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HomeMy WebLinkAboutMinutes - 16th - April 10, 1980 signed83 MINUTES OF A REGULAR MEETING OF THE ECONOMIC DEVELOPMENT CORPORATION OF LIVONIA A Regular Meeting of the Economic Development Corporation of Livonia was called to order by the Chairman, Peter Ventura, at approximately 7:14 p.m., April 10, 1980, in the Third Floor Conference Room of the City Hall, 33000 Civic Center Drive, Livonia, Michigan. The Clerk called the roll: DIRECTORS PRESENT: DIRECTORS ABSENT; OTHERS PRESENT: *Mr. Mardiros arrived at 7:15 p.m. Mr. Kenneth Hale Mr. Alan Helmkamp Ms. Helen Kavanaugh *Mr. Ron Mardiros Mr. Angelo Plakas Mr. Peter Ventura Mr. Fernon Feenstra (American Community) Mr. Edward McNally (American Community) Mr. James Campbell ( Carrollton Arms) Mr. Donald Hesse (Carrollton Arms) Mr. Frank Hand Mr. Robert Jankowski Mr Stanley Telman Mr. James Ford, American Community Mr. Douglas Bonner, American Community Mr. Tom Zimmer, Dickinson/Wright Mr. Marvin R. Stempien, Attorney Mr. Charles Tangora, Attorney Mr. James Albright, Ardmore Acres Mr. Ed Schweier, Ardmore Acres Mr. Bob Beauchamp, Farmington Hills EDC Mr. Dennis Neiman, Miller/Canfield Mr. Daniel J. Gilmartin, Executive Director Ms. Marie King, Recording Secretary On a motion by Mr. Helmkamp, supported by Mr. Hale, it was #80-108 RESOLVED, that the minutes of the meeting of March 27, 1980, of the Economic Development Corporation of Livonia be approved as submitted. A roll call vote was taken on the foregoing motion with the following result: AYES: Hale, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. The first item on the agenda this evening was the consideration of a bond resolution for American Community Mutual Insurance Company. Mr. Gilmartin explained that the various documents were not received in time to mail copies 84 to the EDC board. However, a bond resolution is contained in each board member's package. There are only two copies of the other four documents: 1. Lease purchase agreement, 2. Indenture and mortgage, 3. Bond purchase contract, and 4. Guaranty agreement. These documents are available for circulation among the board members. Mr. Tom Zimmer, bond counsel for the American Community Mutual Project, passed out a revised copy of the bond resolution. He explained that a Section 14 had to be added to the resolution regarding the City Council approval of the Bylaws of the Economic Development Corporation of Livonia. No bonds can be issued until the City Council approves the Bylaws. Hopefully, the City Council will approve the Bylaws at its meeting of April 23. Mr. Ventura inquired as to whether Mr. Neiman or anyone else from Miller/ Canfield had reviewed these documents to see if they were in order. Mr. Neiman said he had only had a chance to skim over them and had not reviewed them thoroughly. However, he had no reason to believe that they were not in order. Mr. Plakas did not feel comfortable voting on the resolution when he had not had the time to review the documents, and our own bond counsel had not reviewed them. Mr. Ventura reminded the board that they were representing the whole City of Livonia and its residents when they voted on this bond resolution, and should vote responsibly. Mr. Helmkamp added that this is the first project to come to this point, and he thought the board members should have the time to read the documents and take their time making a decision. Mr. Zimmer explained that Dickinson/Wright is the bond counsel for this project; and in that capacity the documents are written to fully protect the EDC. Mr. Hale said he would be in favor of acting on thismatter now. He did not see any benefit in waiting. 85 Mr. Mardiros agreed with Mr. Hale. Mr. Neiman agreed with Mr. Hale and Mr. Mardiros. He said he was "relatively comfortable with the resolution and Mr. Zimmer." Mr. Zimmer added that modifications can be made in these documents if any discrepancies were found. 0n a motion by Mr. Helmkamp, supported by Ms. Kavanaugh, it was 180-109 RESOLVED, to table this matter of the bond resolution for American Community Mutual Insurance Company until A) the next regularly scheduled meeting of the EDC or B) a special meeting to be called subsequent to the April 23 Council meeting at the discretion of the Chairman. A roll call vote was taken on the foregoing motion with the following result: AYES: Helmkamp, Kavanaugh, Plakas, Ventura NAYS: Feenstra, Hale, Mardiros, McNally The motion failed for lack of support. On a motion by Mr. Mardiros, supported by Mr. Feenstra, it was 1180-110 RESOLVED, that the Bond Resolution for American Community Mutual Insurance Company be approved, pending review by our Bond Counsel, Miller, Canfield, Paddock and Stone, as follows: A resolution authorizing the issuance of an Economic Development Revenue Bond (American Community Mutual Insurance Company Office Building Project), of the City of Livonia, Michigan, For the purpose of financing of a project comprising a commercial facility located within the City of Livonia, for the lease and sale thereof to American Community Mutual Insurance Company, in order to promote the Economic Development of the City of Livonia; providing for the pledge of revenues for the indenture to secure further the principal and interest of such bond. WHEREAS, the Issuer, as hereinafter defined, is a public body corporate organized and existing under and pursuant to the Constitution and laws of the State of Michigan and is authorized by Act No. 338 of the Michigan Public Acts of 1974, as amended (hereinafter referred to as "Act 338"), to acquire a project (as the term is defined in Act 338) and to lease it to any person, firm or corporation, in order to assist and retain local industries and commercial enterprises and to strengthen and revitalize the economy of the City of Livonia and the State of Michigan; and WHEREAS, in furtherance of the said public purposes set forth in Act 338, the Issuer adopted a resolution on October 3, 1979 indicating its intention to acquire the Project as hereinafter defined, which will be leased to American Community Mutual Insurance Company, a Michigan cor- poration qualified to do and doing business in this State as an insurance company (the "Company"), and to finance the cost of the Project by the issuance and sale of the bond as hereinafter defined, and 86 WHEREAS, the Bond will be paid from Net Revenues, as hereinafter defined, and other specific collateral and shall never constitute a general obligation of the Issuer within the meaning of any constitutional or statutory or charter provision or limitation, and WHEREAS, it has been determined that the estimated amount necessary to pay the costs of the Project, including necessary expenses incidental thereto, will require the issuance, sale and delivery of the Bond in principal amount not to exceed $2,742,000, to be issued under the terms and conditions of this Resolution and secured by the Indenture and Mortgage to be entered into between the Issuer and the Bondholder dated as of April 1, 1980 (the "Indenture"), and WHEREAS, the acquisition and lease of the Project and the issuance of the Bond by the Issuer, as herein recited and provided, will serve the intended purposes and in all respects conform to the provisions and requirements of Act 338; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of The Economic Development Corporation of the City of Livonia, State of Michigan: Section 1. Authorization of the Bond. It is hereby determined to be necessary to, and the Issuer shall, issue, sell and deliver, as provided herein, a limited obligation revenue bond in principal amount of $2,742,000, pursuant to the authority of Act 338, for the purpose of acquiring the Project, comprising of a commercial facility within the boundaries of the City of Livonia, for lease and subsequent sale to the Company in order to alleviate and prevent conditions of unemployment, to assist and retain local industrial and commercial enterprises, to strengthen and revitalize the economy of the City of Livonia and the State of Michigan, to provide encouragement and assistance to industrial and commercial enterprises in locating, purchasing, constructing, reconstructing, modern izing, improving, maintaining, repairing, furnishing, equipping and expanding in the City of Livonia, State of Michigan, and to encourage the location and expansion of commercial enterprises to more conveniently provide needed facilities and services to the City of Livonia and the residents thereof. Said bond (the "Bond") shall be designated "The Economic Development Corporation of the City of Livonia Limited Obligation Economic Development Revenue Bond (American Community Mutual Insurance Company Office Building Project)" and shall be substantially in the form of Exhibit I hereto. Section 2. Intentionally omitted. Section 3. Authorization of Lease Purchase Agreement and Indenture. The Chairman and Secretary of the Issuer are authorized and directed to execute and deliver, in the name and on behalf of the Issuer, the Lease Purchase Agreement, the Bond Purchase Contract and the In- denture in substantially the forms submitted to this Governing Body, which are hereby approved in all respects; and the Secretary is hereby directed to insert copies thereof, in the form submitted to this meeting and approved hereby, in the record 87 of proceedings of this Governing Body with the minutes of this meeting and to certify thereon that they are the forms of Indenture, Lease Purchase Agreement and Bond Purchase Contract so submitted to this Governing Body and approved by this Bond Resolution. Section 4. Definitions. In addition to terms elsewhere defined in this Bond Resolution, the following terms as used in this Bond Resolution, the Lease Purchase Agreement and the Indenture shall have the following mean- ings unless the context or use indicates another or differ- ent meaning or intent, and such definition shall be equally applicable to both the singular and plural forms of the terms herein defined: "Bond Fund" means the account directed .to be opened and described in Section 8 hereof. "Bondholder" means the Person in whose name the Bond is registered. "Bond Purchase Contract" means the Bond Purchase Contract between the Issuer. and National Bank of Detroit (as the Bondholder) dated as of April 1, 1980. "Construction Fund" means the account directed to be opened by Section 7 hereof. "Depositary" means National Bank of Detroit, a national banking association with its principal office in Detroit, Michigan, or any successor depositary. "Governing Body" shall mean the Board of Directors of the Issuer and any board, commission or other body which hereafter succeeds, by operation of law, to the powers and duties thereof. "Indenture" means the Indenture and Mortgage dated April 1, 1980, between the Issuer and National Bank of Detroit, as the Bondholder and the Depositary. "Issuer" means The Economic Development Corpora- tion of the City of Livonia, a public body corporate incor- porated pursuant to Public Act No. 338 of the Michigan Public Acts of 1974, as amended, and its lawful successors. "Lease Purchase Agreement" means the Lease Pur- chase Agreement between the Issuer and the Company and dated as of April 1, 1980. 88 "Net Revenues" means all of the following: (a) the net rentals and revenues derived by the Issuer from the leasing, sale or other disposition of the Project, from the sale of bonds to refund the Bond, and from the investment income on bond proceeds and (b) the proceeds obtained from the foreclosure of the Project or other realization upon collateral mortgaged or assigned by the Indenture. "Person" means any natural person, firm, associa- tion, corporation, or public body. "Project" shall mean the commercial building and site therefor and any machinery and equipment to be in- stalled therein, as described in the Lease Purchase Agreement, including such modifications therefor and substitutions therefor and Improvements to the Project (as defined in the Lease Purchase Agreement and excluding deletions therefrom as shall be made in accordance with the Lease Purchase Agreement and Act 338). Section 5. Terms of the Bond. The Bond shall contain a recital that is issued pursuant to Act 338, shall be issued as a single registered Bond in a stated principal amount of $2,742,000 shall mature and bearing interest, be callable for redemption, payable and otherwise in substan- tially the form set forth in Exhibit I attached hereto, shall be executed by the Chairman and Secretary of the Issuer, and shall bear the corporate seal of the Issuer. In case any officer whose signature shall appear on the Bond shall cease to be such officer before the issu- ance or delivery of the Bond, such signature shall neverthe- less be valid and sufficient for all purposes, the same as if he had remained in office until that time. The Bond shall be payable solely from Net Reve- nues; and anything in this Bond Resolution, the Bond or the Indenture to the contrary notwithstanding, this Bond Resolu- tion, the Bond and the Indenture shall not constitute a debt or a pledge of the full faith and credit of the Issuer, the City of Livonia or the State of Michigan. The Bond shall contain on the face thereof a statement to the effect that the Bond is not a general obligation of the Issuer, the City of Livonia or the State of Michigan, but is payable solely from the aforesaid source. Section 6. Sale of the Bond. Sale of the Bond to the Bondholder at par plus accrued interest from the date thereof to the date of delivery thereof and payment therefor is hereby approved, and it is hereby determined that the price and interest rate for the Bond and the manner of -sale 89 thereof, as provided in this Bond Resolution and in the Bond Purchase Contract, are in the best interest of the Issuer and consistent with all legal requirements. The Chairman and Secretary of the Issuer are hereby authorized and directed to take all steps necessary to effect the due issuance, delivery and security of and for the Bond under the terms of this Bond Resolution, the Bond Purchase Contract and the Indenture. Section 7. Establishment and Use of Construction Fund. The Construction Fund shall be an account established with the Depositary. The Construction Fund shall receive all proceeds from the sale of the Bond, excluding any premi- um and accrued interest, and shall receive insurance and condemnation proceeds as provided in the Lease Purchase Agreement. Moneys in the Construction Fund shall be expend- ed and disbursed in accordance with the provisions of the Lease Purchase Agreement. The Depositary shall keep and maintain adequate records pertaining to the Construction Fund and all receipts and disbursements pertaining thereto, and shall furnish periodic statements with respect thereto to the Issuer and the Company. The records of the Deposit- ary with respect to all income and disbursements relating to the Construction Fund shall be made available by the Depos- itary at its office during normal business hours to the Company and the Issuer. Section 8. Establishment and Use of Bond Fund.. The Bond Fund shall be an account established with the Depositary. There shall be deposited in the Bond Fund any premium or accruedinterest received on the sale of the Bond, all payments of rent under the Lease Purchase Agree- ment, and all other moneys received by the Depositary which under the Lease Purchase Agreement are to be deposited in the Bond Fund. Moneys in the Bond Fund shall be used for the payment of the interest on the Bond and for the payment of principal of the Bond upon maturity, or mandatory or option- al prepayment, provided, however, that any amounts trans- ferred from the Construction Fund to the Bond Fund following the Completion Date of the Project as defined and provided in the Lease Purchase Agreement may only be -used to pay principal on the Bond. The Issuer hereby authorizes and directs the Depositary to withdraw sufficient funds from the Bond Fund to pay the principal of and interest on the Bond as the same become due and payable. The Lease Purchase Agreement provides that certain moneys in the Bond Fund are available for use for the prepayment of the Bond. The Depositary shall use such moneys to prepay the Bond subject to the restrictions on redemption, if any. 90 Section 9. Source of Payment. The Company is obligated to pay rent under the Lease Purchase Agreement in an amount sufficient to pay the principal of, premium, if any, and interest on the Bond. Under the terms of the Lease Purchase Agreement, the Company additionally has agreed to assume and pay all reasonable expenses which the Issuer is required to incur for the Project. The Issuer covenants and agrees that so long as the Bond is outstanding, it shall fully cooperate with the Bondholder in protecting the rights and security of the Bondholder and shall diligently and promptly proceed in good faith and use its best efforts so that at all times suffi- cient revenues and receipts will be derived from the Project to meet and pay principal of and interest on the Bond as the same become due and payable. Section 10. Covenants of Issuer. In addition to the other covenants, representations and warranties of the Issuer set forth in this Bond Resolution and the Indenture, the Issuer further covenants with the Bondholder as follows: (a) Payment of Principal and Interest. The Issuer will, but solely from the Net Revenues and other collateral described in the Indenture, pay the principal of, premium, if any, and interest on the Bond on the dates and at the places and in the manner provided in the Bond. (b) Performance of Covenants. The Issuer will faithfully observe and perform at all times all agreements, covenants, undertakings, stipulations and provisions con- tained in the Lease Purchase Agreement, this Bond Resolu- tion, the Indenture and the Bond and in all proceedings of the Governing Body pertaining to the Project which are to be observed or performed by the Issuer. (c) Public Records. The Issuer covenants that it will cause the Lease Purchase Agreement, the Indenture and any amendments or supplements thereto, and all necessary financing statements, amendments thereto, continuation statements and instruments of similar character securing the Bond, to be recorded and filed in such manner and in such places as may be required by law in order fully to preserve and protect the security of the Bondholder under the Inden- ture. (d) Inspection of Project Books. The Issuer covenants and agrees that all books and documents in its possession relating to the Project and the Net Revenues shall at all reasonable times be open to inspection by such accountants or other agents as the Bondholder may from time to time designate in writing to the Issuer. 91 (e) Rights under Lease Purchase Agreement. Ref- erence is hereby made to the Lease Purchase Agreement which sets forth covenants and obligations of the Company, and the Issuer agrees that the Bondholder in its name or in the name of the Issuer may enforce all rights of the Issuer and all obligations of the Company under and pursuant to the Lease Purchase Agreement, whether or not the Issuer is in default of the enforcement of such rights and obligations. (f) Maintenance of Lease Purchase Agreement. The Issuer shall do all things on its part necessary to maintain the Lease Purchase Agreement in effect in accordance with the terms thereof and will take all actions necessary to enforce and protect its rights under the Lease Purchase Agreement, including actions at law and in equity, as may be appropriate. Section 11. Registration. The Bond shall be issued in fully registered form both as to principal and interest and shall only be transferable upon the registra- tion books of the Issuer kept by the Depositary. Transfer may be made only by the registered owner in person or by its attorney duly authorized in writing with a duly executed instrument of transfer satisfactory to the Depositary and the notation of such transfer shall be endorsed on the Bond by the Depositary. Section 12. Redemption. The Bond may be called for redemption as set forth in the Bond. Section 13. Declaration of Waiver. By the adoption of this Bond Resolution and the authorization of the issuance and sale of the Bond, the Issuer hereby intends to waive the defense of usury if and to the extent such defense is or may be available or applicable. Section 14. City Council Approval. This Bond Resolution shall be effective upon the due passage and approval by the City Council of the City of Livonia of all necessary resolutions relating to the organization of the Issuer, and the American Community Mutual Insurance Company Office Building Project and the Bond, including without limitation a resolution approving the Project Plan of the American Community Mutual Insurance Company Office Building Project and a resolution approving the By -Laws of the Issuer. ADOPTED THIS loth day of April, 1980. 92 A roll call vote was taken on the foregoing motion with the following result: AYES: Peenstra, Hale, Mardiros, McNally, Ventura NAYS: Helmkamp, Kavanaugh, Plakas The Chairman declared the resolution adopted. On a motion by Mr. Helmkamp, supported by Mr. Hale, it was #80-111 RESOLVED, to direct our staff to transmit a copy of the Bylaws to the City Council and same to be placed on their agenda of April 23 for Council to review and act favorably upon them as required by Public Act 338. A roll call vote was taken on the foregoing motion with the following result; AYES: Hale, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. The next item on the Agenda was the consideration of approval of a Project Plan for Carrollton Arms. The legal documents have been prepared by Hugh Smith, of Miller/Canfield. Mr. Tangora, attorney for Carrollton Arms, informed the Board that Carrollton Arms has signed a lease with a company, and it will not entail the transferring of any employees from any other municipality. It is a wholesale distribution center and will employ approximately 20 people. On a motion by Mr. Hale, supported by Mrs. Kavanaugh, it was #80-112 RESOLVED, that the Project Plan for Carrollton Arms be approved as follows: WHEREAS, there exists in the City of Livonia, County of Wayne, Michigan (the "City") the need for certain programs to alleviate and prevent conditions of unemployment and to assist and retain local industries and commercial enterprises and to encourage the location of industries and commercial enterprises in order to strengthen and revitalize the City's economy; and WHEREAS, a program to alleviate the aforesaid conditions has been initiated by the Corporation; and WHEREAS, the Corporation in conformity with Act 338 of the Public Acts of 1974, as amended ("Act 338"), has prepared a project plan, providing all information and requirements necessary for a commercial project; 93 NOW, THEREFORE, BE IT RESOLVED THAT: 1. The project plan, as attached hereto and made a part hereof, meets those requirements set forth in Section 8(3) of Act 338. 2. The persons who will be active in the management of the project for not less than one year after approval of the project plan have sufficient ability and experience to manage the plan properly. 3. The proposed methods of financing the project as outlined in the project plan are feasible and this Corporation has the ability to arrange or cause to be arranged, the financing. 4. The project as submitted is reasonable and necessary to carry out the purposes of the Act. 5. Based upon the information submitted and obtained, the project plan, as submitted and the project to which it relates serves to alleviate and prevent conditions of unemployment and strengthen and revitalize the City's economy and, therefore, constitutes a vital and necessary public purpose. 6. The Secretary of this Board (the "Secretary") be and is hereby authorized to convey this resolution and the project plan to the City's Planning Commission and the legislative body of the City of Livonia for their review. 7. The Secretary is further directed to certify to the legislative body of the City of Livonia that upon advice of the project's applicant and upon this Board's investigation the project will not have the effect of transferring employment from another Michigan municipality to the City of Livonia. The certification shall be substantially in the form attached hereto as Exhibit A. 8. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution be and the same hereby are rescinded. A roll call vote was taken on the foregoing motion with the following result: AYES: Campbell, Hale, Helmlcamp, Hesse, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. An application by Ardmore Acres Psychiatric Hospital was the next item to be considered. The purpose of this project is to expand the present 25 bed'. hospital to fifty beds and provide an ancillary services structure. Mr. Neiman had some reservations about this project because construction has already begun. The foundation and outer walls are complete. There were five questions directed to Ardmore Acres, c/o Mr. Jim Albright which must be answered 94 in writing before consideration can be given to an inducement resolution. Mr. Neiman said when he has all the pertinent information, then he will take the information to a committee at Miller/Canfield. The committee will review the project and determine if it is eligible for EDC financing. After some further discussion, it was determined that the amount offinancing requested from the EDC by Ardmore Acres is $1,500,000, not $3,000,000 as listed on the application. Mr. Helmkamp suggested that Mr. Albright submit any communications he may have received from a financial institution indicating desire to purchase the bonds. On a motion by Mr. Hale, supported by Mrs. Kavanaugh, it was #80-113 RESOLVED, that the application of Ardmore Acres be forwarded to Mr. Dennis Neiman, Miller/Canfield, for his review and recommendation. A roll call vote was taken on the foregoing motion with the following result: AYES: Hale, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. There was some discussion regarding the changing of the Chairman's title to President. However, Mr. Neiman indicated there would be no difference legally between the two; and if the Board decided to make the change, the articles of incorporation would have to be changed as well. Therefore, the Board decided to leave things as they are now with a Chairman and Vice Chairman. Mr. Helmkamp gave the Treasurer's Report. He indicated that there is $6,658.42 presently in the account. In addition to that, a $500 check was received this evening from Ardmore Acres. This would bring the new balance to $7,158.42. On a motion by Mr. Plakas, supported by Mr. Hale, it was #80-114 RESOLVED, that the Treasurer's Report be accepted as presented. A roll call vote was taken on the foregoing resolution with the following result: AYES: Hale, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None 95 Mr. Helmkamp introduced Mr. Marvin Stempien to the Board Members. He has been appointed the general legal counsel for the EDC. Mr. Stempien said he is "looking forward to working with all of you, and I will be pleased to do anything you may want me to do." A lengthy discussion ensued regarding how much material the board members wished to receive prior to the meetings, and how much of the financial documents they wished to receive at all. Mr. Plakas and Mr. Ventura would like a copy of the resolution with some explanation as to the highlights in the documents, and a notefrom our bond counsel that everything is in proper order. Mr. Ventura directed the staff to have the meeting notices say that the meetings will begin at 7:30; however, the directors are to be there at 7:00 for a study meeting. This will give the board time to read over the documents and become familiar with their contents before the applicants arrive. 0n a motion by Mr. Plakas, supported by Mr. Helmkamp, it was #80-115 RESOLVED, that all documents and correspondence relating to matters to be placed on the agenda, must be in the hands of the staff at least five working days prior to the date at which it will be considered by the Board. A roll call vote was taken on the foregoing resolution with the following result: AYES: Hale, Helmkamp, Kavanaugh, Plakas, Ventura NAYS: Mardiros The Chairman declared the resolution adopted. On a motion by Mr. Plakas, supported by Mr. Helmkamp, and unanimously adopted, it was #80-116 RESOLVED, that the Regular Meeting of the Economic Development Corporation of Livonia be adjourned at 9:03 p.m., April 10, 1980. Respectfully su.mitted, on Mari'os, Secre%r RM/mk