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HomeMy WebLinkAboutResolutions - RS-96-5 - 04/17/1996 - IRB Resolution for Robert SwainRS-96-5 PRELIMINARY BOND RESOLUTION WHEREAS, the City of McHenry, Illinois (the "City") is authorized under the Industrial Project Revenue Bond Act, 65 ILCS 5/11-74-1 to 5/11-74-14 (1994 State Bar Edition) to issue industrial revenue bonds; and WHEREAS, Robert D. Swain (the "Borrower") intends to acquire certain real estate in Tonyan's Industrial Park, McHenry, Illinois (the "Site"), construct a building and equip the same for manufacturing purposes (the "Project") and lease the same to Chroma Corporation, a Delaware corporation, and/or other tenants; WHEREAS, the Borrower wishes to have the City issue its revenue bonds to provide financing for a portion of the costs of such Project; and WHEREAS, the Borrower has presented the City with evidence of his intention to reimburse himself for expenditures relating to the Project which he may initially pay from funds which are not proceeds of the revenue bonds; and WHEREAS, a Memorandum of Agreement (the "Memorandum of Agreement") has been presented to the City under the terms of which the City agrees, subject to the provisions of such agreement, to issue its revenue bonds and lend the proceeds thereof to the Borrower to finance a portion of the costs of the Project; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS, AS FOLLOWS: 1. That the Mayor and City Clerk of the City are hereby authorized to execute the Memorandum of Agreement with the Borrower in substantially the form of such agreement as was presented at this meeting or with such changes therein as shall be approved by the officers executing the same. 2. That the officers and employees of the City are hereby authorized to take such further action as is necessary to carry out the intent and purpose of the Memorandum of Agreement as executed, including, but not limited to applying for the volume cap allocation, and to cause its revenue bonds to be issued upon the terms and conditions stated in such Memorandum of Agreement with respect to the Project described in the Memorandum of Agreement, which Memorandum of Agreement is hereby made a part of this Resolution. 3. That the City will hold a public hearing on the Project in compliance with Section 147(f) of the Internal Revenue Code of 1986, as amended, on a date mutually agreeable to the City and the Borrower and the City Clerk is authorized to publish the appropriate notice prior to said public hearing. ADOPTED ON APRIL 17, 1996. AYES: Rn1 n,S r, RatPG, T aw--nn , Baird NAYS: None AB S ENT : Locke ABSTAINED: None NOT VOTING: None APPROVED THIS 17th DAY OF APRIL, 1996. d'Z a r Steven Cuda Attest: City Clerk Pamela J. Altho f Recorded in the City Records on April 18 , 1996. -2- MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT between the City of McHenry, McHenry County, Illinois (the "City") and Robert D. Swain (the "Borrower"). 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the following: (a) The City is authorized to issue its revenue bonds to' finance certain industrial facilities under the provisions of the Industrial Project Revenue Bond Act, 65 ILCS 5/11-74-1 to 5/11-74-14 (1994 State Bar Edition) (the "Act"). (b) The Borrower desires to acquire certain real estate in Tonyan's Industrial Park, McHenry, Illinois (the "Site"), construct a building and equip the same for manufacturing purposes (the "Project") and lease the same to Chroma Corporation, a Delaware corporation, and/or other tenants. (c) The Borrower estimates that the Project will cost approximately $1,300,000. (d) The proposed financing will serve to maintain and increase employment, encourage the increase of industry and commerce, increase the tax base and provide other benefits for the City. (e) The revenue bonds of the City shall be limited obligations of the City payable solely out of the revenues and receipts derived from the financing of the Project. No holder of any such bonds shall have the right to compel any exercise of the taxing power of the City or any political subdivision of the State of Illinois and such Bonds shall not constitute an indebtedness or a loan of credit of the City. (f) The City finds that the financing as herein described will further the public purposes of the Act. 2. Undertakings on the Part of City. Subject to compliance with all requirements of law, the provisions and requirements of the Act and the other conditions stated herein, including execution of a contract to sell the bonds on terms satisfactory to the City and the Borrower, the City agrees as follows: (a) That it will authorize the issuance and sale of its revenue bonds in an amount necessary to finance a portion of the costs of the Project, including costs and expenses incidental thereto and to the issuance of the bonds pursuant to its lawful and constitutional authority. (b) That it will enter into a loan agreement or other financing arrangement with the Borrower whereby the Borrower will pay to or on behalf of the City such sums as shall be sufficient 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 has no obligation hereunder to find any purchaser or purchaser for said bonds. 3. Undertakincrs on the Part of the Borrower. Subject to the conditions stated herein, the Borrower agrees as follows: (a) That he will use all reasonable efforts to find one or more purchasers for the bonds. (b) That contemporaneously with the delivery of the bonds he will enter into a loan agreement or other financing agreement with the City, under the terms of which the Borrower will obligate himself to pay for or on behalf of the Issuer an amount sufficient 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, and which shall contain such other provisions as are mutually acceptable to the City and the Borrower. (c) The Borrower will pay the City for any and all professional fees, City Council salaries and other expenses directly or indirectly incurred by, or charges to, the City in connection with the subject matter of the proposed bonds. 4. General Provisions (a) All commitments of the City under paragraph 2 hereof and of the Borrower under paragraph 3 hereof are subject to the conditions that on or before one year from the date hereof (or such other date as shall be mutually satisfactory to the City and the Borrower), the City and the Borrower shall have agreed to mutually acceptable terms and conditions of the loan agreement or other financing arrangement referred to in paragraph 3 and of the bonds and other instruments or proceedings relating to the bonds including a contract for the sale of the bonds. (b) All costs and expenses in connection with the financing and completion of the Project, including the fees and expenses of bond counsel and counsel to the City, and any agent or underwriter for the sale of the bonds, shall be paid f rom the proceeds of the bonds or by the Borrower. If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof and the bonds in an amount of approximately the amount stated above are not sold within such time, the Borrower agrees that he will reimburse the City for all expenses which the City may incur as a result of the execution of this Agreement and the -2- performance by the City of its obligations hereunder, and this Agreement shall thereupon terminate. (c) The decision not to approve or agree to any term or condition of any documents or not to take any action prior to the issuance of the bonds shall rest solely within the complete discretion of the parties to this Agreement. If, for any reason, the bonds are not issued, the City shall not in any way be liable for damages or otherwise to any party for such failure of consummation of the financing. (d) The closing of the bonds in regard to the Project is subject to the receipt of the City of sufficient volume cap allocation from the State of Illinois or otherwise. The City agrees to apply for such volume cap allocation or to receive the same from other appropriate municipalities. (e) The Borrower may assign his interest to any designee. IN WITNESS WHEREOF, the parties hereto have entered into this Memorandum of Agreement by their officers thereunto duly authorized as of the 17th day of April, 1996. (SEAL) Attest: z- City Clerk ROBERT D. SWAIN CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS a r -3- r Council Member Bolger moved and Council Member Lawson seconded the motion that said Resolution as presented and read by the City Clerk be adopted. After a full discussion thereof, the Mayor directed that the roll be called for a vote upon the motion to adopt said Resolution as read. Upon the roll being called, the following Council Members voted AYE: Bolder, Bates, Lawson, Baird The following Council Members voted NAY: hone Absent: Locke Whereupon the Mayor declared the motion carried and approved the Resolution as adopted and did direct the City Clerk to record the same in the records of the City Council of the City of McHenry, McHenry County, Illinois. Other business not pertinent to the adoption of said Resolution was duly transacted at said meeting. Upon motion duly made and seconded, the meeting was adjourned. (SEAL) City Clerk Pamela J. Althoff