HomeMy WebLinkAboutResolution - 81-94 - Final Approval MIDB's for $1,072,000 for Minnesota Supply Company - 06/02/1981 RESOLUTION NO.
RESOLUTION DETERMINING TO PROCEED WITH A PROJECT
AND ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL
DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE
COMMISSIONER OF SECURITIES FOR APPROVAL ; AND
AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS
BE IT RESOLVED by the City Council of the City of
Eden Prairie , Minnesota ( the Municipality) , as follows :
SECTION 1
Recitals and Findings
1 . 1 . This Council has received a proposal that the
Municipality finance a portion or all of the cost of a
proposed project under Minnesota Statute's , Chapter 474
( the Act) , consisti-ng of the acquisition of land and the
construction thereon of an office building and service
department ( the Project) by Minnesota Supply Company , a
Minnesota corporation ( the Borrower ) .
At a public hearing , duly noticed and held on
1981 , 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 the public
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
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 , and the State of Minnesota 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 Municipality, Hennepin County and
School District in which the Project is located and would
provide increased opportunities for employment for
residents of the Municipality and surrounding area .
-3-
( d ) This Council has been advised by
representatives of the Borrower and by Juran & Moody ,
Inc . , investment bankers and dealers in municipal bonds ,
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
Juran & Moody, Inc . that on the basis of their discussions with
potential buyers of tax-exempt bonds , revenue bonds of the
Municipality ( which may be in the form of a commercial
development revenue note or notes) could be issued and
sold upon favorable rates and terms to finance the Project .
( f ) The Municipality 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 issuance of such bonds by the
Municipality would be a substantial inducement to the
Borrower to acquire and construct the Project .
SECTION 2
Determination to Proceed with
the Prod ect and its Financing
2. 1. On the basis of the information given the
Municipality to date , it appears that it would be in the
best interests of the Municipality to issue its revenue
bonds under the provisions of the Act to finance the
Project in an estimated total amount of $1, 072 , 500 .
2. 2. It is hereby determined to proceed with the Project
and its financing and this Council hereby declares its
present intent to have the Municipality issue - its revenue
bonds under the Act to finance the Project .
Notwithstanding the foregoing , however , the adoption of
this resolution shall not be deemed to establish a legal
obligation on the part of the Municipality or its City
Council to issue or to cause the issuance of such revenue
bonds. All details of such revenue bond issue and the
provisions for payment thereof shall be subject to final
approval of the Project by the Minnesota Commissioner of
Securities and may be subject to such further conditions
as the Municipality may specify . The revenue bonds, if
-4-
issued , shall not constitute a charge , lien or
encumbrance , legal or equitable , upon any property of the
Municipality , 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 Municipality within the meaning of any constitutional
or statutory limitation .
2. 3. The Application to the Commissioner of Securities ,
with attachments , is hereby approved , and -the Mayor and
City Manager are authorized to execute said documents in
behalf of the Municipality .
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
the Application to be submitted to the Commissioner of
.the
for approval of the Project . The Mayor , City
Manager , Finance Director/Clerk , City Attorney and other
officers , employees and agents of the Municipality 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 Municipality
will enter into a lease , sale or loan agreement or similar
agreement satisfying the requirements of the Act ( the
Revenue Agreement) with the Borrower . The lease rentals ,
installment sale payments , loan payments or other amounts
payable by the Borrower to the Mun is ipal ity under the
Revenue Agreement shall 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. 2. The adoption of this resolution does not constitute
a guarantee or a firm commitment that the Municipality
will issue the bonds as requested by the
Borrower . The Municipality retains the right in its sole
discretion to withdraw from participation , and accordingly
not issue the bonds , should the Mun -ic ipal ity at any time
prior to the issuance thereof determine that it is in the
-5-
best interest of the Municipality 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 Municipality expressed herein
are subject to the condition that within twelve months
from the date of adoption of this resolution the
Municipality 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 .
3. 4 . If the events set forth herein do not take place
within the time set forth above or any extension thereof j
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 Municipality in connection 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
Municipality by resolution authorizes the issuance of the
bonds , will be paid by the Borrower upon request .
3. 5 . The Municipality 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 .
Adopted this day of r_, , 1981 .
Mayor
Attest : `c
/ n ce Director Clerk
(SEAL)
�6-
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: ,t,!
and the fol-owing voted against the same :
whereupon the resolution was declared duly passed and
adopted .
-7—