19940913 r-94-35RESOLUTION NO. R-94-35
A RESOLUTION APPROVING A PLAN OF LEASE FINANCING WITH
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF
FAIRFAX, VIRGINIA, ANDAN ECONOMIC DEVELOPMENT FACILITY
WHEREAS, the Council of the City of Fairfax, Virginia (the
"City Council"), acknowledges the need for the acquisition of
certain parcels of land and all improvements thereto (the
"Property") for economic development by the City of Fairfax,
Virginia (the "City"); and
WHEREAS, there has been presented to the City Council a plan
of lease financing for the acquisition of the Property, which would
not create debt of the City for purposes of the Virginia
Constitution; and
WHEREAS, the City has requested that the Industrial
Development Authority of the City of Fairfax, Virginia (the
"Authority..), undertake a plan of lease financing and issue its
lease revenue bonds in connection with the financing of the
acquisition of the Property; and
WHEREAS, the City Manager has received offers from four banks
or trust companies to be appointed as the trustee for the Bonds and
has recommended that the offer of Signet Trust Company, Richmond,
Virginia, is in the best interests of the City; and
WHEREAS, the City Manager has received offers from four firms
to be appointed as the Underwriter and has recommended that Craigie
Incorporated be selected as the underwriter for the Bonds (the
"Underwriter") and that Hunton & Williams be selected as bond
counsel; and
WHEREAS, there have been presented at this meeting drafts of
the following documents (the "Documents"), which the City Council
proposes to execute or approve to carry out the transactions
described above, copies of which shall be filed with the records
of the City Council:
(a) Lease Agreement dated as of November 1, 1994, between the
Authority and the City, providing for the acquisition of the
Property by the City on behalf of the Authority (the "Lease
Agreement"), and upon acquisition of the Property, conveying to the
City a leasehold interest in the Property, subject to certain
existing leases of a portion of the Property with the United States
Postal Service (the "USPS Leases") and all future improvements to
be made thereto (collectively, the "Project") and providing for the
purchase of the Project at the end of the lease term;
(b) Trust Agreement dated as of November 1, 1994, between the
Authority and the Trustee (as defined in the Trust Agreement),
including the form of the Bonds, pursuant to which the Bonds are
to be issued and which is to be acknowledged and consented to by
the City (the "Trust Agreement");
(c) Assignment Agreement dated as of November 1, 1994,
between the Authority and the Trustee, assigning to the Trustee
certain of the Authority's rights under the Lease Agreement, which
is to be acknowledged and consented to by the City (the "Assignment
Agreement");
(d) Preliminary Official Statement of the Authority, to be
dated the date of its distribution, relating to the public offering
of the Bonds (the "Preliminary Official Statement"); and
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(e) Bond Purchase Agreement between the Authority and the
Underwriter, which is to be acknowledged and consented to by the
City (the "Bond Purchase Agreement");
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FAIRFAX,
VIRGINIA:
1. Acquisition of the Property is declared to be essential
to the City's plans for economic development, and the City
anticipates that the Project will be used for projects that are
essential to the City's economic development during the term of the
Lease Agreement. The City Council, while recognizing that it is
not empowered to make any binding commitment to make appropriations
beyond the current fiscal year, states its intent to make annual
appropriations in future fiscal years in amounts sufficient to make
all lease payments attributable to the Project under the Lease
Agreement and hereby recommends that future City Councils do
likewise during the term of the Lease Agreement.
2. The following plan for financing the acquisition of the
Property is approved. The Authority is requested to issue its
lease revenue bonds in an amount now estimated to be approximately
$2,850,000 (the "Bonds"). The City will use the proceeds thereof
to acquire the Property in the name of the Authority subject to the
existing USPS Leases. The Authority will lease the Project to the
City under a "triple net lease" at a rent sufficient to amortize
the Bonds and to pay the fees and expenses of the Authority. The
obligation of the Authority to pay principal and interest on the
Bonds will be limited to rent payments received from the City. The
obligation of the City to pay rent will be subject to annual
appropriations by the City Council for such purpose. The Bonds
will be secured by an assignment of rents under the Lease Agreement
to a trustee for the benefit of the bondholders. The Bonds will
also be secured by a pledge of revenues derived from rental of a
portion of the Property under the USPS Leases and from rental of
certain City-owned property to the United State Postal Service.
Subject to certain terms and conditions in the Lease Agreement,
under the Lease Agreement the City has the option to purchase the
project. The plan for financing the acquisition of the Property
shall contain such additional requirements and provisions as may
be approved by the City.
3. The Authority is requested to undertake the issuance of
the Bonds, to provide for the City to use the proceeds of the Bonds
for the acquisition of the Property and to secure the Bonds by a
pledge of rents.
4. The City Manager or Director of Finance, either of whom
may act, is authorized and directed to execute or approve the
Documents, which shall be in substantially the forms submitted at
this meeting, which are approved, with such completions, omissions,
insertions and changes not inconsistent with this Resolution as may
be approved by the officer executing them, his execution to
constitute conclusive evidence of his approval of any such
completions, omissions, insertions and changes. In making
completions to the Lease Agreement, the City Manager or Director
of Finance, either of whom may act, shall provide for payments of
rent in amounts equivalent to the payments on the Bonds, which
shall be sold to the Underwriter on terms as shall be satisfactory
to the City Manager or Director of Finance, either of whom may act;
provided, however, that the payments of rent shall be equivalent
to the Bonds maturing in installments commencing no earlier than
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1995 and ending no later than 2004; having a net interest cost not
exceeding 8.95% per year; being subject to optional redemption at
a premium not exceeding 4% of their principal amount; and being
sold to the Underwriter at a price not less than 99% of the
principal amount thereof, without taking into account any original
issue discount. As set forth in the Lease Agreement, the City
agrees to pay such "late charges" and other charges as provided
therein. The City Manager or Director of Finance, either of whom
may act, are further authorized to approve (a) a lesser principal
amount for the Bonds and (b) a maturity schedule, including serial
maturities and term maturities, for the Bonds as the City Manager
or Director of Finance shall determine to be in the best interest
of the City. Following the sale of the Bonds, the City Manager or
Director of Finance shall file a copy of the Bond Purchase
Agreement with the City Clerk setting forth the final terms and
purchase price of the Bonds. The actions of the City Manager or
Director of Finance in approving the terms of the Bonds shall be
conclusive, and no further action shall be necessary on the part
of the City. The principal of and premium, if any, and interest
on the Bonds shall be payable in lawful money of the United States
of America.
5. The Preliminary Official Statement in the form presented
at this meeting is approved with respect to the information
contained therein pertaining to the City. The Underwriter is
authorized to distribute to prospective purchasers of the Bonds the
Preliminary Official Statement in form deemed to be "near final,"
within the meaning of Rule 15c2-12 of the Securities and Exchange
Commission (the "Rule"), with such completions, omissions,
insertions and changes not inconsistent with this Resolution as may
be approved by the City Manager or Director of Finance. Such
distribution shall constitute conclusive evidence that the City
has deemed the Preliminary Official Statement to be final as of its
date within the meaning of the Rule, with respect to the
information contained therein pertaining to the City. The City
Manager or Director of Finance, either of whom may act, is
authorized and directed to approve such completions, omissions,
insertions and other changes to the Preliminary Official Statement
that are necessary to reflect the terms of the sale of the Bonds,
determined as set forth in paragraph 4, and the details thereof and
that are appropriate to complete it as an Official Statement in
final form (the "Official Statement"), and distribution thereof by
the Underwriter shall constitute conclusive evidence that the City
has deemed the Official Statement to be final as of its date within
the meaning of the Rule, with respect to the information contained
therein pertaining to the City.
6. The officers of the City are authorized and directed to
execute, deliver and file all certificates and documents and to
take all such further action as they may consider necessary or
desirable in connection with the issuance and sale of the Bonds,
the acquisition of the Property and the undertaking of the Project.
7. Ail costs and expenses in connection with the acquisition
of the Property and the issuance of the Bonds, including the
Authority's fees and expenses and fees and expenses of bond
counsel, counsel for the Authority, counsel for the City, the
Trustee, the City's financial advisor, the Underwriter and its
counsel, shall be paid from the proceeds of the Bonds or other
legally available funds of the City. If for any reason the Bonds
are not issued, it is understood that all such expenses shall be
paid by the City from its legally available funds and that the
Authority shall have no responsibility therefor.
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8. Any authorization herein to execute a document shall
include authorization to deliver it to the other parties thereto
and to record such document where appropriate.
9. Craigie Incorporated is approved as the Underwriter,
Signet Trust Company as Trustee, and Hunton & Williams as bond
counsel for the Bonds. Craigie Incorporated has appointed Hunton
& Williams to serve as Underwriter's counsel in this transaction.
The City acknowledges that Hunton & Williams is also serving as
Underwriter's counsel in the transaction and consents to Hunton &
Williams acting in both roles.
10. Ail other acts of the officers of the City that are in
conformity with the purposes and intent of this Resolution and in
furtherance of the issuance and sale of the Bonds, the acquisition
of the Property and the undertaking of the Project are approved
and ratified.
11. This Resolution shall take effect immediately.
Adopted this 13th day of September, 1994.
Mayor
ATTEST:
C~ty ~lerk