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45 of 1981 - RESOLUTION AUTHORIZING AND INDUCING THE EXECUTION OF A MEMORANDUM OF AGREEMENT WITH RIO GRANDE ASSOC • APPROVED AS TO FORM Self Lake City AHorney's / 8Y }_. • Salt Lake City, Utah May 26, 1981 The City Council of Salt Lake City, Salt Lake County, Utah met in regular session at its regular meeting place in Salt Lake City, Utah, at 5:00 p.m. on May 26, 1981 with the following City officials present: Palmer DePaulis Chairman Grant Mabey Councilmember Sydney Reed Fonnesbeck Councilmember Ronald J. Whitehead Councilmember Alice Shearer Councilmember Ione Davis Councilmember Edward W. Parker Councilmember Also present: Ted L. Wilson Mayor Absent: None After the meeting had been duly called to order the minutes of the preceding meeting read and approved, the following resolution was introduced in writing, read in full, and pursuant to motion duly made by Councilmember Shearer and seconded by Councilmember parker , adopted by the following vote: - YEA: - Ronald J. Whitehead Grant Mabey ,Sydney Reed Fonnesbeck Palmer DePaulis Alice Shearer Ione Davis Edward W. Parker NAY: None The resolution was then signed by the Mayor in open meeting and recorded by the Acting City Recorder in the official records of Salt Lake City, Utah. The resolution is as follows: RESOLUTION AUTHORIZING AND INDUCING THE EXECUTION OF A MEMORANDUM OF AGREEMENT WITH RIO GRANDE ASSOCIATES, A UTAH PARTNERSHIP, REGARDING THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS FOR A COMMERCIAL INDUSTRIAL PROJECT. WHEREAS, Salt Lake City, Utah (the "Issuer"), is an incorporated City authorized and empowered by the provisions of the Utah Industrial Facilities Development Act Sections 11- 17-1 et seq. , Utah Code Annotated (1953) as amended (the "Act") to issue industrial development revenue bonds or other forms of industrial revenue financing (the "Bonds") for the purpose of acquiring or financing manufacturing, industrial, or commercial projects; and -2- WHEREAS, in order to promote industry and commerce and develop trade by inducing manufacturing, industrial and commercial enterprises to locate or remain in the State of Utah and Salt Lake City, the Issuer proposes to finance the renovation of warehouse space to office space and other improvements (the "Project") within the boundaries of the Issuer to be developed and operated by Rio Grande Associates, (the "Company"); and WHEREAS, the Company is reluctant to take steps toward the realization and completion of the Project without satisfactory assurance from the Issuer that the proceeds of the sale of the Bonds of the Issuer will be made available to finance the development of said Project; and WHEREAS, it is deemed necessary and advisable for the development, welfare and prosperity of the Issuer and its inhabitants that the Project be constructed, and that the Issuer take such action as may be required under applicable statutory provisions to authorize and issue its Bonds to finance the cost thereof, to an amount not exceeding $900,000; and WHEREAS, a form of agreement, designated as a "Memorandum of Agreement," has been prepared under which the Company has stated its willingness to let construction contracts, and commence construction and development of the Project; and -3- WHEREAS, it is considered necessary and desirable and for the best interest of said Issuer that execution of said Memorandum of Agreement be authorized for and on behalf of the Issuer: NOW, THEREFORE, Be It Resolved by the City Council of Salt Lake City, Salt Lake County, Utah, as follows: Section 1. In order to assure the location of this Project within the boundaries of Salt Lake City, Utah, with the resulting public benefits which will flow therefrom, it is deemed necessary and advisable that the Memorandum of Agreement hereinafter referred to, be approved and executed for and on behalf of the said Issuer. Section 2. The Memorandum of Agreement by and between the Company and Salt Lake City, Utah, in the form and with the contents set forth in Exhibit "A" attached hereto, is hereby approved and the execution thereof is hereby authorized. Section 3. All resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 4. The City Council considers that this resolution is necessary and in the best interest of the Issuer, and therefore, it shall become effective immediately upon its passage, approval and adoption. -4- • PASSED and approved this 26th day of May, 1981 by the City Council of Salt Lake City, Utah. Al71/4-A4C ATTEST: Act' g City Recorder ( S E A L ) -5- After conduct of other business not pertinent to the above, the meeting was, on motion duly made and seconded, adjourned. ,a.,44 /t/de mayor ATTEST: (&-Xtfr'77 Actiot City Recorder ( S E A L ) -6- STATE OF UTAH - ) ss. COUNTY OF SALT LAKE ) I, Kathryn ?•Sarshall, the duly qualified Acting City Recorder of Salt Lake City, Salt Lake County, Utah, do hereby certify, according to the records of said City in my official possession, that the above and foregoing is a true and correct copy of the minutes of a meeting of the City Council of said City, including a resolution adopted at said meeting, insofar as said minutes pertain to the matters therein set out. IN WITNESS WHEREOF, I have hereunto subscribed my official signature and impressed herein the seal of Salt Lake City, Salt Lake County, Utah this _ec9 'day of May, 1981. Acti g City Recorder ( SEAL ) -7- • STATE OF UTAH ) CERTIFICATE OF COMPLIANCE : ss. WITH OPEN MEETING LAW COUNTY OF SALT LAKE ) I, Kathryn Marshall, the duly qualified Acting City Recorder of Salt Lake City, Salt Lake County, Utah, do hereby certify that on the 22nd day of May , 1981, pursuant to Utah Code Annotated Section 54-4-6 (1953), as amended, there was posted (at least 24 hours prior to the meeting time) at the regular meeting place of the City Council written notice of the regular meeting of the City Council held on May 26 , 1981 at said regular meeting place. I further certify that there was delivered to the local news media, at least 24 hours prior to said meeting, a copy of said Notice of Regular Meeting. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said City this r/ day of May, 1981. /�y� Ac C ty Re corde - ( S E A L ) -8- APPROVED AS TO FORM Salt Lake City Atforney's Office t) ,p Oats ..._ . MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between Salt Lake City, Salt Lake County, Utah, party of the first part (hereinafter referred to as the "Issuer"), and Rio Grande Associates, a Utah partnership, party of the second part (hereinafter referred to as "Company"). 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in the execution of this Agreement are the following: (a) The Issuer is authorized and empowered by the provisions of the Utah Industrial Facilities Development Act (the "Act"), to issue industrial revenue bonds for the purpose of acquiring, or financing the acquisition of, manufacturing, industrial, or commercial projects (as defined in the Act) and of leasing, selling or financing the same to or for others for such rentals and upon such terms and conditions as the Issuer may deem advisable. (b) The purposes of the Act are to achieve greater industrial and commercial development in the State of Utah and to authorize municipalities and counties in the state to finance, acquire, own, lease, or sell projects for the purpose of reducing, abating, or preventing pollution and of protecting and promoting the health, welfare, and safety of the citizens of the state. The Act vests the Issuer with all powers that may be necessary to enable it to accomplish such purposes. Said Act further authorizes the Issuer to issue industrial development revenue bonds, or other forms of municipal industrial development financing, (the "Bonds") for the purpose of carrying out its powers. In furtherance of such purposes the Issuer proposes to finance the renovation of warehouse space into office space and other improvements (the "Building"). The Building, the equipment and furnishings and any other related improvements (all of which are collectively referred to herein as the "Project") shall be financed by the Issuer based upon the commitment of the Company to repay the obligations underlying the financing arrangements at no cost to the Issuer or the taxpayers residing within the Issuer. (c) In view of rising construction costs, it is considered essential that the Project be completed at the earliest practicable date. The Company is willing to proceed with the Project on the understanding that the proceeds of the sale of the Bonds of the Issuer will be made available to finance the cost of land and building acquisition, construction, furnishing and equipping by the Issuer of the Project. (d) The Issuer, is interested in assisting the Company to effect the financing of the project consistent with the -2- • purposes of the Act and hereby advises the Company that, subject to due compliance with all requirements of law and the obtaining of all necessary consents and approvals and to the happening of all acts, conditions and things required precedent to such financing, and subject to the Company's use of an in-state trustee for the administration of bond proceeds and the repayment of the Bonds, the Issuer by virtue of such statutory authority as may now or hereafter be conferred, will issue and sell the Bonds in an amount not exceeding $900,000 to pay the costs of the Project, provided, however, that said bond issue be placed with an institutional purchaser or purchasers through a private placement. 2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the Issuer agrees as follows: (a) It will authorize or cause to be authorized, the issuance and sale of an issue of the Bonds, pursuant to the terms of the Act as then in force, in an aggregate principal amount not exceeding $900,000. Said Bonds shall not be guaranteed by the Issuer nor secured with a pledge of the credit of the Issuer. (b) It will cooperate with the Company to endeavor to find a purchaser or purchasers for the Bonds and if purchase arrangements satisfactory to the Company and consistent with its existing borrowing commitments can be made, it will adopt, or cause to be adopted, such proceedings and authorize the execution -3- of such documents as may be necessary or advisable for the authorization, issuance and sale of the Bonds, and the financing of acquisition, construction, furnishing and equipping of the Project by the Company exclusively, all as shall be authorized by law and mutually satisfactory to the Issuer and the Company. (c) The aggregate loan payments to be paid by the Company (i.e., the loan payments to be used to pay the principal, interest and premium, if any, on the Bonds) payable under the loan agreement whereby the Project shall be financed by the Company shall be such sums as shall be sufficient to pay the prin- cipal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable. (d) 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) It will use all reasonable efforts consistent with its existing borrowing commitments to find one or more purchasers for the Bonds in an aggregate principal amount not exceeding $900,000. (b) It will, to the extent deemed by it to be for the acquisition, construction, furnishing and equipping of the -4- Project and at the time of the delivery of the Bonds, it will pledge its interest in the Project toward repayment of the Bonds. After acquisition of the Site, title thereto as well as title to the equipment, furnishings and other personal property in connection with the Project, shall be held in such a manner as to be subject to assessment for real and personal property taxes. (c) Contemporaneously with the delivery of the Bonds it will enter into a loan, purchase or lease agreement with the Issuer under the terms of which the Company will obligate itself to pay the Issuer 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 to contain provisions required by law and such other provisions as shall be mutually acceptable to the Issuer and the Company, including but not limited to the indemnification of the Issuer by the Company against any costs or damages arising from or connected with the offer and sale of the Bonds and the payment or default in payment of principal or interest of the Bonds. In addition, the Company will pay and reimburse the Issuer from proceeds from the sale of the Bonds for costs advanced and, if agreed upon in advance, for the services of certain staff personnel such as the City Attorney, the Director of Finance and Administrative Services and the Acting City Recorder. In the absence of extraordinary and presently unforeseen expenses it is -5- agreed that the sum of $2,500 including the $1,000 to be paid in accordance with paragraph 4(b) will be sufficient to satisfy said expenses of the City. If the City incurs extraordinary and unforeseen expenses, it will submit an itemized statement of the same to the Company at the time of delivery of the Bonds and the Company will allocate payment for such expenses from Bond proceeds. (d) It will take such further action and adopt such further proceedings as may be required to implement its aforesaid undertakings or as it may deem appropriate in pursuance thereof. 4. General Provisions. (a) All commitments of the City under paragraph 2 hereof and of the Company under paragraph 3 hereof are subject to the obtaining of all necessary governmental approvals and the approvals of the appropriate financial officers of the Company and the condition that on or before one (1) year from the date hereof (or such other date as shall be mutually satisfactory to the Issuer and the Company), the Issuer and the Company shall have agreed to mutually acceptable terms for the Bonds and of the sale and delivery thereof, and mutually acceptable terms and conditions of the agreements referred to in paragraph 3 and the proceedings referred to in paragraphs 2 and 3 hereof. (b) If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof -6- and financing in such amount as shall not exceed $900,000 is not arranged for and consummated within such time, the Company agrees that it will reimburse the Issuer for all reasonable and necessary direct out-of-pocket expenses, including reasonable attorney's fees for the review and/or preparation of documents, which the Issuer may incur at the Company's request arising from the execution of this Agreement and the performance by the Issuer of its obligations hereunder, and this Agreement shall thereupon terminate. In addition the Company will pay the City amounts sufficient to reimburse the City for the review of the initial proceedings and an evaluation of financial information concerning the Company and the Project. At the time of execution of this Agreement the Company will deposit with the City the sum of $1,000 from which the City may draw monies in reimbursement for said initial costs. -7- IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their agents thereunto duly authorized as of the 2“1) day of May, 1981. SALT LAKE CITY, SALT LAKE COUNTY, UTAH By Mayor ( CITY SEAL ) ATTES Y1) 1 Actin ity RecordeLZ .4.f( RIO GRANDE�AASSOCIATES By4)G2� � Part By 4_ " 7 By /I ,44, 1 7 / Partner -8- Resolution No. _ 45 By City Council COMMISSIONER Authorizing and inducing the execution of a Memorandum of Agreement with "io Grande Associates, regarding the issuance of industrial development revenue bonds for a commercial industrial project.