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HomeMy WebLinkAboutResolutions - R-87-13 - 07/15/1987 - Cunat Mill Street ApartmentsRESOLUTION NO. R-87-13 A RESOLUTION AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT (CUNAT BROS., INC.-PROJECT) WHEREAS, CUNAT BROS., INC., an Illinois corporation (the "Borrower") wishes to finance the acquisition of a site and construction of buildings, comprising approximately 95 residential rental apartments at part of the Northwest Quarter of Section 35, Township 45 North, Range 8 East of the Third Principal Meridian in the City of McHenry, County of McHenry, T Illinois with frontage on Mill Street, and wishes to have the CITY OF McHENRY, ILLINOIS (the "Issuer") issue its revenue bonds to finance such acquisition and construction; and WHEREAS, a Memorandum of Agreement has been presented to the Issuer under the terms of which the Issuer agrees, subject to the provisions of such Agreement, to issue its revenue bonds to finance such acquisition and construction; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF McHENRY, ILLINOIS, as follows: SECTION 1: That the Mayor of the Issuer is hereby authorized to execute, and the City Clerk of the Issuer is hereby authorized to attest a Memorandum of Agreement with the Borrower in substantially the form of such agreement appended to this Resolution as Exhibit "A". SECTION 2: That the officers and employees of the Issuer are hereby authorized to take such further action as is necessary to carry out the intent and purposes of the Memorandum of Agreement as.executed and to issue an amount not to exceed $5,000,000 of its revenue bonds upon the terms and conditions stated in such Memorandum of Agreement for the purpose of defraying the cost of acquisition and construction of the Project (as defined in the Memorandum of Agreement). SECTION 3: This Resolution shall be in full force and effect upon its passage and approval. PASSED this 15th. day of July 1987. AYES: Bolger, Lieder, Nolan, Patterson, McClatchey, Serritella, Smith, Teta NAYS: None ABSENT: None ABSTAINING: None APPROVED this 15th day of July 1987. CITY OF McHENRY r. /I ATTEST: CITY CLERK CITY ATTORNEY By: - 2 - MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between the CITY OF MCHENRY, ILLINOIS, an Illinois municipality and political subdivision (the "City") and CUNAT BROS., INC., an Illinois Corporation (the "Company"). 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the following: (a) The City is authorized and empowered by the provisions of the Industrial Project Revenue Act, Sections 11-74-1 through 11-74-14, inclusive, of Chapter 24, Illinois Revised Statutes, as amended (the "Act"), to issue its revenue bonds to finance the cost of economic development projects. (b) The Company wishes to obtain satisfactory assurance from the City that the proceeds of the sale of the revenue bonds of the City will be made available to it to finance the acquisition of land and the construction of buildings containing approximately 95 residential rental apartments to be located in the City of McHenry, Illinois (the "Project"). (c) Subject to the conditions contained herein and to the compliance with all requirements of law (and of all ordinances of the City), the City, by virtue of such authority as may now or hereafter be conferred by the Act, has indicated a willingness to issue and sell its industrial development revenue bonds in an aggregate principal amount not to exceed $5,000,000 (the "Bonds" to finance the cost of the project. (d) The City proposes to enter into a loan agreement (or mortgage and loan agreement) with the Company with respect to the Project pursuant to the provisions of the Act as then in effect (an "Agreement"). The Bonds shall not be general obligations of the City or of the State of Illinois, but will be payable solely out of revenues and receipts derived by the City with respect to the Project, and no holder of any such bonds shall have the right to compel any exercise of the credit or taxing power of the City or any other political subdivision of the State of Illinois. Such Bonds shall not constitute an indebtedness or a loan of credit of the City. Under the Agreement, the Company shall obligate itself to pay (directly or through notes, debentures, bonds, or other debt obligations of the Company executed and delivered to evidence or secure its obligations thereunder or otherwise) sums sufficient in the aggregate 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. The purchaser(s) of the Bonds and subsequent holders thereof, if any, must and shall agree to accept assignment of the Agreement and — rights to the revenues and receipts derived by the City with respect to the Project along with such additional security as provided under the bond purchase agreement, as full and complete satisfaction of the City's obligations under the provisions of the Act and such agreements and documents as shall be entered into in the course of the issuance. Such a provision will be included on the face of the bonds. 2. Undertaking on the Part of the City. Subject to the conditions herein stated, the City agrees as follows: (a) That it will begin the proceedings necessary on its part to cause the issuance and sale of the Bonds, pursuant to terms mutually acceptable to the City, the Compfany, or its designee, and potential purchasers of the Bonds. (b) That it will cooperate with the Company, or its designee, and if satisfactory purchase agreements can be made, the City will adopt such proceedings authorizing the execution of such documents as may be necessary or advisable for the authorization, issuance and sale of the bonds and the financing of the Project, all as shall be authorized in an ordinance of the City Council and mutually satisfactory to the City, the Company, or its designee, and potential purchasers of the Bonds. (c) That, if the City issues and sells the Bonds, the financing instruments will provide (i) that the City will lend the proceeds of the 2 Bonds to the Company, or its designee, to finance the Project, and (ii) that the aggregate amounts (i.e., the repayments to be made by the Company, or its designees, upon such loan and used by the City to pay the principal of, interest and redemption premium, if any, on the Bonds) , payable under the instruments whereby the Project shall be financed, shall be 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. (d) That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 3. Undertakings on the Part of the Company. Subject to the conditions above stated, the Company agrees as follows: (a) That it will use all reasonable efforts to find one or more purchasers satisfactory to the City for the Bonds. The purchaser(s) of the Bonds must and shall agree to accept the assignment of the Agreement and rights to the revenues and receipts derived by the City with respect to the Project as full and complete satisfaction of the City's obligations under the provisions of the Act and such agreement as shall be entered into in the course of the issuance and the purchaser(s) shall receive the Bonds so endorsed. (b) That contemporaneously with the delivery of the Bonds, it will enter into the Agreement with the City (in a form and substance satisfactory to the City), under the terms of which the Company will obligate itself to pay the City sums sufficient in the aggregate 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. Such Agreement shall be assignable by the City as contemplated in paragraph 3(a) above. The Company agrees that the City may require that performance of the Company's obligations under the Agreement be secured by a lien, mortgage, collateral assignment of lease and all rentals, or other security as 3 determined appropriate by the City upon the property comprising the Project. (c) The Company will pay to the City for any and all administrative costs, legal and professional fees, City Council salaries resulting from special meetings of the City Council, and other City expenses directly or indirectly incurred by, or charged to the City in connection with the subject matter of the proposed Bonds, whether or not such bonds are issued. The Company will immediately deposit with the City Clerk the sum of $ o .o o to be used by the City toward defraying such expenses and fees. Any time that payments from said fund shall be reduced _ to less than $ ,g, 000.00 , the Company, upon request from the City Clerk, will deposit such additional sum as will restore the fund balance to the sum originally deposited. Within 90 days after the closing of the sale of said Bonds, any unobligated balance remaining in said fund shall be repaid to the Company or its assigns. (d) That the Company will comply with all of the conditions and requirements of the law and of all of the City Ordinances. Neither this Memorandum of Agreement nor any action taken by the City pursuant thereto shall be construed as any waiver of any requirement of any zoning, building or other ordinance of the City. 4. General Provisions. (a) All commitments of the City under Paragraph 2 hereof and of the Company or its designee under Paragraph 3 hereof are subject to the condition that on or before one year from the date hereto (or such other date as shall be mutually satisfactory to the City and the Company), the City and the Company, or its designee, shall have agreed to mutually acceptable terms and conditions of the loan agreement and of the Bonds and other instruments or proceedings relating to the Bonds. The decision not to approve or agree to any term or condition of any document or not to take any action prior to issuance of the Bonds shall rest solely within the complete discretion of the parties to the Agreement. All regulatory or other governmental approvals requisite to the 4 execution of such documents and the issuance and sale of the Bonds shall first have been obtained. If for any reason the Bonds are not issued, the City shall not be liable in any way for damages or otherwise to any party for such failure of consummation of this financing. (b) If the events set forth in (a) of this Paragraph 4 do not take place within the time set forth or any extension thereof and the Bonds are not sold within such time, the Company agrees that it will reimburse the City for all direct out-of-pocket expenses which the City may incur or as a result or arising out of the passage of the Resolution (including but not limited to the payment of attorney and other consultant fees arising from the execution of this Agreement and the performance by the City of its obligations hereunder) and will pay the same upon demand and this Agreement shall thereupon terminate. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers duly authorized as of the 15th day of ,1111 y 1987. 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