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HomeMy WebLinkAbout060 - 05/01/2001 - AUTHORIZING THE ISSUANCE OF VARIABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING BONDS FOR THE COMRI ORDINANCE NO. 60 92001 AN ORDINANCE AUTHORIZING AND APPROVING THE ISSUANCE BY THE CITY OF FORT COLLINS, COLORADO OF ITS VARIABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING BONDS, SERIES 2001 (COMRIDGE, LLP PROJECT) IN THE PRINCIPAL AMOUNT OF $297009000 FOR THE PURPOSE OF REFUNDING THE OUTSTANDING PRINCIPAL BALANCE OF A PRIOR ISSUE OF BONDS OF THE CITY, WHICH WERE USED TO ASSIST IN THE FINANCING OF COSTS OF CERTAIN FACILITIES LOCATED IN THE JURISDICTION OF THE CITY; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE FROM THE CITY TO BANK ONE TRUST COMPANY, N.A., AS TRUSTEE; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN THE CITY AND COMRIDGE, LLP, AND THE ASSIGNMENT BY THE CITY TO THE TRUSTEE OF ITS INTEREST IN THE LOAN AGREEMENT AND RELATED PROMISSORY NOTE; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT AMONG COMRIDGE, LLP, THE CITY, AND GATES CAPITAL CORPORATION, AS UNDERWRITER, AND AUTHORIZING THE PREPARATION AND THE EXECUTION OF RELATED DOCUMENTS AND INSTRUMENTS. WHEREAS, the City of Fort Collins, Colorado (the "City") is authorized by Part 1 of Article 3 of Title 29, Colorado Revised Statutes, as amended (the "Act") and its charter, to issue revenue bonds for the purpose of assisting in the promotion of economic development, maintaining employment, and encouraging job opportunities in areas of unemployment and underemployment; and WHEREAS, pursuant to a Resolution duly adopted on March 20, 2001 (the "Inducement Resolution"), the City expects to take all necessary and advisable steps to issue such bonds in accordance with the provisions of the Act for the purpose of refunding the outstanding principal balance of a prior issue of bonds of the City(the "Refunding Project"), which were used to assist in the financing of costs of certain facilities located in the jurisdiction of the City(the "Facility"); and WHEREAS, to accomplish its stated purposes, the City is authorized and empowered under the Act to issue its bonds and other obligations to finance the Refunding Project in the City; and WHEREAS, Comridge, LLP, a Colorado limited liability partnership (the "Company") has requested the City to issue economic development revenue refunding bonds to finance the Refunding Project; and WHEREAS, the City has given due consideration to the request and to representations by the Company that preserving the Facility and completing the Refunding Project will assist in promoting economic development or in maintaining employment in the area in which the Facility is located, or in an area reasonably accessible thereto, or in the reduction of unemployment or underemployment in such area; and b WHEREAS, the City wishes to authorize the issuance of up to $2,700,000 aggregate principal amount of its Variable Rate Economic Development Revenue Refunding Bonds, Series 2001 (Comridge, LLP Project) (the "Bonds") upon the terms and conditions stated herein and to use the proceeds thereof to finance the Refunding Project; and WHEREAS, the Company and City desire to prepay the outstanding $3,500,000 City of Fort Collins, Colorado, Industrial Development Revenue Bonds, Series 1984 (The Comridge Project) (the"Prior Bonds")with the proceeds of the Bonds; and WHEREAS, the following documents have been submitted to the City Council of the City of Fort Collins, Colorado (the "Council") and filed in the office of the City Clerk (the "Clerk") and are there available for public inspection: (i) a Trust Indenture, to be dated as of June 1, 2001 (the "Indenture"), between the City and Bank One Trust Company,N.A., as trustee (the "Trustee"); (ii) a Loan Agreement (the "Loan Agreement") to be dated as of June 1, 2001, between the City and Company, including a form of the Company's Note to the City (the "Company Note"); (iii) Letter of Credit, to be dated as of the issuance date of the Bonds, in the approximate amount of$2,793,206 issued by Bank One, Colorado, N.A. (the "Bank"), pursuant to a Reimbursement Agreement to be dated as of June 1, 2001, between the Company and the Bank; (iv) a Bond Purchase Agreement to be dated its date of delivery (the "Bond Purchase Agreement") among Gates Capital Corporation, as underwriter (the "Underwriter"), the City and the Company; and (v) the Official Statement (the "Official Statement') relating to the Bonds; and WHEREAS, if the City proceeds with the Refunding Project, then the City is willing to: (i) enter into the Indenture, the Loan Agreement and the Bond Purchase Agreement; (ii) acknowledge the use and distribution of the Official Statement and consent to the use of the information therein under the caption "THE ISSUER"; and (iii) issue, execute and deliver the Bonds; and BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO: -2- ARTICLE I DEFINITIONS, LEGAL AUTHORIZATION, ELECTION,APPROVALS AND FINDINGS 1.1. Definitions. The terms used herein, unless the context hereof shall require otherwise, shall have the same meanings when used herein as assigned to them in the Indenture unless the context or use thereof indicates another or different meaning or intent. 1.2. Legal Authorization. The City is a municipality and political subdivision of the State of Colorado and is authorized under the Act and its charter to finance the Refunding Project and to issue and sell the Bonds for the purpose, in the manner and upon the terms and conditions set forth in the Act, its charter and in this Ordinance,without voter approval in advance. 1.3. Findings. Based upon the representations made by the Company to the City, the City hereby makes the following findings and determinations: (a) Preserving the Facility and completing the Refunding Project will assist in promoting economic development or in maintaining employment in the area in which the Facility is to be located, or in an area reasonably accessible thereto, or in the reduction of unemployment or underemployment in such area, which will promote the public welfare, convenience and prosperity. (b) The Loan Agreement provides for payment to the City of such revenues that, together with any government subsidies relating to the Facility and the Refunding Project and other moneys available or expected to be available, will be sufficient in each year to pay the principal of and interest on the Bonds, to pay all taxes which may be due and owing with respect to the Facility and the Refunding Project, and to build up and maintain any reserves deemed advisable by the City in connection with the retirement of the Bonds and the maintenance of the Facility therewith. The Loan Agreement provides that the Company shall maintain the Facility and carry all proper insurance with respect thereto. (c) It is desirable and in the public interest for the City to approve the Refunding Project and to issue the Bonds in a principal amount sufficient to finance the cost of the Refunding Project. (d) The Bonds and the interest accruing thereon shall be special and limited obligations of the City and shall never constitute the debt or indebtedness of the City within the meaning of any provision or limitation of the constitution or statutes of the State of Colorado or its charter, and the Bonds and the interest thereon do not create any multiple fiscal year direct or indirect debt or other financial obligation of the City and shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. The Bonds and the interest accruing thereon shall be payable solely from payments to be made by the Company under the Loan Agreement and from funds pledged under the Indenture. -3- 1.4. Authorization and Ratification of Refundine. The City hereby authorizes the Company to provide for the Refunding Project by such means as shall be available to the Company and in the manner determined by the Company. 1.5. Election by Issuer. The City hereby elects,with respect to the Bonds, to be within the limitation imposed by the provisions of Section 144(a)(4)(A) of the Internal Revenue Code of 1986, as amended (the "Code") and the City Clerk is hereby directed to keep this election in the City Clerk's official records of the proceedings of the Council, and any and all acts heretofore taken pertaining to such election and relating to such requirements are hereby ratified and confirmed. 1.6 Approval Pursuant to Section 147(f) of the Code For purposes of complying with Section 147(f) of the Code,this Council has on second reading of this Ordinance conducted a public hearing with respect to the Refunding Project and the use of proceeds of the Bonds, notice of which hearing was published at least 14 days prior thereto, for purposes of approving the issuance of the Bonds in the maximum aggregate principal amount of $2,700,000, respectively, and the use of the proceeds for the Refunding Project. ARTICLE II THE BONDS 2.1. Issuance and Sale of Bonds, Interest Rates. The City hereby authorizes the issuance of its Variable Rate Economic Development Revenue Refunding Bonds, Series 2001 (Comridge, LLP Project) to be dated the date of their delivery, in a principal amount not to exceed $2,700,000 for the purpose, in the form and upon the terms set forth in the Bonds and the Indenture. The Bonds shall be subject to redemption as set forth in the Indenture. The Bonds shall be sold by the Underwriter pursuant to the terms of the Bond Purchase Agreement. The Bonds shall be numbered consecutively from "R-1" upward, shall be issued in minimum denominations of $100,000, or any larger denomination constituting an integral multiple of $5,000. Interest on the Bonds shall be payable as set forth in Section 203 of the Indenture. Each Bond shall bear interest until the principal sum thereof has been paid; provided, however, that if Bonds have been called for redemption and funds are available for the payment on the redemption date thereof in full accordance with the terms of this Ordinance and the Indenture, the Bonds shall then cease to bear interest. The Bonds shall bear interest as more fully described in the Indenture and shall mature on December 1, 2014. The Bonds shall be subject to mandatory sinking fund redemption as provided in the Indenture. The Bonds will be sold by the Underwriter and the Underwriter will use an Official Statement (as defined in the Bond Purchase Agreement) in the sale of the Bonds. -4- The maximum net effective interest rate authorized for the Bonds is twelve percent (12%) per annum. The initial net effective interest rate on the Bonds shall be as provided in the Indenture but not in excess of such maximum. ARTICLE III PREPAYMENT AND REDEMPTION OF PRIOR BONDS 3.1 Redemption and Prepayment of Prior Bonds. The City hereby opts, upon instruction from the Company, to redeem and prepay the Prior Bonds, prior to maturity, in their entirety, with the proceeds of the Bonds, if the Company (a) provides 30 days prior written notice of the same to the City and First National Bank, N.A. ("FNB"), the owner of the Bonds and the assignee of the City's rights and interest in the Loan Agreement dated December 1, 1984, between the City and the Company, which relates to the Prior Bonds, pursuant to the Assignment of Loan Agreement between the City and FNB, formerly known as First Interstate Bank of Fort Collins, N.A. and (b) redeems and prepays the Prior Bonds, including outstanding principal and accrued interest,within 90 days of the issuance of the Bonds. ARTICLE IV GENERAL COVENANTS 4.1. Payment of Principal and Interest. The principal and interest are payable solely from and secured by revenues and proceeds payable pursuant to the Indenture, the Loan Agreement, the Company's Note, and the Letter of Credit; and nothing in the Bonds or in this Ordinance shall be considered as assigning, pledging or otherwise encumbering any funds or assets or property of the City. 4.2. Performance of and Authority for Covenants. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Ordinance, the Indenture, the Loan Agreement, the Bonds and in all proceedings of the Council pertaining thereto; that it is duly authorized under the Constitution and laws of the State of Colorado including particularly, and without limitation, the Act and its charter to issue the Bonds, pledge the revenues and assign the Loan Agreement and endorse the Company Note in the manner and to the extent set forth in this Ordinance, the Indenture, the Bonds and the Loan Agreement; and that all action on its part for the issuance of the Bonds and for the execution and delivery thereof has been duly and effectively taken. 4.3. Nature of Security. Notwithstanding anything contained in the Bonds, the Indenture, the Loan Agreement, the Bond Purchase Agreement, the Letter of Credit or any other document referred to in this Ordinance, the Bonds and the interest thereon shall never constitute the debt, indebtedness or multiple fiscal year direct or indirect debt or other financial obligation of the City within the meaning of any provision or limitation of the constitution or statutes of the State of Colorado or its charter and shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; and the City, its directors, members, agents, officers and employees shall not be subject to any personal or pecuniary liability thereon. -5- Introduced, approved on first reading and ordered published by number and title this 17th day of April, 2001, and to be presented for final passage on the 1 of May, 2001. p Randolph R. Martinez, Mayor,-- ATTEST: Wanda M. Kraji ek, 'ity erk APPROVED AS TO FORM: Assistant City Att Read, finally passed on second reading and ordered published by number and title this 1 st day of May, A.D. 2001. O Pf Randolpht. Martinez VV ayor~: ATTEST: Wanda M. Krajicek, 6ty rk APPROVED AS TO FORM: Assistant City Attu } -8-