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Legislation #: 961037 Introduction Date: 8/8/1996
Type: Ordinance Effective Date: 9/1/1996
Sponsor: None
Title: Authorizing the City of Kansas City, Missouri, to issue its taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project), Series 1996A, in the principal amount not to exceed $82,000,000.00 and its taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project) Series 1996B, in the principal amount not to exceed $4,200,000.00 for the purpose of providing funds to pay substantially all of the costs to purchase, construct, extend and improve a project for industrial development; authorizing the City to enter into a trust indenture and a lease agreement in connection with the issuance of said Bonds; approving the issuance by the City of an obligation to the Missouri Development Finance Board in an amount not to exceed $1,600,000.00 in connection with the financing of certain infrastructure improvements; and approving certain other documents and authorizing the City to take certain other actions in connection with the issuance of said Bonds.

Legislation History
DateMinutesDescription
8/8/1996

Prepare to Introduce

8/8/1996

Referred Finance & Administration Committee

8/14/1996

Do Pass as a Committee Substitute

8/15/1996

Assigned to Third Read Calendar

8/22/1996

Passed as Substituted


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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 961037

 

Authorizing the City of Kansas City, Missouri, to issue its taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project), Series 1996A, in the principal amount not to exceed $82,000,000.00 and its taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project) Series 1996B, in the principal amount not to exceed $4,200,000.00 for the purpose of providing funds to pay substantially all of the costs to purchase, construct, extend and improve a project for industrial development; authorizing the City to enter into a trust indenture and a lease agreement in connection with the issuance of said Bonds; approving the issuance by the City of an obligation to the Missouri Development Finance Board in an amount not to exceed $1,600,000.00 in connection with the financing of certain infrastructure improvements; and approving certain other documents and authorizing the City to take certain other actions in connection with the issuance of said Bonds.

 

WHEREAS, the City of Kansas City, Missouri, a constitutional charter city and municipal corporation of the State of Missouri (the "City"), is authorized and empowered pursuant to the provisions of Article VI, Section 27 of the Missouri Constitution, as amended, and Sections 100.010 to 100.200, inclusive, of the Missouri Revised Statutes, as amended (the "Act"), to purchase, construct, extend and improve certain projects (as defined in the Act), and to issue revenue bonds for the purpose of (i) providing funds to pay the costs of such projects and to lease or sell such projects to others, (ii) loaning the proceeds of such bonds to others to provide funds to pay the costs of such projects, and to pledge the rents, revenues and receipts from such projects as security for the payment of the principal of, premium, if any, and interest on such bonds, or (iii) refunding revenue bonds previously issued by the City; and

 

WHEREAS, the City Council of the City does now find and determine that it is desirable for the improvement of the economic welfare and development of the City of Kansas City, Missouri, and its people, and that it is within the authority and public purposes of the Act, that the City issue its Taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project), Series 1996A, in the principal amount not to exceed $82,000,000.00 (the "Series A Bonds"), and its Taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project) Series 1996B in the principal amount not to exceed $4,200,000.00 (the "Series B Bonds") (the Series A Bonds and the Series B Bonds collectively, the "Bonds"), for the purpose of providing funds to pay substantially all of the costs to purchase, construct, extend and improve a project for industrial development, consisting of a motorcycle manufacturing facility to be located in the City (the "Project"); and

 

WHEREAS, the City initially will lease the Project to Harley-Davidson Motor Company, a Wisconsin corporation (the "Company"), pursuant to the terms of the Lease Agreement dated as of September 1, 1996, and the rental payments therefrom shall be applied to pay the debt service on the Bonds; and

 

WHEREAS, the City Council of the City of Kansas City (the "City") has previously adopted Resolution No. 960581 pursuant to which the City has submitted an application for a loan to the Missouri Development Finance Board, a body corporate and politic of the State of Missouri (the "Board"), a body corporate and politic duly organized and existing pursuant to the Constitution and laws of the State, including particularly the Missouri Development Finance Board Act, Sections 100.250 to 100.297, inclusive, of the Revised Statutes of Missouri, as amended (the "Act"), in order to finance certain infrastructure improvements; and

 

WHEREAS, the Board has approved such application and is authorized under the Act to make loans to finance the costs of "projects" (as defined in the Act), which includes "infrastructure facilities" (as defined in the Act); and

 

WHEREAS, pursuant to the Act and at the request of the City the Board will make a loan to the City to finance the costs of certain infrastructure facilities, such loan to made in the form of the purchase by the Board of the Obligation (as herein defined); and

 

WHEREAS, the City desires to authorize the issuance and sale to the Board of its Obligation in the aggregate principal amount not to exceed $1,600,000.00 for the purpose of financing certain infrastructure facilities (the "Project"), as more fully described in the hereinafter authorized Purchase Agreement; and

 

WHEREAS, the City Council of the City further finds and determines that it is necessary and desirable in connection with the issuance of the Bonds that the City take certain other actions and approve the execution of certain other documents as herein provided; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. Authorization of the Bonds and the Bond Forms. The City is hereby authorized to issue and sell its Taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project), Series 1996A in the principal amount not to exceed $82,000,000.00, and its Taxable Industrial Revenue Bonds (Harley-Davidson Motor Company Project) Series 1996B in the principal amount not to exceed $4,200,000.00, for the purpose of paying substantially all of the costs to purchase, construct, extend and improve the Project. The Bonds shall bear such dates, shall mature at such times and in the amounts, shall be in such denominations, shall bear interest at such rates, shall be subject to redemption, shall have such other terms and provisions, and shall be issued, executed and delivered in such manner subject to such provisions, covenants and agreements, as are set forth in the Indenture. The City hereby approves the Bond Forms in substantially the forms attached hereto as Exhibits A and B with such changes as shall be approved by the Director of Finance.

 

Section 2. Special Obligations. The Bonds and the interest thereon shall be special obligations of the City payable solely out of the rents, revenues and receipts derived by the City from the Project and not from any other fund or source of the City, including the rents payable under the Lease, and such rents, revenues and receipts shall be pledged and assigned to the Trustee as security for the payment of the Bonds as provided in the Indenture. The Bonds and the interest thereon shall not constitute general obligations of the City of Kansas City or the State of Missouri, and neither said City nor said State shall be liable thereon, and the Bonds shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction and are not payable in any manner by taxation.

 

Section 3. Authorization of Indenture. The City is hereby authorized to enter into the Trust Indenture, dated as of September 1, 1996 (the "Indenture"), between the City and Boatmen's Trust Company, Kansas City, Missouri (the "Trustee"), pursuant to which the Bonds will be issued and secured in substantially the form on file with the Director of Finance, under which the Bonds shall be issued and the City shall pledge and assign the rents, revenues and receipts derived from the Project to the Trustee for the benefit and security of the holders of the Bonds upon the terms and conditions as set forth in said form of Indenture, submitted to and reviewed by the City Council of the City on the date hereof, with such changes therein as shall be approved by the officers of the City executing the Indenture, such officers' signatures thereon being conclusive evidence of their approval thereof.

 

Section 4. Authorization of Lease. The City is hereby authorized to enter into the Lease Agreement, dated as of September 1, 1996 (the "Lease"), between the City and the Company under which the City will cause the proceeds of the Bonds to be applied to finance the purchase, construction, extension and improvement of the Project in substantially the form on file with the Director of Finance, under which the City shall lease the Project to the Company and grants the Company an option to purchase the Project, all upon the terms and conditions as set forth in said form of Lease, submitted to and reviewed by the City Council of the City on the date hereof, with such changes therein as shall be approved by the officers of the City executing the Lease, such officers' signatures thereon being conclusive evidence of their approval thereof.

 

Section 5. Creation of Bond Fund. The City is hereby authorized to establish with the Trustee pursuant to the Indenture, a special trust fund in the name of the City to be designated the "City of Kansas City, Missouri, Industrial Revenue Bond Fund-Harley-Davidson Motor Company Project," and the City shall cause all sums required by the Indenture to be deposited therein and shall create all accounts therein required by the Indenture.

 

Section 6. Approval of Guaranty Agreements. The Guaranty Agreement, dated as of September 1, 1996, pursuant to which Harley-Davidson, Inc. unconditionally guarantees to the Trustee, for the benefit of the owners of the Bonds and the City, the payment of certain rental payments due under the Lease, is hereby approved in the form on file with the Director of Finance, which Guaranty Agreement the Trustee is authorized to accept. The Guaranty Agreement, dated as of September 1, 1996, pursuant to which Harley-Davidson, Inc. unconditionally guarantees to the City, the payment of certain additional payments due under the Lease, is hereby approved in the form on file with the Director of Finance.

 

Section 7. Approval of Indemnity Agreement. The Indemnity Agreement, dated as of September 1, 1996, pursuant to which the Company, indemnifies the City, is hereby approved in the form on file with the Director of Finance, which Indemnity Agreement the Director of Finance is authorized to accept.

 

Section 8. Approval of Preliminary Placement Memorandums and Placement Memorandums. The form and content of the Preliminary Placement Memorandums, and the use and distribution thereof in connection with the public sale of the Bonds are hereby ratified and confirmed. The Director of Finance is hereby directed to review the information contained in the definitive Placement Memorandums and is further authorized and directed to execute and deliver the City's approval of the Placement Memorandums in such form as she shall finally approve. The use and distribution of the Placement Memorandums are hereby authorized and approved.

 

Section 9. Limited Obligation. The Obligation of the City, by the terms thereof, is subject to annual appropriation by the City and shall not constitute a debt, liability or indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. Although it is not required by the terms hereof to do so, the City intends to budget or appropriate funds to make Payments and Additional Payments under the Obligation until all amounts are fully paid. The City reasonably believes that legally available funds in an amount sufficient to make all Payments and Additional Payments as contemplated hereunder can be obtained.

 

Section 10. Authorization of Documents and of Issuance of Obligation. The City is hereby authorized to enter into the following documents, in substantially the forms presented to and reviewed by the City Council at this meeting (copies of which documents shall be filed in the records of the City), with such changes therein as shall be approved by the officers of the City executing such documents, such officers' signatures thereon being conclusive evidence of their approval thereof:

 

(a) the Purchase Agreement (the "Purchase Agreement"), between the Board and

the City, under which the Board shall purchase the Obligation and the City shall apply the net proceeds thereof to acquire, construct and equip the Project; and

 

(b) Obligation (the "Obligation"), hereby authorized and issued by the City and

to be sold to the Board pursuant to the Purchase Agreement.

 

Section 11. Execution of Bonds, Obligation and Documents. The Mayor of the City is hereby authorized and directed to execute the Bonds and to deliver the Bonds to the Trustee for authentication for and on behalf of and as the act and deed of the City in the manner provided in the Indenture. The Mayor or the Director of Finance of the City is hereby authorized and directed to execute and deliver the Indenture, the Obligation, the Purchase Agreement and the Lease, and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance for and on behalf of and as the act and deed of the City. The City Clerk of the City is hereby authorized and directed to attest to the Bonds, the Indenture, the Obligation, the Purchase Agreement, the Lease, and to such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance.

 

Section 12. Further Authority. The City shall, and the officers, agents and employees of the City are hereby authorized and directed to, take such further action, and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance, to carry out the purchase and construction of the Project, and to carry out, comply with and perform the duties of the City with respect to the Bonds, the Indenture and the Lease.

 

Section 13. Effective Date. This Ordinance shall take effect and be in full force ten days after its adoption by the City Council of the City.

 

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Approved as to form and legality:

 

 

 

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Assistant City Attorney