8.2 Transfer Property KASA IRBAGENDA SECTION
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CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
8/26/2013 4:00 P.M-
ORIGINATING DEPARTMENT:
CITY ATTORNEY
BY: Greg Bengtson
FISCAL APPROVAL:
BY: 0IA
FINAL APPROVAL.
BY , f r
ITEM: Resolution No. 13 -7032
A resolution authorizing the sale and conveyance of certain property to KASA Industrial Controls, Inc.
BACKGROUND:
In 2002 the City issued industrial revenue bonds ( "IRBs ") to finance the cost of acquiring, remodeling
and equipping an existing industrial facility for KASA Industrial Controls, Inc. ( "KASA ") located at 305
E. Avenue B (the "Project "). In 2007 interest rates were such that IRBs were issued by the City to
refund the 2002 IRBs. Under Kansas law, repayment of the IRBs was secured by a lease /purchase
arrangement between the City as issuer of the IRBs and KASA as the developer of the Project.
Accordingly, when the bonds were issued in 2002, title to the Project was conveyed to the City and the
City leased the property back to KASA. The lease payments provided the source of funding for the
debt service on the IRBs. After fulfilling all of its responsibilities under the lease, KASA has the option
to purchase the property for a nominal amount (in this case $100).
The City's administrative and fiscal roles in relation to an IRB issue are generally assigned to a
trustee. In this case, Sunflower Bank, N.A. served as Trustee and in that role served as fiscal and
paying agent for the IRBs.
KASA has fulfilled all of its responsibilities under the lease with the City and the Trustee has certified
that no bonds remain outstanding. KASA has given notice of its intent to exercise its option to
purchase the Project. The attached resolution authorizes the Mayor to sign (1) a Special Warranty
Deed conveying the real estate and improvements, (2) a Bill of Sale relating to equipment purchased
with IRB proceeds, and (3) a Release of Lease. The proposed deed is a "special" warranty deed in
that the City is warranting title, but with special covenants generally limiting the warranty to those
matters within the control of the City during the time the City held title to the Project. The forms of the
documents to be signed by the Mayor are set forth as exhibits to the Resolution.
FISCAL NOTE:
This specific action has no direct fiscal consequence for the City.
COMMISSION ACTION OR RECOMMENDED ACTION:
Staff recommends adoption of Resolution No. 13 -7032.
Gilmore & Bell, P.C.
July 24, 2013
RESOLUTION NO. 13 -7032
A RESOLUTION OF THE GOVERNING BODY OF THE CITY OF
SALINA, KANSAS AUTHORIZING THE SALE AND
CONVEYANCE OF CERTAIN PROPERTY TO KASA
INDUSTRIAL CONTROLS, INC.
WHEREAS, pursuant to Ordinance No. 07 -10381 and Supplemental Trust Indenture No. 1 dated
as of March 15, 2007, which amends and supplements a Trust Indenture dated as of June 15, 2002 (the
"Original Indenture "), the City of Salina, Kansas (the "Issuer ") has previously issued its Industrial Revenue
Refunding Bonds, Series 2007 (KASA Industrial Controls, Inc.) in the original aggregate principal amount
of $3,005,000 (the 'Bonds ") to refund certain Industrial Revenue Bonds, Series 2002 (KASA Industrial
Controls, Inc.) dated June 15, 2002 (the "Original Bonds ") which financed the cost of acquiring, remodeling
and further equipping an existing industrial facility (the "Original Project ") and leased to KASA Industrial
Controls, Inc., a Kansas corporation (the "Tenant "), pursuant to Supplemental Lease No. 1 dated as of
March 15, 2007 between the City and the Tenant (the "Supplemental Lease "), which amends and
supplements a Lease dated as June 15, 2002 (the "Original Lease ") (the "Supplemental Lease" and the
"Original Lease ", collectively, the "Lease "); and
WHEREAS, the Tenant desires to exercise its option to purchase the Project under Section 17.1 of
the Original Lease and is not in default under the Lease; and
WHEREAS, the Tenant had made all the payments of Basic Rent and Additional Rent pursuant to
the Lease and all principal and interest on the Bonds has been paid or payment has been provided for; and
WHEREAS, Sunflower Bank, N.A., Salina, Kansas, as fiscal and paying agent for the Bonds, has
certified that no Bonds remain outstanding; and
WHEREAS, the Tenant has provided the City written notice of its intent to exercise its option to
purchase the Project;
NOW THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY
OF SALINA, KANSAS:
Section 1. The Mayor and Clerk are authorized and directed to execute and deliver to the Tenant a
special warranty deed substantially in the form set forth on Exhibit A and a bill of sale substantially in the
form set forth in Exhibit B attached hereto, transferring title to the Project to the Tenant. The Mayor and
Clerk are hereby further authorized and directed to execute a Release of Lease, substantially in the form
attached hereto as Exhibit C, and deliver same to the Tenant.
Section 2. The Mayor and Clerk are hereby further authorized and directed to sign such other
instruments and certificates as shall be necessary and desirable in connection with this Resolution, and are
hereby further authorized to take such further actions as may be necessary to accomplish the purposes of this
Resolution.
[BALANCE OF THIS PAGE LEFT BLANK INTENTIONALLY]
SOS \600596.062 \TITLE TRANSFER
ADOPTED by the governing body of the City of Salina, Kansas on August 26, 2013.
CITY OF SALINA, KANSAS
Mayor
[SEAL]
Attest:
By:
Clerk
SOS \600596.062 \TITLE TRANSFER
EXHIBIT A
THIS CONVEYANCE IS FOR THE PURPOSE OF RELEASING SECURITY FOR A DEBT OR
OTHER OBLIGATION AND IS EXEMPT FROM THE REQUIREMENTS OF A SALES
VALIDATION QUESTIONNAIRE PURSUANT TO K.S.A. 79- 1437e(2).
SPECIAL WARRANTY DEED
THIS SPECIAL WARRANTY DEED, made August _, 2013 between the City of Salina,
Kansas, a municipal corporation, as Grantor, and KASA Industrial Controls, Inc., a Kansas corporation, as
Grantee;
WITNESSETH, that said Grantor, in furtherance of the terms of Supplemental Lease No. 1 dated
as of March 15, 2007, which amends and supplements a Lease dated as of June 15, 2002 (collectively, the
"Lease ") between Grantor and Grantee, and as authorized by a Resolution duly adopted by the governing
body of the Grantor, and by these presents does hereby convey to Grantee, its successors and assigns, all the
following described real estate in Saline County, Kansas:
The South Half (S /2) of Lot Two (2), all of Lot Three (3) except the East Nineteen feet
(E 19') of the North Half (N /2) thereof, and the East Fifty feet (E 50') of Lot Four (4), all in
Block Two (2) of the South Industrial Area, being located in the South Half of the
Northwest Quarter (S /2NW /4) of Section One (1), Township Fifteen (15) South, Range
Three (3) West of the 6`h P.M., in Saline County, Kansas, together with a perpetual
non - exclusive easement on and over the East Nineteen Feet (E 19') of the North Half (N/2)
of said Lot Three (3) for use as a roadway and for use in connection with the construction,
maintenance, repair, removal or replacement of improvements on the adjoining real estate,
and with the right to fill, slope or grade the land subject to such easement from time to time
to an evaluation or height not greater than that of the real estate otherwise described herein;
The West Ten Feet (W 10') of the South Ninety -Five Feet (S 95') of the East Nineteen Feet
(E 19') of the North Half (N /2) of Lot Three (3), in Block Two (2) of Industrial Area, being
a part of the South Half of the Northwest Quarter (S /2 NW /4) of Section One (1), Township
Fifteen (15) South, Range Three (3) West of the Sixth Principal Meridian, in Saline
County, Kansas;
The West Five Feet (W 5') of the East Fifty -Five Feet (E 55') of the North One Hundred
Sixty -Five Feet (N 165') of Lot Four (4), in Block Two (2) of Industrial Area, being a part
of the South Half of the Northwest Quarter (S /2 NW /4) of Section One (1), Township
Fifteen (15) South, Range Three (3) West of the Sixth Principal Meridian, in Saline
County, Kansas;
The West Ten Feet (W 10') of the East Nineteen Feet (E 19') of the North Half (N /2),
except the South Ninety -Five Feet (S 95') thereof, of Lot Three (3), in Block Two (2) of
Industrial Area, being a part of the South Half of the Northwest Quarter (S /2 NW /4) of
Section One (1), Township Fifteen (15) South, Range Three (3) West of the Sixth Principal
Meridian, in Saline County, Kansas;
Lots Twenty -one (21) through Thirty (30), Block Two (2) of South Industrial Area in
Saline County, Kansas, EXCEPT the East Thirty-Two Feet (E 32') of said Lot Thirty (30).
for the sum of $100.00 and other valuable consideration;
SOS \600596.062 \TITLE TRANSFER
A -1
TO HAVE AND TO HOLD, the premises described, with all and singular the rights, privileges,
appurtenances and immunities thereto belonging or in any way appertaining, to Grantee and to its successors
and assigns forever; and Grantor hereby covenants that the premises are free and clear of all encumbrances
whatsoever, except (a) those to which the title was subject on the date of conveyance to Grantor, or to which
title became subject with Grantee's written consent, or which resulted from any failure of Grantee to perform
any of its covenants or obligations under the Lease from Grantor referred to above, (b) taxes and
assessments, general and special, if any, and (c) the rights, titles and interests of any party having
condemned or attempting to condemn title to, or the use for a limited period of, all or any part of the
premises conveyed; and that it will warrant and defend the title to the premises to Grantee and Grantee's
successors and assigns forever against the lawful claims and demands of anyone claiming by, through or
under it.
IN WITNESS WHEREOF, Grantor has executed this deed and affixed its corporate seal on the
day and year first above written.
[SEAL]
ATTEST:
Lieu Ann Elsey, Clerk
SOS \600596.062 \TITI,E TRANSFER
A -2
CITY OF SALINA, KANSAS
a municipal corporation
Barbara V. Shirley, Mayor
STATE OF KANSAS
SS:
COUNTY OF SALINE
The foregoing instrument was acknowledged before me this day of August, 2013 by Barbara
V, Shirley, Mayor, and Lieu Ann Elsey, Clerk, respectively, of the City of Salina, Kansas, on behalf of said
City.
[SEAL]
Notary Public
My appointment expires:.
SOM640596.0621T1TLE TRANSFER
A -3
E TIIBIT B
BILL OF SALE
In furtherance of the terms of Supplemental Lease No. 1 dated as of March 15, 2007, which amends
and supplemental a Lease dated as of June 15, 2002 (collectively, the "Lease ") between the City of Salina,
Kansas, as Assignor, and KASA Industrial Controls, Inc., a Kansas corporation, as Assignee, and for
valuable consideration, Assignor hereby transfers, assigns and conveys to Assignee, all personal property
purchased with the proceeds of the City of Salina, Kansas, Industrial Revenue Refunding Bonds, Series
2007 (KASA Industrial Controls, Inc.).
[SISAL]
ATTEST:
Lieu Ann Elsey, Clerk
STATE OF KANSAS )
SS:
COUNTY OF SALINE }
CITY OF SALINA, KANSAS
a municipal corporation
Barbara V. Shirley, Mayor
The foregoing instrument was acknowledged before me this day of August, 2013 by
Barbara V. Shirley, Mayor, and Lieu Ann Elsey, Clerk, respectively, of the City of Salina, Kansas, on behalf
of said City.
[SEAL]
Notary Public
My appointment expires:
SOM600596.0621UHLE TRANSFER
B -1
EXHIBIT C
RELEASE OF LEASE
WHEREAS, the City of Salina, Kansas (the "Issuer ") has heretofore entered into Supplemental
Lease No. 1 dated as of March 15, 2007, which amends and supplements a Lease dated as of June 15, 2002
(collectively, the "Lease ") between the Issuer and KASA Industrial Controls, Inc., a Kansas corporation (the
"Tenant "), notice of which is recorded in Book 1148 at page 256 in the office of the Saline County Register
of Deeds; and
WHEREAS, the Issuer assigned its interest in the Lease to Sunflower Bank, N.A., Salina, Kansas,
acting as Trustee for the Issuer and others for purpose of enforcement of the Tenant's covenants under the
Lease; and
WHEREAS, the Tenant has exercised its option to purchase the facility described in the Lease (the
"Project ") from the Issuer; and
WHEREAS, all of the Tenant's obligations to the Issuer under the Lease have been satisfied;
THEREFORE, the property described in the attached Schedule I is hereby released from any claim
of the Issuer and the Sunflower Bank, N.A. under the Lease.
[SEAL]
ATTEST.
Lieu Ann Elsey, Clerk
STATE OF KANSAS )
SS:
COUNTY OF SALINE )
CITY OF SALINA, KANSAS
:
Barbara V. Shirley, Mayor
ACKNOWLEDGMENT
The foregoing instrument was acknowledged before me this day of August, 2013 by Barbara
V. Shirley, Mayor, and Lieu Ann Elsey, Clerk, respectively, of the City of Salina, Kansas, on behalf of said
City.
[SEAL] BY= ._--
Notary Public
My appointment expires:
SM600596.062 \TITLE TRANSFER
C -1
Sunflower Bank, N.A.
Salina, Kansas
[SEAL]
By:_
Name:
Title:
ATTEST:
Name:
Title:
STATE OF KANSAS }
SS:
COUNTY OF SALINE )
Lynne Weiser
Vice President & Trust Officer
This instrument was acknowledged before me this _ day of August, 2013 by Lynne Weiser as
vice president and trust officer of the Sunflower Bank, N.A., Salina, Kansas, a Kansas banking association
or corporation.
[SEAL]
My appointment expires:
Date
SQS\600596.0621TITL.E TRANSFER
C -2
Notary Public
SCHEDULE I
PROPERTY SUBJECT TO LEASE
Section 1. (a) The following described real estate located in Saline County, Kansas:
The South Half (S /2) of Lot Two (2), all of Lot Three (3) except the East Nineteen feet
(E 19') of the North Half (N /2) thereof, and the East Fifty feet (E 50') of Lot Four (4), all in
Block Two (2) of the South Industrial Area, being located in the South Half of the
Northwest Quarter (S /2NW /4) of Section One (1), Township Fifteen (15) South, Range
Three (3) West of the 61h P.M., in Saline County, Kansas, together with a perpetual
non - exclusive easement on and over the East Nineteen Feet (E 19') of the North Half (N /2)
of said Lot Three (3) for use as a roadway and for use in connection with the construction,
maintenance, repair, removal or replacement of improvements on the adjoining real estate,
and with the right to fill, slope or grade the land subject to such easement from time to time
to an evaluation or height not greater than that of the real estate otherwise described herein;
The West Ten Feet (W 10') of the South Ninety -Five Feet (S 95') of the East Nineteen Feet
(E 19') of the North Half (N /2) of Lot Three (3), in Block Two (2) of Industrial Area, being
a part of the South Half of the Northwest Quarter (S /2 NW /4) of Section One (1), Township
Fifteen (15) South, Range Three (3) West of the Sixth Principal Meridian, in Saline
County, Kansas;
The West Five Feet (W 5') of the East Fifty -Five Feet (E 55') of the North One Hundred
Sixty -Five Feet (N 165') of Lot Four (4), in Block Two (2) of Industrial Area, being a part
of the South Half of the Northwest Quarter (S /2 NW /4) of Section One (1), Township
Fifteen (15) South, Range Three (3) West of the Sixth Principal Meridian, in Saline
County, Kansas;
The West Ten Feet (W 10') of the East Nineteen Feet (E 19') of the North Half (N /2),
except the South Ninety -Five Feet (S 95') thereof, of Lot Three (3), in Block Two (2) of
Industrial Area, being a part of the South Half of the Northwest Quarter (S /2 NW /4) of
Section One (1), Township Fifteen (15) South, Range Three (3) West of the Sixth Principal
Meridian, in Saline County, Kansas;
Lots Twenty -one (21) through Thirty (30), Block Two (2) of South Industrial Area in
Saline County, Kansas, EXCEPT the East Thirty-Two Feet (E 32') of said Lot Thirty (30).
said real property constituting the "Land" as referred to in said Lease.
(b) All buildings, improvements, machinery and equipment now or hereafter constructed, located
or installed on the Land pursuant to said Lease, constituting the "Improvements" as referred to in said Lease,
together with any substitutions or replacements therefor any "Project Additions" as referred to in said Lease,
the property described in paragraphs (a) and (b) of this Schedule I together constituting the "Project" as
referred to in said Lease.
SOS \600596.062 \TITLE TRANSFER
C -3
TRUST'EE'S CERTIFICATION
Re: City of Salina, Kansas
Industrial Revenue Refunding Bonds, Series 2007
(KASA Industrial Controls, Inc.) (the "Bonds'')
The undersigned, on behalf of Sunflower Bank, N.A., Salina, Kansas, as Trustee with
respect to the referenced Bonds, hereby certifies that as of the date hereof, no Bonds remain .
outstanding under Supplemental Trust Indenture No. 1 dated March 15, 2007, which amends and
supplements a Trust Indenture dated as of June 15, 2002 Oointly, the "Indenture ") authorizing and
securing the Bonds, and all fees and expenses of the Sunflower Bank, N.A. in connection with
such Bonds have been paid in full.
Dated: August 2013
[SEAL]
SM600596.06WITLF TRANSFER
Sunflower Bank, N.A.
Salina, Kansas
By:
Name: Lynne Weiser
Title: Vice President & Trust Officer