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HomeMy WebLinkAboutResolution - 79-72 - Preliminary Approval MIDB Donald C. Russ - 7 � - 7-J- RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROPOSED INDUSTRIAL DEVELOPMENT PROJECT TO BE CONSTRUCTED AND FINANCED UNDER THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, AUTITOR- IZING THE SUBMISSION OF AN APPLICATION TO THE MINNESOTA COMMISSIONER OF SECURITIES FOR APPROVAL THEREOF AND AUTHORIZING THE PREPARA- TION OF DOCUMENTS AND MATERIALS IN CONNECTION WITH THE PROJECT BE IT RESOLVED by the City Council cf the City of Eden Prairie, Minnesota, as follows : 1 . There has been presented to this City Council a proposal that the City undertake a project pursuant to the Minnesota Munici- pal Industrial Development Act , Chapter 474 , Minnesota Statutes , as amended ( the "Act ") consisting of the acquisition of land in the City, the construction of a 32 , 000 square foot multi-tenant office building thereon and the installation of leasehold improvements therein ( the "Project" ) . Under the proposal , Donald C . Russ, a Minnesota resident (the "Proponent" ) will enter into a loan agree- ment ( the "Loan Agreement" ) with the City whereby the City agrees to issue and sell its $ 1 , 350 , 000 Industrial Development Revenue Bond ( the "Bond" ) to partially finance the Project and to loan the proceeds of such sale to the Proponent who agrees to construct the Project . The Loan Agreement will require the Proponent to pay amounts sufficient to pay the principal of and interest on the Bond . The Bond will be issued and sold to an institutional invest- or or investors, as a tax exempt mortgage financing , and will be secured by a mortgage on the Project. The Proponent will retain title to and ownership of the Project and will lease the Project to various business enterprises under lease terms sufficient to provide for the payment of principal of and interest on the Bond . The interest of the Proponent in the leases and the interest of the City in the Loan Agreement will be assigned to the holder of the Bond as additional security for the Bond. The Bond will be issued and sold 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 City Council a form of Application to the Minnesota 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 f industry to use the available resources of the City, in order to retain the benefit of its existing investment in educational and public service facilities ; the promotion of employment opportuni- ties in the City; 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 pro- vided by the City, the county and the school district in which the C i ty 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 City Council , the Proponent and the institutional investor or investors of the ultimate details of the Project and the terms of the Bond. 4 . The Proponent, through Dobgherty, Dawkins, Strand & Ekstrom, Incorporated, investment bankers , is undertaking to make arrangements with an institutional investor or investors for the purchase of the Bond. This City Council has been advised by Dougherty , Dawkins , Strand & Ekstrom, Incorporated that, on the basis of information submitted to it, the Project is economically feasible and that the Bond could be issued and sold upon favorable rates and terms in order to finance the Project . The Mayor and the City Manager are hereby authorized and directed to submit the Application to the Minnesota Commissioner of Securities for approval of the Project, substantially in the form presented at this meeting , together with the letter_ of feasibility for the sale of the Bond and the Statement Conce.r•ning a Proposed Project, substantially in the form presented at this meeting . The Mayor and the City Manager and other officers , employees and agents of the City are hereby authorized to provide the Minnesota Commissioner of Securities with such preliminary information as he may request and are hereby authorized and directed to execute the Memorandum of Agreement substantially in the form presented at this meeting . 5 . The Proponent has agreed to pay directly or through the City any and all costs incurred by the City in connection with the Project whether or not the Project is approved by the Minnesota Commissioner of Securities ; whether or not the Project is carried to completion; and whether or not the Bond or operative instruments are executed . 5 . The adoption of this Resolution does not constitute a guarantee or a firm commitment that the City will issue and sell the Bond as requested by the Proponent. The City retains the right in its reasonable discretion to withdraw from participation, and accordingly not issue the Bond , should the City at any time prior to the 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 of the documents required for the transaction. r -2- 7 . The ' Proponent is hereby authorized to enter into such contracts as may be necessary for the construction of the Project by any means available to him and in the manner he determines without advertisement for bids as may be required for the construc- tion or acquisition of other municipal facilities . 8 . Mackall , Crounse & Moore, acting as bond counsel , is authorized to assist in the preparation and review of all documents relating to the Project; to consult with the City Attorney, the Proponent and the purchaser of the Bond as to the maturity, inter- est rate and other terms and provisions of the Bond and as to the- covenants and other provisions of the necessary documents; and to submit such documents to this City Council for final approval . Adopted by the Eden Prairie City Council this 17th day of July, 1979. Attest: R ty rk l -3-