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HomeMy WebLinkAboutMinutes - 55th - July 14, 1983 signedMINUTES 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 5:10 p.m., July 14, 1983, in the Council Chambers of the City Hall, 33000 Civic Center Drive, Livonia, Michigan. The Secretary called the roll: Directors Present: Mr. Kenneth Hale Mr. Robert Jankowski Mr. Ron Mardiros Mr. Robert McCann Mr. Stanley Telman *Mr. Angelo Plakas Mr. Peter Ventura Mr. Larry Raschella (MGIII Associates) Mr Paul Riggio (MGIII Associates) Directors Absent: Mr. Frank Hand Mr. Alan Helmkamp Others Present: Mr. Sheldon Winkelman, MGIII Attorney Mr. Harold Blumenstein, Paragon Properties Mr. Donald Keim, Miller/Canfield Ms. Nancy Fisher, Miller/Canfield Mr. Daniel Gilmartin, Executive Director Ms. Marie King, Recording Secretary On a motion by Mr. Jankowski, supported by Mr. Hale, and unanimously adopted, it was #83-323 RESOLVED, that the minutes of the June 9, 1983 Regular Meeting of the Economic Development Corporation be approved as submitted. The first agenda item was the consideration of the resolution authorizing the issuance and sale of an economic development limited obligation revenue bond in the principal amount of $7,310,000 to acquire a project for transfer to the obligor, authorizing the execution and delivery of the installment sale contract, the indenture securing the bonds, the mortgage, the security agreement, the assignment of lease and rentals and the bond purchase agreement, and authorizing and determining other matters relative thereto, for the MG -III Associates Limited Partnership Project. 355 Mr. Winkelman commented that 12 of the 13 buildings in the project have been completed. The one remaining building should be completed very soon. Mr. Keim indicated that all legal matters were in order for the bond authorizing resolution. *Mr. Plakas arrived at 5:15 p.m. On a motion by Mr. Hale, supported by Mr. McCann, it was #83-324 WHEREAS, the Economic Development Corporation of the City of Livonia (the "EDC") is empowered under Act 338, Public Acts of Michigan, 1974, as amended (the "Act"), to assist in the financing of certain projects and facilities through the issuance of its economic development limited obligation revenue bonds. MG -III Associates Limited Partnership (the "Obligor") has proposed that the EDC acquire existing industrial buildings and the sites thereof and certain fixtures therein, (the buildings, sites, and fixtures, collectively, the "Project") in the City of Livonia, Michi- gan (the "CITY"), and to convey the Project to the Obligor to realize the purposes of the Act, and as an inducement therefor, has requested the EDC to assist in the financing of the Project in the following general manner (as detailed in the Installment Sale Contract, a copy of which is on file with the EDC (the "Contract")). The EDC will issue its Economic Development Limited Obligation Revenue Bonds (MG -III Associates Limited Partnership Pro- ject), Series A, in the principal amount of $7,310,000 (the "Bonds") under the Act and will acquire the Project from Harold Blumenstein Revocable Intervivos Trust dated December 13, 1979, Penny B. Blumenstein Revocable Intervivos Trust dated December 13, 1979, Stephen D. Rogers Revocable intervivos Trust dated December 6, 1979, and Leslie L. Rogers Revocable Intervivos Trust dated December 6, 1979 (the "Purchasers"). The EDC will in turn convey the Project to the Obligor and the Obligor will execute and deliver an installment Sale Note (the "Note") to the EDC evidencing the obligation of the Obligor to make Contract Payments (as defined in the Contract) in amounts sufficient to pay the principal of, premium, if any, and interest on the Bonds. The Obligor will be responsible for paying any Project Costs (as defined in the Contract) exceeding the amount of the Bonds, maintaining and insuring the Project and paying all taxes and expenses relating to the Project. The Note will then be assigned and endorsed by the EDC to the Purchasers as Bondholders (the "Bondholders"). The EDC will enter into an Indenture (the "Indenture") with the Bondholders wherein the EDC will assign and pledge its right, title and interest in the Contract and the Note to the Bondholders as security for the Bonds. As further security for the Bonds, the Obligor will execute and deliver to the EDC as Assignment of Lease and Rentals (the "Assignment"), a Mortgage (the "Mortgage") and a Security Agreement (the "Security Agreement"), copies of which are on file with the EDC, and the EDC will assign its interests to the Bondholders. Upon full payment of the Bonds or provision therefor, the Contract would be terminated and the Note appurtenant thereto cancelled; and WHEREAS, the EDC's participation in the financing of the Project is to enable the Obligor to utilize applicable provisions of the United States Internal Revenue Code (the "Code"). Section 103 of the Code encourages the construction of certain facilities and the public financing thereof through economic development limited obligation revenue bonds by 356 providing that the interest on such bonds, as contrasted with any bonds issued by the Obligor itself, will be exempt from Federal income tax. This tax exemption enables the purchaser of the Bonds to accept a lower rate of interest, and since the Obligor in effect pays the interest on the Bonds, reduces the interest cost of the Project financing to the Obligor; and WHEREAS, on the basis of representations of the Obligor and the advice of Bond Counsel that the EDC has the authority to issue the Bonds, acquire the Project from the Purchasers and convey it to the Obligor; and in order to induce acquisition of the Project, and thereby serve the purposes of the Act, the EDC has previously determined to issue the Bonds, subject to the following condition: principal of and interest on the Bonds and any other cost or liability relating to the Bond or the issuance or sale thereof, the Project, or the ownership or financing of the Project and the performance of any obligation of the EDC under the Contract, the Indenture or the Bond Purchase Agreement between the EDC and the Purchasers, a copy of which is on file with the EDC, shall never be payable from tax revenues or other public or general funds of the EDC or the City, but shall be payable only from the Security (as defined in the Indenture) or otherwise by the Obligor; and WHEREAS, the Obligor has estimated Project Costs to be not less than $7,310,000 and has tentatively arranged the financial terms and sale of the Bonds in that amount to the Purchasers. The EDC, the Obligor, the Bondholders and the Purchasers have completed negotiation and drafting of the Contract, the Note, the Indenture, the Mortgage, the Security Agreement and the Assignment, and have submitted these documents to the EDC for review and action. It is now appropriate for the EDC to act on the proposed documents and the proposed issuance and sale of the bonds. NOW, THERE@OBE, BE IT RESOLVED: SECTION 1. Determination of Necessity. The Project creates employment in and stimulates the economy of the City and constitutes a public purpose under the Act. The issuance of the Bonds is necessary to induce the Obligor to remain and expand in the City and thereby obtain the employment and economic benefits therefrom. SECTION 2. Issuance of Bonds, Limited Obligation. The Bonds shall be issued by the EDC in the principal amount of S7,310,000, in such form and denominations as provided in the Indenture. SECTION 3. Approval of Contract,_Note, Indenture, Mortgage, Security Agreement, Assignment and Bond Purchase Agreement. The forms of Contract, Note, Indenture, Mortgage, Security Agreement, Assignment and Bond Purchase Agreement on file with the Secretary of the EDC ("Secretary") are hereby approved. SECTION 4. Execution and Delivery of .the Contract, the Indenture, the Mortgage, Security Agreement, Assignment and the Bond Purchase Agreement and Changes Therein. The Chairman of the EDC ("Chairman") is hereby authorized to execute and deliver and the Secretary is authorized to attest 357 and seal the Contract, the Indenture, the Mortgage, the Assignment, the Security Agreement and the Bond Purchase Agreement, and to endorse the Note, and to assign to the Bondholders the Contract, the Mortgage and the Security Agreement, and the Assignment all in the forms approved, with such changes and insertions in such documents, and attachment of exhibits, as may be necessary or desirable, permitted by the Act and otherwise by law, and not materially adverse to the EDC. SECTION 5. Sale and Delivery of the Bonds. The Bonds shall be sold by the EDC to the Bond Purchasers under the Bond Purchase Agreement at a purchase price of 100% of the principal amount thereof. Upon compliance with the terms and conditions of the Bond Purchase Agreement, the Chairman and the Secretary shall execute, seal and deliver the Bonds upon receipt by the EDC of insurable title to the Project from the Purchasers in accordance with the Contract. SECTION 6. Approval of Filings and Submissions with Other Governmental Agencies. The Chairman, Secretary, members, staff and counsel for the EDC, or any of them, are authorized on behalf of the EDC to apply for such rulings, orders and approvals and file or submit such elections or other documents to any governmental that the Bonds may be validly issued and the interest thereon be exempt from Federal income taxation, and to execute such powers of attorney as may be appropriate in connection with the foregoing. SECTION 7. Authorization of Other Documents. The Chairman, Secretary, members, staff and counsel for the EDC or any of them, are hereby authorized to execute and deliver such other certificates, documents, instruments, and opinions and other papers as may be required by the Contract, the Indenture, the Mortgage, the Security Agreement, the Assignment or the Bond Purchase Agreement or as may be necessary or convenient to effectuate the sale and delivery of the Bonds in accordance with the terms of the Contract, the Indenture, the Mortgage, the Security Agreement, the Assignment and the Bond Purchase Agreement and to make such changes to the foregoing as are reasonable and appropriate to effectuate the sale and delivery of the Bonds. SECTION 8. Conflict and Effectiveness. All resolutions and parts of resolutions or other proceedings of the Issuer in conflict herewith are repealed to the extent of such conflict. This resolution shall become effective upon at9option. SECTION 9. Definitions. The words used herein and in the premises shall have, where not otherwise indicated, those meanings established in the indenture. A roll call vote was taken on the foregoing resolution with the following result: AYES: Hale, Jankowski, Mardiros, McCann, Telman, Ventura, Raschella, Riggio NAYS: None ABSTENTIONS: Plakas The Chairman declared the resolution adopted. 358 The next item on the agenda was the Allen Project. The Executive Director explained that on July 23, 1981, the EDC authorized the issuance of bonds for the Allen Group project in the amount of $1,800,000 for the expansion of Advanced Technology and Testing, 12837 Stark. Purchaser of the bonds was Union Bank of California. The bonds were secured by the guarantee of the Allen Group Inc. Now, Union Bank, holder of the bonds, wishes to sell a participation interest in the bonds to a certain Income Fund whereby certain of the rights and obligations of Union Bank would be sold to such fund. The Allen Group Inc. has agreed to such sale and Union Bank wishes the EDC, as issuer of such bonds, to consent to the sale. The Executive Director received a letter from Mr. Dennis Neiman, of Miller, Canfield, Paddock and Stone advising the board that "we have had an opportunity to very briefly review the materials forwarded to us and would have no problems with such consents being approved provided that such consents were conditioned upon no liability accruing to the EDC as a result of such consent." Such conditions were incorporated in a proposed letter from the Livonia EDC directed to Norman Coker, of the Union Bank; and to Richard P. Motta, Vice President and Treasurer of the Allen Group. If the EDC consents, it should do so by resolution, and the letter can be signed by the Chairman for the EDC. On a motion by Mr. Te]man, supported by Mr. Plakas, and unanimously adopted, it was #83-325 RESOLVED, that the Economic Development Corporation of the City of Livonia hereby grants its consent to the proposed sale by Union Bank of a participation interest in the 81,800,000 Economic Development Limited Obligation Revenue Bond (Allen Project) provided that no liability shall accrue to the Economic Development Corporation of the City of Livonia as a result of any sale. Due to the absence of the Treasurer, the Treasurer's Report will be tabled until the next Regular Meeting of the Economic Development Corporation. The next item on the agenda was a letter received from the Accounting Department, signed by Mr. Lawrence, requesting an increase in the fees paid to the Accounting Department for services rendered from $120 to $150. 359 On a motion by Mr. Mardiros, supported by Mr. Telman, and unanimously adopted, it was #83-326 RESOLVED, that the question of increasing the accounting fees paid by the Economic Development Corporation from $120 to $150 be referred back to Mr. Jack Dodge, Finance Director, for his review and it is further requested that Mr. William Lawrence itemize the services involved, and this matter will be taken up again at the next regular meeting of the Economic Development Corporation. On a motion by Mr. Hale, supported by Mr. Telman, and unanimously adopted, it was #83-327 RESOLVED, that the Regular Meeting of the Economic Development Corporation of the City of Livonia, held July 14, 1983, be adjourned at 5:24 p.m. Respectfully submitted, Ron Mardi os, Secr-tary RM/mk