HomeMy WebLinkAboutResolution - 78-160 - Giving Preliminary Approval to Project and Referring Proposal to Commissioner of Securities and Authorizing Preparation of Documents for Kensington Investments, Inc./Phillips Temro, Inc. - Member, introduced the following
resolution and moved its adoption:
RESOLUTION NO.
RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT
UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT
REFERRING THE PROPOSAL TO THE COMMISSIONER OF
SECURITIES FOR APPROVAL, AND AUTHORIZING PREPAR-
ATION OF NECESSARY DOCUMENTS
BE IT RESOLVED by the City Council of the City of Eden
Prairie, Minnesota, as follows :
1. It is hereby found, determined and declared as
follows:
1.1 Kensington Investments, Inc. , a Minnesota corporation,
and Neil Brastad (hereinafter the "Developer") , has advised this
Council that it desires to acquire and construct a building and
improvements and acquire and install equipment in connection there-
with (hereinafter referred to as the "Project") , which Project
will be leased to Phillips Temro, Inc. , which Lease will be
guaranteed by The Budd Automotive Company of Canada, Limited,
which Project, when leased will be used for assembly, manufacture,
• storage and shipping of automotive products.
1.2 The existence of the Project in the City will contribute
to more intensive development and use of land to increase the
tax base of the City and overlapping taxing authorities and
maintain and provide for an increase in opportunities for employ-
ment for residents of the City.
1.3 The City has been advised that conventional, commercial
financing to pay the capital cost of the Project is available at
such costs of borrowing that the economic feasibility of operating
the Project would be significantly reduced, but that with the aid
of municipal financing, and its resulting low borrowing cost, the
Project is economically more feasible.
1::4 This Council has been advised by a representative of
Tower Mortgage Corporation of Minneapolis, Minnesota, that on
the basis of information submitted to them and their discussions
with representatives of the Corporation and potential buyers of
tax-exempt bonds, industrial development revenue bonds (which may
be in the form of a single debt instrument such as a note) of the
City could be issued and sold upon favorable rates and terms to
finance the Project.
1.5 The City is authorized by Minnesota Statutes, Chapter
474, to issue its revenue bonds to finance the cost, in whole or
in part, of the acquisition and construction, consisting of prop-
erties used and useful in connection with a revenue producing
enterprise, such as that of the Developer, and the issuance of
such bonds by the City would be a substantial inducement to the
Developer to construct its facility in the City
2 . On the basis of information given the City to date,
it appears that it would be in the best interest of the City to
issue its industrial development revenue bonds under the provi-
sions of Chapter 474 to finance the Project of the Developer at
a cost presently estimated not to exceed $1, 000,000 .
3 . The Project above-referred to is hereby given pre-
liminary approval by the City and the issuance of bonds for
such purpose and in such amount approved, subject to approval of
the Project by the Commissioner of Securities and to the mutual
agreement of this body, the Developer and the initial purchasers
of the bonds as to the details of the bond issue and provisions
for their payment. Messrs. Faegre & Benson, Minneapolis, Minne-
sota, are hereby appointed as bond counsel in connection with
the bond issue. In all events, it is understood, however, that
the bonds of the City shall not constitute a charge, lien or
encumbrance legal or equitable upon any property of the City
except the Project and each bond, when, as, and if issued,
shall recite the substance that the bond, including interest
thereon, is payable solely from the revenues received from the
Project and property pledged to the payment thereof, and shall
not constitute a debt of the City.
4 . In accordance with Minnesota Statutes, Section
• 474 .01, Subdivision 7a, the Mayor is hereby authorized and dir-
ected to submit the proposal for the Project to the Commissioner
of Securities for his approval of the Project. The Mayor, 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, including
but not limited to a statement as to the findings of public
purpose for the Project, as stated herein, and the City Attorney
is authorized to initiate and assist in the preparation of such
documents as may be appropriate to the Project, if it is approved
by the Commissioner.
5. The Developer must. pay all administrative and legal costs
and fees incurred by the City, if any, whether or not the devel-
opment contemplated herein is completed or whether or not the
bonds contemplated herein are issued or whether or not the entire
transaction contemplated herein is consummated.
OR
ATTEST:
C RK