HomeMy WebLinkAbout97-118 •
Resolution No. 97-118
RESOLUTION
AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT
AND ALLOCATING VOLUME CAP
(CROSS CONTAINER CORP. PROJECT)
WHEREAS, CROSS CONTAINER CORP. , an Illinois corporation
(the "Borrower" ) wishes to finance the acquisition of a
building and the refurbishing thereof comprising the
Borrower' s manufacturing facility located at 1155 Timber
Drive, Elgin, Illinois, for use in the manufacturing of
corrugated boxes (the "Project" ) and wishes to have the CITY
OF ELGIN, ILLINOIS (the "Issuer" ) issue its variable rate
demand industrial revenue bonds to finance such facilities; and
WHEREAS, a Memorandum of 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 tax-exempt
variable rate demand industrial development revenue bonds to
finance the costs of the Project; and
WHEREAS, the official estimate of the 1994 population of
the Issuer is 85, 339 , giving the Issuer volume cap of
$4 ,266 , 950 for the year 1997 ; and
WHEREAS, the Village of Downers Grove, Illinois has
transferred to the Issuer $2 , 531, 100 of its volume cap
allocation for use by the Issuer in financing the Project; and
WHEREAS, after giving effect to the foregoing transfer of
volume cap allocation from the Village of Downers Grove, the
Issuer has currently available volume cap allocation equal to
$6 , 798, 050, $3,298, 000 of which volume cap allocation the
Issuer desires to make available for the Project; and
WHEREAS, the Borrower has requested that the Issuer enter
into the Memorandum of Agreement and allocated $3,298, 000 of
volume cap to the financing of the Project;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ELGIN, ILLINOIS :
Section 1 . That the Mayor of the Issuer is hereby
authorized to execute, and the Clerk of the Issuer is hereby
authorized to attest a Memorandum of 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
Memorandum of Agreement as executed and to issue not to exceed
$3, 298, 000 of its tax-exempt variable rate demand industrial
development revenue bonds upon the terms and conditions stated
in such Memorandum of Agreement for the purpose of defraying
the cost of equipping the Project and that the same is
declared to be for public purpose and a matter pertaining to
the government and affairs of the Issuer, pursuant to
applicable home rule authority.
Section 3 . The Issuer hereby allocates $3,298, 000 of its
volume cap allocation to the issuance of variable rate demand
industrial development revenue bonds to finance the Project
or, if the financing of the Project does not occur on or
before December 1, 1997, for the issuance of such other
industrial development revenue bonds for the purpose of
financing qualified manufacturing facilities as deemed
appropriate by the City Council of the Issuer.
Section 4 . That this resolution shall be in full force
and effect upon its passage and approval .
s/ Kevin Kelly
Kevin Kelly, Mayor
Presented: April 30, 1997
Adopted: April 30, 1997
Vote: Yeas 5 Nays 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
AGREEMENT
MEMORANDUM OF AGREEMENT
THIS Memorandum of Agreement is between the CITY OF
ELGIN, ILLINOIS (the "Issuer" ) and CROSS CONTAINER CORP. , 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
Ordinance No. S2-80, passed on February 13, 1980, as from time
to time supplemented and amended (the "Ordinance" ) , to issue
variable rate demand industrial development 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 economic project
and to enter into a loan agreement with the Borrower pursuant
to which the proceeds of such tax-exempt variable rate demand
industrial development revenue bonds may be lent to the
Borrower to finance the costs of such an economic development
project.
(b) The Borrower wishes to obtain satisfactory assurance
from the Issuer that the proceeds of the sale of such
tax-exempt variable rate demand industrial development revenue
bonds of the Issuer will be made available to it to finance
the cost of purchasing and refurbishing a building comprising
a manufacturing facility at 1155 Timber Drive, Elgin,
Illinois, for the manufacturing of corrugated boxes (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 Ordinance, will issue and sell its
industrial development revenue bonds in an amount not to
exceed $3,298, 000 (the "Bonds" ) to finance the costs of the
Project, which bonds are intended to be tax-exempt under
sections 103(a) and 144 of the Internal Revenue Code of 1986,
as amended (the "Code" ) .
(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 Ordinance 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 which Bonds are
limited obligations payable by the Borrower and therefore are
not eligible for designation under Section 265(b) ( 3) of the
Code.
(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 comply with all requirements of
Issuer' s ordinance including but not limited to a written
application and payment of a non-refundable deposit for
preliminary expenses of investigation.
(b) That it will use all reasonable efforts to find one
or more purchasers for the Bonds .
(c) 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 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 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 solely within the complete discretion of the parties to
this Agreement.
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t
(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 or arising
out of this Agreement including but not limited to the payment
of attorneys and other consultant fees and disbursements
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
( 1992 State Bar Association Edition) .
IN WITNESS WHEREOF, the parties hereto have entered into
this Agreement by their officers thereunto duly authorized as
of the 30th day of April, 1997 .
CITY OF E GIN
By
Mayor
Attest:
A144),1~-10,
City Clerk
CROSS CONTAINER CORP.
BY �(.�'
Its 7-Q ere, At
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SENT BY:ELGIN DIVISION ; 4-29-97 ; 16:34 ;AMERICAN NAT'L. bANK-' 1tS47WlotijU;* zI z
1"41!°°.
AmericanAmericanNationalBank
and Trust Company of Chicago
Elgin Division
24 Dm Chicago Sera/Elgin,Illinois 60120/(847)742-Fi200
April 29, 1997
City of Elgin
150 Dexter Court
Elgin, IL 60120
Dear Mayor and Council Members:
Following is a brief summary background on Cross Container Corporation and the project for
which we are hoping to obtain a minimum of$2.9 million in industrial Revenue Bond financing:
CROSS CONTAINER,CORPORATION
Cross Container Corporation is a manufacturer of corrugated boxes which sells to industrial and
commercial accounts. Thu company has shown substantial growth in recent years in building its
annual soles to over$7 million,while also adding several new employees to its staff. Presently,
Cross Container is 50%owned by Jerry Matlock, Sr.,who started the company in 1977,and 50%
owned by his partner. Robert Norcross,who joined the company in 1978. For its first seventeen
years,tho company was located in Itasca,Illinois before moving to its present location at 885
Church Road in Elgin in 1994.
Just recently,Cross Container agreed to terms with Georgia Pacific for acquiring their building
located at 1 155 Timber Drive in northwest Elgin. The total cost, including the purchase price
and refurbishing costs,will exceed$2,900,000. Given the timing of the transaction,American
National has been aggressively socking available IR13 cap from home-rule municipalities before
it must be returned to the Governor's office for reallocation.
On Monday,the Village of Downers Grove passed a resolution to seed S2,531,100 in IR13 cap to
Elgin for the benefit of Cross Container. Upon notifying Ray Moller that Downers Grove was
seeding its cap to Elgin, he informed us that the City of Elgin has available cap remaining in the
amount of$766,950. Cross Container and American National would profer to fund the proicct
first using this available Elgin cap,while using only the necessary portion of the Downers Grove
cap to cover the remaining project costs.
In closing, on behalf of Cross Container and American National, 1 would like to thank everyone
who dedicated their time and effort to arrange a last minute meeting to consider this request
before May 1 st.
Sincerely,: /y
lid
William A. Karsten