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HomeMy WebLinkAboutResolutions - R-85-46 - 06/03/1985 - John Tyshenko and EDC MUN177/WCW/676288-a/4050785 RECEIVED MA' RESOLUTION NO. R-85-46 CIS(, OF MENU A PRELIMINARY RESOLUTION OF THE CITY OF McHENRY, ILLINOIS APPROVING THE APPLICATION OF JOHN TYSHENKO AND THE McHENRY AREA ECONOMIC DEVELOPMENT COMMISSION, INC. AND AUTHORIZING THE CITY TO EXECUTE A MEMORANDUM OF AGREEMENT WITH JOHN TYSHENKO AND THE McHENRY AREA ECONOMIC DEVELOPMENT COMMISSION, INC. CONCERNING THE ISSUANCE BY THE CITY OF ITS INDUSTRIAL DEVELOPMENT REVENUE BONDS. WHEREAS, the City of McHenry, Illinois (the "City" ) is a municipality and political subdivision and a non-home rule unit of local government of the State of Illinois; and WHEREAS, the City is authorized and empowered by the Industrial Project Revenue Bond Act, Sections 11-74-1 through 11-74-14 , inclusive, of Chapter 24 , Illinois Revised Statutes, as amended ( the "Act" ) , to issue its industrial development revenue bonds to finance the cost of the acquisition, construction, re- construction, improvement , betterment or extension of any "industrial project" , as defined in the Act, and to enter into a loan agreement pursuant to which the proceeds of such industrial development revenue bonds may be loaned to industrial or com- mercial enterprises to finance the cost of the acquisition, con- struction and equipping of any such project; and WHEREAS, John Tyshenko, a resident of Lake Geneva,' Wisconsin ( the "Developer" ) , and McHenry Area Economic Development Commission, Inc. , an Illinois corporation ( the "Commission" ) have applied to the City for economic assistance through the issuance by the City of its industrial development revenue bonds to finance the acquisition, construction and equip- ping of a facility located or to be located on Illinois State Route 31 in the City and consisting of a 55 to 58-unit motel with a banquet hall for up to 400 people, indoor swimming pool , whirl- pool , restaurant and cocktail lounge ( the "Project" ) ; and WHEREAS, pursuant to the powers of the City as a non- home rule unit under the provisions of the Act , the City proposes to execute a Memorandum of Agreement relating to the Project and the financing thereof ; and WHEREAS, the Illinois General Assembly has declared in the Act the purpose and intent to relieve conditions of unemploy- ment, to maintain existing levels of employment and to encourage the increase of industry and commerce within the State of Illinois, thereby reducing the evils attendant upon unemployment and to increase the tax base of the various municipalities of the State of Illinois, which were all declared and determined to be public purposes and for the public safety, benefit and welfare of the residents of the State of Illinois; and WHEREAS, a 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 limited obligation industrial development revenue bonds to finance the Project; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF McHENRY, ILLINOIS, as follows: SECTION 1: The City hereby finds and determines, based on the representations of the Developer and the Commission, that the Project proposed by the Developer and the Commission and hereinafter described will increase employment opportunities and increase the real estate tax base of the City, and that aiding the financing of the Project through the issuance of the City' s industrial development revenue bonds ( the "Bonds" ) is hereby declared and determined to be for an industrial project within the meaning of the Act. SECTION 2: Subject to due compliance with all require- ments of law and of the Ordinances of the City, the Mayor of the City is hereby authorized to execute, and the Clerk of the City is hereby authorized to attest a Memorandum of Agreement (the "Memorandum of Agreement" ) with the Developer and the Commission' in substantially the form of the agreement appended to this Reso- lution as Exhibit A. The Memorandum of Agreement is hereby ap- proved and authorized. SECTION 3 : The officers and employees of the City are hereby authorized and directed 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 not more than $2 , 500 ,000 principal amount of its industrial development revenue bonds upon the terms and conditions stated in such Memorandum of Agreement to defray and reimburse the Developer or his designee or the Commission or its designee for the cost of acquiring, construct- ing and equipping the Project (as further defined in the Memoran- dum of Agreement) and the same is declared and determined to be consistent with the policy of the City to encourage economic development within the City as set forth in the Act , and this Resolution shall constitute affirmative official action toward the issuance of the Bonds within the meaning of applicable United States Treasury Regulations . -2- SECTION 4: All Bonds to be issued by the City for the Project shall be limited obligations of the City. Such Bonds shall not constitute an indebtedness of the City or a loan of credit thereof, or a pledge or any exercise of the City' s taxing powers . The assignment of the rights to the revenues and re- ceipts derived by the City with respect to the Project to the purchaser(s) of the Bonds, along with such additional security as provided under a bond purchase agreement , shall serve as full and complete satisfaction of the City' s obligations under the provi- sions of the Act and such agreements as shall be entered into in the course of the issuance of the Bonds. - SECTION 5: The City Clerk is hereby authorized to determine, in consultation with the Developer or his designee or with the Commission or its designee, a date for a public hearing on the plan of financing and the proposed issuance of the Bonds, as required by Section 103 (k) of the Internal Revenue Code of 1954, as amended, and to publish a public notice of such hearing, substantially in the form and with the contents set forth in Exhibit B appended hereto. Said public hearing date may be the date of any regular meeting of this City Council or any special meeting for which notice is duly given, and the public notice shall be published in such newspapers as the City Clerk , in con- sultation with the Developer or his designee or with the Commis- sion or its designee, may determine, but in any event not less than one time not less than 14 days prior to the public hearing date in a newspaper of general circulation in the vicinity of the site of the Project . SECTION 6 : All actions heretofore taken by any off- icers or employees of the City in connection with the financing' of the Project are hereby ratified, confirmed and approved. SECTION 7 : That all resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such con- flict . PASSED this 3rd day of June , 1985 . AYES: Bolger, Lie ed r, McClatche Nol n S mit T NAYS: one ABSENT: None ABSTAINED: None NOT VOTING: None -3- APPROVED this 3rd day of June ► 1985. Z(1 M or ATTEST: °/ZiactiLds-- City Clerk Published in pamphlet form by order of the corporate authorities of the City of McHenry, McHenry County, Illinois. The foregoing Resolution No. R-85-46 was voted and passed by the City Council of the City of McHenry, Illinois at a ( regular ) (spaci .) meeting of the City Council duly called and held on the 3rd day of June , 1985. City Clerk -4- MUN177/WCW/676288-b/3-050685 EXHIBIT A MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is by and among the City of McHenry, Illinois, an Illinois municipality and political subdivision ( the "City" ) and John Tyshenko, a resident of Lake Geneva, Wisconsin and McHenry Area Economic Development Commission, Inc. , an Illinois corporation ( the "Commission" ) . 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the follow- ing: (a) The City is authorized and empowered by the provi- sions of the Industrial Project Revenue Bond Act, Sections 11-74 1 through 11-74-14 , inclusive, of Chapter 24, Illinois Revised Statutes, as amended ( the "Act" ) , to issue its industrial development revenue bonds to finance the cost of the acquisition, construction, reconstruction, improvement, betterment or exten- sion of any "industrial project" , as defined in the Act . (b) The Developer and the Commission wish to obtain satisfactory assurance from the City that the proceeds of the sale of the industrial development revenue bonds of the City will be made available to the Developer or his designee, or to the Commission or its designee, to finance the acquisition of land and construction and equipping of a 55 to 58-unit motel with a banquet hall for up to 400 people, indoor swimming pool, whirl- pool, restaurant and cocktail lounge (the "Project" ) located or to be located on an approximately 10 acre tract of land on the West side of Illinois State Route 31, approximately 1 ,650 feet South of Bull Valley Road and abutting the present Northern Illinois Medical Center property in the City. (c) Subject to the conditions contained herein and to the compliance with all requirements of law (and of all ordinances of the City, including particularly the approval by the appropriate zoning authorities and governmental authorities having jurisdiction over sewers and occupancy requirements of the City) , the City by virtue of such authority as may now or here- after be conferred by the Act, has indicated a willingness to issue and sell its industrial development revenue bonds in an. amount not to exceed $2 , 500,000 ( the "Bonds" ) ' to finance the cost of the Project, or, with the mutual consent of the City and the Developer or his designee, or the Commission or its designee, such portion of the cost of the Project as shall then be permis- sible to qualify the Bonds under the exemptions contained in Section 103(b) of the Internal Revenue Code, as amended ( the "Code" ) , or any successor provision of similar import . (d) The City proposes to enter into a loan agreement or mortgage and loan agreement ( the "Revenue Agreement" ) with the -2- Developer or his designee, or with the Commission or its designee, with respect to the Project pursuant to the provisions of the Act as then in effect. 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 Revenue Agreement, the Developer or his designee, or the Commission or its designee, shall be obligated to pay (directly or through notes, debentures, bonds, or other debt obligations of the Devel- oper or his designee, or the Commission or its designee, 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 Revenue 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 a 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 -3- into in the course of the issuance of the Bonds. 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 Developer or his designee, or the Commission or its designee, and potential purchasers of the Bonds. That it will cooperate with the Developer or his desig- nee, or with the Commission 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 or resolution of the City Council and mutually satisfactory to the City, the Developer or his designee, or the Commission 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 Bonds to the Developer or his designee, or to the Commission or its designee, to finance the Project , and ( ii ) that the aggregate amounts ( i .e. , the repayments to be made by the Developer or his designee, or the Commission or its designee, -4- 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. That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to imple- ment the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 3. Undertakings on the Part of the Developer and the Commission. Subject to the conditions above stated, the Devel- oper and the Commission agree as follows : (a) That the Developer or the Commission will use all reasonable efforts to find one or more purchasers satisfactory to the City for the Bonds , which shall be originally issued as a single, fully registered bond which may be exchangeable for Bonds in a minimum denomination of $100 , 000 , subject to the approval of modifications in such denomination by the City. The purchaser (s ) of the Bonds must and shall agree to accept assignment of the Revenue 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 agreements as shall be entered into in the course of the issuance of the Bonds and the purchaser ( s) shall -5- receive the Bonds so endorsed. (b) That contemporaneously with the delivery of the Bonds, the Developer or his designee, or the Commission or its designee, will enter into the Revenue Agreement with the City ( in a form and substance satisfactory to the City) , under the terms of which the Developer or his designee, or the Commission or its designee, will be obligated 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 Revenue Agreement shall be assignable by the City as contemplated in paragraph 3 (a) above. The Developer and the Commission agree that the City may require that perform- ance of the obligations of the Developer or his designee, or the Commission or its designee, under the Revenue Agreement be secured by a lien, mortgage, collateral assignment of lease and all rentals, or other security as determined appropriate by the' City upon the property comprising the Project . (c) The Developer or the Commission will pay or cause to be paid to the City for any and all administrative costs , legal and professional fees exn�^.. s of i s couns9� ^� bond coui+sreij , 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 Developer will -6- immediately deposit with the City Clerk the sum of $ Sco,c to be used by the City toward defraying such expenses and fees. Any any time that payments from said fund shall be reduced to less than $ 5oc.c o , the Developer , upon request from the City Clerk , will deposit or cause to be deposited such additional sum as will restore the fund balance to the sum originally deposited. Within 90 days after the closing of the sale of the Bonds , any unobligated balance remaining in said fund shall be repaid to the Developer or his assigns. (d) That the Developer or his designee, or the Commis- sion or its designee, 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 the matters set forth in the Notice which was recorded in the Office of the McHenry County Recorder of Deeds on May 23 , 1980 as Docu-- ment No. 795201 . 4 . General Provisions . (a) All commitments of the City under Paragraph 2 hereof and of the Developer or his designee, or the Commission or its designee, under Paragraph 3 hereof are subject to the condi- tion that on or before one year from the date hereof (or such other date as shall be mutually satisfactory to the City and the Developer , or the Commission) , the City and the Developer or his designee, or the Commission or its designee , shall have agreed to -7- mutually acceptable terms and conditions of the Revenue 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 dis- cretion of the parties to the Revenue Agreement . All regulatory or other governmental approvals requisite to the 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 Devel- oper agrees that he 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 Resolution No. • ( includ- ing 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 ) . (c) The Developer and the Commission acknowledge that the intended qualification of the Bonds under the provisions of Section 103 (b) of the Code will require an adequate allocation to the Bonds, under Section 103 ( n) of the Code, of the private activity bond limit of the State of Illinois , which allocation is not wholly within the control of the City. -8- (d) If, by reason of the limitations of Section 103 ( n) of the Code or for other cause, the City is prevented from fulfilling its undertakings hereunder in accordance with the intent of the parties hereto, then this Agreement may be assigned with full substitution by the City to the Illinois Development Finance Authority or other state or local agency having power to - finance the Project and willing to accept such assignment, and upon such assignment all obligations of the City hereunder shall terminate. In the event of such assignment , the Developer or the Commission shall pay or cause to be paid to the City all sums owing under Paragraph 3(c) hereof. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunto duly authorized as of the day of , 1985. • CITY OF McHENRY, ILLINOIS Mayor (SEAL) ATTEST: City Clerk -9- John Tyshenko McHENRY AREA ECONOMIC DEVELOPMENT COMMISSION, INC. By Its ( SEAL) ATTEST: Its -10- • EXHIBIT B NOTICE OF PUBLIC HEARING Public notice is hereby given that the City Council of the City of McHenry, Illinois ( the "City" ) , on behalf of the said City, on the day of , 1985, at the Council Chambers in the City Hall, 1111 North Green Street , McHenry, Illinois, at o'clock .M. , will conduct a public hearing on ( i ) the proposed plan of financing the costs of acquiring, constructing and equipping a project consisting of a 55 to 58-unit motel with a banquet hall for up to 400 people, indoor swimming pool , whirl- pool, restaurant and cocktail lounge ( the "Project" ) for use by ( the "User" ) , said Project being lo- cated or to be located on an approximately 10 acre tract of land on the West side of Illinois State Route 31 , approximately 1 ,650' feet South of Bull Valley Road and abutting "the present Northern Illinois Medical Center property, in the City of McHenry, Illinois, and ( ii ) the proposed issuance of industrial development revenue bonds by the City ( the "Bonds" ) , in an aggre- gate principal amount not to exceed $2 , 500 , 000 pursuant to said plan of financing. The Bonds , if and when issued, will be limited obliga- tions of the City, payable solely and only out of payments to be made by or on behalf of the User under a revenue agreement between the City and the User . No holder of any of the Bonds will have the right to compel any exercise of the credit or tax- ing power of the City to pay the Bonds or the interest thereon, and the Bonds will not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitu- tional or statutory provision. At the time and place fixed for said public hearing, all who appear will be given an opportunity to express their views for or against the proposal to issue the Bonds and the nature, location and plan of financing of the Project . Written comments may be submitted on or before the aforesaid date of the public hearing to the undersigned City Clerk at the City Hall , 1111 North Green Street, McHenry, Illinois 60050 . Dated: , 1985 . City Clerk -2-