HomeMy WebLinkAbout01-301 Resolution No. 01-301
RESOLUTION
AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT
(GEMINI MOULDINGS, INC. PROJECT)
WHEREAS, the City of Elgin, Illinois (the "Issuer" ) is
authorized under its home rule powers, as set forth in the 1970
Constitution of the State of Illinois, Article VII , Section 6, and
the provisions of an Ordinance adopted on February 13 , 1980, as
from time to time supplemented and amended (the "Act" ) , to issue
industrial revenue bonds for the purpose of financing, in whole or
in part, the cost of the acquisition, purchase, construction,
reconstruction, improvement, betterment or extension of any
industrial project;
WHEREAS, Gemini Mouldings, Inc . , an Illinois corporation (the
"Borrower" ) , wishes to finance the acquisition of real estate
located at 2755 Spectrum Drive in Elgin, Illinois and the
construction and equipping of an approximately 50, 000 square foot
manufacturing facility located thereon to be used by the Borrower
in the manufacturing of picture frames and related products (the
"Project" ) , and wishes to have the Issuer issue its industrial
revenue bonds to finance the acquisition, construction and
equipping of such facilities; and
WHEREAS, a Memorandum of Agreement (the "Agreement" ) has been
presented to the Issuer under the terms of which the Issuer agrees,
subject to the provisions of such Agreement, to issue its
industrial revenue bonds to finance the Project;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, as follows :
Section 1 . The form, terms and provisions of the Agreement
presented to this meeting are hereby approved.
Section 2 . That the Mayor of the Issuer is hereby authorized
to execute, and the City Clerk of the Issuer is hereby authorized
to attest to the Agreement with the Borrower in substantially the
form of such agreement appended to this Resolution as Exhibit A.
Section 3 . That the officers and employees of the Issuer are
hereby authorized to take such further action as is necessary to
carry out the intent and purposes of the Agreement as executed and
to issue not to exceed $3 , 040, 000 of its industrial revenue bonds
upon the terms and conditions stated in such Agreement for the
purpose of defraying the cost of the Project and that the same is
declared to be for a public purpose .
Section 4 . The Issuer hereby declares its intent to assist
the Borrower under Treasury Regulations Section 1 . 150-2 to
reimburse any expenditures made on costs of the Project prior to
the issuance of the Bonds with proceeds of the Bonds .
Section 5 . All ordinances, resolutions, orders and parts
thereof in conflict herewith are hereby superseded to the extent of
such conflict .
Section 6 . If any section, paragraph, clause or provision of
this Resolution shall be held invalid, the invalidity of such
section, paragraph, clause or provision shall not affect any of the
other provisions of this Resolution.
Section 7 . This Resolution shall be in full force and effect
upon its passage and approval .
PASSED this 14th day of November, 2001 pursuant to roll
call vote as follows .
AYES : Councilmembers Figueroa, Gilliam, Munson, Walters,
Wasilowski, Yearman and Mayor Schock
NAYS : None
ABSENT: None
APPROVED by me this 14t'' day of November, 2001 .
s/ Ed Schock
Mayor
ATTEST:
s/ Dolonna Mecum
City Clerk
ORDINANCE NO. S16-01
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
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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
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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 of the 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
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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
pY
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.
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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.
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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.
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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
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•
December 14, 2001
MEMORANDUM
TO: Loni Mecum, City Clerk
FROM: William A. Cogley, Corporation Counsel
SUBJECT: Gemini Mouldings, Inc. Industrial Development Revenue Bonds
Attached find an executed original copy of the Memorandum of Agreement
between the City of Elgin and Gemini Mouldings.
WAC
mg
Attachment
EXHIBIT A
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT is among the City of Elgin,
Illinois (the "Issuer" ) , and Gemini Mouldings, Inc . , an Illinois
corporation (the "Borrower") .
1 . Preliminary Statement . Among the matters of mutual
inducement which have resulted in this Agreement are the following:
(a) The Issuer is authorized under its home rule
powers, as set forth in the 1970 Constitution of the State of
Illinois, Article VII, Section 6, and the provisions of an
Ordinance adopted on February 13, 1980, as from time to time
supplemented and amended (the "Act" ) , to issue industrial
revenue bonds for the purpose of financing, in whole or in
part, the cost of the acquisition, purchase, construction,
reconstruction, improvement, betterment or extension of any
industrial project and to enter into a loan agreement with the
Borrower pursuant to which the proceeds of such industrial
revenue bonds may be lent to the Borrower to finance the costs
of the acquisition, rehabilitation and equipping of such an
industrial project .
(b) The Borrower wishes to obtain satisfactory
assurance from the Issuer that the proceeds of the sale of
such industrial revenue bonds of the Issuer will be made
available to it to finance the costs of acquisition of real
estate located at 2755 Spectrum Drive in Elgin, Illinois and
construction and equipping of an approximately 50 , 000 square
foot manufacturing facility located thereon to be used by the
Borrower in the manufacturing of picture frames and related
products (the "Project") .
(c) Subject to the conditions contained herein and to
the due compliance with all requirements of law, the Issuer,
by virtue of such statutory authority as may now or hereafter
be conferred by the Act, will issue and sell its industrial
revenue bonds in an amount not to exceed $3, 040, 000 (the
"Bonds" ) to finance the costs of the Project .
(d) The Borrower has presented the Issuer with evidence
of its intention to reimburse itself for expenditures relating
to the Project which it may pay from funds which are not
proceeds of the Bonds .
(e) The Bonds shall be limited obligations of the Issuer
payable solely and only out of the revenues and receipts
derived from the trust estate established under a loan
agreement, indenture of trust, bond purchase agreement, or any
similar document pursuant to which the Bonds are issued; the
Project shall be financed by means of a loan of the proceeds
of the Bonds to the Borrower, and the Borrower shall agree to
make payments in an amount sufficient to pay the principal and
purchase price of, and premium, if any, and interest on, and
expenses of, the Bonds. No holder of any of the Bonds shall
have the right to compel any exercise of the taxing power of
the Issuer, and the Bonds shall not constitute an indebtedness
or a loan of credit of the Issuer within the meaning of any
constitutional or statutory provision.
2 . Undertakings on the Part of the Issuer. Subject to the
conditions above stated, the Issuer agrees as follows :
(a) That it will authorize the issuance and sale of the
Bonds pursuant to the terms of the Act as then in force.
(b) That it will, at the proper time and subject in all
respects to the prior advice, consent and approval of the
Borrower, adopt or cause to be adopted, such proceedings and
authorize the execution of such documents as may be necessary
and advisable for the authorization, issuance, and sale of the
Bonds as aforesaid, and that it will enter into a loan
agreement whereby the Borrower will pay to or on behalf of the
Issuer such sums as shall be sufficient to pay the principal
and interest and redemption premium, if any, and expenses on
the Bonds as and when the same shall become due and payable.
(c) The Issuer hereby declares its intent to assist the
Borrower under Treasury Regulations Section 1 . 150-2 to
reimburse any expenditures made on costs of the Project prior
to the issuance of the Bonds with proceeds of the Bonds .
3 . Undertakings on the Part of the Borrower. Subject to the
conditions above stated, the Borrower agrees as follows :
(a) That it will use all reasonable efforts to find one
or more purchasers for the Bonds .
(b) That contemporaneously with the delivery of the
Bonds it will enter into a loan agreement with the Issuer
under the terms of which the Borrower will obligate itself to
pay to or on behalf of the Issuer sums sufficient in the
aggregate to pay the principal of and interest and redemption
premium, if any, and expenses on the Bonds as and when the
same shall become due and payable.
4 . General Provisions .
(a) All commitments of the Issuer under Paragraph 2
hereof and of the Borrower under Paragraph 3 hereof are
subject to the condition that on or before November 1, 2002
(or such other date as shall be mutually satisfactory to the
Issuer and the Borrower) , the Issuer and the Borrower shall
have agreed to mutually acceptable terms and conditions of the
loan agreement and of the Bonds and other instruments or
proceedings relating to the Bonds . The decision not to
approve or agree to any term or condition of any document or
not to take any action prior to issuance of the Bonds shall
rest solely within the complete discretion of the parties to
this Agreement .
(b) If the events set forth in (a) of this Paragraph 4
do not take place within the time set forth or any extension
thereof and the Bonds in an amount not exceeding the amount
stated above are not sold within such time, the Borrower
agrees that it will reimburse the Issuer for all reasonable
and necessary direct out-of-pocket expenses which the Issuer
may incur at the Borrower ' s request or as a result of or
arising out of this Agreement including but not limited to the
payment of attorney and other consultant fees arising from the
execution of this Agreement and the performance by the Issuer
of its obligations hereunder, and this Agreement shall
thereupon terminate.
(c) The obligations of the Issuer under this Agreement
and the closing of the Bonds in regard to the Project are
subject to and contingent upon the possession by the Issuer or
the receipt by the Issuer of sufficient 2001 volume cap
allocation from the State of Illinois or otherwise pursuant to
the Illinois Private Activity Bond Allocation Act (30 ILCS
345/1 through 345/9 (2000 State Bar Edition) ) , as supplemented
and amended. In addition, in the event the Issuer possesses
or receives such sufficient 2001 volume cap allocation, the
Issuer agrees to apply $3 , 040, 000 of its 2001 volume cap
allocation to the issuance of the Bonds.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement by their officers thereunto duly authorized as of the
l a+` day of maiSQ:lb�r, 2001
CITY OF ELGIN, ILLINOIS
Mayor
(SEAL) ,'
ATTEST z
Mr+V`jhof� f,k:
SVA614"42,
City Clerk
GEMINI MOULDINGS, INC.
By /� �� ( ((/Frederick Cam ell , resident
By �L
Jane C pbell , Vic President
SEPTEMBER 26, 2001 VOLUME LXVI
REQUEST FROM GEMINI MOULDING, INC. APPROVED FOR A PORTION OF THE
CITY' S 2001 ANNUAL INDUSTRIAL REVENUE BOND AUTHORITY
Councilmember Yearman made a motion, seconded by Councilmember
Walters, to adopt an inducement resolution for Gemini Moulding,
Inc . in the amount of $3 . 4 million in Industrial Revenue Bonds
and authorize the Fiscal Services Manager to conduct the TEFRA
public hearing at an appropriate time and place . Upon a roll call
vote : Yeas : Councilmembers Figueroa, Gilliam, Munson, Walters,
Wasilowski, Yearman and Mayor Schock. Nays : None .
AGREEMENT WITH MARKETPLACE MEDIA GROUP, INC. APPROVED FOR PHASE
ONE MARKETING SERVICES FOR THE FAMILY RECREATION CENTER
Councilmember Figueroa made a motion, seconded by Councilmember
Gilliam, to approve an agreement with Marketplace Media Group,
Inc . for Phase I marketing services for the Family Recreation
Center at a cost not to exceed $7, 935 . Upon a roll call vote :
Yeas : Councilmembers Figueroa, Gilliam, Munson, Walters,
Wasilowski, Yearman and Mayor Schock. Nays : None .
NEIGHBORHOOD BUSINESS IMPROVEMENT PROGRAM APPLICATION APPROVED
FOR PROPERTY LOCATED AT 801-805 DUNDEE AVENUE
Councilmember Walters made a motion, seconded by Councilmember
Figueroa, to approve an agreement with Scott Schroeder in the
amount of $10, 154 . 50 . Upon a roll call vote : Yeas :
Councilmembers Figueroa, Gilliam, Munson, Walters, Wasilowski,
Yearman and Mayor Schock. Nays : None .
AUTHORIZATION OF PAYMENT TO VARIOUS VENDORS
Councilmember Figueroa made a motion, seconded by Councilmember
Gilliam, to authorize the following payments . Upon a roll call
vote : Yeas : Councilmembers Figueroa, Gilliam, Munson, Walters,
Wasilowski, Yearman and Mayor Schock. Nays : None .
Northeastern Ill . $ 9, 609 . 00 2001 Membership
Planning Commission
Chicago, IL
Gents with Tents $ 5, 702 . 00 Tent and table rental for
Elgin, IL Fine Arts Festival
Nelson Systems, Inc . $ 9, 390 . 47 Communications Center
Springfield, IL equipment maintenance
Badger Meter, Inc . $18, 505 . 00 Water meter installation
Milwaukee, WI
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Ez (12)7
Agenda Item No.
1 City of Elgin
E 16` r
September 21, 2001 'y _
is 1'
N
TO: Mayor and Members of the City Council
ECONOMIC GROWTH
FROM: Joyce A. Parker, City Manager
SUBJECT: Request from Gemini Moulding, Inc . for
a Portion of the City' s 2001 Annual
Industrial Revenue Bond Authority
PURPOSE
The purpose of this memorandum is to present to the Mayor and
members of the City Council a request from Gemini Moulding, Inc .
for $3 .4 million of the year 2001 Industrial Revenue Bond (IRB)
authority.
BACKGROUND
The City has received a request regarding the availability of IRBs
for business expansion from Gemini Moulding, Inc . The company is
requesting $3 .4 million in IRB capacity. The City is allocated
$5 . 588 million from the State of Illinois . Funding in excess of
the City' s $5 . 588 million must be secured from other municipalities
or directly from the State of Illinois . $3 . 880 million of the
City' s 2001 IRB capacity has been committed to Food Concepts Inc .
in IRB capacity Thus, only $1 . 7 million p y remains for Gemini Moulding
under the City' s regular allocation. However, on August 9, 2001,
Governor Ryan authorized an additional $753 , 666 . 64 in IRB capacity
to the City of Elgin. Thus, $2 , 453 , 666 in IRB funding is available
to Gemini Moulding.
The company is applying for City approval of industrial development
bonds so that it may move its base of operations from the Village
of Palatine to the City. The purchaser is expected to be the Fred
and Jane Campbell Trust . Fred and Jane Campbell are the owners of
the company. Proceeds will be used to purchase land located at
2755 Spectrum Drive, on which a new facility will be built and new
equipment installed. The proposed site has a land area of
approximately four acres and the new facility will have
approximately 187, 000 square feet . The total estimated costs of
the project are as follows : construction $1 , 953 , 000 , equipment
$442 , 000, land $810, 000 and other $195, 000 . The project started on
June 1, 2001 and is expected to be completed by December 2001 .
•
Gemini Moulding, Inc .
September 21, 2001
Page 2
The company, founded in 1976, manufactures and sells picture frames
and acrylic boxes . The company' s market area is primarily the ten-
state Midwest area, including Illinois, Iowa, Michigan and
Wisconsin.
The company currently has 44 full-time employees, one part-time
employee and nine managers . Currently, one of the company' s
employees live in the City and several employees are relocating to
the area. The company expects to retain all of its current
employees and create eight permanent full-time and two permanent
part-time positions consisting of two clerical , six manual labor,
one supervisory and one managerial . The total annual payroll is
approximately $1, 930, 000, inclusive of management .
In April 2001, the Mayor and City Council approved a Memorandum of
Understanding with Cell Parts Manufacturing for $3 . 4 million in IRB
capacity for the development of a manufacturing facility located at
the Tollgate Industrial Park in Elgin. Cell Parts encountered
difficulties at the Elgin site and chose to locate their new
facility outside of Elgin. Thus, the funds that had been made
available to Cell Parts may now be committed to Gemini Moulding.
As previously indicated, only $2 , 453 , 666 is available in City of
Elgin IRB capacity. Therefore, a gap of $946, 334 exists . Bond
Counsel for Gemini may attempt to secure the gap in funding and
then have that capacity seeded to Elgin. If they are unsuccessful
in obtaining IRB funding elsewhere, the difference will be covered
by a portion of the City of Elgin 2002 IRB capacity.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Request reviewed and supported by the Development Review Team.
FINANCIAL IMPACT
Gemini Moulding, Inc . has paid the $2 , 500 IRB application fee .
Furthermore, all costs pertaining to the IRB issuance will be borne
by Gemini Moulding, Inc .
Speer Financial , Inc . found the company, based on its unaudited
financial reviews, to be financially stable . The IRB project will
allow the company to continue operations, enhance its business,
create approximately ten new jobs and increase the City' s property
taxes by approximately $17, 600 . Speer finds this a worthwhile
project and recommends that the City proceed with the inducement
resolution.
•
Gemini Moulding, Inc .
September 21, 2001
Page 3
The Internal Revenue Code stipulates that all assessments related
to the IRB process must be completed prior to the end of the
calendar year.
wkiLEGAL IMPACT
The inducement resolution and memorandum of agreement should be
subject to obtaining sufficient IRB capacity for the proposed
project . Cell Parts Manufacturing would also need to agree to
enter into a termination agreement providing for the termination of
the memorandum of agreement for the Cell Parts Manufacturing
Project .
ALTERNATIVES
1 . Authorize Gemini Mounding, Inc . to use $3 . 4 million of the
City' s IRBs capacity. The cap would include $2 , 453 , 666 in
2001 capacity and $946, 334 in 2001 capacity seeded to Elgin
from other communities or $946, 334 in 2002 IRB capacity.
2 . Deny the request by Gemini Moulding, Inc . to utilize $3 .4
million of the City' s IRB capacity.
RECOMMENDATION
It is recommended that an inducement resolution be adopted for
Gemini Moulding, Inc . in the amount of $3 . 4 million in Industrial
Revenue Bonds and that the City of Elgin Fiscal Services Manager be
authorized to conduct the TEFRA public hearing at an appropriate
time and place .
R ectfully submitted,
J ce . Parker
City Manager
RHM:amp
Attachments
SPEER FINANCIAL, INC. PUBLIC FINANCE CONSULTANTS SINCE 1954
raj
KEVIN W.McCANNA DAVID F.PHILLIPS LARRY P.BURGER DANIEL D.FORBES BARBARA L.CHEVALIER
PRESIDENT SR VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT
September 5, 2001
The Honorable Ed Schock and
Members of the City Council
City of Elgin
150 Dexter Court
Elgin, Illinois 60120
Dear Mayor and City Council:
Pursuant to the request of the City of Elgin (the "City"), Speer Financial, Inc. has reviewed the
industrial bond application, and supporting documentation, including unaudited financial
statements, of Gemini Moulding, Inc. (the "Company"). The Company is applying for City
approval of$3,400,000 industrial development bonds so that it may move its base of operations
from the Village of Palatine to the City. The purchaser is expected to be the Fred and Jane
Campbell Trust. Fred and Jane Campbell are the owners of the Company. Bond counsel has not
been determined. Proceeds will be used to purchase land located at 2755 Spectrum Drive, on
which a new facility will be built and new equipment installed. The proposed site has a land area
of approximately four acres and the new facility will have approximately 187,000 square feet.
The total estimated costs of the project are as follows: Construction $1,953,000; Equipment
$442,000; Land $810,000; and Other $195,000. The project started on June 1, 2001 and is
expected to be completed by December 2001.
The Company, founded in 1976, manufactures and sells picture frames and acrylic boxes. The
Company's market area is primarily the 10 state Midwest area, including Illinois, Iowa, Michigan
and Wisconsin.
The Company currently has 44 full time employees, 1 part time employee and 9 managers.
Currently one of the Company's employees lives in the City and several employees are relocating
to the area. The Company expects to retain all of its current employees and create 8 permanent
full time and 2 permanent part time positions consisting of 2 clerical, 6 manual labor, 1
supervisory and 1 managerial. The total annual payroll is approximately$1,930,000, inclusive of
management.
The Company has previously been a member of the Palatine Chamber of Commerce and intends
to support local civic activities upon moving to the City.
Financial Analysis
As the accompanying tables indicate, the Company's financials have been stable over the past
five years. Total assets have increased by approximately 15% per year. The ratio of current
assets to total assets has averaged approximately 88%, indicating good liquidity. In addition,
retained earnings as a percent of total liabilities and net worth has averaged approximately 59%.
Over the past five years total income has increased by approximately 13%per year. Cost of sales
and operating expenses have increased by approximately 14%per year.
SUITE 4100•ONE NORTH LASALLE STREET•CHICAGO.ILLINOIS 60602•(312)346-3700•FAX(312)346-8833
SUITE 500.531 COMMERCIAL STREET•WATERLOO,IOWA 50701 •(319)291-2077•FAX(319)291-6787
SPEER FINANCIAL, INC.
The $3,400,000 of bonds are to be amortized over 20 years. The bonds will pay interest at a
floating rate. Annual debt service at an average rate of 6.0% is approximately $290,000. The
Company has outstanding a line of credit in the amount of$687,718,of which approximately half
is for equipment, and $85,431 of loans payable mainly to Fred Campbell as of June 30, 2001.
Debt service coverage for the bonds and existing debt is approximately 1.25x based on an
operating profit before depreciation of$406,034 for the year ending December 31,2000.
Conclusion
In summary, we find the Company, based on its unaudited financial reviews, to be financially
stable. The IDB project will allow the Company to continue operations, enhance its business,
create approximately 10 new jobs and increase the City's property taxes by approximately
$17,600. We find this a worthwhile project and recommend that the City proceed with the
inducement resolution. We would be pleased to discuss this with you.
Sincerely,
Kevin W. McCanna
President
KWM/wjk
Enclosure
SPEER FINANCIAL, INC.
Gemini Moulding,Inc.
Balance Sheet
Unaudited as of December 31
1996 1997 1998 1999 2000
ASSETS:
Current Assets:
Cash $ 96,141.99 S 34,217.01 $ 20,829.25 S 67,741 17 $ 162,678.26
Accounts Receivable 462,433.34 560,780.90 665,593.37 670,451.34 707,214.02
A/R Con Mkt Fund - - 2,746.34 1,299.86 1,297.14
A/R Coop 4,044.19 40,699.00 51,545.23 35,363.42 20,463.93
A/R Steve Kelly 300 00 500.00 - - -
Loan Receivable-Katarzyna - - - - 50.00
Inventory 586,089.37 711,603.86 772,649.32 868,687.04 1,048,190.04
Non Stock Inventory - - - - (637.52)
Section 263 A Costs 93,305.43 107,309.86 117,519.96 134,107.91 149,010.70
Prepaid Interest 3,080.61 13.304.91 11,964.53 8.270.53 -
Exchange - - - - (1,460.20)
Total Curent Assets $1,245,394.93 S 1,468,415.54 S 1,642,848.00 $1,785,921.27 $2,086,804.37
•
Fixed Assets:
Furniture 8 Fixtures S 85.628.30 $ 85628.30 $ 85,628.30 $ 85,628.30 $ 85,628.30
Accumulated Depr Furn/Fix (81,507.77) (83,966.77) (85,195.77) (85,196.46) (85,196.46)
Trucks&Autos 164,604.65 182,084.11 188,819.71 223,437.40 395,256.09
Accumulated Depr-Vehicles (95,608.74) (82,040.74) (93,674.74) (121,219.53) (163,320.00)
Equipment 28,370.87 54,890.50 58,390.50 79,919.34 79,919.34
Accumulated Depr-Equipmt (25,546.09) (28,88(1.09) (36,993.09) (46,145.57) (55,748,49)
Leasehold Improvements 30,214.12 30,214.12 30,214.12 30,214.12 30,214.12
Accumulated Amortization (17,755.05) (20,776.05) (23,797.05) (26,818.05) (29,839.05)
Computerized Saw 32,100.00 32,100.00 32,10000 32,100.00 32,100.00
Accumulated Dept Saw (32,10000) (32,100.00) (32,100.00) (32,100.00) (32,100.00)
Computer 29,88040 34,000.00 34.000.00 34,000.00 34,000.00
Accumulated Depr-Computer (29,880.40) (850.00) (7,650.00) (14,450.04) (21,250.08)
Assets Sold (44,680.42) (18,013.50) - - (69,153.00)
Depr on Assets Sold 35,857.00 14.035.00 - - 38,402.00
Net Fixed Assets $ 79,576.87 $ 166,324.88 $ 149,741.98 $ 159,369.51 $ 238,91277
Other Assets:
Goodwill S 41,94400 $ 41,944.00 S 41,944.00 $ 41,944.00 $ 41,944.00
Advances&Deposits 2,100.00 4,100.00 4,100.00 4,100.00 4,100.00
Federal Income Tax Dep 5,430 00 10,000.00 14,955.00 - 27,600.00
State Inc Tax Deposits 5230 00 5,325.40 11.651.00 - 14,000.00
Total Other Ae ats S 54,704.00 $ 61,369.40 $ 72,650.00 $ 46,044.00 $ 87,644.00
Total Assets $1,379,675.80 S 1,696,109.82 $1 865,239.98 $1,991,334 78 S 2,413,361.14
LIABILITIES&NET WORTH:
Liabilities:
Current Liabilities:
Accounts Payable $ 584591 35 S 780,263.17 $ 774,619.80 $ 831,804.14 S 878,360.47
AP/AR Clearing Acc (36-
t
A/P-PPFA 10,645 12 15,735 04) ((0.04)
Accrued FICA&Fed Wh Tax - - 7,286.08 - -
Accrued IL St Wh Tax - 1,53202 1,769.72 -
Accrued WI St Wh Tax - - 1,406.56 - -
Accrued MI State WM Tax - 3216 428.75 -
Accrued Iowa Wh Tax - 90.40 - - -
Ind St WM Tax - 257.97 296.57 -
IN Mad Cry Tax - 53.08 71.58 -
Accrud MI U/C Taxes 132.35 112.71 - -
Accrued Fed U/C Tax 202.55 266.43 193.40 - -
Accrued IL State U/C Tax (958.33) 414.09 205.10 - -
Accrued Income Tax 14,881.00 23,745.00 24,967 00 16,053 00 77,26200
Accrued Sales Tax 434.00 - 451.00 644.05 418.00
Payable for�rx,k 129,411.23 89,664.36 46 618.52 - -
401-K Payable 8,547.32 13,162.89 14.209.94 19,323 93
A/P Con Mkt Fund 1,719.01 3,036.20 - - -
Loans Payable 100,465.09 84,431.71 84,150 00 85,330 93 85,430.93
Total Current Liabilities $ 839,425.57 S 983,786.59 $ 966,384.80 $ 953,740.64 $1,060,763.03
Long Term Liabilities:
Bank Loans S 317,080.41 $ 322,079.69 $ 429,969.87 S 421,275.25 S -
Equipment Loans 40,932.01 91,364.85 84,057.01 82,775.09 669,237.27
Total Long Term Liabilities S 358,01242 $ 413,444.54 $ 514,026.88 $ 504,050.34 S 669,237.27
Total Liabilities $1,197,437.99 $1,397,231.13 $1,480,411.68 $1,467,790.98 S 1,730,000.30
Stockholders Equity
Capital Stock S 10,500.00 $ 10,500.00 S 10,500.00 $ 10,50000 $ 10,500.00
Less:Treasury Stock Purch (800,000 00) (8.00,000.00) (800,000.00) (800,000.00) (800,000.00)
Retained Earnings 924,589.55 971,716.56 1,081,670.71 1,174,328 30 1,313,043.80
NetProfit/(Loss) 47,148.26 116,662.13 92,657.59 138,715.50 159,817.04
Total Stockholders Equity $ 182,237.81 $ 298,878.69 $ 384,828.30 S 523,543.80 S 683,360.84
Total Liabilities&Net Worth S 1,379,675 80 $1,696,109.82 $1,865,239.98 $1,991,334.78 $2,413,361.14
Gemini Molding, Inc.
Income Statement
Unaudited for the year ending December 31
1996 1997 1998 1999 2000
Income $ 5,308,477.72 $ 6,414,316.49 $ 7,429,598.50 $ 7,729,250.88 $ 8,698,856.02
Cost of Sales 3,898,225.86 4,614,475.15 5,296,178.55 5,488,994.12 6,326,828.69
Gross Profit $ 1,410,251.86 $ 1,799,841.34 $2,133,419.95 $2,240,256.76 $ 2,372,027.33
Operating Expenses 1,360,114.17 1,683,290.01 1,767,751.24 1,861,193.23 1,965,993.75
Operating Profit Before Depreciation $ 50,137.69 $ 116,551.33 $ 365,668.71 $ 379,063.53 $ 406,033.58
Depreciation 29,998.00 31,953.00 44,832.00 46,519.00 61,560.43
Operating Profit After Depreciation $ 20,139.69 $ 84,598.33 $ 320,836.71 $ 332,544.53 $ 344,473.15
Other Income and Expenses 41,889.57 55,808.80 (203,212.12) (152,576.03) (107,394.11)
62 029.26 140 407.13 117 624.59 $ 179,968.50 $ 237,079.04
Profit Before Tax $ $ $
Provision for Tax 14,881.00 23,745.00 24,967.00 41,253.00 77,262.00
U Profit After Tax $ 47,148.26 $ 116,662.13 $ 92,657.59 $ 138,715.50 $ 159,817.04
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Gemini Moulding, Inc.
Elgin,Illinois
$3,400,000 Industrial Development Bonds
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I
-
9/01/2001 -
-
9/01/2002 85,000.00 6.000% 204,000.00 2E9,000.00
9/01/2003 90,000.00 6.000% 193,900.00 2E8,900.00
9/01/2004 95,000.00 6.000% 193,500.00 2E8,500.00
9/01/Z005 100,000.00 6.000% 1E7,1.00.00 287,E00.00
9/01/2006 110,000.00 6.000% 181,E00.00 291,E00.00
9/01/2007 115,000.00 6.000% 175,200.00 290,200.00
9/01/200E 120,000.00 6.000% 163,300.00 288,300.00
9/01/2009 130,000.00 6.000% 161,100.00 291,100.00
9/01/2010 135,000.00 6.000% 153,300.00 2E8,300.00
9/01/2011 145,000.00 6.000% 145,200.00 290,200.00
9/01/2012 150,000.00 6.000% 136,500.00 286,500.00
9/01/2013 160,000.00 6.000% 127,500.00 2E7,500.00
9/01/Z014 170,000.00 6.000% 117,900.00 287,900.00
9/01/2015 1E0,000.00 6.000% 107,700.00 287,700.00
9/01/2016 • 190,000.00 6.000% 96,900.00 286,900.00
9/01/2017 205,000.00 6.000% 85,500.00 290,500.00
9/01/2018 Z15,000.00 6.000% 73,200.00 288,200.00
9/01/2019 230,000.00 6.000% 60,300.00 290,300.00
9/01/2020 Z45,000.00 6.000% 46,500.00 291,500.00
9/01/2021 255,000.00 6.000% 31,E00.00 2E6,800.00
9/01/2022 275,000.00 6.000% 16,500.00 Z91,500.00
Total 3,400,000.00 - 2,669,400.00 6,069,400.00
YIELD STATISTICS
490.00
Bond Year Dollars S44'
Average life. 13.0E5 Years
Average Coupon 6.0000000%
Net Interest Cost(NIC) 6.0000000%
True Interest Cost( IC) 5.912602E%
Bond Yield for Arbitrage Purposes 5.9126028%
All Inclusive Cost(AIC) 5.9126028%
IRS FORM 8038
Net Interest Cost 6.0000000%
Weighted Average Maturity 13.0E5 Years
Speerf5nancis!,Inc. 1)7e=Bi/lsf-GentiniMolding-SINGLE PURPOSE
Public finance Consultants Since 1954