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HomeMy WebLinkAboutResolutions - R-85-38 - 04/15/1985 - Atlantis Group Bonds RESOLUTION NO. R-85-38 A PRELIMINARY RESOLUTION OF THE CITY OF MCHENRY, ILLINOIS, APPROVING THE APPLICATION OF ATLANTIS GROUP, LTD. , AND AUTHORIZING THE CITY TO EXECUTE A MEMORANDUM OF AGREEMENT WITH THE COMPANY CONCERNING THE ISSUANCE BY THE CITY OF ITS REVENUE BONDS WHEREAS, the City of McHenry, Illinois ( the "City" ) is a 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 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 extension of any industrial project and to enter into a loan agreement pursuant to which the proceeds of such revenue bonds may be loaned to private companies to finance the costs of the acquisition , construction and equipping of such projects; and WHEREAS, ATLANTIS GROUP , LTD. , an Illinois corporation ( the "Company" ) has applied to the City for economic assistance through the issuance by the City of its economic development revenue bonds to finance the acquisition , construction and equipping of an apartment building complex containing in excess of 100 dwelling . units to be located at the Southwest corner of the intersection of McCollum Lake Road and Orleans Street in the City ( 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 WHEREAS, the Illinois Legislature has declared in the Act the purpose and intent to relieve conditions of unemployment , and to encourage the increase of industry and commerce within the State of Illinois , thereby reducing the evils attendant upon unemployment , and to provide for the increased welfare and property of the residents of the State of Illinois , which were declared and determined to be public purposes ; 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 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 Company' s representations , that the Project proposed by the Company and hereafter described will increase employment opportunities and increase the real estate tax base of the City' s industrial revenue bonds (the "Bonds" ) is declared and determined to be an " industrial project" within the meaning of the "Act" . SECTION 2 : 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 Agreement" ) with the Company or its designee in substantially the form of the agreement appended to this Resolution as Exhibit A. The Memorandum of Agreement is hereby approved and authorized . SECTION 3 : Subject to due compliance with all requirements of law, 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 $7 ,000,000. principal amount of its revenue bonds upon the terms and conditions stated in such Memorandum of Agreement to defray and reimburse the Company or its designee for the cost of acquiring , constructing and equipping the Project ( as further defined in the Memorandum 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 . 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 receipts derived by the City with respect to the Project to the purchaser( s) of the Bonds , along with such additional security as provided under the bond purchase agreement , shall serve 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 . -2- SECTION 5 . All actions heretofore taken by any officers or employees of the City in connection with the financing of the Project are hereby ratified , confirmed and approved . SECTION 6 . This Resolution be and the same shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City. PASSED this 15thday of April , 1985 . AYES : Bolger, Busse, Datz, McClatchey, Serritella, Smith, Snell NAYS : None ABSTAINED : None ABSENT: Nolan NOT VOTING : None APPROVED thi s 15th day of April , 1985 . MAYOR ATTEST : 04/A f CITY CLERK -3- 1 SEAL) ATTEST: City Clerk ATLANTIS GROUP, LTD. , an Illinois Corporation B y: 11740fti ,George postolo ( SEAL) ATTEST : ,e-/ Elias K. P -6- MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between the City of McHenry, Illinois , an Illinois municipality and political subdivision ( the "City" ) and Atlantis Group, Ltd . , 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 construction and equipping of a new apartment building complex containing in excess of 100 dwelling units to be located at the Southwest corner of the intersection of McCollum Lakes Road and Orleans Street in the City ( 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, including particularly the approval of any zoning variations by the appropriate authorities) , 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 revenue bonds in an amount not to exceed $7 ,000,000. (the "Bonds" ) to finance the costs 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 E/,4/ B/ T /17. 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 deliverd 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 Company, 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 • -2- 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 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 designee , 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 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 . -3- ( 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 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 $ 4,000. 00 to be used by the City toward defraying such expenses and fees . And any time that payments from said fund shall be reduced to less than $ 1,000.00 , 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- 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 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 /51H day of l¢P/2i .- , 1985 . CITY OF MCHENRY, ILLINOIS Mayor -5- _ (SEAL) ATTEST: 42"1:1/4-d City Clerk ATLANTIS GROUP, LTD. , an Illinois Corporation By: eorge postolo ( SEAL) ATTEST : e/ Elias K. P -6-