manner as to cause the Bonds to be "arbitrage bonds" under Section 148 and any regulations thereunder. The Site, the Facilities, and the proceeds of the Bonds will likewise be used in such manner that the Bonds will not be a"private activity bonds" under Section 141 of the Internal Revenue Code of 1986, as amended, and applicable regulations. 6.02. The officers of the City are authorized and directed to prepare and furnish to the original purchaser of the Bonds, and to the attorneys approving the Bonds, certified copies of all proceedings and records of the City relating to the power and authority of the City to enter into the Ground Lease and the Lease within their knowledge or as shown by the books and records in their custody and control, and such certified copies and certificates shall be deemed representations of the City as to the facts stated therein. 2 251425(JAE) CR 100-9 4 6.03. The City covenants that it will file (or cause the Authority to file) with the Internal Revenue Service the information required under Section 149(e) of the Internal Revenue Code of 1986. 6.04. Capitalized terms used herein and defined in the Lease have the meanings given in the Lease. Section 7. Effective Date. This resolution shall be effective immediately upon its final adoption. 3 251425(JAE) CR 100-9 . • The foregoing resolution was introduced by Member Gageby and seconded by Member Thomas . The following voted in favor of the resolution: Bucher, Gageby, Guenthner, Lymangood, Thomas The following voted against: none Whereupon the resolution was adopted. ADOPTED: August 12, 2004. inistrator Mayor 4 251425(ME) CR100-9