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HomeMy WebLinkAboutResolution - 79-20 - Municipal Industrial Development Bonds for Menard, Inc. - 17 Y — c,�- o 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 O'chool 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 per- sonal 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. Menard, Inc. , a corporation organized under the laws of the State of Wisconsin, authorized to do business in the State of Minnesota (the "Corporation") , desires to undertake a project in the City, at a total cost presently estimated at approximately $3,000,000.00 comprising the acquisition of land and the design, construction and equipment thereon of buildings comprising approximately 65 ,000 sq. ft. to be used for business and warehousing activities (the "Project") . The Corporation proposes to immediately acquire all of the necessary land and to construct the buildings above referred to. 1..04. The Project 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 oppor- tunities 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 feasi- bility of the Project; and that tax exempt revenue obligation financing pursuant to the Act would substantially increase the economic feasi- bility of 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 $3,000,000.00 of the cost of the Project, and has also advised the City that a financial institution (the "Purchaser") , has tentatively agreed to purchase revenue obligations of the City issued in such amount for such put-pose. The obligations are to be issued in one series. Section 2. Authorization. 2.01. 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 Purchaser as to the details of the 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 $3,000,000.00 is authorized to finance a portion of the cost of the Project. 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 Com- missioner as he shall 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 Purchaser as to the terms and provisions 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 of the Project other than the revenues thereof -2- or the proceeds of the revenue obligations. The revenue obligations shall not constitute 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 obligation 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 consti- tute indebtedness of the City within the meaning of any constitutional, statutory or charter limitation. Section 4. Project Expenditures. In anr_icipation 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 neces- sary, including the use of interim financing, subject to reimbursement from the proceeds of the revenue obligations when and if issued, but- otherwise without liability on the part of the City. Section S. Approval of Preliminary Agreement. The form of Pre- liminary 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. Withdrawal by City. The adoption by the City of this resolution does not constitute a guaranty that the City will issue the revenue obligations as requested by the Corporation. The City retains the right at its reasonable discretion to withdraw from participation, and accordingly not issue the revenue obligations 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. The adoption of this Resolution is also subject to the condi- tion that within one month from the date hereof the Corporation shall have submitted to the City Clerk a completed application for Industrial Development Bond Project Financing (including all requisite attachments) in form and content acceptable to the City Attorney and the City Clerk. If this condition is not satisfied, the City may on its own motion rescind, alter or modify this Resolution. Adopted DeeembzP l91� 494%8. ) ;' KL;' I-layo`* r Attest : / City Manager -3-