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HomeMy WebLinkAboutResolution - 84-142 - Grant Preliminary Approval - MIDB's Rott-Rivett Super 8 - 06/05/1984 After some c;iscussion , Member introduced the following Resolution an�d/ moved its adoption : RESOLUTION NO . RESOLUTION GRANTING PRELIMINARY APPROVAL AND DETERMINING TO PROCEED WITH A PROJECT AND ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO THE MINNESOTA ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY FOR APPROVAL AND AUTHORIZING PIREPARATION 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) , consist- ing o.E the acquisition of land and the construction and equipping thereon of a 60 unit motel (the Project) by Rout-Rivett Developers , a South Dakmeta partnership ( the Borrower) . The Project would be located at the intersection of 78th Street and Izighways 212/169 in the City. 1 . 2 . At a public hearing , duly noticed and held on 1984 , 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 said proposal . Based on such hearing and such other facts and circumstances as this Council deems relevant , this Council hereicy 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, 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. t, (c ) The: existence of the Project would add to the ta,�_ base of the Municipality and the County and School District in which the Project Ls located and would provide increased opportunities for emplo_ymerit for residents of the Municipality and surrounding area . (d) This Council has been advised by representa- tives 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 . (e ) 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 Munici- pality 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, It is desirable for the Municipality to issue its revenue bonds under the provisions of the Act to finance the Project in an estimated total amount of $1 , 300 , 000 . 2. 2 . It is hereby determined to grant preliminary approval to and 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 . The Municipality retains the right in its sole discretion to withdraw from participation and , accordingly , not issue the revenue 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 revenue bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of an,,,7 of the documents required for the transaction . 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 Energy and Economic Development Authority and may be subject to such further condi- tions 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, r 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 Minnesota Energy acid Economic Development Authority , with attachments , is hereby approved , and the Mayor and City Clerk are authorized to execute said documents in behalf of the Municipality . SECTION 3 3 . 1 . If the revenue 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 (tree Revenue Agreement) with the Borrower . The lease rentals , installment sale payments , loan payments or other amounts pavable 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 revenue bonds as and when the same shall become due and payable . a 3 . 2 . 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 approved by the Energy and Economic Development Authority , whether or not the Project is carried to completion and whether or not the Municipality by resolution authorizes the issuance of the revenue bonds , shall be pail by the Borrower on request. 3 . 3 . All commitments of the Municipality expressed herein are subject to the condition that within twelve months of 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 . 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. 3. 4. Pending Legislation . This Council is aware that legislation, including the Tax Reform Act of 1984 , HR4170 , is pending before Congress that would restrict the terms and conditions upon which industrial development bonds may be issued after January 1, 1984 and bear interest exempt from federal incorne taxation . In approving the issuance of the Note by this resolution , this Council does not intend to use , and specifically disclaims using, any portion of an allocation to issue "private activity bonds" or industrial development bonds that may be granted or available to the City under such pending legislation . The Obligor will acknowledge in the Loan Agreement the Pendency of such legislation and the provisions of. this Section G . Adopted this 5th day of June 1984 . Mayor Attest : City Clerk (SEAL) f