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HomeMy WebLinkAboutResolution - 83-172 - Preliminary Approval - MIDB's - BBS Partnership (Hoyt) - $2,000,000 - 07/19/1983 RESOLUTION NO . RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT AND ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE DEPARTMENT OF COMMERCE 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 Statutes , Chapter 474 (the Act ) , consisting of the acquisition of land and the construction and equipping thereon of a facility approximately of 60 , 000 square feet to be located at 99th and 74th Streets in the Municipality (the Project ) by BBS Partners , a Minnesota general partnership (the Borrower ) , to be leased by the Borrower to Bachman ' s , Inc . , a Minnesota general partnership . 1 . 2 . At a public hearing, duly noticed and held on 1983 , 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 . 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, the 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 . t°� (d) This Council has been advised by representatives of the Borrower that conventional , commercial financing to pay the cost or 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 representatives of the Borrower 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 the 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 Project and its Financing 2 . 1 . On the basis of tte information given the Municipality to date , it appears that it would be desirable for the Municipality to issue its revenue bonds under the provisions of the Act to finance the Project in an aggregate principal amount not to exceed $2 , 000 , 000 . 2 . 2 . Preliminary approval is hereby given to 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 Department of Commerce and may be subject to such further conditions as the Municipality may specify . The revenue bonds , if 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 �r -2- 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 Department of Commerce , with attachments , is hereby approved, and the r?ayor and Finance Director/Clerk 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 and Finance Director/Clerk are hereby authorized and directed to cause the Application to be submitted to the Department of Commerce for approval of the Project . The Mayor , Finance Director/Clerk , City Attorney and other officers , employees and agents of the Municipality are hereby authorized and directed to provide the Director with any preliminary information needed for this purpose . The City Attorney is authorized to initiate and assist in the preparation of documents as may be appropriate to the Project , if approved by the Director . 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 Municipality 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 the participation, and accordingly not issue the bonds , should the Municipality at any time prior to the issuance thereof determine that it is in the 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 . 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 Municiality 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 sale . 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 . 3 . 5 . The Borrower has agreed and it is hereby determined that any and all direct and indirect costs incurred by the Municipality in connection with the Project , whether or not the Project is carried to completion , and whether or not approved by the Department of Commerce , and whether or not the Municipality by resolution authorizes the issuance of the bonds , will be paid by the Borrower upon request . 3 . 6 . The Mayor and Finance Director/Clerk are directed, if the bonds are issued and sold, thereafter to comply with the provisions of Minnesota Statutes , Section 474 . 01 , Subdivision 8 . Adopted this 19th day of July 1983 . Mayor Attest : Fi irector/Clerk ( SEAL) -4- COMPREHENSIVE STATEMENT The undersigned , being the duly qualified and acting Mayor and Finance Director/Clerk of the City of Eden Prairie, Minnesota ( the Municipality) , certify that the City Council has been provided by a representative of BBS Partners , a Minnesota general partnership (the Borrower ) , with certain information concerning a proposed Project under the Minnesota Municipal Industrial Development Act , Minnesota Statutes , Chapter 474 . On the basis of such information the City Council , by resolution adopted �� 4-'y / % , 1983 , has given preliminary approval to the proposed Project and the financing thereof by f the issuance of revenue bonds of the Municipality . The following are factors considered by the City Council in determining to give preliminary approval to the Project : 1 . The Project consists generally of the acquisition of land and construction and equipment thereon of a facility of approximately 60 , 000 square feet for use as an office/distribution facility. 2 . Bond Counsel is of the opinion that the Project constitutes a "project" within the meaning of Minnesota Statutes , Section 474 . 02 , Subdivision la . 3 . Based upon an estimated total cost of construction of $2. , 000 , 000 , it is the opinion of the City Council that the Project , when completed, will add to the commercial tax base of the Municipality, the County and the School District in which t the Project is located . 4 . Representative: of the Borrower estimate that upon completion of the Project , approximately 25 persons be employed in the operation of the Project , which would provide increased employment opportunity for residents of the Municipality and the surrounding area . 5 . Representatives of the Borrower estimate that the acq-iisition and construction of the Project will result in an annual payroll of approximately $10 , 000 , 000 , based on wage rates currently in effect . The City Council believes that a substantial percentage of that payroll will be spent on housing, food and other goods and services in the Municipality and the surrounding area , thus benefiting the local economy . r' 5 . The Municipality will cause the Borrower to provide the Department of Commerce with the information required by Minnesota Statutes , Section 474 . 01 , subdivision 8 , upon entering into a revenue agreement , as defined in the Act , with the Borrower . 7 . On the basis of information provided by the Borrower , the Project does not include any property to be sold or affixed to or consumed in the production of property for sale , and does not include any housing facility to be rented or used as a permanent residence . 8 . A public hearing on the proposal to undertake and finance the Project was conducted pursuant to Minnesota Statutes , Section 474 . 01 , subdivision 7b , on u 1983 , -2- at 1 �30_ o ' clock P . M . , at the City Hall , at which public hearing all interested parties were afforded an opportunity to express their views . Dated : _ ,J�_y_ / f _ 1983 . mjayor ( SEAL) Director/Clerk — i t -3-