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HomeMy WebLinkAboutResolution - 78-228A - Relating to a Project Under the Municipal Industrial Development Act, Giving Preliminary Approval, Referring to the Commissioner of Securities, and Authorizing Execution of Documents - Northland Company - 12/19/1978 t 78-228A • RESOLUTION RELATING TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; GIVING PRELIMINARY APPROVAL TO THE PROJECT; REFERRING THE PROPOSAL TO THE COMMISSIONER OF SECURITIES FOR APPROVAL; AND AUTHORIZING EXECUTION OF A PRELIMINARY AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota (the "City") , as follows: Section 1. Policy and Purpose. 1. 01. The welfare of the residents of the State of Minnesota requires active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental acts ; the encouragement of employment opportunities for citizens of the State; the development of industry to use available resources of the State 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 metropolitan areas to provide an adequate tax base to finance the increase in the amount and cost of governmental services required to be provided by the State and its local government units , including the City, Hennepin County- and the School District • in which the City is located. 1. 02. For the purposes specified in paragraph 1.01 - the City is authorized by the Municipal Industrial Development Act, Minnesota Statutes, Chapter 474 (the "Act") , to acquire and lease real and personal property for use by a revenue-producing enterprise, or to - loan funds directly to the enterprise to be used for such acquisition, said funds to be raised through the issuance of revenue obligations of the City the interest on which is exempt from federal and, under certain conditions, State income taxes. 1. 03 . The Northland Company, a corporation organized under the laws of the State of Minnesota (the "Corporation") , desires to undertake a project in the City, at a total cost presently estimated at approximately $3,400 ,000, comprising the acquisition of land and the design, construction and equipment thereon of buildings comprising 92,000 sq. ft. to be leased for business offices and warehousing activities (the "Project") . The Corporation proposes to immediately acquire all of the necessary land and to construct a portion of the Project comprising 27,000 sq. ft. (Phase I) ; and to construct the balance of the Project comprising 65 , 000 sq. ft. (Phase II) upon completion and leasing of Phase I. The estimated cost of Phase I is $1,400,000, and the estimated cost of Phase II is $2,000 ,000. Z: 1. 04. The Project, and each Phase of it, would increase the level of economic activity in the City?, would increase the tax base of the City, Hennepin County and the School District, and would provide additional employment opportunities for residents of the City and surrounding area. 1. 05 . The Corporation has advised the City that conventional commercial financing for the cost of the Project is available only on a •limited basis and at interest rates which decrease the economic feasibility of the Project; and that tax_ exempt revenue obligation financing pursuant to the Act would substantially increase the economic feasibility o- the Project, and would be a significant inducement to the construction of the Project in the City by the Corporation. 1. 06 . The Corporation has proposed that the City issue its revenue obligations pursuant to the Act to finance up to $3,200,000 of the cost of the Project, and has also advised the City that the Northland Mortgage Company of Edina, Minnesota (the "Underwriter") , has agreed to purchase or provide others to purchase revenue obligations of the City issued in such amount for such purpose. The obligations are to be issued in two series, one for each Phase of the Project. Section 2 . Authorization. • 2..O1. Subject to 'approval of the Project by the Commissioner of Securities of the. State of Minnesota as required by law, and subject to the mutual agreement of the City, the Corporation and the Underwriter as to the details of a loan agreement, a mortgage and security agreement and other documents necessary to evidence and effect the financing of the Project and the issuance of the revenue obligations, the issuance of revenue obligations of the City pursuant to the Act in an amount not exceeding $3,200,000 is authorized to finance a portion of the cost of the Project. The amount of revenue obligations to be issued with respect to each Phase of the Project shall be determined by and subject to the approval of this Council. 2. 02 . The Mayor and City Manager are authorized and directed to submit the Project to the Commissioner of Securities for his approval as tending to further the purposes and policies of the Act, and to cause such information concerning the Project to be submitted to the Commissioner as he snali require for this purpose. 2. 03 . The City' s legal counsel and bond counsel are authorized to assist in the preparation and review of documents necessary to provide for the issuance, payment and security of the revenue obligations ; to consult with the Corporation and the Underwriter as to the terms and pro- visions of the revenue obligations and the necessary documents; and to submit such documents to this Council for - final approval. _ Section 3. No Liability of City. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the expenditure of any moneys of the . City on the Project other than the revenues thereof or the proceeds of the revenue obligations. The revenue obligations shall not con- stitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City except the Project and the revenues pledged to the payment thereof, nor shall the City be subject to any liability thereon. No holder of any revenue obligations shall ever have the right to compel any exercise of the taxing power of the City to pay any such obligation or the interest thereon, nor to enforce payment thereof against any property of the City except the Project. Each revenue obliga- tion shall recite on its face that the obligation, including interest thereon, is payable solely from the revenues pledged to the payment thereof. No obligations issued hereunder shall constitute indebtedness of the City within the meaning of any constitutional., statutory or charter limitation. Section 4. Project Expenditures. In anticipation of the approval of the Project by the Commissioner of Securities and the issuance of revenue obligations of the City to finance the Project, and in order that completion of the Project will not be unduly delayed when approved, the Corporation is hereby authorized to make such expenditures and advances toward payment of costs of the Project as it considers necessary, including the use of interim financing, subject to reimbursement from the pro- ceeds of the revenue obligations when and if issued, but other- wise without liability on the part of the City. Section 5. Approval of Preliminary Agreement. The form of' Preliminary Agreement relating to the issuance of the revenue obligations authorized in Section 2, presented to the Council at this meeting, is hereby approved, and the Mayor and City Manager are hereby authorized and directed to execute the Preliminary Agreement on behalf of the City. Section 6 . The adoption by the City of this resolu- tion does not constitute a guaranty that the City will issue the note(s) as requested by the Corporation. The City retains the right at its reasonable discretion to withdraw from parti- cipation, and accordingly not issue the note (s) should the parties be unable to reach agreement as to the structuring of the financing or as to the terms and conditions of any of the documents required for the transaction. Adopted December 19 , 1978. 0 �Z. Mayor Attest: C Itf 41a_n r��v�dt