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HomeMy WebLinkAbout2016-146B (sale of Tax Increment Revenue Refunding Bonds, Territorial Springs and Lofts of Stillwater projects, Series 2016C and providing for issuance) Extract of Minutes of a Meeting of the City Council of the City of Stillwater, Minnesota Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Stillwater, Minnesota, was duly held at the City Hall in said City on Tuesday, the 19th day of July, 2016 at 7:00 o'clock P.M. The following Council members were present: Councilmembers Menikheim, Junker, Weidner, Polehna and Mayor Kozlowski and the following were absent: None During said meeting Councilmember Polehna introduced the following resolution and moved its adoption: RESOLUTION NO. 2016-146B RESOLUTION AUTHORIZING SALE OF TAX INCREMENT REVENUE REFUNDING BONDS (TERRITORIAL SPRINGS AND THE LOFTS OF STILLWATER PROJECTS) SERIES 2016C AND PROVIDING FOR THEIR ISSUANCE The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Menikheim, and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: Councilmembers Menikheim, Junker, Weidner, Polehna and Mayor Kozlowski and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. 7717314v4 RESOLUTION AUTHORIZING SALE OF TAX INCREMENT REVENUE REFUNDING BONDS (TERRITORIAL SPRINGS AND THE LOFTS OF STILLWATER PROJECTS) SERIES 2016C AND PROVIDING FOR THEIR ISSUANCE A. WHEREAS, pursuant to Section 469.178 of the Tax Increment Act (as defined below), the City is authorized to issue and sell its bonds or notes for the purpose of financing capital and administration costs in development districts and to pledge tax increment revenues derived from a tax increment financing district established within the development district to the payment of the principal of and interest on such obligations; and B. WHEREAS, the City of Stillwater, Minnesota, (the "City") established 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 Issuer has approved the establishment of Tax Increment Financing District No. 10 (the "TIF District") pursuant to authority granted by Minnesota Statutes, Sections 469.174-469.1799, as amended (the "Tax Increment Act"), within the Development District, and adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District. In order to provide for the redevelopment of the Development District and the TIF District and, specifically, to provide for the redevelopment of the Minnesota Territorial State Prison Site, referred to generally as Territorial Springs, LLC Project (the "Territorial Springs Project"), the City entered into a Contract for Private Redevelopment, dated August 19, 2003, as amended and restated (the "Territorial Springs Contract"), between the Issuer and Territorial Springs, LLC (collectively, the "Territorial Springs Developer"). The Territorial Springs Project consists of the construction of five (5) separate buildings of for-sale housing. The City previously issued its Series 2003 Note and its Series 2004 Note, both defined hereinafter, for the purpose of paying site improvement costs of the Territorial Springs Project, which Series 2003 Note and Series 2004 Note are payable from Available Tax Increments (as described in the Indenture) derived from the Territorial Springs Project. Phase I of the Territorial Springs Project consists of three buildings as follows: Building 1 consists of fourteen (14) for-sale housing units and two (2) commercial units including 4,000 square feet of retail space. Building 2 includes forty-two (42) for-sale housing units. Building 4 includes thirty-six (36) for-sale housing units. Phase II of the Territorial Springs Project consists of two buildings as follows: Building 3 consists of forty-six (46) for-sale housing units. Building 5 consists of thirty-seven (37) for-sale housing units; and C. WHEREAS, on October 28, 2003, the City Council of the City adopted Resolution No. 2003-230 (the "2003 Note Resolution"), which provided for the issuance and sale 2 7717314v4 of a tax increment revenue note. Pursuant to the terms of the 2003 Note Resolution, the City issued its Taxable Tax Increment Revenue Note (Territorial Springs, LLC Project), Series 2003 (the "Series 2003 Note"), in the principal amount of$3,255,000, dated as of December 10, 2003, payable solely from a portion of the proceeds of the Series 2003 Note and from tax increment revenues generated from Phase I of the Territorial Springs Project, to finance Phase I of the Territorial Springs Project; and D. WHEREAS, on September 15, 2004, the City Council of the City adopted Resolution No. 2004-188 (the "2004 Note Resolution"), which provided for the issuance and sale of a tax increment revenue note. Pursuant to the terms of the 2004 Note Resolution, the City issued its Taxable Tax Increment Revenue Note (Territorial Springs, LLC Project), Series 2004 (the "Series 2004 Note"), in the principal amount of$2,923,000, dated as of September 15, 2004, payable solely from a portion of the proceeds of the Series 2004 Note and from tax increment revenues generated from Phase II of the Territorial Springs Project, to finance Phase II of the Territorial Springs Project. The Series 2003 Note and the Series 2004 Note are hereinafter referred to collectively as the "Territorial Springs Notes"; and E. WHEREAS, pursuant to the terms of the Territorial Springs Contract, the City agreed to refund the Series 2003 Note and the Series 2004 Note with tax-exempt tax increment revenue bonds when the conditions set forth in the Territorial Springs Contract for the issuance of such revenue bonds have been satisfied. Such conditions have been satisfied for the issuance of the tax-exempt tax increment revenue bonds; and F. WHEREAS, in order to provide for the redevelopment of the Development District and the TIF District, referred to generally as The Lofts of Stillwater, Inc. Project (the "Lofts Project" and, with the Territorial Springs Project, the "Projects"), the City entered into an Amended and Restated Contract for Private Redevelopment, dated February 3, 2005 (the "Lofts Contract" and, with the Territorial Springs Contract, the "Contracts"), between the City and The Lofts of Stillwater, Inc. (the "Lofts Developer" and, with the Territorial Springs Developer, the "Developers"). The Lofts Project consists of the construction of an approximately 109,000 square foot four-story residential condominium building containing approximately sixty-six (66) for-sale housing units; and G. WHEREAS, on June 20, 2006, the City Council of the City adopted Resolution No. 2006-137, which provided that the City and U.S. Bank National Association (the "Trustee") enter into an Indenture of Trust dated as of July 1, 2006 (the "Lofts Indenture") pursuant to which the City agreed to issue its Tax Increment Revenue Bonds (The Lofts of Stillwater, Inc. Project), Series 2006 in the aggregate principal amount of$2,390,000 (the "Series 2006 Bonds")to finance the Lofts Project; and H. WHEREAS, it is proposed that the City and the Trustee enter into an Indenture of Trust dated as of July 1, 2016 (the "Indenture") pursuant to which the City has agreed to issue its Tax Increment Revenue Refunding Bonds (Territorial Springs and The Lofts of Stillwater Projects) Series 2016C in the aggregate principal amount of $6,585,000 (the "Bonds") to redeem and prepay the outstanding principal amount of the Territorial Springs Notes and Series 2006 Bonds issued to finance the Projects; and 3 7717314v4 I. WHEREAS, the City and the Trustee will agree in the Indenture that the Bonds will be payable solely from certain Available Tax Increment (as defined in the Indenture) derived from the Project. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Stillwater, Minnesota, as follows: SECTION 1 ISSUANCE OF THE BONDS. 1.1 In order to refund the outstanding principal amount of the Territorial Springs Notes and the Series 2006 Bonds, the City Council hereby authorizes the issuance of tax increment revenue bonds to be designated as the "Tax Increment Revenue Refunding Bonds (Territorial Springs and The Lofts of Stillwater Projects) Series 2016C" in a principal amount of $6,585,000. The Bonds shall be issued on such date and upon the terms and conditions determined by the Administrator of the City. The Bonds are authorized to be issued as obligations the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. This authorization to issue the Bonds is effective without any additional action of the City Council and shall be undertaken by the Administrator on such date and upon the terms and conditions deemed reasonable by the Administrator. The City Council hereby authorizes the sale of the Bonds to Dougherty& Company LLC (the "Underwriter") upon the offer of the Underwriter to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the City and the Underwriter(the "Bond Purchase Agreement"). 1.2 There have been presented to the City Council forms of the following documents: (i) the Indenture and (ii) the Bond Purchase Agreement. The Indenture and the Bond Purchase Agreement are hereby approved in substantially the forms on file with the City on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that are approved by the Administrator of the City. 1.3 The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered, and issued in such denominations, shall be subject to mandatory, optional and special redemptions and prepayment prior to maturity, shall be executed, sealed, and authenticated in such manner, shall be in such form, and shall have such other details and provisions as are prescribed in the Indenture. The form of the Bonds included in the Indenture is approved in substantially the form in the Indenture, subject to such changes not inconsistent with this resolution and applicable law, and subject to such changes that are approved by the Administrator. Without limiting the generality of the foregoing, the Administrator is authorized to approve the original aggregate principal amount of the Bonds to be issued under the terms of this resolution (subject to the maximum aggregate principal amount for all series authorized by this resolution), to establish the terms of redemption, the principal amounts subject to redemption, and the dates of redemption of the Bonds, and to approve other changes to the other terms of the Bonds which are deemed by the Administrator to be in the best interests of the City. The issuance and delivery of the Bonds shall be conclusive evidence that the Administrator has approved the terms and provisions of the Bonds in accordance with the authority granted by this resolution. The proceeds derived from the sale of the Bonds, and the earnings derived from the investment of such proceeds, shall be held, transferred, expended, and invested in accordance with determinations of the Administrator. 4 7717314v4 1.4 The Bonds shall be secured by the terms of the Indenture and shall be payable solely from Available Tax Increments (as defined in the Indenture) that are expressly pledged to the payment of the Bonds pursuant to the terms of the Indenture. 1.5 It is hereby found, determined and declared that the issuance and sale of the Bonds, the execution and delivery by the City of the Indenture and the Bond Purchase Agreement (the "City Documents"), and the performance of all covenants and agreements of the City contained in the City Documents, and of all other acts required under the Constitution and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the City enforceable in accordance with their respective terms, are authorized by applicable Minnesota law, including, without limitation, the Tax Increment Act and this Resolution. 1.6 Under the provisions of the Tax Increment Act, and as provided in the Indenture and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against any funds other than the revenues pledged to the payment thereof; the City shall not be subject to any liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever have the right to compel any exercise by the City of its taxing powers (other than as contemplated by the pledge of tax increment revenues under the terms of the Indenture) to pay the principal of, premium, if any, and interest on Bonds, or to enforce payment thereof against any property of the City other than the property expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City other than the revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a pledge of the general or moral obligation of the City, 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 City within the meaning of any constitutional or statutory limitation of indebtedness. SECTION 2 DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES. 2.1 The preparation and distribution of an Official Statement in conjunction with the offer and sale of the Bonds was previously authorized. In order to provide for continuing disclosure with respect to the Bonds, the City Clerk may execute and deliver an agreement or certificate providing for continuing disclosure with respect to the Bonds. 2.2 Unless litigation shall have been commenced and be pending questioning the Bonds, the proceedings for approval of the Bonds, tax increment revenues generated or collected for payment of the Bonds, revenues pledged for payment of the Bonds, or the organization of the City, or incumbency of its officers, the City Clerk shall also execute and deliver a suitable certificate as to absence of material litigation, and the Administrator shall also execute and deliver a certificate as to payment for and delivery of the Bonds, and the signed approving legal opinion of Briggs and Morgan, Professional Association, as to the validity and enforceability of the Bonds and the tax-exempt status of interest on the Bonds. 2.3 The City Clerk, the Administrator, and other agents, officers, and employees of the City are hereby authorized and directed, individually and collectively, to furnish to the attorneys approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and certifications as to facts as shown by the books and records of the City, and the 5 7717314v4 right and authority of the City to issue the Bonds, and all such certified copies and certifications shall be deemed representations of fact on the part of the City. Such officers, employees, and agents of the City are hereby authorized to execute and deliver, on behalf of the City, all other certificates, instruments, and other written documents that may be requested by bond counsel, the Underwriter, the Trustee, or other persons or entities in conjunction with the issuance of the Bonds and the expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the preceding sentence, such officers and employees are specifically authorized to execute and deliver one or more UCC-1 financing statements, a certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, a receipt for the proceeds derived from the sale of the Bonds, an order to the Trustee, a general certificate of the City, and an Information Return for Tax-Exempt Governmental Obligations, Form 8038-G. SECTION 3 REDEMPTION OF TERRITORIAL SPRINGS NOTES AND THE SERIES 2006 BONDS. 3.1 The City elects to apply the net proceeds of the Bonds to the optional prepayment of the Territorial Springs Notes and the Series 2006 Bonds in accordance with their terms. Following the sale and issuance of the Bonds, the City Clerk, as Registrar of the Territorial Springs Notes, is directed to cause notice of redemption of the Territorial Springs Notes to be given to the holders of the Territorial Springs Notes in accordance with the terms of the Territorial Springs Notes, and to give notice to the Trustee to give notice of redemption to the holders of the Series 2006 Bonds in accordance with the terms of the Series 2006 Bonds, and to take all other actions necessary to cause the redemption and prepayment of the Territorial Springs Notes and the Series 2006 Bonds to occur as soon as possible after the date of issuance of the Bonds. SECTION 4 MISCELLANEOUS. 4.1 All agreements, covenants, and obligations of the City contained in this resolution and in the above-referenced documents shall be deemed to be the agreements, covenants, and obligations of the City to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the City and enforceable in accordance with their terms. No agreement, covenant, or obligation contained in this resolution or in the above- referenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the City Council, or of any officer, employee, or agent of the City in that person's individual capacity. Neither the members of the City Council, nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. 4.2 Nothing in this resolution or in the above-referenced documents is intended or shall be construed to confer upon any person (other than as provided in the Indenture, the Bonds, and the other agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision of this resolution. 4.3 If for any reason the City Clerk, or any other officers, employees, or agents of the City authorized to execute certificates, instruments, or other written documents on behalf of the 6 7717314v4 City shall for any reason cease to be an officer, employee, or agent of the City after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. If for any reason the City Clerk, or any other officers, employees, or agents of the City authorized to execute certificates, instruments, or other written documents on behalf of the City shall be unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other written documents may be executed by a deputy or assistant to such officer, or by such other officer of the City as in the opinion of the City Attorney is authorized to sign such document. 4.4 The City shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code"). The City shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "arbitrage bonds," within the meaning of Section 148 of the Code. Furthermore, the City shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not and does not become includable in gross income for federal income tax purposes. 4.5 The authority to approve, execute, and deliver future amendments to the documents executed and delivered by the City in connection with the transactions contemplated hereby is hereby delegated to the City Clerk, subject to the following conditions: (a) such amendments do not require the consent of the holders of the Bonds or, if required, such consent has been obtained; (b) such amendments do not materially adversely affect the interests of the City as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the City; (d) such amendments are acceptable in form and substance to the City Attorney, bond counsel or other counsel retained by the City to review such amendments; (e) the City has received, if necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the tax-exempt character or interest on the Bonds, if the Bonds are then tax- exempt obligations; and (f) such amendments do not materially prejudice the interests of the owners of the Bonds. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the City Clerk shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the City Clerk, any instrument authorized by this paragraph to be executed and delivered by the City Clerk may be executed by such other officer of the City as in the opinion of the City Attorney is authorized to execute and deliver such document. 7 7717314v4 Passed and adopted by the city council of the City of Stillwater, Minnesota, this 19th day of July, 2016. Mayor ATT ST: 4g-7 ila?4A/ City Clerk 8 7717314v4 STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF STILLWATER I, the undersigned, being the duly qualified and acting City Clerk of the City of Stillwater, 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 duly called and held on the date therein indicated, insofar as such minutes relate to the City's Tax Increment Revenue Refunding Bonds (Territorial Springs and The Lofts of Stillwater Projects) Series 2016C. WITNESS my hand on July 12016. /06A, .,eu 2,1)M City Clerk 9 7717314v4