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HomeMy WebLinkAboutS16-01 ORDINANCE NO. S 16-01 AN ORDINANCE PROVIDING FOR THE FINANCING BY THE CITY OF ELGIN,ILLINOIS OF AN ECONOMIC DEVELOPMENT PROJECT CONSISTING OF THE ACQUISITION AND CONSTRUCTION OF A MANUFACTURING FACILITY IN ORDER THAT JFK MANAGEMENT, L.L.C. (THE "BORROWER") MAY BE PROVIDED WITH FACILITIES TO PROVIDE INCREASED JOB OPPORTUNITIES IN A LABOR SURPLUS AREA;AUTHORIZING THE ISSUANCE OF ITS VARIABLE RATE DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS (GEMINI MOULDINGS, INC.PROJECT), SERIES 2001 IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $3,040,000 IN CONNECTION THEREWITH; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN THE CITY OF ELGIN, ILLINOIS AND THE BORROWER;AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST SECURING SAID BONDS;AUTHORIZING THE EXECUTION AND DELIVERY OF A PLACEMENT AGENCY AGREEMENT;AND RELATED MATTERS. WHEREAS,the City of Elgin,Illinois,a home rule unit and municipal corporation existing under the Constitution and the laws of the State of Illinois (the "Issuer") is authorized and empowered by the provisions of the 1970 Constitution of the State of Illinois, Article VII, Section 6, and the provisions of an Ordinance adopted by the City Council of the Issuer on February 13, 1980,as from time to time supplemented and amended(collectively,the"Act")to issue its revenue bonds to finance the costs of any "economic development project" in order that the Issuer may be able to relieve conditions of unemployment, to maintain existing levels of employment and to encourage the increase of industry and commerce with the Issuer, thereby reducing the evils attendant upon unemployment and provide for the public safety,benefit and welfare of the residents of the Issuer; and WHEREAS,as a result of negotiations between the Issuer and JFK Management,L.L.C.,an Illinois limited liability company(the "Borrower"),the Borrower has provided for financing of the cost of acquiring real estate located at 2755 Spectrum Drive in Elgin, Illinois and constructing an approximately 50,000 square foot facility located thereon,to be used by Gemini Mouldings,Inc.(the "Company") to manufacture picture frames and related products (hereinafter referred to as the "Project"), which constitutes an economic development project under the Act, and the Issuer is willing to issue its revenue bonds to finance the cost of the Project and to enter into a loan agreement with the Borrower upon terms which will produce revenues and receipts sufficient to provide for the prompt payment at maturity of the principal and interest on such revenue bonds, all as set forth in the details and provisions of the Loan Agreement hereinafter identified; and WHEREAS, the Project will be leased by the Borrower to the Company; and WHEREAS, it is necessary and proper for the Issuer for the benefit of the inhabitants of the Issuer to authorize the financing of the Project and the issuance of the Issuer's Variable Rate Demand Industrial Development Revenue Bonds (Gemini Mouldings, Inc. Project), Series 2001 in the aggregate principal amount of not to exceed$3,040,000 (the "Bonds"); and WHEREAS,LaSalle Capital Markets,A Division of ABN AMRO Financial Services, Inc., its successors and their assigns (the "Placement Agent") has indicated its willingness to place the Bonds with certain purchasers; and WHEREAS, it is necessary to authorize the execution of a Loan Agreement between the Issuer and the Borrower under the terms of which the Issuer will lend the proceeds of the sale of the Bonds to the Borrower to reimburse the Borrower for the financing of the costs of the Project, the payments to be paid by the Borrower to the Issuer in repayment of the loan to be sufficient to pay at maturity the principal of, premium, if any, and interest on the Bonds; and WHEREAS, it is necessary for the Issuer to execute and deliver an Indenture of Trust to LaSalle Bank National Association, as Trustee(the"Trustee") for the holders from time to time of the Bonds pursuant to which the Bonds will be issued; and WHEREAS,LaSalle Bank National Association(the"Initial Letter of Credit Provider")will issue an Irrevocable Transferable Direct Pay Letter of Credit to the Trustee(the"Letter of Credit"); and -2- WHEREAS, a Preliminary Private Placement Memorandum (collectively, with the final Private Placement Memorandum,the"Placement Memorandum")has been prepared and presented to this meeting; and WHEREAS, it is necessary to authorize the sale of the Bonds and to execute a Placement Agreement as hereinafter defined in connection therewith; and WHEREAS,the Issuer has caused to be prepared and presented to this meeting the following documents, which the Issuer proposes to enter into: 1. The Loan Agreement dated as of December 1, 2001, between the Issuer and the Borrower(the "Loan Agreement"); 2. The Indenture of Trust dated as of December 1,2001 (the"Indenture"),between the Issuer and the Trustee, setting forth terms, conditions and security requirements for the proposed bond issue to finance the Project and containing the form of the Bonds; and 3. The Placement Agency Agreement to be dated the date the Bonds are priced (the "Placement Agreement") among the Issuer, the Borrower and the Placement Agent. WHEREAS, the Issuer held a Public Hearing pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended, on November 28, 2001; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, KANE COUNTY, ILLINOIS, AS FOLLOWS: Section 1. That the form, terms and provisions of the proposed Loan Agreement and Indenture be, and they hereby are, in all respects approved, and that the Mayor and the City Clerk of the Issuer be,and they are hereby authorized,empowered and directed to execute and deliver such instruments in the name and on behalf of the Issuer, to cause the Loan Agreement to be delivered to the Borrower and to cause the Indenture to be delivered to the Trustee; that the Indenture shall -3- constitute a lien for the security of the Bonds and upon all right,title and interest of the Issuer in and to the Loan Agreement(except for certain rights ofthe Issuer to notice,indemnification and payment of expenses)and in and to the payments,revenues and receipts payable to the Issuer pursuant thereto, and said revenues are hereby and in the Indenture pledged for such purpose; that the Loan Agreement and the Indenture are to be in substantially the respective forms submitted to this meeting and are hereby approved,with such changes therein as shall be approved by the officials of the Issuer executing the same,their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the forms of the Loan Agreement and the Indenture hereby approved; and that from and after the execution and delivery of such instruments, the officials, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of such instrument as executed. Section 2.That the form,terms and provisions of the proposed Placement Agreement,a copy of which is before this meeting,be,and it hereby is,in all respects approved,and that the Mayor and the City Clerk of the Issuer be,and they hereby are,authorized,empowered and directed to execute the Placement Agreement in the name and on behalf of the Issuer and thereupon to cause the Placement Agreement to be delivered to the Borrower and the Placement Agent;that the Placement Agreement is to be in substantially the form thereof submitted to this meeting and hereby approved, with such changes therein as shall be approved by the officials of the Issuer executing the same,their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of such instrument hereby approved;that the Placement Agreement shall be entered into with the Borrower and the Placement Agent; and that from and after the execution and delivery of such instrument, the officials, agents and employees of the Issuer are -4- hereby authorized,empowered and directed to do all such acts and things necessary to carry out and comply with the provisions of such instrument as executed. Section 3.That the issuance of the Bonds in the aggregate principal amount of not to exceed $3,040,000 to mature on December 1,2028 with the interest rate to be at the Weekly Rate,the Semi- Annual Rate or the Multi-Annual Rates, as determined from time to time in accordance with the Indenture is hereby approved and the Mayor and the City Clerk of the Issuer be and are hereby authorized, empowered and directed to cause to be prepared the Bonds in the form and having the other terms and provisions specified in the Indenture (as executed and delivered); that the Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of its Mayor and the manual or facsimile signature of its City Clerk and the seal of the Issuer shall be impressed or reproduced thereon, and that the Mayor or any other officer of the Issuer shall cause the Bonds, as so executed and attested,to be delivered to the Trustee for authentication and the Trustee is hereby requested to authenticate the not to exceed$3,040,000 aggregate principal amount of Bonds;and the form of the Bonds submitted to this meeting as the same appears in the Indenture, subject to appropriate insertion and revision in order to comply with the provisions of said Indenture be, and the same hereby is, approved, and when the same shall be executed on behalf of the Issuer in the manner contemplated by the Indenture and this Ordinance in the aggregate principal amount of not to exceed $3,040,000, it shall represent the approved form of the Bonds of the Issuer. Section 4. That the distribution and use of the Placement Memorandum by the Placement Agent is hereby ratified. Section 5. That the placement and sale of the Bonds, upon the terms and conditions set out in the Placement Memorandum, be, and is, in all respects authorized and approved. -5- Section 6. That from and after the execution and delivery of the Loan Agreement, the Indenture and the Placement Agreement,the proper officials,agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of said documents as executed and to further the purposes and intent of this Ordinance, including the preamble hereto. Section 7.That all acts and doings of the officials of the Issuer which are in conformity with the purposes and intent of this Ordinance and in furtherance of the issuance and sale of the Bonds in the aggregate principal amount of not to exceed$3,040,000 and the financing of the Project to that amount be, and the same hereby are, in all respects, approved and confirmed. Section 8.That approval is hereby granted for the issuance of the Bonds pursuant to Section 147(f) of the Code. Section 9. That the Issuer hereby elects to have the provisions of Section 144(a)(4)(A)of the Internal Revenue Code of 1986,as amended,apply to the Bonds and hereby affirmatively notes said election on this Ordinance. Section 10. That the Bonds shall be issued in compliance with and under the authority of the provisions of the Act, this Ordinance and the Indenture. Section 11. That the provisions of this Ordinance are hereby declared to be separable, and if any section,phrase or provision shall, for any reason,be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases or provisions. Section 12. That all ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby superseded. Section 13. This Ordinance shall be in full force and effect from and after its passage and approval, in accordance with law. -6- Section 14. The obligation of the Issuer to issue and deliver the Bonds is subject to the availability for such purpose of a necessary and sufficient 2001 volume cap allocation under Section 146 of the Internal Revenue Code of 1986, as amended, and the Illinois Private Activity Bond Allocation Act(30 ILCS 345/1 et seq.) (the "Illinois Volume Cap Act"). In connection therewith, the Issuer, pursuant to and in accordance the Illinois Volume Cap Act and the Guidelines and Procedures of the Office of the Governor effective January 1, 2001,hereby designates $3,040,000 of its year 2001 volume cap for the purpose of issuing the Bonds to finance the Project. Section 15. The Bonds,including but not limited to the principal of,premium,if any,interest thereon and any expenses thereto shall be limited obligations of the Issuer,payable solely and only from the revenues and receipts derived by the Issuer pursuant to the Loan Agreement and shall be otherwise secured as provided in the Loan Agreement and the Indenture. The Bonds shall not in any respect be a general obligation of the Issuer,nor shall they be payable in any manner from funds of the Issuer raised by taxation. The Bonds shall state that they do not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitutional or statutory provision. Nothing in this Ordinance, the Loan Agreement, the Indenture, the Placement Agreement, the Placement Memorandum or the form of the Bonds (hereinafter referred to collectively as the "Financing Documents") or in any document or agreement required hereby and thereby, shall be construed as an obligation or commitment by the Issuer to expend any of its funds other than(i)the proceeds derived from the sale of the Bonds, (ii)the revenues and receipts derived from the Loan Agreement, and (iii) any monies arising out of the investment or reinvestment of said proceeds, income, revenues, receipts or monies. -7- PASSED this 28th day of November, 2001. APPROVED this 28th day of November, 2001. s/Ed Schock Mayor ATTEST: s/Dolonna Mecum City Clerk AYES: Councilmembers Figueroa, Gilliam, Munson, Walters, Wasilowski Yearman and Mayor Schock NAYS: None ABSENT: None -8-