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HomeMy WebLinkAboutResolution-1983-0831 RESOLUTION NO. ~ Series of 1983 TITLE: RESOLUTION RELATING TO THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS; GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE COUNTY AND MUNICIPALITY DEVELOPMENT REVENUE BOND ACT AND THE ISSUANCE OF REVENUE BONDS TO DEFRAY THE COSTS THEREOF AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS. WHEREAS, this Council has received a proposal that the City finance a portion or all of the cost of a proposed project under the County and Municipality Development Revenue Bond Act, Title 29, Article 3, C.R.S. 1973, as amended (the Act), consisting of the acquisition of land and the construction and furnishing thereon of a 128 unit motel in the City (the Project) by a limited partnership to be formed by Prime Rate, Inc., a Minnesota corporation, with at least one general partner being Prime Rate, Inc. (the Borrower). WHEREAS, at a public hearing, duly noticed and held on February 28, 1983, in accordance with Section 103 of the Internal Revenue Code of 1954, as amended by Section 215 of the Tax Equity and Fiscal Responsibility Act of 1982, on the proposal to undertaKe and finance the Project, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance the Project. Based on the public hearing and such other facts and circumstances as this Council deems relevant, this Council hereby finds, determines and declares as follows: (a) The legislature of the State of Colorado, in the Act, has found and declared it to be a public purpose for municipalities to promote industry and develop trade or other economic activity by inducing profit or non-profit corporations, federal governmental offices, hospitals, and agricultural, manufacturing, industrial, commercial, or business enterprises to locate, expand, or remain in this State, to mitigate the serious threat of extensive unemployment in parts of this State, to secure and maintain a balanced and stable economy in all parts of this State, and to further the use of its agricultural products or natural resources. (b) In furtherance of the foregoing purposes, the legislature has authorized municipalities to issue revenue bonds under the Act for the purpose of defraying the cost of financing, refinancing, acquiring, improving, and equipping any "project" including any land, building, Resolution No. 0~1 or other improvement and all real or personal properties, whether or not in existence, suitable or used for or in connection with commercial enterprises; to enter into a "financing agreement" with the user of the project for the purpose of providing revenues to pay the bonds so authorized; and to secure the payment of such bonds as provided in the Act. (c) The existence of the Project would promote the sound economic growth of the State of Colorado and the City of Wheat Ridge, would provide increased opportunities for employment for residents of the City and surrounding area and would further the public purposes set forth in subsection (a) hereof. (d) The City has been advised that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but with the aid of municipal financing, and its resulting low borrowing costs, the Project is economically more feasible. (e) This Council has been advised by First Bank St. Cloud that revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. (f) The Project constitutes a "project" as defined in Section 29-3-103(10) of the Act, (g) The City wishes to proceed with the financing of the Project, subject to the conditions herein contained. (h) The proposed issuance of the revenue bonds and the execution of related financing documents are not prohibited by any ordinances or rules of the City. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Wheat Ridge, Colorado, that: Section 1. On the basis of the information given the City to date, it appears that it is in the best interest of the City for the City to issue its industrial development revenue bonds under the provisions of the Act to finance all or part of the costs of the Project. Section 2. The Project is hereby given preliminary approval by the City and the issuance of revenue bonds for such purpose and in an amount sufficient to pay project costs but not to exceed $3,800,000 approved. Notwithstanding the foregoing, however, the adoption of this resolution shall not be - 2 - Resolution Nr 831 deemed to establish a legal obligation on the part of the City or this Council to issue or to cause the issuance of such revenue bonds. Prime Rate, Inc., or its assignee, shall, prior to issuance of any such Industrial Revenue Development Bonds, pay to the City of Wheat Ridge the sum of $25,000.00 for use by the City of Wheat Ridge in the acquisition of property rights for, and the construction of, the 1-70 Service Road to be relocated south of 1-70, on Kipling Street. All details of such revenue bond issue and the provisions for payment thereof shall be subject to the mutual agreement of this Council, the Borrower and the purchaser or purchasers of the revenue bonds and such further conditions as the City may specify, such agreement and specification on the part of the City to be evidenced by an ordinance of this Council authorizing the issuance of the revenue bonds on the terms and conditions agreed upon and authorizing the execution of necessary documents. Section}L Prior to or simultaneously with the issuance of the bonds, the City will enter into a financing agreement with the Borrower with respect to the Project. The financing agreement shall provide for payment by the Borrower to the City of such revenues as will be sufficient to pay the principal of, premium, if any, and interest on the revenue bonds, to build up and maintain any reserves deemed advisable by this Council in connection therewith, and to pay the costs of maintaining the Project in good repair and keeping it properly insured, unless the financing agreement obligates the Borrower to pay for the maintenance of and insurance on the Project. Section 4. All commitments of the City expressed herein are subject to the condition that within twelve months from the date of adoption of this resolution the City and the Borrower shall have agreed to mutually acceptable terms and conditions of the financing agreement, the revenue bonds and of the other instruments and proceedings relating to the revenue bonds, and their issuance and sale. Section ~ If the events set forth herein do not take place within the time set forth above or any extension thereof and the revenue bonds are not sold within such time, this resolution shall expire and be of no further force or effect. ~ection 6. The Borrower has agreed and it is hereby determined that any and all direct and indirect costs incurred by the City in connection with the Project, whether or not the Project is carried to completion, and whether or not the City by ordinance authorizes the issuance of the revenue bonds, will be paid by the Borrower upon request. Section 7. The Mayor, City Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project. -3- Resolution No. 8~" Section 8. In all events, it is understood, however, that the principal of and interest on the revenue bonds issued to finance the Project shall be payable solely out of the revenues derived from the financing of the Project. The bonds and interest coupons, if any, appurtenant thereto shall never constitute the debt or indebtedness of the City within the meaning of any provision or limitation of the State Constitution, statutes, or home rule charter, and shall not constitute nor give rise to a pecuniary liability of the City or charge against its general credit or taxing powers. Such limitation shall be plainly stated on the face of each bond. DONE AND RESOLVED, this 28th day of EebrJ.J.Qll_, 1983. "-/u;,.,L . ~ Frank Stites, Mayor ATTEST: rk \ ." , \ - 4 -