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HomeMy WebLinkAboutOrdinance 12-1977/ � _ , r . � � : r ORDINANCE N0. 12-�� AN ORDINANCE PROVIDING FOR THE ACQUISITION AND CONSTRUCTION OF A WAREHOUSE AND DISTRIBUTION FACILITY, INCLUDING REAL PROPERTY, BUILDINGS AND EQUIPMENT, TO BE LEASED TO COAST-TO-COAST STORES (CENTRAL ORGANIZATION) , INCORPORATED; THE ISSUANCE AND SALE OF REVENUE BONDS TO PROVIDE FUNDS THEREFOR; AND APPROVING OFFICIAL STATEMENT, UNDERWRITING AGREEMENT, DEED, LEASE, MORTGAGE AND INDENTURE OF TRUST AND LEASE GUARANTY AGREEMENT BE IT ORDAINED BY THE CITY OF BROOKINGS, SOUTH DAKOTA: l. The City of Brookings is, by the Constitution and Laws of the State of South Dakota, including Chapter 9-54 , South Dakota Compiled Laws of 1967, as amended (the "Act") authorized to issue and sell its revenue bonds for the purpose of financing the cost of purchasing, constructing, improving and equipping buildings and acquiring sites therefor for industrial and manu- facturing facilities and to enter into agreements with any cor- poration for such facilities. 2. This Board proposes that the City shall acquire cer- tain real property and buildings and improvements constructed and to be constructed thereon and certain items of capital equipment to be permanently located on such real property and in such . buildings and shall lease the same to Coast-to-Coast Stores (Central Organization) , Incorporated, a Delaware corporation, for use as a warehouse and distribution facility, all pursuant to the Act. Forms of the following documents relating to the Project have been submitted to the Board of Commissioners and are now on file in the office of the Finance Officer: (a) Warranty Deed, conveying to the City title to the Project site, in Brookings County, South Dakota; (b) Lease, dated as of July l, 1977 between the City, as Lessor, and Coast-to-Coast Stores (Central Organization) , Incorporated, as Lessee, leasing the Project site and setting forth proposed recitals, covenants and agreements by the parties with respect to the Project site, buildings, improvements and capital equipment; (c) Mortgage and Indenture of Trust, dated as of July 1, 1977, between the City and Northwestern National Bank of Minneapolis, as Trustee, pledging the revenues and mortgaging the entire interest of the City in the Project site, buildings, improvements and capital equipment for the security of $4, 500, 000 Industrial Development Revenue Bonds (Coast-to-Coast Stores (Central Organization) , Incorporated Project) , to be issued by the City, and setting forth proposed recitals, covenants and agreements relating thereto; (d) Lease Guar.anty Agreement dated July l, 1977, whereby City Products Corporation, an Ohio corporation, unconditionally guarantees to the Trustee payment of principal, premium, if any, and interest on the Bonds; (e) Underwriting Agreement, dated as of July �6 , 1977, proposed to be made and entered into by and amony Goldman, Sachs & Co. and Dain, Kalman & Quail, Incor- porated, as underwriters, the Lessee, City Products Corporation and the City, establishing the terms of • •, , . , . . purchase, sale and delivery of the Bonds and setting forth proposed recitals, covenants and agreements with respect thereto; and (f) Official Statement proposed to be distributed by Goldman, Sachs & Co. and Dain, Kalman & Quail, Incorporated for the purpose of offering the Bonds for sale to institutional investors. , 3. It is hereby found, determined and declared that: (a) The Project, comprised of the real property, buildings, improvements and capital equipment described in the Warranty Deed, Lease and Indenture referred to in paragraph 2, consisting of real and personal prop- erties useful and to be used in connection with the operation of a revenue-producing enterprise, constitutes a ro 'ect authorized b the Act. P J Y (b) The purpose of the Project is and the effect , thereof will be to promote, stimulate and develop the general economic welfare and prosperity of the State of South Dakota and of the City and other political sub- divisions, and manufacturing, commercial, agricultural and natural resources development; to encourage and assist in the expansion of existing business develop- ment; and to promote the economic stability of the . State and the City and other political subdivisions by providing greater employment opportunities and diver- sification of industry, thus promoting the general welfare of the citizens. (c) The acquisition and construction of the Project, the issuance and sale of the Bonds, the exe- cution and delivery of the Lease and of the Indenture, and the performance of all covenants and agreements of the City contained in the Lease and Indenture and of all other acts and things required under the Constitu- tion and laws of the State of South Dakota to make the Lease, Indenture and Bonds valid and binding obliga- tions of the City in accordance with their terms, are authorized by the Act. (d) It is desirable that the Lessee by authorized, in accordance with and subject to the terms and condi- tions set forth in Article III of the Lease, which terms and conditions the City determines to be neces- sary, desirable and proper, to provide for the construc- tion, acquisition and installation of the buildings, improvements and capital equipment to be included in the Project by such means as shall be available to the Lessee and in the manner determined by the City, and with or without advertisement for bids as required for the construction and acquisition of other municipal facilities. (e) It is desirable that the City of Brookings Industrial Development Revenue Bonds (Coast-to-Coast Stores (Central Organization) , Incorporated Project) in the amount of $4, 500, 000 be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City' s interest in the Lease and the Lease Guaranty Agreement will be pledged and the Project will be mortgaged to the Trustee as security for the payment of principal and interest on the Bonds. -2- � . , , . . (f) The rentals provided in the Lease for the use of the Project are fixed, and required to be revised from time to time as necessary, so as to produce income and revenues sufficient to provide for prompt payment of principal of and interest on all Bonds issued under the Indenture when due, and the Lease also contains provisions requiring the Lessee 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 leased premises and payable during the term of the Lease, and the Lease further provides for payment of a sum equal to the amount of property taxes which would be due if owned by the Lessee, to be pro- rated among the taxing districts involved and taking into consideration reductions permitted pursuant to Sections 10-6-35. 1 to 10-6-35. 3, inclusive, South Dakota Compiled Laws of 1967, as amended, for the term of the agreement. (g) Under the provisions of the Act, and as pro- vided in the Lease and Indenture, the Bonds are not to be payable from nor charged upon any funds other than the Lease rentals pledged to the payment thereof; the City is not subject to any liability thereon; no . holders of the Bonds shall ever have the right to compel any exercise of the taxing powers of the City to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the City except the Project mortgaged by the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, le gal or equitable, upon any property of the City except the Project; each Bond issued under the Indenture shall recite that the Bond, including interest thereon, is payable solely from the revenue pledged to the payment thereof; and no Bond shall constitute a debt of the City within the meaning of any constitutional or statutory limitation. 4. The forms of Official Statement, Underwriting Agree- ment, Warranty Deed, Lease, Lease Guaranty Agreement and Mortgage and Indenture of Trust referred to in paragraph 2 are approved. The City shall accept the conveyance by the Warranty Deed of the Project site. The Lease and the Lease Guaranty Agreement shall be executed, sealed and acknowledged in the name and on behalf of the City by the Mayor and Finance Officer, upon execution thereof by the officers of the Lessee and City Products Corporation, respectively, in sub- stantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same. The Mortgage and Indenture of Trust shall be executed, sealed and acknowledged in the name and on behalf of the City by the Mayor and Finance Officer in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other laws, as may be aFproved by the officers executing the same and then shall be delivered to the Trustee. Copies of all the documents shall be delivered, filed and recorded as provided therein. 5. In anticipation of the collection of revenues of the Project, the City shall proceed forthwith to issue its City of Brookings Industrial Development Revenue Bonds (Coast-to-Coast Stores (Central Organization) , Incorporated Project) , dated as of July 1, 1977, in the principal amount of $4, 500, 000, in the form and upon the terms set forth in the Mortgage and Indenture of Trust, which terms are for this purpose incorporated in this reso- lution and made a part hereof. The proposal of Goldman, Sachs & -3- !_ , ! - . , q • . Co. and Dain, Kalman & Quail, Incorporated (the "Underwriters") to purchase such Bonds at a price of $4 ,432 , 500 (98. 50� of their par value) plus accrued interest, upon the terms and conditions set forth in the Underwriting Agreement is hereby found and determined to be reasonable and is hereby accepted, and the Mayor and Finance Officer are authorized and directed to execute and deliver the underwriting Agreement in substantiaily the form on file, but with all such changes therein, not inconsistent with the Act or other laws, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. The Mayor and Finance Officer are authorized and directed to prepare and execute the Bonds as prescribed in the Mortgage and Indenture of Trust and to deliver them to the Trustee, together with a certified copy of this Ordinance and the other documents required by Section 2. 09 of the Mortgage and Indenture of Trust, for authentication and delivery to the purchaser. Alan F. Glover, attorney-at-law, licensed to practice law in the State of South Dakota and actually residing therein, is hereby appointed to countersign the said Bonds as provided by Section 6-8-8, South Dakota Compiled Laws of 1967. 6. The Mayor and Finance Officer and other officers of the City are authorized and directed to prepare and furnish to the purchaser of the Bonds, when issued, certified copies of all pro- ceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the office.rs ' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 7. Tlie City hereby elects that the $5,000, 000 limitation of capital expenditures set forth in Section 103 (c) (6) (D) of the Internal Revenue Code shall be applicable to the Project and the Bonds, and the Finance Officer shall execute and file on behalf of the City the form of election required by said Section and the Regulations thereunder. Approved �� � Mayo Attest ina e Of ce Passed first reading J'uly 26 , 1977 Passed second reading August 2 , 1977 Approved August 2 , 1977 Published August 4 , 1977 -4-