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HomeMy WebLinkAboutResolutions - R-87-20 - 11/18/1987 - Cunat Westside Crest ApartmentsRESOLUTION NO. R-87-20 A RESOLUTION PROVIDING FOR THE FINANCING BY THE CITY OF MCHENRY, ILLINOIS, OF A MULTIFAMILY HOUSING PROJECT CONSISTING OF BUILDINGS, CONSTRUCTION, EQUIPMENT AND RELATED PROPERTY IN ORDER THAT WESTSIDE CREST LIMITED PARTNERSHIP MAY BE PROVIDED WITH FACILITIES TO RELIEVE CONDITIONS OF UNEMPLOYMENT AND ENCOURAGE THE INCREASE OF COMMERCE; AUTHORIZING THE ISSUANCE OF ITS $3,900,000 INSURED MULTIFAMILY HOUSING BONDS (INDEBONDS-TM), WESTSIDE CREST APARTMENTS PROJECT IN CONNECTION THEREWITH; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN THE CITY OF MCHENRY, ILLINOIS AND WESTSIDE CREST LIMITED PARTNERSHIP; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE SECURING SAID BONDS; AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF SAID BONDS TO THE PURCHASER THEREOF AND RELATED MATTERS. WHEREAS, the City of McHenry, Illinois (the "Issuer"), a municipality duly organized and validly existing under the laws of the State of Illinois is authorized and empowered by the provisions of the Industrial Project Revenue Bond Act, Illinois Revised Statutes, 1985, Chapter 24, Section 11-74-1 et seq., as from time to time supplemented and amended (the "Act") to issue its revenue bonds to finance the costs of any industrial development project to the end that the Issuer may be able to relieve conditions of unemployment, to maintain existing levels of employment and to encourage the increase of industry and commerce within the City of McHenry, thereby reducing the evils attendant upon unemployment and provide for the public safety, benefit and welfare of the residents of the City of McHenry and to provide decent, safe and sanitary housing which persons and families, including low and moderate income persons and families can afford; and WHEREAS, as a result of negotiations between the Issuer and Westside Crest Limited Partnership, an Illinois limited partnership (the "Company") the Company has entered into contracts for the acquisition of land and the construction of a certain multifamily housing development (hereinafter referred to as the "Project"), which constitutes an industrial project under the Act, and the Issuer is willing to issue its revenue bonds to finance the cost of the Project and to enter into a loan agreement with the parties upon terms which will produce revenues and receipts sufficient to provide for the prompt payment at maturity of the principal of, premium, if any, and interest on such revenue bonds, all as set forth in the details and provisions of the Loan Agreement hereinafter identified; and WHEREAS, it is in the interests and convenience of the Issuer and its inhabitants to authorize the financing of the Project and the issuance of the Issuer's Insured Multifamily Housing Bonds (InDeBonds-Tm), Westside Crest Apartments Project in the aggregate principal amount of $3,900,000 (the "Bonds"); and WHEREAS, Prudential-Bache Securities Inc. (the "Under- writer") has indicated its willingness to purchase the Bonds to provide the financing for a portion of the Project; and WHEREAS, it is necessary to authorize the execution of a Loan Agreement between the Issuer and the Company under the terms of which the Issuer will loan the proceeds of the sale of the Bonds to the Company to finance a portion of the costs of -2- construction of the Project, the payments to be paid by the Company in repayment of the loan to be sufficient to pay at maturity the principal of, premium, if any, and interest on the Bonds; and WHEREAS, it is necessary for the Issuer to execute and deliver a Trust Indenture to American National Bank and Trust Company of Chicago, as Trustee (the "Trustee") for the bondholders pursuant to which the Bonds will be issued; and WHEREAS, The Continental Insurance Company (the "Insurer") will issue a Multifamily Housing Bond Insurance Policy for the benefit of the holders of the Bonds (the "Policy"); and WHEREAS, the Company will cause McHenry State Bank as Trustee under Trust Number 4168 dated October 2, 1987 and not individually to enter into a Mortgage and Security Agreement (the "Mortgage") to IDBI Managers, Inc., as Managing General Agent for the Insurer to secure such Bonds; and WHEREAS, it is necessary to authorize the sale of said Bonds and to execute a Bond Purchase Agreement in connection therewith; and WHEREAS, a Preliminary Official Statement dated November 2, 1987 (the "Preliminary Official Statement") has been prepared and presented to this meeting; and WHEREAS, there has been prepared and presented to this meeting the following documents, which the Issuer proposes to enter into: 1. The Loan Agreement dated as of November 1, 1987, between the Issuer and the Company (the "Loan Agreement"); -3- 2. The Trust Indenture dated as of November 1, 1987 (the "Indenture"), between the Issuer and the Trustee, setting forth terms, conditions and security requirements for the proposed bond issue to finance the Project and containing the form of the Bonds; 3. The Bond Purchase Agreement among the Issuer, the Underwriter and the Company (the "Bond Purchase Agreement"); and 4. The Guaranty Agreement dated as of November 1, 1987 (the "Guaranty") from Brian G. Cunat and John C. Cunat to the Issuer, the Trustee and the Insurer (the "Guaranty"); and WHEREAS, the Issuer held a public hearing pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended, (the "Code") on November 18, 1987 and hereby approves the issuance of the Bonds. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, COUNTY OF MCHENRY, STATE OF ILLINOIS, AS FOLLOWS: Section 1. That the form, terms and provisions of the proposed Loan Agreement and Indenture be, and they hereby are, in all respects approved, and that the Mayor and the City Clerk of the Issuer be, and they are hereby authorized, empowered and directed to execute and deliver such instruments in the name and on behalf of the Issuer, to cause the Loan Agreement to be delivered to the Company and to cause the Indenture to be delivered to the Trustee; that the Indenture shall constitute a lien for the security of the Bonds and upon all right, title and interest of the Issuer in and to the Loan Agreement (except for certain rights of the Issuer to indemnification and payment of -4- expenses), the promissory note of the Company (the "Note") delivered pursuant thereto and the Loan Agreement and in and to the payments, revenues and receipts payable to the Issuer pursuant thereto, and said revenues are hereby and in the Indenture pledged for such purpose; that the Loan Agreement and the Indenture are to be in substantially the respective forms thereof submitted to this meeting and hereby approved, with such changes therein as shall be approved by the officials of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of such instrument hereby approved. The officials, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of such instruments as executed. Section 2. That the form, terms and provisions of the proposed Bond Purchase Agreement and Guaranty, copies of which are before this meeting, be, and they hereby are, in all respects approved, and that the Mayor and the City Clerk of the Issuer be, and they hereby are, authorized, empowered and directed to execute the Bond Purchase Agreement and the Guaranty in the name and on behalf of the Issuer and thereupon to cause the Bond Purchase Agreement to be delivered to the Underwriter and the Company and the Guaranty to be delivered to the Guarantors, the Trustee and the Insurer; that the Bond Purchase Agreement and the Guaranty are to be in substantially the respective forms thereof submitted to this meeting and hereby -5- approved, with such changes therein as shall be approved by the officials of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of such instrument hereby approved; that the Bond Purchase Agreement shall be entered into with the Underwriter and that from and after the execution and delivery of such instrument, the officials, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things necessary to carry out and comply with the provisions of such instrument as executed. Section 3. That the issuance of the Bonds in the aggregate principal amount of $3,900,000 to mature on December 1, 1999 at the interest rate of eight and one -quarter percent (81%) per annum with sinking fund redemptions as provided on the attached Exhibit A is hereby approved and the Mayor or the City Clerk of the Issuer be and are hereby authorized, empowered and directed to cause to be prepared the Bonds in the form and having the other terms and provisions as set forth in the Indenture (as executed and delivered); the Bonds shall be executed and attested in the name of the Issuer with the facsimile signature of the Mayor and the facsimile signature of the City Clerk of the Issuer; the seal of the Issuer shall be impressed or imprinted thereon; the Mayor or City Clerk of the Issuer shall cause the Bonds, as so executed and attested, to be delivered to the Trustee for authentication and the Trustee is hereby requested to authenticate the $3,900,000 principal amount Bonds; and the form of the Bonds submitted to this meeting as the same appears in the Indenture, subject to appropriate insertion and revision in order cm to comply with the provisions of said Indenture be, and the same hereby is, approved, and when the same shall be executed on behalf of the Issuer in the manner contemplated by the Indenture and this Resolution in the principal amount of $3,900,000, it shall represent the approved form of the Bonds of the Issuer. Section 4. That the distribution of the Preliminary Official Statement presented to this meeting in connection with the marketing of the Bonds be, and the same is hereby consented to. The use by the Underwriter of the Preliminary Official Statement and the Final Official Statement is hereby consented to. Section 5. That the sale of the Bonds to the Underwriter at a purchase price of 961% of the principal amount thereof, upon the terms and conditions set out in the Bond Purchase Agreement presented at this meeting be, and they hereby are, in all respects authorized and approved. Section 6. That from and after the execution and delivery of said documents, the proper officials, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of said documents as executed and to further the purposes and intent of this Resolution, including the preamble hereto. Section 7. That all acts and doings of the officials of the Issuer which are in conformity with the purposes and intent of this Resolution and in furtherance of the issuance and SM sale of the Bonds in the principal amount of $3,900,000 and the financing of the Project to that amount be, and the same hereby are, in all respects, approved and confirmed. Section 8. That approval is hereby granted of the issuance of the Bonds pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended. Section 9. The Bonds shall be a limited obligation of the Issuer payable solely out of the revenues and receipts to be derived from the Loan Agreement and the Note. No holder of any Bond shall ever have the right to compel any exercise of the taxing power of the Issuer to pay the Bonds or the interest or premium, if any, thereon and the Bonds shall not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitutional or statutory provision. It shall be plainly stated on the face of each Bond that it has been issued under the provisions of the Act and that it does not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitutional or statutory provisions. Nothing in this Bond Resolution, the Loan Agreement or the Indenture shall be construed as an obligation or commitment by the Issuer to expend any of its funds other than (i) the proceeds of the sale of the Bonds, (ii) the revenues and receipts to be derived from the Loan Agreement and the Note, or (iii) any moneys arising out of the investment or reinvestment of said proceeds, rents, revenues or moneys. Section 10. The Bonds shall be issued in compliance with and under the authority of the provisions of the Act, this Resolution and the Indenture. Section 11. That the provisions of this Resolution are hereby declared to be separable, and if any section, phrase or provision shall, for'any reason, be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases or provisions. Section 12. That all ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Resolution are, to the extent of such conflict, hereby superseded. -9- Section 13. This Resolution shall be in full force and effect from and after its passage and approval, in accordance with law. PASSED this 18th day of November, 1987. Ayes: William J. Bolger, Gary W. Lieder, Frank McClatchey, Randy Patterson Cecilia Serritella, Raymond Smith, Michael R. Teta Nays: None Absent: Elizabeth Nolan APPROVED this 18th day of November, 1987. ATTEST: to City Clerk -10- EXHIBIT A SINKING FUND REDEMPTIONS Maturity Date Redemption Amount December 1, 1990 $ 35,000 December 1, 1991 35,000 December 1, 1992 40,000 December 1, 1993 45,000 December 1, 1994 50,000 December 1, 1995 55,000 December 1, 1996 60,000 December 1, 1997 65,000 December 1, 1998 70,000 December 1, 1999 3,445,000 -11-