HomeMy WebLinkAboutResolution - 80-213 - Relating to Authorization an Issuance of Revenue Bonds for a Project and Authorizing an Application to Commissioner of Securities for Hustad Properties - 11/04/1980 • After all persons who wished to do so had stated their
views on the proposal, the Mayor declared the hearing to
be closed.
After some discussion, Councilmember
introduced the following resolution and (after it had been
read in full ) (after the reading of the resolution was
dispensed with by unanimous consent) moved its adoption:
RESOLUTION NO. O-- /,3
RESOLUTION RELATING TO THE AUTHORIZATION AND
ISSUANCE OF REVENUE BONDS OF THE CITY UNDER
MINNESOTA STATUTES, CHAPTER 474, FOR THE PURPOSE
OF FINANCING A PROJECT THEREUNDER; AND
AUTHORIZING AN APPLICATION BY THE CITY TO THE
MINNESOTA COMMISSIONER OF SECURITIES
BE IT RESOLVED by the City Council of the City of
Eden Prairie, Minnesota, as follows:
Section 1. Recitals.
1.01. The Legislature of the State of Minnesota
in Minnesota Statutes, Chapter 474, as amended (the Act) ,
has found and declared that the welfare of the State
requires active promotion, attraction, encouragement and
development of economically sound industry and commerce
through governmental acts to prevent, so far as possible,
emergence of blighted lands and areas of chronic
unemployment; has authorized municipalities to issue
revenue bonds to finance, in whole or in part, the cost of
the acquisition, construction, reconstruction, improvement
and betterment of projects, including any properties, real
or personal, used or useful in connection with a revenue
producing enterprise engaged in any business; and has
authorized municipalities to enter into "revenue
agreements" , as defined in thq Act, with any person, firm,
or public or private corporation or federal or state
governmental subdivision or agency (the Contracting Party)
providing for the payment by the Contracting Party of
amounts sufficient to provide for the prompt payment of
principal and interest on the revenue bonds.
1.02. It has been proposed that the City issue
• its revenue bonds, pursuant to the authority of the Act,
in an amount not exceeding in the aggregate principal
•
amount $500, 000, or such lesser amount as may be neces-
sary, to finance costs of acquisition of land within the
City and construction and equipping thereon of one or more
buildings (the Project) to be owned and operated by Hustad
Properties, a Minnesota. general partnership (the Partner-
ship) , and leased to Hustad Development Corporation and
Hustad Real Estate Company, Minnesota corporations, for
use as office facilities; and to make the proceeds of such
sale available to the Partnership. The Partnership will
agree to pay the City amounts sufficient to pay promptly
the principal of and interest on the revenue bonds, and
will agree to cause the Project to be completed. The
Project is presently estimated to cost approximately
$502,500.
1. 03. The City has been advised that
conventional, commercial financing to pay the capital cost
.of the Project is available only on a limited basis and at
such high costs of borrowing that the scope of the Project
or the economic feasibility of operating the Project would
be significantly reduced, but that with the aid of
municipal financing, and its resulting low borrowing
costs, the Project can be constructed as designed and its
operation is economically more feasible.
• Section 2. Public Hearing.
2. 01. As required by Section 474. 01, Subdivision
7b, of the Act, this Council, pursuant to a motion passed
on October 7, 1980, called and held a public hearing on
the proposal to undertake and finance the Project. Notice
of the time and place of the hearing, and stating the
general nature of the Project and an estimate of the
principal amount of bonds to be issued to finance the
Project, was published at least once not less than fifteen
days nor more than thirty days prior to the date fixed for
the hearing , in the official newspaper of the City and a
newspaper of general circulation of the. City. A draft
copy of the proposed application to the Minnesota
Commissioner of Securities, together with all attachments
and exhibits thereto, was available for public inspection
following the publication of such notice at the place and
times set forth in the notice.
2. 02. All parties who appeared at the public
hearing were given an opportunity to express their views
with respect to the proposal to undertake and finance the
Project. This Council has heard and considered the views
expressed at the public hearing and the information
submitted to the City by the Partnership.
• Section 3. Approvals and Authorizations.
3.01. On the basis of information given the City
to date, and the views expressed at the public hearing, it
is found and determined that the Project furthers the
purposes stated in Section 474.01 of the Act, and that it
would be in the best interest of the City to issue its
industrial development revenue bonds under the provisions
of the Act to finance costs of the Project in an amount
not to exceed $500,000 (the Bonds) .
3.02. The Project is hereby given preliminary
approval by the City and the issuance of the Bonds for
such purpose approved. The Bonds shall not be issued
until the Project has been approved by the Commissioner of
Securities, as provided by the Act, and until the City and
the Partnership have agreed upon the details of the Bonds
and provisions for their payment.
3.03. If the Bonds are issued and sold, the City
will enter into a lease, mortgage, direct or installment
sale contract, loan agreement, take or pay or similar
agreement, secured or unsecured, satisfying the
requirements of the Act (the Revenue Agreement) with the
Partnership. The amounts payable by the Partnership to
• the: City under the Revenue Agreement will be sufficient to
pay the principal, interest and redemption premium, if
any, on the Bonds as and when the same shall become due
and payable.
3.04. The Partnership 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 Commissioner of Securities; whether or
not the Project is carried to completion; and whether or
not the Bonds or Revenue Agreement and all other operative
instruments are executed.
3 .05. The adoption of this resolution does not
constitute a guarantee or a firm commitment that the City
will issue the Bonds as requested by the Partnership. 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 City, Partnership and any
other parties to the transaction be unable to reach
agreement as to the terms and conditions of any of the
documents required for the transaction.
• 3 .06. In accordance with the Act, the Mayor and
City Clerk are hereby authorized and directed to submit
the proposal for the Project to the -Minnesota Commissioner
of Securities for her approval of the Project. The Mayor,
City Clerk, City Attorney and other officers, employees
and agents of the City, in conjunction with Dorsey,
Windhorst, Hannaford , Whitney & Halladay, Bond Counsel to
the City, are hereby authorized to provide the
Commissioner with any preliminary information she 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.
3 .07 . The City will cause the Partnership to
comply with all of the provisions of the Act, including
Section 474.01, Subdivision 8 , thereof, in the issuance of
the Bonds and the financing of the Project.
3.08 . All commitments of the City expressed
herein are subject to the condition that within twelve
months of the date of adoption of this Resolution the City
and the Partnership 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. 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 effect.
Section 4. Special Obligations.
In all events, it is understood, however, that
the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable , upon any property of the
City except the Project, if it becomes the property of the
City, and from the revenues received from the Project and
property pledged to the payment thereof , and shall not
constitute a debt of the City.
Section 5. Effective Date.
This resolution shall be effective immediately
upon its final adoption:
PASSED AND FINALLY ADOPTED by the City Council of
the City of Eden Prairie, this 4th day of Ngvember , 1980 .
r
W gang/M. nzel - Mayor
• ATTEST:
J rane - City Clerk