Resolution 4298 - Resolution of Intent - Outlaw Inn Bond Refunding Request1:479
RESOLUTION NO. 4298
RESOLUTION RELATING TO A PROJECT ON BEHALF OF OUTLAW
INN JOINT VENTURE AND THE ISSUANCE OF REVENUE BONDS
TO REFUND CERTAIN OUTSTANDING INDUSTRIAL
DEVELOPMENT REFUNDING MORTGAGE OF THE CITY OF
KALISPELL UNDER MONTANA CODE ANNOTATED, TITLE 90,
CHAPTER 5, PART 1, AS AMENDED; GRANTING PRELIMINARY
APPROVAL THERETO AND CALLING A PUBLIC HEARING
THEREON
BE IT RESOLVED by the City Council (the "Council") of Kalispell, Montana
(the "City"), as follows:
Section 1. Recitals.
1.01. Pursuant to Montana Code Annotated, Title 90, Chapter 5, Part 1, as
amended (the "Act"), the City is authorized to enter into agreements upon terms the
governing body considers advantageous and not in conflict with the provisions of
the Act to issue its revenue bonds and sell such bonds at public or private sale in
such manner and at such times as may be determined by this body to be most
advantageous; and to loan the proceeds of its revenue bonds for the purpose of
defraying the cost of acquiring or improving real and personal properties suitable for
use for, among other things, commercial, manufacturing, agricultural or industrial
enterprises, or to refund bonds or notes issued under the Act. Such revenue bonds
may be secured by a pledge of the revenues to be derived by the City from a loan
agreement with the borrower, by a mortgage on the project and by such other
security devices as may be deemed advantageous. Under the provisions of the Act,
any bonds so issued by the City shall be special, limited obligations of the City and
the bonds shall not constitute nor give rise to a pecuniary liability of the City or a
charge against its general credit or taxing powers.
1.02. Pursuant to the Act, the City has issued its Industrial Development
Refunding Mortgage (Outlaw Inn), Series 1986, dated as of December 15, 1986, in the
original aggregate principal amount of $2,680,000, of which $2,680,000 in aggregate
principal amount are now outstanding (the "Series 1986 Bonds"), to redeem the
outstanding principal balance of the City's Industrial Development Revenue
Mortgage Note originally issued to finance on behalf of the Outlaw Inn Joint
Venture, a Montana joint venture (the "Borrower"), the costs of constructing and
equipping additions to the Borrower's motel -convention facility (as hereinafter
defined, the 'Refinanced Facilities"I, The Refinanced Facilities comprise the motel -
convention facility known as the Outlaw Inn, including the land, building,
improvements and equipment to the extent financed from the proceeds of the
Series 1986 Bonds.
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1.03. The Borrower has proposed that the City, pursuant to the Act, issue its
revenue bonds in the approximate aggregate principal amount of $2,680,000, in one
or more series at one time or from time to time (the "Bonds"), the proceeds of
which will be loaned by the City to the Borrower in the approximate amount of
$2,680,000 to be used, with certain available funds of the Borrower, to refund in
advance of their maturities the Outstanding Bonds. The borrower will pay costs of
issuance of the Bonds. The Refinanced Facilities will be owned by the Borrower and
are located at 1701 Highway 93 South in the City.
Section 2. Preliminary Findings. Based on representations made by the
Borrower to the City to date, the Council hereby makes preliminary findings,
determinations and declarations, subject to final findings, determinations and
declarations.
(a) The City is authorized to issue revenue bonds to defray the costs of
making a loan to the Borrower, the proceeds of which will be used to refund,
with other available funds of the Borrower, the Outstanding Bonds and
paying the costs and expenses incident to the issuance and sale of the Bonds,
including any security for the Bonds, and to enter into a Loan Agreement
with the Borrower requiring loan repayments from the Borrower in amounts
sufficient to repay the loan when due and requiring the Borrower to pay all
costs of maintaining and insuring the Refinanced Facilities, including taxes
thereon.
(b) The loan repayments to be made by the Borrower under the Loan
Agreement, shall be established at a level and payable in installments at times
sufficient to pay all principal of, premium, if any, and interest on the Bonds
when due.
(c) In preliminarily authorizing the refunding of the Outstanding
Bonds and the issuance of the Bonds, the City's purpose is and the effect
thereof will be to promote the public welfare of the City and its residents by
retaining the location of a revenue -producing enterprise within the City
thereby promoting and stimulating economic activity within the City,
improving employment opportunities for present and future residents,
increasing and providing a better balance for the tax base of the City and
underlying taxing jurisdictions and otherwise furthering the purposes and
policies of the Act.
(d) The refunding of the Outstanding Bonds and the issuance of the
Bonds to finance all or a portion of the costs thereof are in the public interest.
Section 3. Preliminary Ap2roval. This Council hereby gives preliminary
approval to the refunding of the Outstanding Bonds and the issuance of the Bonds
in the approximate aggregate principal amount of $2,680,000 to finance all or a
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portion of the costs thereof, subject to final determination by the Council that the
refunding of the Outstanding Bonds and the issuance of the Bonds are in the best
interest of the City.
Section 4. Costs. The Borrower will pay, or upon demand reimburse the City
for payment of, any and all costs incurred by the City in connection with the
refunding of the Outstanding Bonds and the issuance of the Bonds, including the
City`s issuance fee, whether or not the Bonds are issued.
Section 5. Commitmcat Conditional. The adoption of this resolution does
not constitute a guarantee or a firm commitment that the City will issue the Bonds
as requested by the Borrower. If, based on information made available to or
obtained by the City during its review of the Refinanced Facilities, it appears that the
Refinanced Facilities or the issuance of Bonds to finance the costs thereof is not in
the public interest or inconsistent with the purposes of the Act, the City reserves the
right not to give final approval to the issuance of the Bonds. The City also retains
the right, in its sole discretion, to withdraw from participation and accordingly not
issue the Bonds should the Council, at any time prior to the issuance thereof,
determine that it is in the best interests of the City not to issue the Bonds or should
the parties to the transaction be unable to reach agreement as to the terms and
conditions of any of the documents for the transaction.
PASSE AND APPROVED by the City Council of Kalispell, Montana, this 7—(St
day of Oc��e Y' -.199b.
I;i Q, 624i;u�--
Douglas Rauthe, Mayor
Attest:
�Vd cm c_
City Clerk
(SEAL)
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