HomeMy WebLinkAboutResolution - 80-21 - Giving Preliminary Approval Under MIDB to Tekcom Properties, Referring Proposal to Commissioner of Securities and Authorizing Preparation of Necessary Documents - RESOLUTION NO. S2�Cl�
RESOLUTION GIVING PRELIMINARY APPROVAL
TO A PROJECT UNDER THE MUNICIPAL INDUS-
TRIAL DEVELOPMENT ACT; REFERRING THE
PROPOSAL TO THE COMMISSIONER OF SECUR-
ITIES FOR APPROVAL; AND AUTHORIZING
• PREPARATION OF NECESSARY DOCUMENTS
BE IT RESOLVED by the -City Council of the City of Eden
Prairie, Minnesota (the City) , as follows:
SECTION 1
Recitals and Findings
1. 1. This Council has received a proposal that the City finance
a proposed project under Minnesota Statutes , Chapter 474 (the Act) ,
consisting of the acquisition of a parcel of land and the con-
struction and eauippinq -thereon of an office and warehouse facil-
ity (the Project) by Tekcom Properties, a limited partner-
ship (the Borrower) , to be leased by- the Borrower to Tekcom, Inc. ,
& packager of electronic components .
1. 2 . At a public hearing, duly noticed and held on /
1.9TA, in accordance with the Act, on the proposal t undertake
an finance the Project, all parties who appeared at the hearing
were given an opportunity to express their views with respect to
the proposal to undertake and finance the Project. Based on such
hearing and such other facts and circumstances as this Council
deems relevant, this Council hereby finds , determines and declares
as follows:
(a) The welfare of the State of Minnesota requires
active promotion, attraction, encouragement and develop-
ment of economically sound industry and commerce through
governmental acts to prevent, so far. as possible, emer-
gence of blighted lands and areas of chronic unemploy-
ment, and the State h4s encouraged local government units
to act to prevent such economic deterioration.
(b) The Project would further the general purposes
contemplated and described in Section 474 . 01 of the Act.
(c) The existence of the Project would add to the
tax base of the City, Hennepin County and the School
District in which the Project is located and would pro-
vide increased opportunities for employment for resi-
dents of the City and surrounding area.
(d) This Council has been advised by Miller &
Schroeder Investment Corp. , agent for the Borrower (the
Agent) , that conventional, commercial financing to pay
the cost of the Project is available only on a limited
basis and at such high costs of borrowing that the econ-
omic feasibility of operating the Project would be sig-
nificantly reduced, but that with the aid of municipal
borrowing, and its resulting lower borrowing cost, the
Project is economically more feasible.
(e) This Council has also been advised by the
Agent that on the basis of their discussions with po-
tential buyers of tax-exempt bonds, revenue bonds of the
City could be issued and sold upon favorable rates and
terms to finance the Project.
(f) The City is authorized by the Act to issue its
revenue bonds to finance capital projects consisting of
properties used and useful in connection with a revenue
producing enterprise, such as that of the Borrower, and
the Borrower represents to the City that issuance of
such bonds by the City would be a substantial inducement
to the Borrower to acquire and construct the Project.
• SECTION 2 Preliminary Approval of Project
2. 1. On the basis of information given the City to date, it ap-
pears that it would be ' in the best interest of the City to issue
its revenue bonds under the provisions of the Act to finance the
Project in an amount not exceeding $1,250,000.
2 . 2 . It is hereby determined to proceed with the Project and its
financing and the Project is hereby given preliminary approval
by the City and the issuance of revenue bonds of the City (which
may be in the form of a commercial development revenue note or
notes) up to such amount is hereby approved, subject to the ap-
proval of the Project by the Commissioner of Securities, the ful-
fillment of such other conditions as the City may require with
respect to the issuance of its bonds in connection with the Pro-
ject, and the mutual agreement of this Council and the Borrower
as to the details of the bond issue and provisions for their pay-
ment. 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 in
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.
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2 . 3 . The form of -the Application to the Commissioner of Secur-
ities , with attachments, is hereby approved, and the Mayor and
City Manager are authorized to execute said documents in behalf
of the City.
2. 4 . In accordance with Section -474.10 , Subdivision 7a of the
Act, the Mayor, City Manager,. and Finance Director/Clerk are
hereby authorized and directed to cause said Application to be
submitted to the Commissioner of Securities for approval of the
Project. The Mayor, City Manager, Finance Director/Clerk, City
Attorney and other officers, employees and agents of the City
are hereby authorized and directed to provide the Commissioner
with any preliminary information the Commissioner may need for
this purpose, 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.
.SECTION 3
General -
3 . 1. If the bonds are issued and sold, the City will enter into
a lease, sale or loan agreement or similar agreement satisfying
the requirements of the Act (the Revenue Agreement) with the Bor-
rower. The lease rentals, installment sale payments, loan pay-
ments or other amounts payable by the Borrower to the City under
the Revenue Agreement shall be sufficient to pay the principal,
interest and prepayment premium, if any, on the bonds as and when
the same shall become due and payable.
3. 2 . The adoption. of this resolution. does not constitute a guar-
antee or a firm commitment that the City will issue and sell the
bonds as requested by the Borrower. The City retains the right
in its sole discretion to withdraw from participation, and
accordingly not issue the bonds, 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 bonds or should
the parties to the transaction be unable to reach agree-
ment as to the structuring of the financing or as to the terms
and conditions of any of the documents required for the transac-
tion.
3 . 3. The Borrower- has agreed and it is hereby determined that any
and all direct and indirect costs incurred by the City in connec-
tion with this Project, whether--or not the Project is carried to
completion, and whether or not approved by the Commissioner of
Securities , and whether or not the City by resolution authorizes
the issuance of the bonds, will be paid by the Borrower upon re-
quest.
3. 4 . The City will require the Borrower, if the bonds are issued
I
and sold, to provide the information necessary to comply with the
provisions of Minnesota Statutes , Section 474 .01, Subdivision 8.
Mayor
Attest:
F' nc irector/Clerk
The motion for the adoption of the foregoing resolution
was duly seconded by Member and upon vote being
taken thereon, the following voted in favor thereof:
• and the following voted against the same:
whereupon said resolution was declared •duly passed and adopted
and was signed by the Mayor whose signature was attested by the
_ Finance Director/Clerk.
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