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HomeMy WebLinkAbout2017-167 (re-setting the interest rate of two taxable Tax Increment Revenue Notes (Curve Crest Villa Limited Partnership Project), Series 2002, in the original aggregate principal amount of $445,000 each) 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 meeting of the City Council of the City of Stillwater, Minnesota was duly held at the City Hall in said City on Tuesday, the 5th day of September, 2017, at 7:00 p.m. The following members were present: Council members Pohlena, Junker, Weidner, Menikheim and Mayor Kozlowski, and the following were absent: None. Member Junker introduced the following resolution and moved its adoption: RESOLUTION 2017 - 167 RESOLUTION RESETTING THE INTEREST RATE OF TWO TAXABLE TAX INCREMENT REVENUE NOTES (CURVE CREST VILLA LIMITED PARTNERSHIP PROJECT), SERIES 2002, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF$445,000 EACH The Motion for the adoption of the foregoing resolution was duly seconded by Member Menikheim and upon vote being taken thereon on the following votes in favor thereof: All, and the following voted against the same: None. Whereupon said resolution was declared duly passed and adopted. CITY OF STILLWATER, MINNESOTA RESOLUTION NO. 2017 RESOLUTION RE-SETTING THE INTEREST RATE OF TWO TAXABLE TAX INCREMENT REVENUE NOTES (CURVE CREST VILLA LIMITED PARTNERSHIP PROJECT), SERIES 2002, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF$445,000 EACH BE IT RESOLVED BY the City Council ("Council") of the City of Stillwater, 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. 9 (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 was 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 found and determined that it was in the best interests of the City that it issue and sell two Taxable Tax Increment Revenue Notes (Curve Crest Villa Limited Partnership Project), Series 2002 in the original principal amount of$445,000 each(collectively, the "Note"), 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 was issued in accordance with that certain Contract For Private Development between the City and Curve Crest Villa Limited Partnership, a Minnesota limited partnership (the "Developer") dated June 4, 2002 (the "Agreement"). The Developer has retained Dougherty & Company LLC (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 was dated as of the date of delivery thereof to bear interest at the rate of 7% per annum to maturity and the purpose of this Resolution is to re-set the Interest rate to 5% per annum effective August 1st, 2017, to maturity, subject to adjustment on each Purchase Date, as set forth in the form of the Note. The Note as amended 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 amended Note attached to this Resolution. 2 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.) 3 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WASHINGTON No. R- $445,000 CITY OF STILLWATER, MINNESOTA TAXABLE TAX INCREMENT REVENUE NOTE (CURVE CREST VILLA LIMITED PARTNERSHIP PROJECT), SERIES 2002 Date of Original Interest Rate Maturity Date Issue 5% February 1, 2029 June 14, 2002, interest reset to 6% effective August 1st, 2012; and reset to 5% effective August 1, 2017 Registered Owner: The City of Stillwater, 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 one-half of the Available Tax Increment (defined below) the principal sum of$445,000 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, 2029, at the interest rate set forth above and thereafter at the adjusted interest rate as provided in Section 2 of this Note, payable on February 1, 2003 and each August 1 and February 1 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 6 of this Note. In the event one-half of the 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, one-half of the 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 Note is terminated in accordance with Section 8 hereof; or(c) February 1, 2029. 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 4 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 the Remarketing 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 June 1, 2002 (the "Remarketing Agreement"), between, the City, the Developer, and Dougherty& Company LLC (the "Remarketing Agent" and the "Tender Agent"). 3. Available Tax Increment. Payments on this Note are payable on each Payment Date solely from one-half of the Available Tax Increment, as defined in the Contract For Private Development, dated as of June 4, 2002 (the "Agreement") between the City and Curve Crest Villa Limited Partnership, a Minnesota limited partnership (the "Developer"), the term "Available Tax increment" means, on each Payment Date, 90% 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. In the case of certain Events of Default under Section 9.1 of the Agreement, the City may suspend or terminate its obligation to pay Available Tax Increment in accordance with Section 9.2 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 one-half of the 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 one-half of the 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 one-half of the Available Tax Increment will be sufficient to pay all or any portion of the principal or interest on this Note. 4. Mandatory Tender. This Note is subject to mandatory tender for purchase on August 1, 2022, and August 1, 2027 (collectively 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"). 5 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 one-half of the Available Tax Increment. 5. Mandatory Redemption of Note. This Note maturing on February 1, 2029, 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.) 6 Redemption Date Principal Amount Redemption Date Principal Amount February 1, 2013 7,500 August 1, 2021 10,000 August 1, 2013 5,000 February 1, 2022 12,500 February 1, 2014 7,500 August 1, 2022 12,500 August 1, 2014 7,500 February 1, 2023 12,500 February 1, 2015 7,500 August 1, 2023 12,500 August 1, 2015 7,500 February 1, 2024 12,500 February 1, 2016 7,500 August 1, 2024 12,500 August 1, 2016 7,500 February 1, 2025 15,000 February 1, 2017 7,500 August 1, 2025 15,000 August 1, 2017 7,500 February 1, 2026 15,000 February 1, 2018 10,000 August 1, 2026 15,000 August 1, 2018 7,500 February 1, 2027 17,500 February 1, 2019 10,000 August 1, 2027 17,500 August 1, 2019 10,000 February 1, 2028 17,500 February 1, 2020 10,000 August 1, 2028 17,500 August 1, 2020 10,000 February 1, 2029* 20,000 February 1, 2021 10,000 *Maturity 6. Optional Redemption of Note. This Note shall be subject to redemption 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 on the following dates and from the following sources: (i) on any Payment Date from one-half of the Available Tax Increment in excess of one-half of the Available Tax Increment applied to the required payments under this Note on any Payment Date; and (ii) from the proceeds of any refunding obligation of the City. 7. Termination. Except as otherwise provided in Section 9.2 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 certain Events of Default on the part of the Developer as defined in Section 9.1 of the Agreement, but only if the Event of Default has not been cured in accordance with Section 9.2 of the Agreement. 8. Nature of Obligation. This Note is one of an issue in the total principal amount of $890,000 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 June 4, 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 Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of 7 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 one-half of the 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 Owner's 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 front registration and prospectus delivery requirements of federal and applicable state securities laws. 10. Additional Obligations. 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.) 8 IN WITNESS WHEREOF, the City Council of the City of Stillwater 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. .-1Zer? i Diane F. Ward, City Clerk Ted Kozlowski, Mayor 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 Signature of City Clerk Minnesota Tax I.D. No. (The remainder of this page is intentionally left blank.) 9 Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Notes were issued as two (2) typewritten notes numbered R-1 and R-2 in the amount of$445,000 each with the principle amount on August 1, 2017 of$302,500 each. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall he payable by check or draft issued by the Registrar described herein; provided that interest on the Note to be paid from capitalized interest shall be payable by check or draft issued by the Remarketing Agent. 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. Registration. 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 the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Register. 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 payments so made to any such registered owner or upon the owner's order shall be valid and 10 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. (h) Amendments. All of the provisions of the Note, when executed as authorized herein, shall be deemed to be a part of this resolution (the "Resolution") as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Note shall be substantially in the form in Section 2 of this Resolution, which form is hereby approved, with such necessary and appropriate variations, omissions and insertions (including changes to the aggregate principal amount of the Note, the stated maturity of the Note, the interest rate on the Note, the terms of redemption of the Note, and variation from City policies regarding methods of offering tax increment notes) as the Mayor (the Mayor") and the City Clerk (the "City Clerk"), in their discretion, shall determine. The execution of the Note with the manual or facsimile signatures of the Mayor and the City Clerk and the delivery of the Note by the City shall be conclusive evidence of such determination. 3.04. Preparation 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 or 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 11 payment of the purchase price therefore, and the Owner shall not be obligated to see to the application of the purchase price. Section 4. Security Provisions. 4.01. Pledge. 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. 4.02. 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 (Curve Crest Villa Limited Partnership 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. Available Tax Increment pledged pursuant to Section 4.01 of this Resolution; all funds remaining in the Project Fund after disbursements in accordance with Section 4.02 of this Resolution; and all investment earnings on funds held in 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. The City shall deposit "Excess Available Tax Increment" into the Debt Service Fund prior to the first permitted Optional Redemption Date. The term "Excess Available Tax Increment" means any amount of Available Tax Increment in excess of the amount needed to make the payment due on a Payment Date and which amount is on deposit in the Debt Service Fund on the business day after a Payment Date. On each Payment Date if funds on deposit in the Debt Service Fund are in a minimum amount of$20,000, the City shall prepay the Note on a pro rata basis in the amount of excess funds on deposit in the Debt Service Fund on such Payment Date. 4.03. Investment of Funds. All amounts held in the Escrow Fund, the Project Fund and Debt Service Fund will be invested in accordance with the provisions of Minnesota Statutes, Chapter 118A, governing the investment of funds of governmental entities. Section 5. Certification of Proceedings. 5.01. 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 furnished, shall be deemed representations of the City as to the facts recited therein. Section 6. 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(d)(1)(i). Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Note. 12 Section 7. 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.) 13 Adopted this 5th day of September, 2017. 1-"Zed6:2 Ted Kozlowski, Mayor ATTEST: SLC 07 /6274d__ Diane F. Ward, City Clerk 14 STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF STILLWATER I, the undersigned, being the duly qualified City Clerk of the City Council 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 of said City duly called and held on the date therein indicted, insofar as such minutes relate to the authorization of the issuance of two Taxable Tax Increment Revenue Notes in the original aggregate principal amount of$445,000 each (Curve Crest Village Project). WITNESS my hand this 5th day of September, 2017. diaA Diane F. Ward, City Clerk