HomeMy WebLinkAboutRes 35-79 10/16/1979
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10/16/79
Resolution No. 35-79
RESOLUTION AUTHORIZING
EXECUTION OF MEMORANDUM OF
AGREEMENT WITH MAISEL
w~EREAS, the Village of Mount Prospect has heretofore,
on July 17, 1979, in the exercise of its authority as a home
rule unit under Section 6 of Article VII of the Constitution
of the State of Illinois of 1970, adopted Ordinance No. 2925
adding a new Section 8.513 to Article V of Chapter 8 of the
Municipal Code of the Village of Mount Prospect authorizing
the issuance of industrial and commercial development project
revenue bonds to, among other things, finance in whole or in
part the cost of constructing and equipping of a commercial
building (collectively called the "Project"] to be used as
a K-Mart Store within the corporate limits of the Village of
Mount Prospect; and
WHEREAS, Maisel & Associates of Michigan, a Michigan
general partnership (the "Partnership"], has determined to
locate the Project within the corporate limits of the Village
of Mount Prospect and has requested that the Village of Mount
Prospect, in the exercise of the authority conferred by the
said Ordinance No. 2925, issue commercial development revenue
bonds to finance the cost of the construction and equipping
of a commercial building to be used as a K~Mart Store; and
WHEREAS, by reason of the matters hereinabove set
forth, the President and Board of Trustees of the Village of
Mount Prospect have found and determined that the issuance of
commercial development revenue bonds of the Village pursuant
to the said Ordinance No. 2925 would be for a public purpose
and in connection with a matter that pertains to the government
and affairs of the Village of Mount Prospect; and
WHEREAS, Maisel & Associates of Michigan previously
presented to the Village of Mount Prospect and the Village of
Mount Prospect reviewed and revised a Memorandum of Agreement
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iin connection with the proposed issuance of the commercial
,development revenue bonds which the Board of Trustees authorized
i!the President of the Village of Mount Prospect to execute by
:Resolution No. 22-79 passed and approved on July 17, 1979; and
WHEREAS, subsequent to the passage of said Resolution
iNo. 22-79, Maisel & Associates of Michigan requested
,revisions in such Memorandum of Agreement; and
WHEREAS, a revised version of such Memorandum of
'Agreement is attached hereto as Exhibit A and incorporated
,herein by this reference; and
WHEREAS, under such revised Agreement, Exhibit A
pereto, the Village would agree, subject to the provisions
:~f the Agreement, to issue its revenue bonds to provide funds
ifor the construction of such project; and
WHEREAS, the President and Board of Trustees of the
'Village of Mount Prospect have found and determined that
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execution of the Agreement would be in the best interests of
the Village and desire to authorize the proper officers of the
to execute the same;
NOW, THEREFORE, BE IT RESOLVED BY THE President and
'Board of Trustees of the Village of Mount Prospect, Cook
iCounty, Illinois, as follows:
SECTION ONE: the President and Board of Trustees
'~ind as facts the matters hereinabove set forth.
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SECTION TWO: The Village President be, and she is
hereby authorized to execute, and the Village Clerk be, and
ire is hereby authorized to attest, a Memorandum of Agreement
;~ith Maisel & Associates of Michigan in substantially the form
;~ttached hereto as Exhibit A and made a part hereof by this
;reference.
SECTION THREE: The officers and employees of the
Village be, and they are hereby authorized to take, such
"further action as may be necessary to carry out the intent
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and purposes of the said Memorandum of Agreement when executed
and, subject' to the provisions of the and compliance with the
Memorandum of Agreement, to prepare and submit to its
President and Baord of Trustees such documents and drafts as
may be necessary to authorize the issuance of approximately
Two Million Five Hundred Thousand Dollars ($2,500,000.00) of
its Commercial Development Revenue Bonds upon the general
terms and conditions set out in the said Agreement for the
purpose of defraying the cost of the constructing and equipping
of said Project.
SECTION FOUR: This resolution shall be in full force
and effect after its passage and approval in the manner provided
by law.
PASSED THIS 16th DAY OF
Octoher::
", 1979.
AYES:
Farley, Floras, Miller, Richardson
l\Tattenberg
Hurauskis
NAYS:
ABSENT: None
APPROVED THIS 16thDAY OF
October
, 1979.
(~+ II ~L
Village President
ATTEST:
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jJd7~ LUd~-- -
Village Clerk
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MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT, made and
entered into this J6rll day of Oe708t=-1( , 1979, by and
between the Village of Mount Prospect, a municipality
in Cook County, Illinois (the "Issuer"), and Maisel &
Associates of Michigan, a Michigan general partnership
(the "partnership")j
WIT N E SSE T H:
WHEREAS the Issuer is authorized under its
home rule powers as set forth in the 1970 Constitution
of the State of Illinois, Article VII, Section 6, and
the provisions of Ordinance No. 2925 passed by the
Board of Trustees of the Issuer on July 17, 1979, as
from time to time supplemented and amended (the
"Ordinance")j to construct, acquire by gift or pur-
chase, reconstruct, improve, equip, better or extend
any commercial development project, and to acquire by
gift or purchase lands or rights in land in connection
therewith in order to relieve conditions of unemploy-
_ment, and to encourage the economic development of the
municipality -and to provide for the increased welfare
and prosperity of the residents of the municipality,
thereby reducing the evils attendant upon unemploymentj
and
WHEREAS the Issuer is willing to issue its
commercial development revenue bonds under and pursuant
to the provisions of the Ordinance and to make the bond
proceeds available to the Partnership for payment of
part of the cost of constructing and equipping a
commercial building (said building and equipment collec-
tively called the "Project"), to be located on a site
within the corporate limits of the Issuer, in the
shopping center commonly known as Mount Prospect Plaza,
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which site (referred to herein as "the Project site")
is leased by the Partnership from Cermak Plaza, Inc.,
an Illinois corporation ("Cermak"), pursuant to a loan
agreement to be entered into between the Issuer and the
Partnership and subject to the conditions set forth
belowj and
WHEREAS the Partnership desires to locate the
Project within the territorial limits of the Issuer and
to lease the Project to K Mart Corporation, a Michigan
corporation (ilK Mart"):
NOW,THEREFORE, in consideration of the
premises and of the mutual undertakings herein ex-
pressed, the parties hereto recognize and agree as
follows:
A. The Issuer represents and agrees:
1. That the Issuer will, subject in all
respects to the provisions and requirements of the
Ordinance and all applicable laws and to a sale of
the bonds on terms satisfactory to the Issuer in
its sole judgment reasonably exercised, authorize,
issue, sell and deliver its commercial development
"revenue bonds in an approximate principal amount
not to exceed $2,500,000 and apply the proceeds
therefrom to the payment of the costs of the
Project upon completion thereof, provided that
prior to the issuance and delivery of such com-
mercial development revenue bonds:
(a) there shall have been entered into
between the Issuer and the Partnership a loan
agreement which will comply with the provisions
of the Ordinance and which will provide for
loan repayments by the Partnership sufficient
to pay the principal of and interest on such
commercial development revenue bonds and
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which may restrict the class of persons to
whom such bonds may be offered and which
shall include a covenant by the Partnership
not to assign its interests in the Project so
long as construction and equipping of the
Project remains uncompleted and thereafter
until such time as all construction warran-
ties by the Partnership have expiredj pro-
vided, however that this prohibition on
assignment shall not extend to any assign-
ments of the Partnership's interests to a
Trustee for the bondholders of any economic
development revenue bonds issued for the
projectj and,
(b) there shall have been entered into
between the Partnership and K Mart a lease
under terms and conditions satiSfactory to
the Issuer and its counsel, including but not
limited to the obligation of K Mart, as
lessee, to pay rent at least sufficient to
pay principal and interest on the commercial
development revenue bonds so long as they
shall be outstanding; and
(c) K Mart shall have furnished its
written guaranty, unconditionally guaran-
teeing to the Issuer and the Trustee of the
commercial development revenue bonds the
payment of principal and interest thereon so
long as they shall be outstanding, together
with all costs and expenses incurred in the
collection thereof and such other amounts as
may be due and payable under the Indenture
securing the bonds, which guaranty shall be
satisfactory in form and substance to the
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Issuer and its counsel and shall be accom-
panied by the opinion of K Mart's counsel
that it is a valid obligation legally en-
forceable in accordance with its terms.
(d) Cermak and all other holders or
owners of interests in the Project site shall
have entered into such agreements satisfac-
tory to the Issuer and its counsel, as shall
assure the holders of the commercial develop-
ment revenue bonds a first lien on the lease-
hold interest of the Partnership in the
Project and the Project site so long as the
bonds shall be outstanding which may include,
without limiting the foregoing, subordination
of any security interests therein and such
non-disturbance and attornment agreements
respecting the leasehold interest of the
Partnership in the Project Site and the K
Mart lease as Issuer may require; and
(e) the Ground Lease and such other
contracts, agreements and evidences of in-
debtedness as the Partnership shall have
entered into shall be acceptable to the
Issuer and its counsel; and
(f) the Partnership shall have paid
(i) any and all costs, fees and expenses
charged or incurred by the Issuer and its
counsel in connection with the Project and
(ii) a fee for the review and processing. of
the Partnership's request for issuance of
said bonds. Costs and expenses shall in-
clude, but not be limited to, attorney's
fees, fees of financial consultants, charges
for administrative time of the Issuer, fees
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of any and all other consultants and any and
all other costs and expenses of the Village
incurred in connection with the Project.
Reimbursement for any attorney's fees in-
curred by the Issuer shall be at the normal
hourly rate of the Issuer's counsel. The fee
for reviewing and processing the Partnership
request shall be 1 1/4% for the fir~t $2,000,000
of bonds issued plus 1% for any amounts in
excess of $2,000,000, of which $6,000 shall
be paid by the Partnership upon execution of
this Memorandum of Agreement with the balance
of the issuance fee to be paid on the date
the Partnership receives the proceeds from
the sale of the bonds. Costs, fees and
expenses of the Issuer and its counsel shall
be paid within ten (10) days of the receipt
of a bill therefor from the Issuer. In the
event commercial development revenue bonds
are not issued for the Project, the $6,000
to be paid by the Partnership upon the execu-
tion of this Memorandum of Agreement shall be
applied against the costs, fees and expenses
of the Issuer and its counsel, provided,
however, that if the costs, fees and expenses
of the Issuer and its counsel exceed said
deposit of $6,000 the Partnership shall pay
such excess within ten (10) days after
receipt of a bill therefor from the Issuer;
and
(g) all documentation which may be
required pursuant to this Memorandum of
Agreement and all documentation relating to
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issuance and sale of the bonds, including the
forms of opinions to be rendered with respect
to validity, exemption of interest on the
bonds from Federal income taxation and
compliance with Federal and state securities
laws, shall have been submitted to the Issuer
and approved by Issuer and its counsel as to
form and content, but no such approval shall
be deemed to be a representation to any party
as to the validity of the bonds or any docu-
ment relating thereto; and
(h) all documentation which may be
required pursuant to this Memorandum of
Agreement and all documentation relating to
issuance and sale of the bonds shall have
been submitted to and approved by bond
counsel as to form and content.
B. The Partnership represents and agrees:
1. That the Project will result in in-
creased employment and will increase economic
development within the municipality.
2. That if the proposed commercial develop-
ment revenue bonds (including the rate of interest
thereon) of the Issuer are satisfactory to the
Partnership, it will enter into a loan agreement
with the Issuer upon terms which will be sufficient
to enable the Partnership to pay the cost of the
Project as evidenced by such commercial develop-
ment revenue bonds to be issued for the account of
the Project, and will enter into appropriate
contracts with the Issuer with regard to the
foregoing and into a lease with K Mart for the
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term and at the rentals prescribed in Section A
l(b) hereof, prior to the issuance and delivery of
any such commercial development revenue bonds by
the Issuer.
3. That the statement of assets and liabil-
ities attached hereto as Exhibit A, truly and
accurately reflects the financial condition of E.
N. Maisel & Associates as of the date thereof and
that the consolidated financial position of E. N.
Maisel & Associates and Maisel & Associates of
Michigan has not been adversely affected since the
date of that statement. Maisel & Associates shall
submit an acceptable financial statement for 1978
to the Village not later than thirty (30) days
from the date hereof.
c. It is further recognized and agreed between
the Issuer and the Partnership as follows:
1. That the commercial development revenue
bonds to be issued by the Issuer shall never con-
stitute an indebtedness of the Issuer or a loan of
credit thereof within the meaning of any constitu-
tional or statutory provision, and such fact shall
be plainly stated on the face of each of said
bonds. No holder of any of said bonds shall ever
have the right to compel any exercise of the
taxing power of the Issuer to pay said bonds or
the interest thereon. The principal of, premium,
if any, and interest on such commercial development
revenue bonds to be issued ;to finance the cost of
the project shall be secured by the payments to be
made under the loan agreement, by a first mortgage
on the Project and the Project site and shall be
additionally secured by a pledge of the aforesaid
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lease between the Partnership and K Mart and the
guaranty of K Mart as described in Section A l(c)
above.
2. That, if for any reason the aforesaid
bonds are not issued, the Issuer shall in no way
be liable in damages or otherwise, to any party
for such failure of consummation of the financing
and no remedy whether legal or equitable shall be
instituted hereunder or under any other agreement
relating hereto.
3. That this agreement shall inure to the
benefit of the Issuer and the Partnership and
their respective successors and assigns provided,
however, that this Agreement may not be assigned
or otherwise transferred by the Partnership.
4. That this agreement may be executed in
separate counterparts, all of which shall be
deemed a single instrument.
5. If satisfactory documents as required
hereinabove are not provided to the Issuer and
bonds have not been issued within twelve months of
the date of this Memorandum of Agreement, this
Memorandum of Agreement shall be of no further
force and effect and the rights and obligations of
the parties herein shall cease.
IN WITNESS WHEREOF, the Issuer, acting by and
through its Board of Trustees, has caused its corporate
name to be hereunto subscribed by its duly authorized
President and attested under its official seal by its
Village Clerk, and Maisel & Associates of Michigan has
caused its name to be hereunto subscribed by its duly
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authorized General Partner, all being done as of the
year and date first above written.
(SEAL)
ATTEST:
jf2r1~.d u~ ~-yrt~
Village Clerk
VILLAGE OF MOUNT PROSPECT, ILLINOIS
By {~"~'l. // JI~
Village 'resident
MAISEL & ASSOCIATES OF MICHIGAN
By~~L
neral Partner
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DORF\IA:-;, ~loRoF. SHEPLO\\", SHARF\IA:---:, \YEI:-iS7El'-: So: CO,\jPA0'Y
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Ct""''-lt::J. ~UI!H.IC .CCOV....T.lNTS
E. N. MAISEL & ASSOCIATES
STATEMENT OF ASSETS ANTI LIP..BILITIES
AS AT DEC~BER 31, 1977
ASSETS
Current Assets
Cash in banks
Savings bonds
Accounts receivable
Jobs under construction and
Development - Net book equity
Total Current Assets
Investments
Income producing real estate
Less: Mortgage balances
~market value - Income producing
Vacant land
Other investments
Total Investments
$122,126,091
100,987,891
real estate
TOTAL ASSETS
LIABILITIES AND CAPITAL
Current Liabilities
Accounts P?yable
Notes payable - Banks
Not~s payable - Partner
Total Current Liabilities
Other Liabilities
Tenant security deposits
Intercompany account - Malan Construction Company
Total Other Liabilities
Total Liabilities
Capital
,
Net worth (Including completed and vacant
properties at market value)
TOTAL LIABILITIES &~D CAPITAL
Exhibit A
$ 2,281,833
51,000
2,122,659
3,296,61L.
$21,138,200
3,523,700
159 , 874
$ 930,084
1,200,000
13.!..,649
$
18,967
390,261
$ 7, 752, 1 nE
24,821,774
$32.573.880
$ 2,264,733
409,228
$ 2,673,961
29,899,919
$32.573.880
'I:; STATE....ENT ~AS EEEN I"RE"'AREo I"RI....ARILY l"oR ....ANAGEMENT F>URPOSES AND CERTAIN AUDITING F>RCCEoURES RECUIRE!:> F'0'l
THE EXPRESSION OF' AN OPINION HAVE NOT BEEN F>ERF'ORMEO AS OF" THIS DATE
DORF\iA'.'-'. \loRor. SHSPLO\\". SHARF':\IAS. WE!SSTC:!:"< & CO;\IPA;\,Y
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::EJtTI'lt:> lItUe\.IC ...c:::lu,..r........",s
E. N. MAISEL & ASSOCIATES
STAT~~~T OF ASSETS ~~u L:;3ILITIES
AS AT DECEMBER 31, 1977
ASSETS
Cur=ent Assets
Cash in banks
Savings, bonds
Accounts receivable
jobs under construction and
Development - Net book equiCy
Total Current Assets
Investments
Income producing real estate
Less: Mortgage balances
~market value - Income producing
Vacant land
Other investments
Total Investments
$122,126,091
100,987,891
real estate
TOT.U ASSE'!S
LI..;]3!LITIES AND CAPITAL
Current Liabilities
Accounts p~yable
Notes payable - Banks
Not~s payable - Partner
Total Current Liabilities
Other Liabilities
Tenant security deposits
Intercompany account - Malan Construction Company
Total Other Liabilities
Total Liabilities
Caui tal
Net ~orth (Including completed and vacant
properties at market value)
TOTAL LIABILITIES ~~ CAPITAL
Exhibit A
$ 2,231,833
51,000
2,122,659
3.296,61~
$21,138,200
3,52.3,700
1.59, S7~
$ 930,084
1,200,000
13"-,649
$
13,967
390,261
':"HI~ S-:-...':'EMCN'l' ......s etCN '""tFARtC "'''IM...'',I..Y FO" ......N...CEMENT JOIJ"''''eSES ,\NO CE:<l,....IN "'UCITINC ....CCEOUI'l!:5
THE EX'""CSSION OF "'N OP'NION M"'VE NOT BEEN "'CJ'!~ORMtO "S o~ T""5 C"T!:
$ 7,752,
24,821.
$32.573.
$ 2,264,
409,:
$ 2,673,~
29,899,~
$32.573.~
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