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HomeMy WebLinkAboutResolution - 83-200 - Preliminary Approval - MIDB's - Thomas Hotel Com. - $9,170,000 - 08/16/1983 Member introduced the following resolu- tion and moved its adoption : �j RESOLUTION NO . d 3 _a RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVEL- OPMENT ACT , REFERRING THE PROPOSAL TO THE MINNESOTA ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY FOR APPROVAL AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS . BE IT RESOLVED by the City Council ( the "Council") of the City of Eden Prairie , Hennepin County , Minnesota ( the "City" ) , as follows : 1 . It is hereby found , determined and declared as follows : I . I . The welfare of the State of Minnesota ( the "State" ) requires active promotion , attraction , en- couragement and development of economically sound in- dustry and commerce through governmental acts to pre- vent , so far as possible , emergence of blighted lands and areas of chronic unemployment , and it is the policy of the State to facilitate and encourage action by local government units to prevent the economic deterioration of such areas to the point where the process can be reversed only by total redevelopment through the use of local , state and federal funds derived from taxation , with the attendant necessity of relocating displaced persons and of duplicating public services in other areas . 1 . 2 . Technological change has caused a shift to a significant degree in the area of opportunity for edu- cated youth to processing , transporting , marketing , service and other industries , and unless existing and related industries are retained and new industries are developed to use the available resources of the City , a large part of the existing investment of the community and of the State as a whole in educational and public service facilities will be lost , and the movement of talented , educated personnel of mature age to areas where their services may be effectively used and com- pensated and the lessening attraction of persons and businesses from other areas for purposes of industry , commerce and tourism will deprive the City and the State of the economic and human resources needed as a base for providing governmental services and facilities for the remaining population . - I - 1. 3 . The increase in the amount and cost of govern- mental services requires the need for more intensive development and use of land to provide an adequate tax base to finance these costs . 1 . 4 . Thomas Hotel Company ( the "Company " ) , has advised this City Council that it desires to acquire land located one-half ( 1/2 ) mile south of the inter- section of Highway toy and Interstate 494 in the City , acquire and construct a building thereon and acquire and install equipment therefor ( the "Project" ) to be utilized as a first class hotel and related facilities . 1. 5 . The existence of the Project in the City will contribute to more intensive development and use of land to increase the tax base of the City and overlapping taxing authorities and maintain and provide for an in- crease in opportunities for employment for residents of the City . 1. 6 . The City has :,een advised that conventional , commercial financing to pay the capital cost of the Project is available at such costs of borrowing that the economic feasibility of operating the Project would be significantly reduced , but that with the aid of munici- pal financing and its resulting low borrowing cost the Project is economically more feasible . 1. 7 . This Council has been advised by a representa- tive of- The Steinberg Financial Corporation , in Minne- apolis , Minnesota, mortgage bankers , that on the basis of information submitted to them and their discussions with representatives of the Company and potential buyers of tax-exempt bonds , industrial development revenue bonds , notes or other obligations of the City could be issued and sold upon favorable rates and terms to finance the Project . 1. 8 . The City is authorized by Minnesota Statutes , Chapter 474 , to issue its revenue bonds , notes or other obligations to finance the cost , in whole or in part , of the acquisition , construction , reconstruction , improve- ment , betterment or extension of capital projects con- sisting of properties used and useful in connection with a revenue producing enterprise , such as that of the Company; the issuance of such bonds , notes or other obligations by the City would be a substantial induce- ment to the Company to construct its facility in the City . 2 . The notice of oublic heari.na for the pLiblic hearing held on this date was submitted for publication by Car:. M. 2 - Juille , the City Manager of the City , which action was taken in accordance with the authority granted the City Manager , and which action is hereby ratified by the Council . 3 . On the basis of information given the City to date , it appears that it would be in the best interest of the City to issue its commercial development revenue bonds , rotes or other obligations under the provisions of Minnesota Stat- utes , Chapter 474 , to finance the Project of the Company at a cost presently estimated not to exceed $9 , 170 , 000 . 4 . The Project is hereby given preliminary approval by the City and the issuance of bonds , notes or other obliga- tions for such purpose and in such amount is hereby ap- proved , subject to approval of the Project by the Minnesota Energy and Economic Development Authority ( the "Authority" ) and to the mutual agreement of this body , the Company and the initial purchasers of the bonds , notes or other obliga- tions as to the details of the bond issue and provisions for their payment . In all events , it is understood , however , that the bonds , notes or other obligations of the City shall not constitute a charge , lien or encumbrance , legal or equitable , upon any property of the City except its interest in the Project , and each bond , note or other obligation when , as and if issued shall recite in substance that the bond , note or other obligation , including interest thereon , is payable solely from the revenues received from the Proj - ect and property pledged to the payment thereof and shall not constitute a debt of the City . 5 . In accordance with Minnesota Statutes , Section 474 . 01 , Subdivision 7a , the Mayor is hereby authorized and directed to submit the proposal for the Project to the Authority for approval of the Project . The Mayor , the Finance Director -Clerk , the City Attorney and other offi- cers , employees and agents of the City are hereby authorized to provide the Authority with any preliminary information needed 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 Authority . 6 . The Company has agreed to pay directly or through the City any and all costs incurred by the City in connec- tion with the Project , whether or not the Project is ap- proved by the Authority , whether or not the Project is car- ried to completion and whether or not the bonds , notes or other obligations or the operative documents relating thereto are executed . 7 . The adoption of this resolution by the Ccunc i 1 does not constitute a guarantee or a firm commitment that the 3 - ` City will issue the bonds , notes or other obligations as requested by the Company . The City retains the right in its sole discretion to withdraw from participation and accord- ingly not issue the bonds , notes or other obligations 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 , notes or other obligations or should the 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 . All commitments of the City expressed herein are subject to the condition that within twelve (12) months of the date of adoption of this resolution , the City and the Company shall have agreed to mutually acceptable terms and conditions of the revenue agreement , the bonds , notes or other obligations and of the other instruments and proceed- ings relating thereto and to the issuance and sale of the bonds , notes or other obligations . If the events set forth herein do not take place within the time set forth above , or any extension thereof , and the bonds , notes or other obliga- tions are not sold within such time , this resolution shall expire and be of no further effect . •s.. � :�_ � i� -.,,r.ham- f / ayor Attest : Fi ance` irector-Clerk 4 - MAYOR ' S STATEMENT CONCERNING A PROPOSED PROJECT UNDER MINNESOTA STATUTES , CHAPTER 474 The undersigned , being the duly qualified and acting Mayor or the City of Eden Prairie , Hennepin County , Minne- sota ( the "City" ) , certifies that the City Council of the City ( the "Council " ) has been provided by Thomas Hotel Com- pany ( the "Company" ) , 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 Council_ , by resolution adopted August 16 , 1983 ( the "Preliminary Resolution" ) , has given preliminary approval to the proposed Project and the financing thereof by the issuance of a revenue obligation or obligations of the City . The following are factors con- sidered by the Council in determining to give preliminary approval to said Project : 1 . The Project consists generally of the acquisi- tion of land located one-half ( 1/2) mile south of the intersection of Highway 169 and Interstate 494 in the City , acquisition and construction of a building thereon and acquisition and installation of equipment therefor to be utilized as a first class hotel and related facilities . 2 . O' Connor & Hannan , as bond counsel , is of the opinion that the Project constitutes a "project" within the meaning of Minnesota Statutes , Section 474 .02 , Sub- division lb . 3 . Based on an estimated total cost of acquisi- tion , construction and installation of approximately $9 , 170 , 000 , it is the opinion of the Council that the Project , when completed , will add significantly to the commercial and industrial tax base of the City and the County and the School Districts in which the City is located . 4 . Representatives of the Company estimate that , as a result of the acquisition , construction and instal- lation of the Project , the Company will employ approxi- mately one hundred fifty ( 150 ) persons , in addition to those currently employed by the Company , in the City and the surrounding area . The Council is concerned about the level of unemployment in the City and surrounding area and the resulting movement of persons to other areas where jobs are more plentiful and believes that the existence of the Project in the City would help alleviate those• problems . 5 . Representatives of the Company estimate that the acquisition , construction and installation of the Project will result in an additional payroll of approxi- mately $ 1 , 250 ,000 , based on currently prevailing wages . The Council believes that a substantial percen- tage of that additional payroll will be spent on hous- ing , food and other goods and services in the City and surrounding area , thus benefiting the local housing industry and local merchants . 6 . The Council has reviewed the proposed Project and believes that the Project , when completed , will be compatible with present and projected development in its area . 7 . Nothing has come to the attention of the Coun- cil to indicate that the proposed financing of the Proj - ect by the City would adversely and unfairly affect any other business enterprise located in the City . 8 . Pursuant to the Preliminary Resolution , the City will require that the Company will comply with the requirements of Minnesota Statutes , Section. 474 . 01 , Subdivision 8 . 9 . Based on representations by the Company , 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 . 10 . A public hearing was conducted , in connection with the Council ' s consideration of the Project , on August 16 , 1983 , at the City Hall in the City , at ap- proximately 7 : 30 p .m. , at which all interested parties were afforded an opportunity to express their views . �' ayor 2 - Is present ly estimated t:iac construction wi 1 i begin on or about October 1 , , 1 9 8 3 _, and will be completed on or about December 31 1984 When completed, ther N i # e approximately 130 new jobs created by the project at an annual payroll of approxi- ,y S 1 ,230 , 000 based upon currently prevailing wages . ( If applicable) There are =_x isti ng ,;yobs prov i ced 'y business . _.'e yenta:' ve farm of the f i nanc i ng i s 30 years , co=enc' ng October , 19 83 he lowing _xn 'bits are furnishes: with this application and are incorporated herein by reference. 1 . An op'nion of bond counsel that the proposal constitutes a project under Minn. Stat. 9474.02 . 2 . A copy of the city council resolution giving preliminary approval for the issuance of its revenue bonds . 3 . A comprehensive statement by the municipality indicating how the projecr. satisfies the Dub l i c purpose of Minn . S tat. 5474.01 . 4 , A letter of intent to purchase the bond issue or a letter confirming the feasibil- ity of the project from a financial standpoint . � . A statement signed by the principal representative of the issuing authority to the effect that upon entering into the revenue agreement , the information required by Minn . Stat. 5474.01, Subd. 8 will be submitted to the Minnesota Energy and Economic Development Authority. 6 . A statement signed by the principal representative of the issuing authority that the project does not include any property to be sold or affixed to or consumed in ne production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 7 . A statement signed by the principal representative of the issuing authority that i a public hearing was conducted pursuant to Minn . Stat. 5474 .01, Subd. ib . The statement shall-include the date, time and place of the meeting and that all interested p;.rti es were afforded an opportunity to express their views . c . Copies of notices) as published which indicate the date(s) of publication and the newspaper(s) in which the notice(s) were published. 9 . Provide a plan for compliance of employment preference of economically disadvan- taged or unemployed individuals . (See Mn. Laws 1983, Ch . 289, 113 .) or appointed '4e, the undersigned, are duly elected/representatives of the City of Eden Prai.ri Minnesota and so 1 'c i t your approval of this project at your earliest convenience so that we may carry it. to a final conclusion. S'gned by: (Principal Officers or Representatives of Issuing Authority; tvoe or orint Mavo_r' s name on the line to the left of the sicnatura, line Thank you . ) ,col fgang Penzel 'Mayor ' s "Jame S i Qn re .Tohn D . Franc �' - i : ;e: .- inance DjLrector-CierK S i _ i his approval shall not be deemed to be an approval lby the Authority or the State of the `easibility of the project or the terms of the revenue agreement to be executed- or the bonds to �e issue(., therefor . Authorized Signature - Minnesota Energy and Economic Date of Approval Development Authority MC�nA nln101 „M-00424-01 This Application must be submitted in DUPLICATE SiA770F MINNE MI NNESOTA ENERGY AND ECONOMIC OEVELJPMEN7 AUTHOR r7Y Application =or Approval of Municipal IncuStr'ic i Revenue Bond Project o: Minnesota Energy and Economic Date August 16 , 1983 Oevelooment Authority 480 Cedar St . , Rm. 100 Hanover 31da. St. Paul , Minnesota 55101 -he governiha body of the Cit. of Eden Prairie , County of Hennepin Minnesota , iereby applies to the Minnesota Energy and Economic Development Autnority o; ttie State of ?innesota for approval of this community' s proposed Municipal industrial Revenue Bond issue as -equired by Minn. Stat . 5474.01 , Subd. 7a. 4e have entered into preliminary discussions with : F i r-n Thomas Hotel Company Address 4820 Highway 55 City Golden .Valley. State MN State of Incorporation Attorney Sidney Lorber , Esq. , Leonard , Street & Deinard Address 1200 Nati:ot:CAT-C'1'ty Bank Building , 510 Marquette Avenue , mills . , DIN 55� Mane of Project P & L Investment Co . Project 'his firm is engaged primarily in (nature of business) : hotel development 'he funds received from the sale of tire. Industrial Revenue Bonds "mill be used to Aeneral ,ature of project) : acG�aire la nd , ..acauire , c7onstruct and equip a first c ss l.0 rury hotel in the City one—half ( 1/2 ) mile' south or the Intersection z5f "Tlt_, _ 1 169 t wi 1 be located in and Lnters.tate 494 in the City of Eden Prairie , Minnesota he total bond issue wil 1 be approximately ; 9 , 170 , 000 to be applied toward payment costs now estimated as r'ollows : Ac;ui5ition , Yeconstruction , improvement , betterment , or extension of project S 750 ,000 Constrc.cti on Costs 5 , 420 ,000 Equipment acquisition and Installation 1 293 000 � — i-ees : Archritectural , engineering , inspec- 9. lion , fiscal , legal , administration , or printing ?� .0 I11�cr=s -L accruai during construction 630 000 initial band r"_'sarve -- Contingencies 2 50 S*ndxxd4SZOa t Loan Fees :4 Other, Misc . ( interior design �T 105,E 0 consultant)