HomeMy WebLinkAboutResolution - 78-174 - Giving Preliminary Approval to Industrial Development Project, Authorizing Submission to Commissioner of Securities and Authorizing Preparation of Documents - Blackbourn, Inc. - 09/19/1978 RESOLUTION #78-174
RESOLUTION GIVING PRELIMINARY APPROVAL TO A
PROPOSED INDUSTRIAL DEVELOPMENT PROJECT TO BE
CONSTRUCTED AND FINANCED UNDER THE MUNICIPAL
INDUSTRIAL DEVELOPMENT ACT, AUTHORIZING THE
SUBMISSION OF AN APPLICATION TO THE COMMISSIONER
OF SECURITIES FOR APPROVAL THEREOF AND
AUTHORIZING THE PREPARATION OF DOCUMENTS AND
MATERIALS IN CONNECTION WITH THE PROJECT
BE IT RESOLVED by the City Council of the City of Eden
Prairie; Minnesota, as follows:
1. There has been presented to this Council a proposal
that the City undertake a project pursuant to the Minnesota Munici-
pal Industrial Development Act, Chapter 474, Minnesota Statutes,
(the "Act" ) consisting of the acquisition of land and construction
thereon of a combination light manufacturing-office building (the
"Project" ) in the City to be used by Blackbourn, Inc. (the "Company" ) .
Under the proposal, Mrs. David S. Nicholson (the "Owner" ) will
enter into a loan agreement with the City whereby the Owner agrees
to have the Project constructed and the City agrees to issue its
$750, 000. 00 Industrial Development Revenue Bond (the "Bond" ) pursuant
to the Act to finance the Project. The Bond will be issued to an
• institutional investor in a tax exempt private placement mortgage
financing whereby the Bond will be secured by a mortgage on the
Project. The Owner will retain title to the Project and the loan
agreement will require the Owner' to pay amounts sufficient to pay
the principal of and interest on any Bond issued. The Owner will
lease the Project to the Company under lease terms sufficient to
provide for the payment of principal of and interest on the Bond.
The interest of the Owner in the lease will be. assigned to the
bondholder as security for the Bond. The City will assign its
interest in the loan agreement to the bondholder to secure the
Bond. The Bond will be issued in accordance with the Act, and will
provide that the Bond is payable solely from amounts received by
the City pursuant to the loan agreement and other property pledged
to its payment. The 'Bond will not be a general obligation of the
City or be payable from any other property or funds of the City.
2. There has also been presented -to this Council a form
of Application to the Commissioner of Securities for approval of
the Project setting forth the estimated costs of the Project and
the increased employment and payrolls to result therefrom. It is
hereby found, determined and declared that the purpose of the
Project is and the effect thereof will be to promote the public
welfare by the attraction, encouragement and development of
economically sound industry and commerce; the development of
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industry to use the available resources of the community, in order
to retain the benefit of its existing investment .in educational and
public service facilities; and the more intensive development of
land available in the area to provide an adequate tax base to
finance the increase in the amount and cost of governmental services
provided by the city, the county and the school district in which
the city is located.
3. The Project is hereby given preliminary approval by
the City, subject to (i) approval of- the Project by the Minnesota
Commissioner of Securities and (ii) approval of this Council, the
Owner, the Company and the institutional investor of the ultimate
details of the Project and the terms of the Bond.
4-. The Company is undertaking to make arrangements with
an institutional investor for the purchase of the Bond. Upon
receipt of a� letter of intent to purchase the Bond, the Mayor; City
Manager and City Clerk are hereby authorized and .directed to submit
an Application to the Commissioner of Securities for approval of
the Project, substantially in the form presented to this meeting,
together with the letter of intent for the purchase of the Bond
necessary to complete such Application. The Mayor, City Manager
and City Clerk and other officers; employees and agents of the City
are hereby authorized to provide the Commissioner of Securities
with such preliminary information as he may request.
5. Mr. Richard W. Anderson, on behalf of the Owner and
as the turn-key developer of the Project, has agreed to pay any and
• all costs incurred by the City in connection with the Project
whether or not the Project is approved by the Commissioner of
Securities; whether or not the Project is carried to completion;
and whether or not the Bond or operative instruments are executed.
6. - . The adoption of this Resolution does not constitute
a guarantee or a firm commitment that the City will issue the .Bond
as requested by the Owner and the Company. The City retains the
right in its sole discretin to withdraw from participation, and
accordingly not issue the Bond, should the City at any time prior
to issuance thereof determine that it is in the best interest of
the City not to issue the Bond or should the parties to the trans-
action be unable to reach agreement as to' the terms and conditions
of any documents required for the transaction.
7. The Company and Mr. Richard W. Anderson, on behalf of
the Owner, are hereby authorized to enter into such contracts as
may be necessary for the construction of the Project by any means
available to it and in the manner it determines without advertise-
ment for bids as may be required for the construction or acquisition
of other municipal facilities.
Mayor
Attest:
y Clerk
pgnT of of 17 71V
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STATEMENT CONCERNING A PROPOSED PROJECT
UNDER MINNESOTA STATUTES, CHAPTER 474
The undersigned, being the Mayor of the City of Eden
Prairie, Minnesota, certifies that Mrs. David S. Nicholson
of Dellwood, Minnesota (the Owner) and Blackbourn, Inc. of St.
Paul, Minnesota (the Company) have provided the City Council
of the City with certain information concerning a proposed
project (the Project) under the Minnesota Municipal Industrial
Development Act, Minnesota Statutes, Chapter 474. On the basis
of such information the City Council, by resolution adopted
September 19, 1978, as amended by resolution adopted October 3 ,
• 1978, has given preliminary approval to the Project and the
financing thereof by the issuance of a revenue obligation of
the City. The following are factors considered by the Council
in determining to give preliminary approval to the Project:
l.. The Project consists generally of the
purchase by Owner of real estate and the construction
of a combination light manufacturing and office building
which will be leased for a period of ten (10) years
by the Owner to the Company.
2, Briggs and Morgan, Professional Association,
as bond counsel, has given its preliminary opinion
that the Project constitutes a "project" within the
meaning of Minnesota Statutes, Section 474. 02, Subdivision l [a] .
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3. Representatives of the Company estimate
that, as a result of the acquisition and construction
of the Project, the Company will employ approximately
70-75 persons in the City and the surrounding area,
in addition to those currently employed by the Company.
The City Council is concerned about providing
employment opportunities in the City, and believes
that the existence of the Project in the City will
help provide such employment.
. 4. Representatives of the Company estimate
that the acquisition and construction of the Project
• will result in an additional annual payroll of
approximately $900,000, based on wage rates currently
in effect. The City Council believes that a substantial
percentage of that additional payroll will be spent
on housing, food and other goods and services in the
City and surrounding area, thus benefiting the local
economy.
5. At the expiration of the ten (10) year lease
with the Company, the Owner expects either to renew
the lease with the Company or to lease the Project
to another entity for the term of the revenue obligation.
6 . The City Engineer has reviewed the preliminary
plans for the Project and believes that the Project,
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when completed, will be compatible with present and
projected development in the area.
f
Tor, derQ Prairie, Minnesota
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IMPORTANT
This Application must be submitted to Commissioner in triplicate
STATE OF MINNESOTA
DEPARTMENT OF COMMERCE
APPLICATION
For Approval of Municipal Industrial Revenue Bond Project
Date September 19 , 1978
To:
Minnesota Department of Commerce
St. Paul, Minnesota 55101
The governing body of F.dPn Prai ri P , County of Hennepin
Minnesota, hereby applies to the Commissioner of Securities of the State of
Minnesota, Department of Commerce, for his approval of this community's proposed
Municipal Industrial Revenue Bond issue, 'as required by Section 1, Subdivision 7,
Chapter 474, Minnesota Statutes.
• We have entered into preliminary discussions with:
FIRM BLACKBOURN, INC.
ADDRESS 1821 University Avenue
'CITY St. Paul STATE Minnesota- 55343
State of Incorporation Minnesota
Marvin C. Ingber
Attorney Mackall, Crounse & Moore
1000 First National Bank Building
Address Minneapolis, Minnesota 55402
This firm is engaged primarily in (nature of business) :
the manufacture and assembly of multi-media packaging products.
The funds received from the sale of the Industrial Revenue Bonds will be
used to (general nature of project) : _partially fund the purchase of real
estate and the gonstruction of a combination light manufacturing and
office building.
It will be located in Eden Prairie, Minnesota
.�0 949
1
The total bond issue will be approximately $ 7509000 to be
applied toward payment of costs now estimated as follows:
Cost Item Amount
Land Acquisition and Site Development $ 100 .000
Construction Qpntracts 611 ,000
22 ,500
Architectural and Engineering Fees - included in constructs, n contract
Legal Fees 25,000
Interest during Construction 10,500
txx �a�tx Construction loan fee 7,500
Contingencies , sales commission '& leasing fees 47,500
BurWxkia=x= Leasehold improvements • 150 ,000
Other Appraisal; mtg. registration tax; 5,000
tite policy; title company fees and misc.
it i c
1 thated that construction will begin on or about
Onf-nhar ], , 19-u_, and will be completed on or about January_,
19_7�9. Whem completed, there will be approximately 72 new jobs created
by ,the project at an annual payroll of approximately $ 900,000. 00 based
upon currently prevailing wages.
The tentative lease term is 25 years, commencing
January 1 , 19 78 , and the tenant will (not) have the option to purchase
the project for a nominal value upon expiration of the lease term.
The municipality will provide the Commissioner with a comprehensive statement
indicating how the project satisfies the public purpose and policies of the
Minnesota Industrial Development Act.
A letter of intent to purchase the bond issue from an underwriter or an
• analysis of a fiscal consultant as to the feasibility of the project from a
financial standpoint is attached to this application.
We, the undersigned, are duly elected representatives of Eden Prairie
Minnesota, and solicit your approval of this project at your earliest convenience
so. that we may carry it to a final conclusion.
Si d y: (P=* 1icers)
This approval shall not be deemed to be an approval by the Commissioner or
the State of the feasibility of the project or the terms of the lease to be
executed or the bonds to be issued therefor.
Date of Approval:
• Commissioner of Securities
Minnesota Department of Commerce