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Home My WebLink About02-36 Resolution No. 02-36 RESOLUTION APPROVING THE ISSUANCE OF BONDS BY THE ILLINOIS DEVELOPMENT FINANCE AUTHORITY TO FINANCE AN INDUSTRIAL PROJECT LOCATED IN THE CITY OF ELGIN, ILLINOIS WHEREAS, the City of Elgin, Illinois (the "City" ) has received a letter from the Illinois Development Finance Authority (the "IDFA" ) to the effect that the IDFA will meet on February 14 , 2002 to consider the adoption of a resolution to approve the issuance of conduit revenue bonds to be issued by the IDFA (the "IDFA Bonds" ) to finance an "industrial project" on behalf of Cook Communications Ministries ( "Cook" ) to reimburse Cook for expenditures made by Cook in connection with the acquisition, construction and equipping of a warehouse facility located at 850 North Grove within the jurisdiction of the City (the "Project" ) ; WHEREAS, pursuant to 20 ILCS 3505/6 . 1 , the IDFA cannot issue any bonds such as the IDFA Bonds within the planning and subdivision control jurisdiction of any municipality unless (i) notice, including a description of the proposed project and the financing for the project, is submitted to the corporate authorities of the municipality, and (ii) the corporate authorities, within 45 days after mailing of the notice, have failed to notify the IDFA that the municipality has adopted a resolution disapproving the industrial project or have notified the IDFA that the municipality has adopted a resolution approving the industrial project; and WHEREAS, to ensure compliance with certain provisions of Federal tax law, the IDFA Bonds must be issued on or prior to March 1 , 2002 , which does not provide sufficient time for the 45- day period to expire without having the City take formal action to approve the issuance of the IDFA Bonds by IDFA; and WHEREAS, the IDFA and Cook have requested that the City adopt this Resolution approving the issuance of the IDFA Bonds by the IDFA; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, as follows : Section 1 . Pursuant to 20 ILCS 3505/6 . 1, the City, as the municipality having planning and subdivision control jurisdiction over the Project, hereby approves the Project and the financing of the Project by the IDFA. Section 2 . The passage and approval of this Resolution and the approval by the City of the Project and the financing of the Project by the IDFA do not otherwise constitute a representation or a warranty by the City with respect to any aspect of the financing or the fitness of the Project for the purposes for which it is being financed, and the City shall have no duties or obligations with respect to the Project or the issuance of the IDFA Bonds and the City is in no manner responsible for the issuance of the IDFA Bonds or in any way liable for the payment of any part thereof . Section 3 . As a result of the passage and approval of this Resolution no officer, council member, attorney or employee of the City shall be liable with respect to the Project or the financing thereof . Section 4 . All ordinances, resolutions, orders and parts thereof in conflict herewith are hereby superseded to the extent of such conflict . Section 5 . 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 6 . This Resolution shall be in full force and effect upon its passage and approval . s/ Robert Gilliam Robert Gilliam, Mayor Pro Tem Presented: January 23 , 2002 Adopted: January 23 , 2002 Vote : Yeas : 5 Nays : 0 Recorded: January 24 , 2002 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk 0 OF Ft°', Agenda Item No. \ City of Elgin 13 .ATEDFt" E • • L '�f;� [ ! i1 "� U January 18 , 2002 G 41t II I II n! ' Ian5 N \ �ti . LiiJii u TO: Mayor and Members of the City Council FINANCIALLY STABLE CITY GOVERNMENT EFFICIENT SERVICES, AND QUALITY INFRASTRUCTURE FROM: Joyce A. Parker, City Manager SUBJECT: Proposed Resolution Approving the Issuance of Bonds by the Illinois Development Finance Authority to Finance a Project of Cook Communications Ministries at 850 North Grove Avenue PURPOSE The purpose of this memorandum is to provide the Mayor and the members of the City Council with information regarding a request for the City Council to adopt a resolution approving the issuance of bonds by the Illinois Development Finance Authority to finance a project of Cook Communications Ministries for a project at 850 North Grove Avenue . BACKGROUND The city has received letters from the Illinois Development Finance Authority (IDFA) and from the attorney for Cook Communications Ministries to the effect that the IDFA will meet on February 14 , 2002 to consider the adoption of a resolution to approve the issuance of conduit revenue bonds to be issued by the IDFA to finance an industrial project on behalf of Cook Communications Ministries . The bonds issued by IDFA would reimburse Cook Communications Ministries for expenditures made in connection with a 38, 000 square foot addition to the existing facility located at 850 North Grove Avenue in Elgin together with an ERP Materials Management System which processes and fulfills orders for Cook' s business . Pursuant to 20 ILCS 3505/6 . 1, the IDFA cannot issue any bonds such as the proposed IDFA bonds within the planning and subdivision jurisdiction of any municipality unless (i) notice, including a description of the proposed project and the financing for the project, is submitted to the corporate authorities for the municipality, and (ii) the corporate authorities, within 45 days Proposed Resolution Approving the Issuance of Bonds January 18, 2002 Page 2 after mailing of the notice, have failed to notify the IDFA that the municipality has adopted a resolution disapproving the industrial project or have notified the IDFA that the municipality has adopted a resolution approving the industrial project . To ensure compliance with certain provisions of federal tax law bond counsel for Cook Communications Ministries has advised that the IDFA bonds must be issued on or prior to March 1, 2002 , which does not provide sufficient time for the 45 day period to expire without having the city to take formal action to approve the issuance of the IDFA bonds by IDFA. IDFA and Cook Communications Ministries have requested that the city adopt a resolution approving the issuance of the IDFA bonds by the IDFA. The proposed resolution is attached hereto. The resolution specifically provides that the city shall have no duties or obligations with respect to the project or the issuance of the bonds and the city is in no manner responsible for the issuance of the bonds or in any way liable for the payment of any part thereof . COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED The city has received correspondence from the Illinois Development Finance Authority and from the attorney for Cook Communications Ministries requesting the adoption of the subject resolution. Copies of letters from the Illinois Development Finance Authority and from the attorney for Cook Communications Ministries are attached. deFINANCIAL IMPACT None . LEGAL IMPACT one . ALTERNATIVES 1 1 . Approve the proposed resolution. 2 . Do not approve the proposed resolution. Proposed Resolution Approving the Issuance of Bonds January 18, 2002 Page 3 RECOMMENDATION It is recommended that the City Council approve the proposed resolution approving the issuance of bonds by the Illinois Development Finance Authority to finance an industrial project on behalf of Cook Communications Ministries relating to the acquisition, construction and equipping of a warehouse facility located at 850 North Grove Avenue, Elgin, Illinois . Respectfully submitted, Joyce 1 r Parker City Manager WAC/nr Attachment • -1 -Yi II• r1 Vq.IIS N NV I11 ISI - IIIIY i Iiw11 VLVY Y/11\ 1 1-V11 1 •Vi/YV YVV YiY IL LINOIS TTY 1.1100 i3b 0031 ,• Vcics t.rOU ne.ops7 .;6 +.13t►' ; : e. DEVELOPMENT FINANCE AUTHORITY ♦? I nNt it.ofpee•Seam Tower•233 South%clear,Sake 4000•Clip.tilfaok 60aob•313.627 1434•Fax 313.496A4/11•hit id6.com ..0» -mnrl l'• ChntritaQy*n Cov.ruor MKMDERS Mkhocl W.butt January 11, 2002 ceanerprt ears Sny4erinun YraL'l�alrnron Vi4 Certified Mali WNW G.1Gpwn Tresuartr Omit W.OM Duct Ms, D0ionna Mecum MI/dn R.RiM•r City Clerk Swan M.Cisco of Elgin 150 Dexter Court fnf w FoiDonia n Fight, Illinois 60120-5570 Pew E.d MR Re: Cook Communications Ministries Rabat M.fray (Elgin Facility AdditionProject) John Kill iepni tut IDEA#9749-NP raMe��McDenovph Paw J.o'plrixn Dear Ms. Mecum: Tent=M aerkn P.Kalth wy64- At a regular meeting of the Illinois Development Finance Authority held in Chicago, Rouild „r, Illinois, an Febuary 14, 2002, the members of the illincis Development Finance Authority will consls;er an application to issue qualified 501(c)(3) bonds on behalf of oti Elgin Facility Addition. The amount of such bonds to be issued on behalf of the Y CfJrIVEDlRFC1 E.! applicant is now estimated at an amount not to exceed $5,000,000. The proceeds of Parkkthe bond Issue will be u led to (i)fund an addition to an existing facility. pi) purchase and install ec Iipment, (ill) fund architectural fees, and (iv) pay for bond issuance casts. The pi.ojsi:t is located at or near 850 North Grove, Elgin, Kane and Cook Counties, Illinois. sprisom orave Following Is the pertinent provision of Section 6.1 of the Illinois Development Finance sl7 E. �i Authority Act,20 ILO; 3605J1 et seq. (2001),which describes one of the Conditions mina,,arm that must be met before bonds (the statutory definition of which includes other indebtedness)may be issued by the Authorry: Fitz 217.1$S.7lb1 0108140e Office t so E.Pnrmam Salo The Authority shall not Issue any bonds relating to the financing of an Corgi.uikleii 62s o1 industrial project loiated within the planning and subdivision control 611.443s561 jurisdiction of any municipality unless: (1) notice, including a Pm 6111.453,0n description of the proposed project and the financing for the project, Is h.rwl sine, submitted to the corporate authorities of Ruch municipeJity; and (2) the 134 NW A44t114 Suet corporate authorities, within 45 days after mailing of the notice, have lu Peewiai P uinoNilsca failed to notify the Authority that them municipality has adopted a X6.491.19s0 resolution disapproving the industrial project or have notified the Fax 301476'a Authority that the municipality has adopted a resolution approving the industrial project. In the case of bands to be Issued on behalf of not for profit entities qualified under Section 501 of the Internal Revenue •Code of 1986, the Authority is authorized to Issue those bonds before complying with the requirements of this Section: but those requirements shall be met before the disbursement of bond proceeds to the not for pint entity to pay or reimburse it for project expenditures. Please be advised that the corporate authorities of Elgin, Kane and Cook counfa , Illinois, have 45 days after the mailing date of this letter to adopt either of the maid resolutions. If the Authority has not been notified of the adoption of any such resolution within 45 days, it will assume that the corporate authorities have no objections to this project. Please send notification of the adoption of an approving or disapproving resolution, and a certified copy of the pertinent resolution by registered or certified mail to; ILLINOIS DEVELOPMENT FINANCE AUTHORITY 233 South Wacker Drive sears Tower Suite 4000 Chicago,IL 60606 Attn: Legal Department If you have any questions concerning this matter, please contact.John Haderlein of our office et(312)627-1434. Sincerely, ILLINOIS DEVELOPMENT FINANCE AUTHORITY By: It; r'' Executive Director cc: Cook Communications Ministries Ice Miller IDEA File 4974941P Certified Receipt Number.7000 1670 0013 0078 3272 JAN-11-02 11:34 From:lce Miller - Chicago 3126416263 T-000 P.02 Job-794 ICE 11 ILL LEGAL itiuSINiSS ADVISORS ER January 11, 2002 wal7W3 Dauer No.ie (312)726-3105 dinar fax(312164 1-263 imamec em!tnr.41<crsurc.com VIA FACSIMILE AND UPS OVERNIGHT IVIAIZ, William Cogley, Esquire City of Elgin,Illinois 150 Dexter Court Elgin,Illinois 60 1 20-5555 Re: Approval Resolution Regarding an Illinois Development Finance Authority Bond Issue for Cook Communications Ministries Dear Bill: As you know, I have forwarded to you a Resolution (the "Elgin Resolution") that we are asking the Elgin City Council to pass and approve at its January 23, 2002 meeting. Cook Communications Ministries ("Cook") based in Colorado Springs, Colorado, has asked the Illinois Development Finance Authority(the "IDFA")to issue conduit revenue bonds (the "IDFA Bonds") on its behalf to finance a 38,000 square foot building addition to an existing warehouse facility located at 850 North Grove in Elgin, together with a state-of-the-art ERP materials management system which processes and fulfills orders for Cook's business. As you may know, Cook has been a long-time employer in the Elgin area and, according to application materials submitted by Cook to the IDFA,the Elgin facility currently employs 150 people with an annual payroll of$6.5 million_ Cook has been contemplating and preparing for this financing for an extended period of time and they have now reached a point where they are prepared to move forward with a bond issue. Because the assets they are financing have recently been placed in service,there is a time urgency to have the IDFA Bonds issued to allow Cook,under Federal tax Iaw, to reimburse its own up-front expenditures for acquiring and constnicting the assets out of the IDFA Bond proceeds. Cook ultimately chose to use the IDFA as the issuer of the conduit revenue bonds, as the IDFA has taken a leading role in the State of Illinois in bond financings for"faith-based"institutions. Ice Miller has also been on the leading edge of approving these types of financings and we have done extensive research on the various United States Supreme Court cases and other lower Federal and state court cases which impact these types of financings. Over the past four years,we have approved 135 South LaSalle Street I Suite 4100 I Chicago,I160603-4800 I P 312-726-1567 I F 312-641-6263 I www.icemiller.com Indianapelis ! Chinga I South Band I Know',City I Welshing ton.D.C. JAN-11-02 11:34 From:lce Miller - Chicago 3126416263 T-000 P.03/08 Job-794 William Cogley January 1 1, 2002 Page 2 close to ten of these bond issues in the State of Illinois through the IDFA and many others in other states, including Indiana and Wisconsin. The IDFA's enabling statute provides that it cannot issue bonds within the planning and subdivision control jurisdiction of any municipality unless(i)notice, including a description of the proposed project and the financing for the project, is submitted to the corporate authorities of the municipality,and(ii)the corporate authorities,within 45 days after mailing ofthe notice,have failed to notify the IDFA that the municipality has adopted a resolution disapproving the project or have notified the IDFA that the municipality has adopted a resolution approving the industrial project. As I stated above, because the assets Cook is financing (through reimbursement) have recently been placed in service,there is a certain urgency created by Federal tax law in having the IDFA Bonds issued to allow Cook to use the IDFA Bond proceeds for purposes of reimbursing its prior expenditures. For that reason,the IDFA has agreed to consider the adoption of a final bond resolution at its February 14,2002 Board of Directors meeting and we will proceed to have the IDFA Bonds issued as soon as possible thereafter. As the timing of the IDFA approval and the issuance of the IDFA Bonds could fall within the duration of the 45-day time period set forth in the IDFA's statute,we are asking Elgin to take the affirmative action of adopting the Elgin Resolution approving the project and the issuance of the IDFA Bonds at its January 23,2002 City Council meeting. I was very careful to provide in the EIgin Resolution that the approvals contained therein did not,in any way, constitute a representation or warranty by Elgin with regard to the Cook facilities and their fitness for any purpose. I also was careful to expressly provide that the passage of the Elgin Resolution does not in any way make EIgin liable or responsible for the issuance ofthe IDFA Bonds or the payment of any portion thereof,nor will it subject any officer, council member, attorney or employee of Elgin to any Iiability with respect to the Cook facilities or the financing thereof Per our conversation,I have also requested that a representative from Cook be present at the January 23,2002 City Council meeting to answer any questions which may arise. If I am not able to confirm that a Cook representative can be present at the meeting,I will make myself available to be in attendance at the meeting. JAN-11-02 11:35 From:lce Miller — Chicago 3126416263 T-000 P.04/08 Job-794 William Cogley January I 1. 2002 Page 3 As always, I appreciate your assistance and cooperation, and I would be pleased to answer any other questions you or others may have in connection with the adoption of the Elgin Resolution. You may contact me at 312-726-8105. Very truly yours, ICE MILLER Thomas C. Smith TCS:jo Enclosure 17809