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HomeMy WebLinkAbout96-56 Resolution No. 96-56 RESOLUTION AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT (Bailey Development, L.L.C. Project) WHEREAS, Bailey Development, L.L.C. , an Illinois limited liability company (the "Borrower" ) wishes to finance the acquisition of approximately 12 acres of land located at the intersection of Spaulding and Gifford Roads in Elgin, Illinois and the construction and equipping of an approximately 46 , 000 square foot manufacturing facility thereon (the "Project" ) and wishes to have the City of Elgin, Illinois (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, ILLINOIS, as follows : Section 1 . 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 2 . 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 $5, 000, 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 3 . That this Resolution shall be in full force and effect upon its passage and approval . s/ Kevin Kelly Kevin Kelly, Mayor Presented: February 28, 1996 Adopted: February 28, 1996 Vote: Yeas 6 Nays 1 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk r . • MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between the City of Elgin, Illinois (the "Issuer") and Bailey Development, L.L.C. , an Illinois limited liability company (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 par t,t, the cost of the acquisition, purchase, co nstruction, 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, construction 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 approximately 12 acres of land located at the intersection of Spaulding and Gifford Roads in Elgin, Illinois and of construction and equipping of an approximately 46, 000 square foot manufacturing facility thereon (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 $5, 000, 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 . 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, 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 : -2- (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 the Issuer sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (c) That it will commence construction of the Project on or before December 31, 1996 . 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 December 1, 1997 (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 solelywithin the complete discretion of the p 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 no t sold within such time, the Borrower agrees that it will reimburse the Issuer for all reasonable -3- r 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 closing of the Bonds in regard to the Project is subject to the possession by the Issuer or the receipt by the Issuer of sufficient 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 (1994 State Bar Edition) ) , as supplemented and amended. In addition, the Issuer agrees to apply its 1997 volume cap allocation in the amount of $3, 850, 500 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 3 2k day of n,) 1996 . CITY OF LGIN, IL INOIS Mayor (SEAL) ATTEST: 1c441"'‘-4( City Clerk BAILEYIEVELOPMENT, L.L.C. BY i/I. ager , -4- / ( 0 -q) 1( !!!r":01'5 ; Agenda Item No. 09 February 19, 1996 TO: Mayor and Members of the City Council FROM: Richard B. Helwig, City Manager SUBJECT: Inducement Resolution with Bailey Development for City' s 1997 Annual Industrial Revenue Bond Authority PURPOSE The purpose of this memorandum is to present to the Mayor and members of the City Council a resolution authorizing the 11/ execution of a Memorandum of Agreement between the City and Bailey Development for $3 . 85 million of 1997 Industrial Reve- nue Bond ( IRB) authority. BACKGROUND The City has received a request from two businesses regarding the availability of IRBs for business expansion. Suburban Plastics, Inc . presented a request for $4 million and Bailey Development (Concrete Specialties, Inc. ) presented a request totalling $5 million. In a memorandum dated January 19, 1996 , staff recommended that the remainder of the City' s 1996 IRB capacity be commit- ted to Suburban Plastics, Inc. and that the entire 1997 bond allocation of $3 . 85 million be committed to Bailey Develop- ment. Bailey Development will utilize the bond funds to purchase 12 acres of land in the City of Elgin at the intersection of Spaulding and Gifford Roads . The site is located in Cook County. Bailey plans to build a 46 ,000 square foot manufac- turing facility which will produce precast concrete struc- tures that are used in the underground utility industry. The facility will generate between 30 and 50 jobs for the City. 11/ COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. IRB/Bailey Development February 19 , 1996 111 Page 2 FINANCIAL IMPACT All costs pertaining to the IRB issuance will be borne by Bailey Development. LEGAL IMPACT None. RECOMMENDATION It is recommended that an inducement resolution be entered into with Bailey Development for $3 . 85 million in Industrial Revenue Bonds . Respectfully submitted, am s R. Nowicki Fi ance Director )1/06/ 111 Raymond H. Moller Director of Business Services and Properties c1 Richard B. Helwig City Manager amp • lit." Kt a+o`f`C' i �, Memorandum 1 _, 1e m p4�f11,,, January 19 , 1996 TO: Richard B. Helwig, City Manager FROM: Raymond H. Moller, Director of Business Services and Properties SUBJECT: 1996 Industrial Revenue Bond Applications PURPOSE The purpose of this memorandum is to apprise you of two appli- cations for Industrial Revenue Bond ( IRB) allocation for 1996 . 111 BACKGROUND THE 1996 allocation of IRB funding from the State of Illinois to the City of Elgin is $3 . 8 million. In 1995, the City Council allocated $2 . 3 million of 1996 funds to Gibson String & Accessories and $1 . 5 million to Grease Guard, Inc . The City received an additional $2 . 3 million in IRB capacity from the State and funded the Gibson String project with 1995 capacity. Thus, $2 . 3 million again became available in 1996 . Two applications have been submitted in 1996 . Suburban Plas- tics has submitted a request for $4 million and Concrete Specialties, Inc. has submitted a request for $5 million. Both applications were submitted to Speer Financial for re- view. Both applications have received a favorable review from Speer Financial . (Project applications and Speer' s re- view letters are attached. ) Both Suburban Plastics and Concrete Specialties are aware that the City does not have sufficient funding capacity to fund both projects or to fund each project in their entirety. Each of the two applicants are at different stages of deter- mining how to fill the void between City funding and the dollars required to fund their projects . Suburban Plastics has been working with the Illinois Development Finance Author- ity ( IDFA) , which also has IRB funding capacity. Concrete Specialties has not made contact with IDFA. 1996 Industrial Revenue Bond Applications January 19 , 1996 Page 2 In an effort to determine the required level of City involve- ment to ensure funding from IDFA for Suburban Plastics , City staff contacted IDFA. City staff was informally advised that a minimum contribution of $2 million would be required from the City to ensure funding from IDFA. Based upon this infor- mation, it would seem prudent to maximize funding to Suburban Plastics and to work with Concrete Specialties on initiating contact with IDFA. In addition, Concrete Specialties could secure an allocation of 1997 City IRB funds and obtain inter- im funding in order to allow Concrete Specialties to proceed with this project in Cook County in 1996 . RECOMMENDATION We recommend committing the City' s remaining 1996 IRB capaci- ty of $2 . 3 million to Suburban Plastics and committing the -4,'3 City' s 1997 IRB capacity of $3 . 8 million to Concrete Special- ties . We further request submitting the application of Con- crete Specialties to the Governor' s office in June of this year f additional IRB capacity. (-/ 111 Raymond H. Moller, irecto Business Services and Properties amp in El , Memorandum p�g4)L�F6eM1 July 22 , 1996 TO: Richard B. Helwig, City Manager FROM: Raymond H. Moller, Director of Business Services and Properties SUBJECT: Additional 1996 IRB Capacity On June 3, 1996 the City of Elgin submitted an application on behalf of Bailey Development for $5 million in additional 1996 IRB capacity. Governor Edgar' s office has decided to fund $1,508, 067 . 13 in additional 1996 bond capacity for the Bailey project. The $1 . 5 million in 1996 plus the $3 . 8 million for 1997 should fully fund the Bailey project. Respectfully submitted, 24// Raymo d H. Moller RHM/skg � • OA.> %1 Oi • n_+ � • 11f114 hVQ 28T`18��I' STATE OF ILLINOIS OFFICE OF THE GOVERNOR SPRINGFIELD 62706 JIM EDGAR GOVERNOR July 19, 1996 Allocation Number HR-i City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 Attention: Mr. Raymond H. Moller Director of Business Services and Properties Re: Issuer: City of Elgin Type: Home Rule Maximum Principal Amount: $1,508,067.13 Bond Description: Economic Development Revenue Bonds Bailey Development, L.L.C, Series 1996 Purpose: Proceeds will be used to purchase land to construct a new 46,000 square foot building, purchase equipment and pay legal and financing costs. Dear Ladies and Gentlemen: In accordance with the Tax Reform Act of 1986, as amended, and 30 ILCS 345, the above-captioned Issuer has requested an allocation for Private Activity Bonds with respect to the above-captioned bonds. In support of this request, I have been presented with the resolution duly adopted by the Issuer or similar official action with respect to the above-captioned bonds. I hereby allocate $1,508,067.13 of the State's 1996 maximum limit on private activity bonds to the above-captioned Issuer. Printed on Recycled Paper This allocation is valid through and including September 19, 1996. If the above- captioned bonds have not been issued by said date this allocation automatically expires and is available for reallocation. I certify under penalty of perjury that this allocation is not made in consideration of any bribe, gift, gratuity, or of direct or indirect contribution to any political campaign. Sincerely, Jim Edgar GOVERNOR JE:kf on E ..... TELEPHONE 847/931-6100 3 FAX 847/931-5610 FOR HEARING IMPAIRED ``�y OF '� TDD 847/931-5616 �1 CITY OF ELGIN 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 o��o M1"m Direct Line 931-5660 �g1lD Ffg June 27 , 1996 Cook County Assessor Cook County Building 118 North Clark Street Chicago, IL 60602 Re: Class 6B Tax Incentive (Bailey Development, L. L. C. ) Gentlemen: I am enclosing a certified copy of the following resolution adopted by the Elgin City Council on June 12 , 1996, regarding Class 6B assessment classification: Resolution No. 96-176 Determining that Certain Real Estate located Along Gifford Road is Appropriate for Class 6B Cook County Real Property Assessment Classification Sincerely, Dolonna "Loni" Mecum, CMC City Clerk dkm Enclosure CERTIFIED MAIL Printed on recycled paper