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HomeMy WebLinkAboutResolution - 80-57 - Giving Preliminary Approval to Project, referring Proposal to Commissioner of Securities, and Authorizing Preparation of Documents for Vinyl Therm Inc., Hoyt Construction and Other Tenants - RESOLUTION NO. �s 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 equipping thereon of office and warehouse facil- ities (the Project) by Steven B. Hoyt and Bruce K. Hoyt, a partnership to be formed, (the Borrower) , to be leased by the Borrower to Vinyl Therm Inc. , Hoyt Construction Co. , and other tenants. 1. 2. At a public hearing, duly noticed and held on , 1980, in accordance with the Act, on the proposal to undertake and 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 has 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 Knutson Mortgage and Financial 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 economic feasibility of operating the Project would be significantly 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 $2,035,000. 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 an industrial development - revenue note or notes) up to such amount is hereby approved, subject to the approval of the Project by the Commissioner of Securities, the fulfillment of such other conditions as the City may require with respect to the issuance of its bonds in connection with the Project, and the mutual agreement of this Council and the Borrower as to the details of the bond issue and provisions for their payment. 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 shail not constitute a debt of the City. -2- 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 agreement as to the structuring of the financing or as to the terms and conditions of any of the documents required for the transaction. 3.3. All commitments of the City expressed herein are subject to the condition that within twelve months from the date of adoption of this resolution the City and the Borrower shall have- agreed to mutually acceptable terms and conditions of the Revenue Agreement, the bonds and of the other instruments and proceedings relating to the bonds, and their issuance and sale. . r ' -3- 3.4. If the events set forth herein do not take place within the time set forth above or any extension thereof and the bonds are not sold within such time, this resolution shall expire and be of no further force and effect. The Borrower has agreed and it is hereby determined that any and all direct and indirect costs incurred by the City in connection with this Project, whether or not the Project is carried to com- pletion, 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 request. 3.5. The City will require the Borrower, if the bonds are issued and sold, to provide the information necessary to comply with the provisions of Minnesota Statutes, Section 474.01, Subdivision 8. Mayor Attest: ance ector/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. s -4- -