HomeMy Public PortalAbout2009-047 Resolution Approving & Awarding the Sale of Ltd Taxable Tax Increment Revenue NotesMember Smith introduced the following resolution and moved its adoption:
CITY OF MEDINA
RESOLUTION NO.2009-47
RESOLUTION APPROVING AND AWARDING THE SALE OF, AND PROVIDING
THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS
LIMITED TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2009 IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $2,000,000
BE IT RESOLVED BY the city council of the city of Medina, Minnesota (the "City") as
follows:
Section 1. Authorization., Award of Sale.
1.01. Authorization. The City has heretofore approved the establishment of Tax
Increment Financing District No. 1-9 (the "TIF District") within Development District No. 1 (the
"Development District'), and has adopted a tax increment financing plan for the purpose of
financing certain improvements within the Development District.
The City has previously approved a Contract for Private Development dated September
21, 2005 (the "Agreement") by and between Ryan Companies US, Inc. ("Ryan") and the City.
Pursuant to the Agreement, Ryan agreed to construct certain public improvements and Target
Corporation ("Target') agreed to open and operate a Target store within the Development
District.
Pursuant to Minnesota Statutes Section 469.178, the City is authorized to issue and sell
its Notes for the purpose of financing a portion of the public development costs of the
Development District. Such Notes are payable from the Available Tax Increment, as defined in
the Agreement, and pledged to the payment of the Notes. The City hereby finds and determines
that it is in the best interests of the City that it issue and sell its Limited Taxable Tax Increment
Revenue Notes, Series 2009 in an aggregate principal amount of $2,000,000 (the "Notes") for
the purpose of financing certain costs of the Development District.
1.02. Issuance, Sale, and Terms of the Notes. The City hereby authorizes issuance of the
Notes in accordance with terms set forth in this resolution to Target in the principal amount of
$1,234,600 and to Ryan in the principal amount of $765,400, at a price of par. The Notes shall
be dated as of the date of delivery and shall bear interest at an annual rate of 6.5 percent from
July 1, 2006 to the earlier of maturity or prepayment.
1.03. Optional Redemption. The City may prepay the Notes in whole or in part, without
premium or penalty, on any date.
Section 2. Form of Notes. The Notes shall be in substantially the following form,
with the blanks to be properly filled in:
Resolution No. 2009-47
July 21, 2009
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF MEDINA
No. R- $
Rate
LIMITED TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2009
Date
of Original Issue
6.5% , 2009
The city of Medina, Minnesota (the "City"), for value received, certifies that it is
indebted and hereby promises to pay to , or registered
assigns (the "Owner"), but solely from the sources, to the extent and in the manner hereinafter
identified, the principal amount specified above, at 6.5 percent annual interest thereon from July
1, 2006, payable on each February 1 and August 1 ("Payment Dates"), commencing August 1,
2009 and continuing to and including February 1, 2023, and on each February 1 and August 1
during the five-year automatic extension of the term of this Note in the event of a Deficiency as
hereinafter provided. Interest shall accrue on the unpaid principal, commencing on the date of
original issue. Interest shall be computed on the basis of a year of 360 days.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the City. Payments on this Note are payable
in any coin or currency of the United Sates of America which, on the Payment Date, is legal
tender for the payment of public and private debts.
This Note is subject to prepayment in whole or in part at the option of the City on any
date without premium or penalty. No partial prepayment shall affect the amount or timing of any
other regular payment otherwise required to be made under this Note.
This Note is one of an issue of two in the total original principal amount of $2,000,000,
both issued to aid in financing certain development costs of a Development Program undertaken
by the City pursuant to Minnesota Statutes, Sections 469.124 through 469.134, and is issued
pursuant to an authorizing resolution (the "Resolution") duly adopted by the City on July 21,
2009, 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. This Note is a limited
obligation of the City which is payable solely from Available Tax Increment, as defined in that
certain Contract for Private Development by and between the City and Ryan Companies US,
Inc., dated September 21, 2005 (the "Agreement"), pledged to the payment hereof under the
Resolution No. 2009-47 2
July 21, 2009
Resolution, the terms of which are hereby incorporated by reference. This Note 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 this Note or other costs incident hereto except out of
moneys pledged thereto under the Resolution, 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
this Note or other costs incident hereto.
The City shall pay to the Owner on each Payment Date its proportionate share ( %) of
the Available Tax Increment unless there is an uncured Event of Default by the Owner. Except
with regard to any Deficiency, as defined in the Agreement, if any amount payable under this
Note has not been paid by February 1, 2023, such amount not paid shall be forgiven and the City
shall have no further liability with respect thereto. If a Deficiency occurs and the Note has not
been paid in full, the term of this Note will automatically be extended for such period as is
necessary to receive five additional years of Available Tax Increment or to such earlier date
when the Deficiency has been paid in full.
If as of any Payment Date there is an uncured Event of Default under the Agreement by
the Owner, the City may withhold Available Tax Increment otherwise payable on such Payment
Date and which is due such Owner. If there is more than one Owner under the Note, then only a
pro rata portion of the Available Tax Increment which is otherwise payable on such Payment
Date to such Owner that is in default may be withheld. The right to withhold Available Tax
Increment is subject to Article XI of the Development Agreement, including Section 11.3(c). If
the default is cured in accordance with the Agreement, the amount that is withheld shall be paid,
without interest thereon, within 10 days after the default is cured.
Any estimates of Tax Increment or Available Tax Increment prepared by the City or its
financial advisors in connection with the TIF District or the Agreement are for the benefit of the
City and are not intended as representations on which the Owner may rely.
THE CITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF
AND INTEREST ON THIS NOTE.
This Note is issuable only as a fully registered note without coupons. As provided in the
Resolution, and subject to certain limitations set forth therein, this Note is transferable in whole
or in part upon the books of the City kept for that purpose at the principal office of Medina's
city administrator -clerk, by the Owner hereof in person or by the 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 Owner. Upon such transfer or exchange and the
payment by the 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 payable
on the same Payment Dates.
Resolution No. 2009-47 3
July 21, 2009
The City shall have a right of setoff against the principal portion of this Note as provided
in Sections 6.4, 6.5, 6.6, 6.10 and 12.2(b) of the Agreement.
The Note shall not be transferred to any person other than an affiliate or other related
entity of the Owner unless the City has been provided with an investment letter in a form
substantially similar to the investment letter submitted by the Owner 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.
If the City defaults in its obligations to the Owner hereunder, then the City shall pay the
Owner for all of the out-of-pocket expenses, including, but not limited to attorneys fees and
costs, incurred by the Owner for the collection of the payments due or to become due or for the
enforcement of the performance or observance of any of the obligations or agreements on the
part of the City under this Note.
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.
This Note shall not be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been manually signed by the Registrar.
IN WITNESS WHEREOF, the city council of the city of Medina, Minnesota, has caused
this Note to be executed with the manual signatures of its mayor and city administrator -clerk, all
as of the Date of Original Issue specified above.
CITY OF MEDINA
City Administrator -Clerk Mayor
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the Medina's city administrator -clerk, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner City Administrator -Clerk
Resolution No. 2009-47 4
July 21, 2009
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Notes shall be issued as typewritten notes
numbered R-1 and R-2.
The Notes shall be issuable only in fully registered form. Payments on the Notes shall
be payable by check or draft issued by the Registrar described herein.
3.02. Payment Dates. Principal of and interest on the Notes 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 administrator -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 Notes and the registration of
transfers and exchanges of the Notes.
(b) Transfer of Notes. Upon surrender for transfer of any 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 or Notes of a like
aggregate principal amount, or such lesser amount, and maturity, as requested by the transferor.
Notwithstanding the foregoing, no Note shall be transferred to any person (other than to an
affiliate or other related entity of the Owner) 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. Any Note surrendered upon a transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the City.
(d) Improper or Unauthorized Transfer. When any 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.
Resolution No. 2009-47 5
July 21, 2009
(e) Persons Deemed Owners. The City and the Registrar may treat the persons in
whose names the Notes are at any time registered in the bond register as the absolute owners of
the Notes, whether the Notes shall be overdue or not, for the purpose of receiving payment of,
or on account of, the principal of, and interest on, each such Note and for all other purposes,
and all such payments so made to any such registered owners or upon the owners' 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 a 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 Notes. 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) Prepayment. In the event a Note is prepaid, notice thereof will be given by the
Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not
more than 60 and not less than 30 days prior to the date fixed for prepayment to the registered
owner of the Note to be prepaid at the address shown on the registration books kept by the
Registrar and by publishing the notice if required by law. Failure to give notice by publication
or by mail to any registered owner, or any defect therein, will not affect the validity of the
proceedings for the prepayment of the Note.
3.04. Preparation and Delivery. The Notes shall be prepared under the direction of the
city administrator -clerk and shall be executed on behalf of the City by the signatures of its
mayor and city administrator -clerk. In case any officer whose signature shall appear on the
Notes shall cease to be such officer before the delivery of the Notes, such signature shall
nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in
office until delivery. When the Notes have been so executed, they shall be delivered by the city
administrator -clerk to the Owners thereof upon the satisfaction of the conditions of delivery
under Section 7.2(c) of the Agreement.
Section 4. Security Provisions.
Resolution No. 2009-47 6
July 21, 2009
4.01. Pledge. The City hereby pledges to the payment of the Notes the proportionate
shares (61.73% to Target and 38.27% to Ryan) of Available Tax Increment, which term has the
meaning given to it in the Agreement, and that is received by the City in the six-month period
immediately before each Payment Date.
4.02. Debt Service Fund. Until the date the Notes are no longer outstanding or have been
paid in full (to the extent required to be paid pursuant to this resolution), the City shall maintain
a separate fund or utilize its existing Tax Increment Financing District No. 1-9 fund (the "Tax
Increment Fund") to be used for the purpose of payment of the Notes. The City irrevocably
agrees to appropriate to the Tax Increment Fund Available Tax Increment in the amount
consistent with the Agreement and necessary to pay amounts due on the Notes on each Payment
Date. Interest earnings on funds in the Tax Increment Fund will be credited to that fund. Any
Available Tax Increment remaining in the Tax Increment Fund upon payment of all amounts
due under the Notes shall be available to the City for any purpose permitted by law.
Section 5. Certification of Proceedings.
5.0-1. Certification of Proceedings. The officers of the City are hereby authorized and
directed to prepare and furnish to the Owner of each 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 Notes 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. Effective Date. This resolution shall be effective upon full execution of the
Agreement.
Adopted this 21st day of July, 2009.
T.M. Crosby, Jr., Mayor
ATTEST:
Chad M. Adams, City Administrator -Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member Weir and
upon vote being taken thereon, the following voted in favor thereof:
Smith, Weir, Crosby, Johnson Siitari
and the following voted against same:
None
Whereupon said resolution was declared duly passed and adopted.
Resolution No. 2009-47
July 21, 2009