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HomeMy WebLinkAboutResolutions - R-90-5 - 01/31/1990 - Bonds for Fawn Ridge ApartmentsRESOLUTION AUTHORIZING ISSUANCE AND SALE OF $8,100,000 THE CITY OF McHENRY, ILLINOIS MULTIFAMILY HOUSING REVENUE BONDS (FAWN RIDGE APARTMENTS PROJECT), SERIES 1990, TO FINANCE A LOAN TO FAWN RIDGE LIMITED PARTNERSHIP SO AS TO ENABLE THE COMPANY TO FINANCE THE COSTS OF THE ACQUISITION, CONSTRUC- TION AND EQUIPPING OF A MULTIFAMILY HOUSING PROJECT, AUTHORIZING THE EXECUTION OF THE LOAN AGREEMENT, THE INDEN- TURE SECURING THE BONDS, AND THE PLACEMENT AGREEMENT, AND DETERMINING AND AUTHORIZING OTHER MATTERS RELATIVE THERETO WHEREAS, the City of McHenry, Illinois (the "Issuer") is authorized by the provisions of the Industrial Project Revenue Bond Act, Illinois Revised Statutes, 1987, Chapter 24, Section 11-74-1, et. seq., as amended (the "Act"), to issue bonds for the purpose of financing the costs of an "industrial project" (as defined in the Act); and WHEREAS, Fawn Ridge Limited Partnership, an Illinois limited partnership (the "Company"), has applied to the Issuer for a loan in an amount of Eight Million One Hundred Thousand Dollars ($8,100,000) to finance the cost of acquiring, constructing and equipping a multifamily housing project to be located in the City of McHenry, Illinois (the "Project"); and WHEREAS, the Issuer proposes to issue its Multi- family Housing Revenue Bonds (Fawn Ridge Apartments Project), Series 1990, in the aggregate principal amount of $8,100,000 (the "Bonds") pursuant to this resolution and the Trust Indenture, dated as of February 1, 1990, between the Issuer and American National Bank and Trust Company of Chicago, as Trustee (the "Indenture"), to obtain funds to lend to the Company pursuant to a Loan Agreement, dated as of February 1, 1990, between the Issuer and the Company (the "Loan Agreement") for the purpose of financing the cost of the Project; and WHEREAS, the principal and purchase price of, redemption premium and up to 110 days' interest on the Bonds will be secured by an irrevocable letter of credit (the "Letter of Credit") to be issued by National Bank of Detroit (the "Bank") in favor of the Trustee; and WHEREAS, the Issuer has determined that granting the loan requested by the Company and issuing and selling the Bonds as hereinafter provided will promote and serve the intended purposes of and in all respects will conform to the provisions and requirements of the Act. NOW, THEREFORE, Be It Resolved by the City Council of the City of McHenry, McHenry County, Illinois, as follows: SECTION 1. Transfer of Inducement. The resolu- tion of inducement for the Project for the Cunat Bros., Inc. •SrA2 dated February 24, 1988, as amended, is hereby transferred to Fawn Ridge Limited Partnership, whose general partners include Cunat Bros., Inc. and John Cunat and Brian Cunat. SECTION 2. Issuance of Bonds. For the purposes of the public hearing requirements required by the Internal Revenue Code of 1986, as amended, and for the purpose of making the loan requested by the Company and thereby assisting in the financing of the Project, the issuance of the Bonds in the aggregate principal amount of $8,100,000 is authorized. The Bonds shall be designated "City of McHenry, Illinois Multifamily Housing Revenue Bonds (Fawn Ridge Apartments Project), Series 1990" and shall be issued in fully registered form initially in denominations of $100,000 or any integral multiple thereof as provided in the Indenture. The Bonds shall be dated, mature, bear interest and be payable as to interest as provided in the Indenture. The initial interest rate to be borne by the Bonds shall not exceed 16% per annum. The initial interest rate applicable to the Bonds shall be approved by the member or officer of the Issuer executing the Bonds and the Indenture (herein- after defined) and shall be conclusively evidenced by the execution of such documents. The Issuer determines that, based solely upon information furnished by the Company, the estimated period of usefulness of the Project is not less than 35 years. -3- The Bonds shall be subject to mandatory and optional redemption and tender for purchase, and may be transferred and registered, all as provided in the Indenture. The Bonds shall be issued pursuant to this resolu- tion and the Indenture in the form on file with the staff of the Issuer, and the terms and provisions of the Indenture are hereby approved and incorporated by reference herein. The staff of the Issuer shall endorse on the form of Inden- ture the date of adoption of this resolution. The Bonds do not constitute an indebtedness of the Issuer or a loan of the credit thereof within the meaning of any constitutional or statutory provision and shall never constitute a debt or obligation of the State of Illinois within the meaning of any constitutional or statutory provi- sion or limitation and shall never constitute nor give rise to a charge against the credit or taxing powers of the State of Illinois or the general funds or assets of the Issuer (including funds relating to other Issuer loans or activi- ties), but shall be a limited obligation of the Issuer pay- able solely from the revenues derived from the Loan Agreement and otherwise as provided in the Indenture. SECTION 3. Form of the Bonds. The form of Bonds shall be substantially in the form contained in the -4- Indenture, with such appropriate changes, omissions and insertions as are permitted or required by subsequent action of the Issuer or the Indenture. SECTION 4. Execution of the Bonds. The Bonds shall bear the manual or facsimile signature of any member of the Issuer, be countersigned by the manual or facsimile signature of an officer of the Issuer, and shall have the official seal of the Issuer (or a facsimile thereof) impressed or imprinted thereon. SECTION 5. Approval of Loan Agreement. The form of Loan Agreement, including the form of Promissory Note attached thereto, on file with the staff of the Issuer and on which has been endorsed by the staff of the Issuer the date of adoption of this resolution is hereby approved. SECTION 6. Acknowledgment of Letter of Credit. The form of Letter of Credit to be issued by the Bank, on file with the staff of the Issuer and on which has been endorsed by the staff of the Issuer the date of adoption of this resolution is hereby acknowledged with such changes therein as may be deemed necessary or desirable by the Bank, permitted by the Act and otherwise by law, and not materi- ally adverse of the Issuer. -5- SECTION 7. Approval of Placement Agreement. The form of Placement Agreement (the "Placement Agreement") among the Issuer, the Company and First Commerce Capital, a Division of Porter, White & Yardley, Inc., as Placement Agent, on file with the staff of the Issuer and on which has been endorsed by the staff of the Issuer the date of adop- tion of this resolution is hereby approved. SECTION 8. Execution and Delivery of Loan Agreement, Indenture, Placement Agreement, and Changes Therein. Any member and authorized officer of the Issuer are hereby authorized to execute, seal in their discretion, and deliver the Indenture in substantially the form approved, and any member or authorized officer of the Issuer is hereby authorized to execute, seal in his or her discre- tion, and deliver the Loan Agreement (and accept and endorse the Promissory Note) and the Placement Agreement in sub- stantially the forms approved, with such changes in such documents as may be necessary or desirable, permitted by the Act and otherwise by law, and not materially adverse to the Issuer. SECTION 9. Sale and Delivery of the Bonds. The Bonds shall be sold by the Issuer to the original purchasers pursuant to the Placement Agreement at an aggregate purchase price equal to 1000 of the aggregate principal amount thereof. In accordance with the Placement Agreement and the Indenture, a member and an authorized officer of the Issuer shall execute, seal and deliver the Bonds upon receipt of payment therefor and pay over the proceeds of the Bonds to the Trustee to the credit of the Construction Fund in accor- dance with the Indenture. SECTION 10. Approval of Filings and Submissions with Other Governmental Agencies. Any member or authorized officer of the Issuer is authorized on behalf of the Issuer to apply for such rulings, orders and approvals and file or submit such elections or other documents to any governmental agency in order that the Bonds may be validly issued and the interest thereon be wholly excludable from gross income for Federal income tax purposes. SECTION 11. Authorization of Other Documents. Any member or authorized officer of the Issuer, as well as counsel to the Issuer, is hereby authorized to execute and deliver such other certificates, documents, instruments, and opinions and other papers as may be required by the Loan Agreement, the Indenture or the Placement Agreement or as may be necessary or convenient to effectuate the sale and delivery of the Bonds. -7- SECTION 12. Election Under Internal Revenue Code. The Issuer hereby elects, in accordance with Section 142(d)(1)(B) of the Code, for the provisions of the 20-50 test to apply to the Bonds. SECTION 13. Conflict and Effectiveness. All resolutions and parts of resolutions or other proceedings of the Issuer in conflict herewith are repealed to the extent of such conflict. This resolution shall become effective upon adoption. Passed this 31st day of January, 1990 AYES :Bolaer, Donahue, Lieder, McClatchev, Patterson, Serritella, Smith, Teta NAYES : None ABSTAIN: None ABSENT: None Approved this 31 st day of January 1990 . Mayor Attest: City CIer KKS/90159/0001/AE4/gs