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HomeMy WebLinkAbout80-0326 Precision Glass Bond g )-03a6 RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A MEMORANDUM OF INTENT BY AND BETWEEN THE CITY OF ELGIN, ILLINOIS, AND ELGIN PRECISION GLASS CO. , INC. , PROVIDING FOR THE ISSUANCE BY SAID CITY OF REVENUE BONDS PURSUANT TO THE PROVISIONS OF ORDINANCE NO. S7-75 OF SAID ISSUER, AS AMENDED BY ORDINANCE NO. S2-78 WHEREAS, the City of Elgin (hereinafter called the "City") recognizes that it is necessary and for the best interests of the City to relieve condi- tions of unemployment, and to encourage the economic development of the City, thereby reducing the evils attendant upon unemployment and to provide for the increased welfare and prosperity of the residents of the City; and WHEREAS, the City is an Illinois home rule unit of local government authorized under the provisions of Section 6(a) of Article VII of the 1970 Constitution of Illinois and the provisions of Ordinance No. S7-75, as amended by Ordinance No. S2-78 (collectively the "Enabling Ordinance") , to acquire, construct and finance economic development projects, to lease, sell or finance the same to or for any person, and to provide for the issuance of revenue bonds in conjunction therewith; and WHEREAS, in order to implement the public purposes set forth in the Enabling Ordinance, the City has indicated its intent to issue its revenue bonds and apply the proceeds therefrom to the construction and equipping of a building or buildings and related facilities designed for the manufacture and distribution of indistrial glass parts and related activities within the corporate boundaries of the City (the "Project") for use by Elgin Precision Glass Co. , Inc. , an Illinois corporation (the "Borrower") ; and WHEREAS, the City's intention to issue said revenue bonds is an induce- ment to the Borrower to locate the Project in the City; and WHEREAS, it is now deemed advisable to authorize the execution and delivery by the City of a Memorandum of Intent (the "Memorandum of Intent") by and between the City and the Borrower, setting forth the understanding heretofore informally agreed upon by the City and the Borrower; and WHEREAS, the form of Memorandum of Intent has been presented to this meeting of the City Council. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN ILLINOIS, as follows: Section 1. The Mayor is hereby authorized and directed to execute the Memorandum of Intent, and the City Clerk is hereby authorized and directed to affix the seal of the City thereto and to attest the same; and said Mayor and City Clerk are hereby authorized and directed to cause said Memorandum of Intent to be delivered to, accepted and executed by the Borrower. The Memorandum of Intent, as executed and delivered, shall be in substantially the form presented to this meeting or with such changes therein as shall be approved by the Mayor and the City Clerk, their execution thereof to con- stitute conclusive approval of any and all changes to the form of Memorandum of Intent presented to this meeting. Section 2. All resolutions and orders or parts thereof, in conflict with the provisions of this resolution, are, to the extent of such conflict, hereby repealed, and this resolution shall be in immediate effect from and after its adoption. s/ Herbert Hill Herbert Hill, Mayor Pro Tem Presented: March 26, 1980 Adopted: March 26, 1980 Vote: Yeas 6 Nays 0 Recorded: Attest: s/ Nancy L. Johnson Nancy L. Johnson, Acting City Clerk The City Council of the City of Elgin, Illinois, convened in public session at the Council Chambers, in City Hall, Elgin, Illinois, its regular meeting place, at 8 : 00 o 'clock P.M. on July 2_, 1980, with the following Councilmen present: Barnes , Gilliam, Hill , Kirkland , Nelson , Waters and Mayor Verbic . Absent: None *** *** *** (Other Business ) The following ordinance was introduced in written form. Councilman Hill made a motion to adopt said ordinance Motion seconded by Councilman Gilliam . The ordinance was adopted by the following vote: Aye: Councilmen Barnes , Gilliam, Hill , Kirkland , Nelson Waters and Mayor Verbic. Nay: None Ordinance No. S8-80 The ordinance is as follows : ORDINANCE NO. S8-80 AN ORDINANCE authorizing the issuance of $900, 000 aggregate principal amount of Industrial Development Revenue Bonds, Series 1980 (Elgin Precision Glass Co. , Inc. Project) ; the lending of the proceeds of said Bonds to Elgin Precision Glass Co. , Inc. ; the execution and delivery of a Mortgage, Loan and Security Agreement and a Trust Indenture; confirm- ing the sale of said Bonds; and prescribing other matters relating thereto. WHEREAS the City of Elgin, Illinois (the "Issuer" ) is a home rule unit of local government under the 1970 Illinois Constitu- tion and is authorized pursuant to the provisions of Ordinance No. S7-75 of the Issuer, adopted on July 23 , 1975, as amended and supplemented by Ordinance No. S2-78 of the Issuer, adopted on March 8 , 1978, and as further amended and supplemented by Ordinance No. S14-80 of the Issuer, adopted on January 28, 1980 (the "Enabling Ordinance" ) , to issue its revenue bonds to finance the construction and equipping of economic development projects; and WHEREAS the Issuer proposes to issue $900, 000 aggregate principal amount of Industrial Development Revenue Bonds, Series 1980 (Elgin Precision Glass Co. , Inc. Project) ( "the "Series 1980 Bonds" ) pursuant to a Trust Indenture (the "Indenture" ) , by and between the Issuer and First American Bank of Bensenville, Bensen- ville, Illinois, as Trustee (the "Trustee" ) ; and WHEREAS pursuant to a Mortgage, Loan and Security Agreement (the "Loan Agreement" ) , by and between the Issuer and Elgin Precision Glass Co. , Inc. , an Illinois corporation (the -2- "Borrower" ) , the Issuer proposes to lend the proceeds from the sale of the Series 1980 Bonds to the Borrower in order to provide funds : (1 ) to construct and equip a facility for the manufacture and distribution of industrial glass parts and related activities located in Elgin, Illinois (the "Project" ) and (2 ) to pay necessary expenses incidental thereto; and WHEREAS pursuant to the Loan Agreement the Borrower will grant the Issuer a mortgage on the Project Real Estate described in the Loan Agreement and a security interest in the Project Equipment described in the Loan Agreement; and WHEREAS pursuant to the Loan Agreement the Borrower will execute and deliver its Series 1980 Note in the principal amount of $900, 000 (the "Series 1980 Note" ) ; and WHEREAS pursuant to the Indenture, as security for the Series 1980 Bonds, the Issuer will assign to the Trustee all of the Issuer' s right, title and interest in, under and to the Loan Agreement (except the Issuer' s rights to issue Additional Bonds, to consent to supplements and amendments to the Loan Agreement, to be reimbursed and held harmless, to consent to the leasing of the Project by the Borrower and to inspect the Borrower' s financial statements, which rights are herein collectively referred to as the "Unassigned Rights" ) and the Series 1980 Note; and WHEREAS forms of the Loan Agreement, the Series 1980 Note and the Indenture have been prepared and presented to this meeting: NOW THEREFORE, Be It Ordained By the City Council of the City of Elgin, Cook and Kane Counties, Illinois, as follows : -3- Section 1 . The construction and equipping of the Project and the payment of necessary expenses incidental thereto are hereby authorized and determined to be in the public interest and in furtherance of the public purposes contemplated by the Enabling Ordinance. Section 2 . In order to provide funds to carry out the public purposes set forth in Section 1. thereof, there are hereby authorized to be issued the revenue bonds of the Issuer in the principal sum of $900, 000, which bonds shall be designated "Indus- trial Development Revenue Bonds, Series 1980 (Elgin Precision Glass Co. , Inc. Project) " (the "Series 1980 Bonds" ) . The Series 1980 Bonds shall be dated in the manner set forth in the Indenture; shall bear interest from their date on the unpaid principal thereof at the rate of 9% per annum; shall be payable as to principal and interest at the times and in the amounts set forth in the Indenture; and shall be subject to redemption prior to maturity at the times, under the circum- stances, in the manner, at the prices and with the effect set forth in the Indenture. The Series 1980 Bonds shall be executed in the name of the Issuer by the manual or facsimile signature of the Mayor, shall be attested by the manual or facsimile signature of the City Clerk, shall have the corporate seal of the Issuer impressed or reproduced thereon and shall be authenticated by the endorse- ment of the Trustee. -4- The Series 1980 Bonds and the interest thereon shall be limited obligations of the Issuer, payable from the revenues and receipts derived by the Issuer from the Loan Agreement and the Series 1980 Note, as provided in the Indenture and the Loan Agreement. The Series 1980 Bonds and the interest thereon shall never constitute an obligation or commitment by the Issuer to expend any of its funds other than (i ) the proceeds of the sale of the Series 1980 Bonds, (ii ) the revenues and receipts derived by the Issuer from the Loan Agreement and the Series 1980 Note, (iii) any insurance or condemnation award proceeds with respect to the Project, (iv) any money arising out of the investment or reinvestment of said proceeds, income, revenues or money, and (v) any proceeds derived by the Trustee from the sale or other disposi- tion of the Project in accordance with the provisions of the Loan Agreement and the Indenture. Section 3 . The Series 1980 Bonds shall be issued in compliance with and under authority of the provisions of the Enabling Ordinance, this Ordinance and the Indenture and the foregoing shall be statedon the face oftheSeries1 8 Bonds . g g ac 9 0 B n s Additional bonds may be issued on a parity with the Series 1980 Bonds in accordance with the provisions and limitations set forth in the Indenture. Section 4. The forms, terms and provisions of the proposed Loan Agreement and Indenture are hereby in all respects approved, and the Mayor and the City Clerk are hereby authorized, empowered and directed to execute and deliver the Loan Agreement and Indenture in the name and on behalf of the Issuer. The Loan -5- Agreement and the Indenture, as executed and delivered, shall be in substantially the forms now before this meeting and hereby ap- proved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution there- of 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 now before this meeting; and from and after the execution and delivery of the Loan Agreement and the Indenture the officers, 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 the intent and accomplish the purposes of this Ordinance and to comply with and make effective the provisions of the Loan Agreement and the Indenture as executed. Section 5 . The sale of $100, 000 principal amount of the Series 1980 Bonds to The First Bank of Dundee, Dundee, Illinois and principal rinci$800, 000al amount of the Series 1980 Bonds to First American Bank of Bensenville, Bensenville, Illinois, at a price of 100% of the principal amount thereof, is hereby approved. Section 6 . The provisions of this Ordinance are hereby declared to be separable and if any section, phrase or provision shall for any reason be declared by a court of competent jurisdic- tion to be invalid or unenforceable, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions hereof. Section 7 . All ordinances , orders and resolutions and parts thereof in conflict herewith are to the extent of such -6- r conflict hereby repealed, and this Ordinance shall take effect and be in full force immediately upon its adoption. Adopted July 9 , 1980 . Approved July 9 , 1980 s/ Richard L. Verbic Richard L. Verbic Mayor (SEAL) Attest: s/ Marie Yearman Marie Yearman City Clerk (Other Business ) Pursuant to motion duly made and seconded, the City Council adjourned. s/ Richard L. Verbic Richard L. Verbic Mayor (SEAL) Attest: s/ Marie Yearman Marie Yearman City Clerk -7- STATE OF ILLINOIS ) COUNTIES OF COOK AND KANE ) I , Marie Yearman, hereby certify that I am the duly qualified and acting City Clerk of the City of Elgin, Illinois, and as such officer I further certify that attached hereto is a copy of excerpts from the minutes of the meeting of the City Council of the City held on July 9 , 1980; that I have com- pared said copy with the original minute record of said meeting in my official custody; and that said copy is a true, correct and complete transcript from said original minute record insofar as said original record relates to $900, 000 aggregate principal amount of Industrial Development Revenue Bonds, Series 1980 (Elgin Precision Glass Co. , Inc. Project) of the City. WITNESS my official signature and the seal of the City this 9th day of July , 1980 . s/ Marie Yearman City Clerk (SEAL) TNH/ew 6/17/80 -8- PALL D. SPEER �/ S .: iSOC le0, J'lt•G. • MUNICIPAL FINANCE CONSULTANTS PAUL D.SPEER,PRESIDENT r �/ ELWOOD BARCE i�✓''� EXECUTIVE VICE PRESIDENT .J.[CI THOMAS E.COUGHLAN S e�y _J(072/1,0Pi _Vied PAUL D_(PETE)SPEER.JR_ �/ �/ p OGDEN KNIFFIN,JR. /. Yn� �060✓ BRENDA K.WAIDZULIS i ;C yO, J LAWRENCE J_ RIMMER AREA 312 • 346-0858 WATERLOO,IOWA 50703 (319)235-7869 August 16, 1979 Mr. Leo I . Nelson City Manager 150 Dexter Court Elgin, Illinois 60120 Re: City of Elgin Industrial Revenue Bonds for Various Labor Unions (19 North Spring Street Building) Dear Leo: We have been furnished details by Mr. John Early, the attorney for the nine Labor organizations listed in his letter of August 1 , 1979 addressed to the City of Elgin in which application was made for the issuance of industrial revenue bonds. Mr. Early has been very coopera- tive and has furnished us much additional information which we requested. He has advised us that the amount of the required bonds will be $420,000 and that these bonds will be purchased by the Union National Bank on the basis of 7 1/2% interest or lower for a 30 year term. We have talked with Mr. William Manning, executive vice president of that bank, and he did confirm their agreement together with another bank to purchase the industrial revenue bonds of the City of Elgin secured by the building proposed to be acquired and secured by the leases to the various Labor organizations. We are awaiting some further information from Mr. Early but we do not believe it will disturb our recommendation to the City contained in this letter which recommendation is based upon the fol- lowing conditions: (1) That the applicant will furnish us, prior to re- questing the City to take final action, a current appraisal of the building to be acquired together with the appraiser' s estimate of the revenues to be received listing therein the various tenants and their respective rents and the estimated costs of operating and maintaining and insuring the building and paying taxes thereon. (2) That the following Labor organizations in their leases for the space they will occupy in the building agree jointly and severally that they will guarantee the payment of the rent of all the associated Labor organizations who will become tenants in the building: ESTABLISHED 1954 An Affiliate of Duff and Phelps, Inc. PAL-I. D. SPEER � dJ{Jrtiafia.,Inc. Mr. Leo I . Nelson August 16, 1979 City Manager Elgin, Illinois - 2 - (a) International Brotherhood of Electrical Workers, Local 117 (b) General Chauffeur, Sales Drivers and Helpers Union, Local 330 (c) Labors International Union of North America, Local 582 We have been furnished with the most recent tax returns and financial statements of the above organizations. (3) That the memorandum of agreement and authorizing resolution will specifically provide that further action, including issue of not exceeding $450,000 Industrial Development Revenue Bonds, will be sub- ject to approval by the City as to all terms of the proposed ordinance and other pertinent documents and that reacquisition from the issuer will be only after all of the issuer's unreimbursed expenses are paid; and (4) That the obligation of the applicant under lease or installment purchase agreement shall include not only sums to pay principal , interest, and redemption premium, if any, on the bonds, but also deposit of required reserves; (5) That it be provided that the applicant will reimburse the issuer for all of its related expenses in con- nection with the issue in the event the bonds are not issued and such expenses should specifically include the fees and expenses of its attorneys and financial consultant. (6) The amount of the bonds shall be $420,000 or such higher amount not exceeding $450,000 as may be re- quired and approved by the City and its consultants. (7) That said bonds shall mature in not over 30 years and shall bear interest at not exceeding 7 1/2i. (8) That the company will , upon the execution and delivery of the bonds by the City and simultaneously therewith, deposit with the Trustee from funds other • PAUL D. SPEER C * eria4.1, Ync Mr. Leo I . Nelson August 16, 1979 City Manager Elgin, Illinois - 3 - than bond proceeds the sum of $50,000 which will be carried throughout the life of the issue as a reserve to assure prompt payment of principal and interest on the bonds. (9) That from the proceeds of the bonds or the sale of the present property to the City there will be provided the sum of $200,000 or so much thereof as may be nec- essary to complete the acquisition of the new property plus the sum of $50,000 or so much thereof as may be needed to make necessary improvements in the building be acquired. Based upon the assurance of the bank they will purchase the bonds on terms which have been agreed upon with the organizations and under the conditions aforementioned it is our opinion that the City of Elgin is warranted in adopting an appropriate resolution authorizing the execution of a memorandum of agreement for the issuance of the necessary bonds in order to enable the organizations to complete the necessary steps to insure the acquisition of the new building. We recommend that the resolution and memorandum of agreement in the forms specified and approved by your City Attorney be adopted by the City Council of the City of Elgin. Respectfully submitted, PAUL D. SPEER & Associates , Inc. Preside PDS:tc cc: Mr. Erwin W. Jentsch Mr. James H. Bolerjack, Jr. Mr. John Early Mr. Robert W. 011is, Jr. MEMORANDUM OF INTENT THIS MEMORANDUM OF INTENT, made and entered into this )-141j(day of A e(zil , 1980 , by and between the CITY OF ELGIN, ILLINOIS , a home rule unit of local government located in Cook and Kane Counties , Illinois (hereinafter called the "City" ) , and ELGIN PRECISION GLASS CO. , INC. , an Illinois corporation (herein- after called the "Borrower" ) ; WITNESSET H: WHEREAS, the City recognizes that it is necessary and for the best interests of the City to relieve conditions of un- employment, and to encourage the economic development of the City, thereby reducing the evils attendant upon unemployment and to provide for the increased welfare and prosperity of the resi- dents of the City; and WHEREAS, the City is authorized under the provisions of Section 6(a) of Article VII of the 1970 Constitution of Illinois and the provisions of Ordinance No . S7-75 , adopted on July 23 , -78 adopted 1975, as supplemented and amended byOrdinance No. 52 p PP on March 8 , 1978 (collectively, the "Enabling Ordinance" ) , to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, equipping, betterment or extension of any economic development project and to provide for the issuance of industrial development revenue bonds in conjunction therewith; and WHEREAS , in order to implement the public purposes enumerated in the Enabling Ordinance and in furtherance thereof to induce the Borrower to construct and equip a building or buildings and related facilities designed for the manufacture and distribution of industrial glass parts and related activities (the "Project" ) , the City has indicated its intent to issue its industrial development revenue bonds under and pursuant to the provisions of the Enabling Ordinance and to apply the proceeds therefrom to the payment of the cost of the construction and equipping of the Project; and WHEREAS , the Borrower, in reliance upon the intent of the City to finance the cost of the Project through the issuance of its industrial development revenue bonds under the provisions of the Enabling Ordinance, has determined to locate the Project within the corporate limits of the City; and WHEREAS , it is now deemed advisable to express formally and in writing the understanding heretofore informally discussed by the parties hereto: NOW, THEREFORE, in consideration of the premises and of the mutual undertakings herein expressed, the parties hereto recognize and intend as follows : A. The City represents and intends : 1 . Pursuant to the provisions of Article VII , Section 6 of the 1970 Illinois Constitution and the Enabling Ordinance, the City is authorized to issue its industrial development -2- revenue bonds in order to provide funds to construct and equip the Project and to pay necessary expenses incidental thereto . 2 . The City intends, subject in all respects to the provisions and requirements of the Enabling Ordinance and to a sale of the bonds on terms satisfactory to the Borrower, to use its best efforts to authorize, issue , sell and deliver its industrial development revenue bonds , to be issued in one or more series (in an aggregate principal amount not exceeding $900, 000, the exact amount to be fixed by ordinance of the City at a later date and agreed to by the Borrower, but not to exceed the cost of the Project, including expenses incidental thereto, as estimated at the time of issuance of the bonds ) , and apply the proceeds therefrom to the payment of the cost of the Project, provided that prior to the issuance and delivery of such industrial development revenue bonds there shall have been entered into by and between the Borrower and the City appropriate financing agreements upon terms which will comply with the provisions of the Enabling Ordinance and which will provide for the payment by the Borrower of amounts which will be sufficient in the aggregate to enable the City to pay when due the principal of, premium, if any, and interest on such industrial development revenue bonds . 3 . The financing of the Project by the City is for a proper public corporate purpose and the financing thereof for the Borrower is necessary to implement the public purposes enumerated in the Enabling Ordinance. -3- B. The Borrower represents and intends : 1 . The Project will create employment in the City. 2 . If the terms of the proposed industrial development revenue bonds (including the rate of interest thereon) of the City are satisfactory to the Borrower, the Borrower will enter into financing agreements with the City which will comply with the provisions of the Enabling Ordinance and which will provide for payments by the Borrower which will be sufficient in the aggregate to enable the City to pay the principal of, premium, if any, and interest on such industrial development revenue bonds . 3 . The Borrower intends during the term of any such financing agreements to cause the Project to be used or occupied primarily for use as a facility for manufacturing and distributing industrial glass parts and related activities . C. It is further recognized and intended between the parties hereto as follows : 1 . The industrial development revenue bonds to be issued by the City shall never constitute an indebtedness of the City or a loan of the credit thereof within the meaning of any constitutional or statutory provision, and such fact shall be plainly stated on the face of each of said bonds . No holder or owner of any of said bonds shall ever have the right to compel any exercise of the taxing power of the City to pay said bonds or the interest thereon. The principal of, premium, if any, and interest on such industrial develop- -4- went revenue bonds to be issued to finance the cost of the Project shall be secured by a pledge to a trustee acting under an indenture of trust for the benefit of the holders and owners of said bonds, or by a pledge directly to the holders and owners of said bonds , of the revenues and receipts derived by the City from the Project pursuant to the aforesaid financing agreements and may be further secured by a mortgage on the Project. 2 . A primary inducement to the Borrower in locating the Project within the City is the intent of the City to finance the Project through the issuance of its industrial development revenue bonds pursuant to the provisions of the Enabling Ordinance. 3 . It is desirable that the Borrower rather than the City arrange for the construction and equipping of the Project. 4. The financing agreements to be entered into by and between the City and the Borrower in connection with the issuance of the bonds may provide that the Borrower may use the Project for purposes other than the manufacture and dis- tribution of industrial glass parts or may permit the Project to be leased to others for purposes other than the manufacture and distribution of industrial glass parts, provided that any such use or leasing will not result in the operation of the Project for purposes that are inconsistent with the Enabling Ordinance and provided further that prior to any such use or leasing the Borrower shall have obtained the -5- prior written consent of the bond trustee or the holders of not less than 51% of the principal amount of the outstanding bonds ; no such use or leasing shall be permitted which violates the Elgin Zoning Ordinance or any other applicable statute or ordinance and no claim of exemption from real estate taxation shall be made for any use of the premises . 5 . This Agreement shall inure to the benefit of the parties and their respective successors and assigns . 6. In the event that the bonds are not issued, sold or delivered as contemplated herein, there shall be no liability on the part of the City or the Borrower or any of their officers or employees for such non-issuance or non-delivery, except that the Borrower shall reimburse the City for all expenses incurred by the City in anticipation of such issuance sale and delivery and the Borrower shall not be entitled to any reimbursement of advance deposits by the Borrower. 7 . This Memorandum of Intent may be executed in separate counterparts , all of which shall be deemed a single instrument. IN WITNESS WHEREOF, the City and the Borrower have caused this Memorandum of Intent to be executed and delivered by their duly authorized officers, all as of the date first above written. CITY OF ELGIN, ILLINOIS rc:46yL.0e, p (SEAL) Attest: City Clerk ,,, .:: ► ELGIN PRECISION GLASS CO. , INC . ,. By � ` i7�� Presid t (SEAL) Attest: Secretary -7-