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HomeMy WebLinkAboutOrdinance-1984-0592Ordinance No. 592 INTRODUCED BY: C01W TI MEMRER WEST AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $1,950,000 CITY OF WHEAT RIDGE, COLORADO INDUSTRIAL DEVELOPMENT REVENUE BONDS (PEARSE ELECTRONICS, INC. PROJECT) SERIES 1984 TO FINANCE A PROJECT FOR PEARSE ELECTRONICS, INC. ; RATIFYING CERTAIN ACTION HERETOFORE TAKEN; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A FINANCING AGREEMENT, INDENTURE OF TRUST, SUCH BONDS AND CLOSING DOCUMENTS IN OgN- NECTION THEREWITH; MAKING DETERMINATIONS AS TO THE SUFFICIENCY OF REVENUES AND AS TO OTHER MAC TERS RELATED TO SUCH PROJECT; AND REPEALING ACTION HERETOFORE TAKEN IN CONFLICT THEREWITH. WHEREAS, the City of Wheat Ridge, Colorado (the "City"), is a legally and regularly created, established, organized and existing municipal corporation under the provisions of Article XX of the Constitution of the State of Colorado and the Charter of the City; and WHEREAS, the Colorado County and Municipality Development Revenue Bond Act, constituting Article 3, Title 29, Colorado Revised Statutes (the "Act"), authorizes municipalities to issue revenue bonds to defray the cost of acquiring, constructing or improving any project, as defined in the Act, in order to promote industry and develop trade or other economic activity by inducing manufacturing, industrial, commercial or business enterprises to locate, remain or expand in the State of Colorado, to mitigate the serious threat of extensive unemployment in parts of the State of Colorado, to secure and maintain a balanced and stable economy in all parts of the State of Colorado or to further the use of its agricultural products or natural resources; and WHEREAS, such municipalities are further authorized by the Act to (a) issue revenue bonds for the purpose of defraying the cost of financing any project and all incidental expenses incurred in issuing such bonds, (b) secure the payment of the principal of, pre- mium, if any, and interest on such bonds as provided in the Act, and (c) enter into financing agreements with others for the purpose of providing revenues to pay such bonds upon such terms and conditions as the municipality may deem advisable; and WHEREAS, representatives of Pearse Electronics, Inc., a corporation duly organized and existing under the laws of the State of Colorado (the "Company") , have presented to the City a proposal whereby the City will, pursuant to the Act, finance a project which will be owned by William J. Pear se, as Trustee of the William J. Pearse Co. Trust under the Trust Indenture of William J. Pearse dated December 21, 1983, and as Trustee of the Barbara Ann Pearse Co. Trust under the Trust Indenture of Barbara Ann Pearse dated December 21, 1983 (the "Owner"), and which will consist of a parcel of land within the City, a building to be constructed thereon and certain equipment to be installed therein (the "Project"), which Project will be leased to the Company and operated as a showroom, distribution, office and service facility in connection with the sale of electronic products and which Project qualifies as a "project" within the meaning of the Act; and WHEREAS, the City has determined it is advisable and in the best interests of the City to issue, sell and deliver its City of Wheat Ridge, Colorado Industrial Development Revenue Bonds (Pearse Electronics, Inc. Project) Series 1984 in the aggregate principal amount of $1,950,000 (the "Bonds") in order to provide financing for the Project, to establish a reserve fund for the Bonds and to pay the costs incidental to the authorization and issuance of the Bonds; and WHEREAS, the City's expressed willingness to issue the Bonds to finance the Project has constituted one of the inducements whereby the Owner and the Company have determined to locate the Project within the City; and WHEREAS, on September 24, 1984, the City Council of the City (the "Council") adopted a resolution whereby the City agreed to authorize the issuance of the Bonds, it being understood that no costs of issuance were to be borne by the City and that the necessary financing documents were subject to formal approval by ordinance of the Council pursuant to the Act; and WHEREAS, the City will issue the Bonds pursuant to and the Bonds will be secured by an Indenture of Trust dated as of December 1. 1984 (the "Indenture") r between the City and United Bank of Fort Collins National Association, a national banking association with its principal corporate trust office in Fort Collins, Colorado, as trustee (the "Trustee"), and concurrently with the issuance of the Bonds the Owner will enter into a Financing Agreement with the City dated as of December 1, 1984 (the "Agreement"), pursuant to which the City will loan the proceeds of the Bonds to the Owner to finance the cost of the Project, to establish a reserve fund for the Bonds and to pay the costs incidental to the authorization and issuance of the Bonds and the Owner will make payments sufficient to pay the princi- pal of, premium, if any, and interest on the Bonds and to meet other obligations as herein and therein provided; and -2- WHEREAS, the Owner will execute a Deed of Trust to Public Trustee, Security Agreement, Financing Statement and Assignment of Rents and Leases dated as of December 1, 1984 (the "Deed of Trust"), to the Public Trustee of Jefferson County, Colorado, to secure the payment of principal of, premium, if any, and interest on the Bonds; and WHEREAS, the Bonds will be supported as to principal by an irrevocable letter of credit in the amount of $1,950,000 to be dated the date of issuance and sale of the Bonds and to be issued in the amount of $1,950,000 (the "Letter of Credit") by United Bank of Denver National Association (the "Bank"); and WHEREAS, there have been presented to the Council (a) the proposed form of the Agreement, (b) the proposed form of the Indenture, (c) the proposed form of the Deed of Trust, (d) the pro- posed form of the Letter of Credit and (e) the proposed form of the Remarketing Agreement dated as of December 1, 1984 (the "Remarketing Agreement"), between the Owner and United Bank of Denver National Association, as Remarketing Agent (the "Remarketing Agent"). NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE: Section 1. All action (not inconsistent with the provi- sions of this ordinance) heretofore taken by the Council and the officers of the City directed toward the financing of the Project and the issuance and sale of the Bonds therefor is hereby ratified, con- firmed and approved. Section 2. The City shall finance the Project by loaning the proceeds of the Bonds to the Owner in accordance with the provi- sions of the Agreement and the Indenture for the purpose described above. Section 3. To defray the cost of financing the Project, to establish a reserve fund for the Bonds and to pay the costs incurred in connection with the authorization, issuance and sale of the Bonds, there is hereby authorized and created an issue of indus- trial development revenue bonds designated "City of Wheat Ridge, Colorado Industrial Development Revenue Bonds (Pearse Electronics, Inc. Project) Series 1984" in the aggregate principal amount of $1,950,000, issuable as fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds shall be dated as provided in the Indenture. The Bonds shall bear interest frcan their date payable semiannually on each June 1 and December 1, commencing June 1. 1985, except as otherwise provided in the Indenture. The Bonds shall bear interest (a) from December 1, 1984, to and including May 31, 1985, at the rate per annum of 7%, and (b) for each -3- subsequent period from each June 1 ("Rate Adjustment Date"), commencing June 1, 1985, to and including the next succeeding May 31 (a "Rate Period") at the rate which in the judgment of the Remarketing Agent, having due regard for prevailing financial market conditions, is the interest rate necessary, but not in excess of the interest rate necessary, to enable the Remarketing Agent to sell any Bonds which may be delivered to it pursuant to the Remarketing Agreement on or before the May 25 next preceding the Rate Adjustment Date on which the Rate Period commences at a price equal to 100% of the principal amount thereof. In no event shall the rate of interest on the Bonds, determined as described above, exceed 20% per annum. The Bonds shall mature on June 1 , 1999, and shall be subject to mandatory sinking fund redemption on June 1 of the years and in the amounts set forth below: 1986 $ 50 ,000 1987 75 ,000 1988 75,000 1989 75,000 1990 100,000 1991 100 ,000 1992 100,000 1993 125,000 1994 125 ,000 1995 150 ,000 1996 175,000 1997 175,000 1998 175,000 1999 450,000 The Bonds shall be payable, shall be subject to redemption prior to maturity and shall be in substantially the form as provided in the Indenture. The Bonds shall be sold by the Bank at a private sale at a purchase price equal to $1,950,000 plus accrued interest to the date of issuance and delivery of the Bonds. The maximum net effective interest rate on the Bonds is 22.25% per annum, which rate is hereby determined to be the maximum net effective interest rate on the Bonds. Section 4, The following determinations and findings are hereby made in accordance with Sections 29-3-113, 29-3-114 and 29-3-120 of the Act : (a) The maximum amount necessary in each year to pay the principal of and the interest on the Bonds is as follows: -4- Annual Period Maximum Maximum To and Interest Principal to be Annual Including June 1 for Such Period Retired in Such Period Debt Service Requirement 1985 $ 195,000 $ - $ 195,000 1986 390 1000 50 1000 440 ,000 1987 380 ,000 75,000 455,000 1988 365 ,000 75 ,000 440 ,000 1989 350,000 75,000 425,000 1990 335 ,000 100F000 435,000 1991 315,000 100,000 415,000 1992 295 ,000 100,000 395 ,000 1993 275,000 125,000 400,000 1994 250 ,000 125 ,000 375 ,000 1995 225 ,000 150 ,000 375,000 1996 195 ,000 175 ,000 370 ,000 1997 160,000 175,000 335,000 1998 125,000 175,000 300,000 1999 90 ,000 450 ,000 540 ,000 2000 (b) The Council has deemed it advisable to establish for contingent use in connection with the retirement of the Bonds, among other purposes, the trust fund created and established by the Indenture designated the Reserve Fund. Moneys on deposit in the Reserve Fund shall be used to provide a reserve for (i) the payment of the interest on the Bonds and (ii) the payment of the principal of, premium, if any, and interest on Bonds to be redeemed as provided in the Indenture. There shall be deposited into the Reserve Fund from the proceeds of the Bonds an amount equal to the Reserve Fund Requirement (as defined in the Agreement) of the Bonds. Except for such deposit of proceeds of the Bonds into the Reserve Fund, it is not necessary for the Owner to pay any amount into the Reserve Fund in any year, absent occurrences of the contingencies described in the Agreement and the Indenture, which occurrences and their magnitude cannot now be accurately foreseen. (c) The terms under which the Project is to be financed provide that the Owner shall maintain, or cause to be maintained, the Project and carry, or cause to be carried, all proper insurance with respect thereto. (d) The revenues payable under the Agreement are sufficient to pay, in addition to all other requirements of the Agreement and this ordinance, all sums referred to in paragraphs (a), (b) and (c) of this Section. (e) The revenues payable under the Agreement are sufficient to pay, in addition to all other requirements of the Agreement and this ordinance, all taxes payable pursuant to Section 29-3-120 of the Act. -5- Section 5. The forms, terms and provisions of the Agreement, the Indenture, the Deed of Trust, the Letter of Credit and the Remarketing Agreement are hereby approved and the City shall enter into the Agreement and the Indenture in their respective forms as presented to the Council at this meeting with such changes therein as are not inconsistent herewith; and the Mayor is hereby authorized and directed to execute and deliver the Agreement and the Indenture and the City Clerk is hereby authorized and directed to affix the City seal to and to attest the Agreement and the Indenture. Section 6. The forms, terms and provisions of the Bonds are hereby approved and the City shall issue the Bonds in the form set forth in the Indenture with such changes therein as are not inconsistent herewith; and the Mayor is hereby authorized and directed to execute and deliver the Bonds and the City Clerk is hereby authorized and directed to affix the seal of the City to the Bonds and to attest the Bonds. The signatures of the Mayor and the City Clerk on the Bonds and the seal of the City on the Bonds shall be affixed manually or by facsimile. Section 7. The officers of the City shall take all action in conformity with the Act necessary or reasonably required to effectuate the issuance and delivery of the Bonds and necessary or desirable in conformity with the Act to finance the Project and to carry out, give effect to and consummate the transactions contem- plated by this ordinance, the Agreement and the Indenture, including without limitation the execution and delivery of any documents neces- sary to elect to have Section 103(b) (6) (D) of the Internal Revenue Code of 1954 , as amended, apply to the Bonds, the f it ing of any statements or reports with the Internal Revenue Service or with the Secretary of the Treasury or his delegate necessary to maintain the exemption of interest on the Bonds from federal income taxation and the execution and delivery of any closing documents to be delivered in connection with the issuance and delivery of the Bonds. Section 8. For the purposes of Section 103(k) of the Internal Revenue Code of 1954, as amended, the Council hereby approves the Bonds and the Project, including the following informa- tion regarding the Project: the Project consists of a showroom, dis- tribution, office and service facility of approximately 36,000 square feet located on a 2.78 acre tract of land within the City designated as 9901, 9921, 9941, 9961 and 9981 50th Avenue. Section 9. The cost of financing the Project will be paid out of the proceeds of the Bonds and the Bonds will not be the general obligations of the City nor shall the Bonds, including inter- est thereon, constitute the debt or indebtedness of the City within the meaning of the Constitution or statutes of the State of Colorado -6- or of the home rule charter of the City nor shall anything contained in this ordinance or in the Bonds, the Agreement, the Indenture, the Deed of Trust, the Letter of Credit, the Remarketing Agreement or any other instrument give rise to a pecuniary liability or a charge upon the general credit or taxing powers of the City, nor shall the breach of any agreement contained in this ordinance or in the Bonds, the Agreement, the Indenture, the Deed of Trust, the Letter of Credit, the Remarketing Agreement or any other instrument impose any pecuni- ary liability upon the City or any charge upon its general credit or against its taxing powers, the City having no power to pay out of its general funds, or otherwise contribute any part of the costs of financing the Project, nor power to operate the Project as a business or in any manner, nor shall the City condemn any land or other prop- erty for the Project, nor contribute any land or other property to the Project. Section 10. After the Bonds are issued, this ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid, cancelled and discharged. Section 11. If any section, paragraph, clause or provi- sion of this ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this ordinance. Section 12. All bylaws, orders, regulations, resolutions and ordinances, or parts thereof, of the City inconsistent herewith and with the documents hereby approved are hereby repealed to the extent only of such inconsistency. This repealer shall not be corn strued as reviving any bylaw, order, regulation, resolution or ordi- nance, or part thereof. Section 13. A public hearing concerning this ordinance shall be held by the Council before final adoption of this ordinance at a meeting of the Council at the Council Chambers in the City Hall Building, 7500 W. 29th Avenue, in the City. Section 14. This ordinance, immediately on its approval on first reading, shall be published in full in the Wheat Ridge Sentinel, a legal newspaper of general circulation in the City. After final approval at a meeting not earlier than seven days after first publication, this ordinance shall be published by title or in full, as the Council may determine, in the Wheat Ridge Sentinel, a legal newspaper of general circulation in the City. If amended, this ordinance shall be published by title and summary and the full text of the amendment or in full as the Council may determine. This ordinance, immediately on its final passage and adoption, shall be numbered and recorded in the Ordinance Book of the City kept for that -7- purpose, authenticated by the signatures of the Mayor and City Clerk and by the certificate of publication. Rection 15. This ordinance shall take effect 1 day after final publication. INTRODUCED, READ, AND ADOPTED on first reading by a vote of 7 to 1 on this 22nd day of October , 1984, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge, and Public Hearing and consideration on final passage set for November 5 , 1984, at 7:30 p.m., in Council Chambers, 7500 West 29th Avenue, Wheat Ridge, Colorado. READ, ADOPTED, AND ORDERED PUBLISHED on second and final reading by a vote of 6 to _Z_, this 5th day of November 1984. Frank Stites, Mayor Wanda Sang, City C ✓ rk APPROVED AS TO FORM BY CITY ATTORNEY: r 1 John Hayes, City Attorney 1st Publication: October 25, 1984 2nd Publication: November 8, 1984 Wheat Ridge Sentinel Effective Date: November 9, 1984 - 8 -