Loading...
HomeMy WebLinkAboutResolution - 78-69 - Authorizing Issuance of Revenue Bonds Under MS Chapter 474 for CPT Corporation, Authorizing Execution of Memorandum of Agreement - n - r Member introduced the following resolu- tion and moved its adoption: 7 6 - RESOLUTION AUTHORIZING THE ISSUANCE, UPON CERTAIN CONDITIONS, OF REVENUE BONDS OF THE CITY UNDER MINNESOTA STATUTES, CHAPTER 474 , FOR THE PURPOSE OF FINANCING CERTAIN FACILITIES TO BE CONSTRUCTED BY CPT CORPORATION; AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT WITH SAID COMPANY; AND AUTHORIZING AN APPLICATION BY THE CITY TO THE " MINNESOTA COMMISSIONER OF SECURITIES BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota, as follows: Section 1. Recitals. 1. 01. The Legislature of the State of Minnesota in Minnesota Statutes, Chapter 474 , as amended (the Act) has found and declared that the welfare of the State requires active pro- motion, attraction, encouragement and development of economically sound industry and commerce through governmental acts to prevent, so far as possible, emergence of blighted lands and areas of chronic unemployment; has authorized municipalities to issue revenue bonds to finance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement and better- ment of projects, including any properties, real or personal, used or- useful in connection with a revenue producing enterprise engaged in any business; and has authorized municipalities to enter into "revenue agreements" , as defined in the Act, with any person, firm, or public or private corporation or federal or state governmental subdivision or agency (the "Contracting Party") providing for the payment by the Contracting Party of amounts sufficient to provide for the prompt payment of principal and interest on the revenue . bonds. 1. 02. It has been proposed that the City issue its revenue bonds, pursuant to the authority of the Act, in an amount not exceeding in aggregate principal amount $3,200 ,000 or such lesser amount as may be necessary to finance the cost of the Pro- ject hereinafter defined, to finance the cost of the acquisition, construction and equipping of certain real and personal proper- ties comprising a headquarters facility including office, manu- facturing, training and assembling facilities (all such properties and facilities being hereinafter referred to as the Project) , and to make the proceeds of the sale of those revenue bonds available to CPT Corporation, a Minnesota corporation (the Company) , which will agree to pay the City amounts sufficient to pay promptly the principal of and interest on the revenue bonds , and to cause the Project to be constructed. The Project is presently estimated to cost approximately $3,000,000. s 1. 03 . The City has been advised that conventional, com- mercial financing to pay the capital cost of the Project is avail- able only on a limited basis and at such high costs of borrowing that the scope of the Project or the economic feasibility of oper- ating the Project would be significantly reduced, but that with the aid of municipal financing, and its resulting low borrowing costs, the Project can be constructed as designed and its opera- tion is economically more feasible. 1. 04. This Council has been advised that revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. 1. 05. There has been presented to this Council a form of Memorandum of Agreement, relating to the issuance of revenue bonds of the City to finance costs of the Project. Section 2. Approvals and Authorizations. 2. 01. On the basis of information given the City, it appears that it would be in the best interest of the City to issue its revenue bonds under the provisions of the Act to finance costs of the Project and, accordingly, there is hereby authorized to be issued and the City hereby determines to issue, subject to the terms and conditions set forth in the Memorandum of Agreement, its revenue bonds, in an" aggregate principal amount not to exceed $3,200,000, for the purpose of financing costs of the Project. • 2 .02. The form of Memorandum of Agreement is approved and the Mayor and City Clerk are authorized to execute the Memor- andum of Agreement, with such changes as the City Attorney may approve, on behalf of the City. 2. 03. In accordance with Minnesota Statutes, Chapter 474, as amended, the Mayor is hereby authorized and directed to submit the proposal for the Project to the Minnesota Commissioner of Securities for his approval of the Project. The Mayor, City Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized to provide the Commissioner with any preliminary information he may need for this purpose, and the City Attorney is authorized to initiate and assist in the prepar- ation of such documents as may be appropriate to the Project, if it is approved. by the Commissioner. Section 3. Special Obligations. In all events, it is understood, however, that the rev- enue bonds of the City shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the Project, if it becomes the property of the City, and each revenue bond, when, as and if issued, shall be payable solely from the revenues received from the Project and property pledged -2- to the payment thereof, and shall not constitute a debt of the City. Mayor Attest: O DJ N. CA . Clerk The motion for the adoption of the foregoing resolution was seconded by Member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: • whereupon the resolution was declared duly passed and adopted. -3- MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT, dated as of April 18 , 19.78, between the City of Eden Prairie, Minnesota (the "City") and CPT Corporation (the "Company") , provides as follows: 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the following: (a) the City is authorized and empowered by the provisions of Chapter 474 , Minnesota Statutes, as amended (the "Act") , to issue revenue bonds to defray the costs of a project as defined in the Act. (b) the Company has proposed that the City, pur- suant to the Act, issue its revenue bonds to defray the costs to be incurred in connection with the acquisition • of certain properties , consisting primarily of land and one or more buildings to be constructed and equipped thereon (the "Project") , for use by the Company as a headquarters facility including office, manufacturing, training and assembling facilities, and that the City and the Company enter into a lease, sale or loan agree- ment or similar agreement satisfying the requirements of .the Act (the "Revenue Agreement") . (c) the Company wishes to obtain satisfactory assurance from the City that the proceeds of the sale of the revenue bonds of the City will be made available to finance the costs of the Project. • (d) subject to due compliance with all require- ments of law, the City by virtue of such statutory auth- ority as may now or hereafter be conferred by the Act, will issue and sell its revenue bonds in an amount not exceeding $3,200,000 (the "Bonds") to pay the costs of the Project. (e) the Bonds shall be limited obligations of the City and the principal of and interest on the Bonds shall be payable solely out of the revenues derived from amounts payable to the City by the Company pursuant to the provisions of the Revenue Agreement. 2. Undertakings on the Part of the City. Subject to the conditions stated in (d) of paragraph 1 hereof, the City agrees as follows: (a) that it will authorize the issuance and sale of the Bonds, pursuant to the terms of the Act as then in force. (b) that, if it issues and sells the Bonds, it will as requested by the Company enter into the Revenue Agreement with the Company. The lease rentals, install- ment sale payments, loan payments or other amounts pay- able under the Revenue Agreement will be sufficient to pay the principal and interest and redemption premium', if any, on the Bonds as and when the same shall become due and payable. 3. Undertakings on the Part of the Company. The Com- -2- h r pany agrees as follows: (a) that it will use all reasonable efforts to find one or more purchasers for the Bonds. (b) that contemporaneously with the delivery of the Bonds the Company will enter into the Revenue Agree- ment with the City under the terms of which the Company will provide security to the City for payment of sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. •4. General Provisions. (a) all commitments of the City under paragraph 2 hereof and of the Company under paragraph 3 hereof are subject to the condition that within twelve (12) months from the date hereof (or such other date as shall be mutually satisfactory to the City and the Company) , the City and the Company shall have agreed to mutually ac- ceptable terms and conditions of the Revenue Agreement, the Bonds and of the other instruments and proceedings relating to the Bonds. (b) if the events set forth in (a) of this para- graph do not take place within the time set forth or any extension thereof and the Bonds are not sold within such time, the Company agrees that it will reimburse the City for all reasonable and necessary direct out-of- pocket -expenses which the City may incur at the Company's -3- E r request arising from the execution of this Agreement Y and the performance by the City of its obligations here- under, and this Agreement shall thereupon terminate. IN WITNESS WHEREOF, the parties hereto have entered into this_ Agreement by their officers thereunto duly authorized this 1 day of 19 , 1978. CITY OF EDEN PRAIRIE, MINNESOTA BY 'k1' (Jnayor Attest: MZL,::. y Clerk • CPT CORPORATION By It Attest: Its • VKA -4-