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HomeMy WebLinkAboutResolution - 84-303 - Denied - RESOLUTION NO. RESOLUTION RELATING TO THE AUTHORIZATION AND ISSUANCE OF REVENUE BONTDS OF THE CITY UNDER MINNESOTA STATUTES , CHAPTER 474 , FOR THE PURPOSE OF FINANCING A PROJECT THEREUNDER; GIVING PRELIMINARY APPROVAL TO THE PROJECT AND AUTHORIZING AN APPLICATION BY THE CITY TO THE MINNESOTA E FRGY AND ECONOMIC DEVELOPMENT AUTHORITY BE IT RESOLVED by the City Council (the Council ) of the City of Eden Prairie , Hennepin County , Minnesota (the City) , as follows : Section 1 . Recitals . 1 . 01 . The Legislature of the State of Minnesota in Minnesota Statutes , Cha_Pter 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 comrr,erce 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 the 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 of and interest on the revenue bonds . 1 . 02 . It has been proposed that the City issue its revenue bonds , pursuant to the authority granted by the Act , in an aggregate principal amount not to exceed $3 , 800 , 000 , or such lesser amount as may be necessary, to finance costs of acquisition of land within the City and the construction and equipping thereon of an approximately 78 , 000 square foot office showroom and manufacturing facility (the Project) to be owned by Autumn Properties, a partnership to be formed under the laws of the State of Minnesota and in which George Welsh and Dennis Doyle will be general partners ( the Borrower ) and leased to Digigraphics Systems Corporation , a Minnesota corporation, and other tenants . The Project is to be located on Outlot E in the Wilson Ridge Business Campus , 7277 Flying Cloud Drive, in the City . The Borrower 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. 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 , and that but for the aid of municipal financing, and its resulting low borrowing costs , the Project would not be undertaken . Section 2 . Public Hearing . 2 . 01 . As required by Section 474 . 01 , Subdivision 7b, of the Act and Section 103 ( k) of the Internal Revenue Code of 1954 , as amended, this Council held a public hearing on the proposal to undertake and finance the Project . Notice of the time and plane of the hearing, stating the general nature of the Project and an estimate of the principal amount of bonds to be issued to fir ance the Project, was published at least once not less than fifteen ( 15 ) days nor more than thirty ( 30 ) days before the date fixed for the hearinq, 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 Energy and Economic Development Authority , 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, including the written comments , if any, filed with) the City Finance Director/Clerk before the date of the hearing , and the information submitted to the City by the Borrower . 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 interests of the City to issue its industrial development revenue bonds under the provisions of the Act to if finance costs of the Project in an amount not to exceed $3 , 800 , 000 (the Bonds ) . -2- 3 . 02 . The Project and the issuance of the bonds for such purpose are hereby given preliminary approval , subject to designation of funds by the Citv of funds from the City ' s entitlement allocation pursuant to Minnesota Laws 1984 , Chapter 582 . The Bonds shall not be issued until. the Project has been approved by the Minnesota Energy and Economic Development Authority, as provided by the Act , and until the City and the Borrower 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 ( Lhe Revenue Agreement ) with the Borrower . The amounts payable by the Borrower to the City under the Revenue Agreement will be sufficient to pay the principal of , interest and redemption premium , if any, on the Bonds as and when the same shall become due and payable . 3 . 04 . The Borrower 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 Minnesota Energy and Economic Development Authori '�v; 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 Borrower . 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 is the best interest of the City not to issue the Bonds or should the City, Borrower or 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 Finance Director/Clerk are hereby authorized and directed to submit the proposal for the Project to the Minnesota Energy and Economic Development Authority for approval . The Mayor , City Finance Director/Clerk, City Attorney and other officers , employees and agents of the City, in conjunction with Bond Counsel- , are hereby authorized to provide the Department with any preliminary information necesary 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 . -J- 3 . 07 . The City will cause the Borrower to comply with all of the provisions of the Act , including Section 474 . 01 , Subdivision 8 , thereof , in the issuance of the 3onds and the financing of the Project . 3 . 08 . The City ' s entitlement allocation for the year 1934 , pursuant to the provisions of Minnesota Laws 1984 , Chapter 582 ( the Act) , is $9 , 239 , 314 , all of which has been previously committed by the City . Consequently , nothing herein shall be construed as obligating the City to provide the Project with any portion of its 1984 entitlement allocation . Further , nothing herein shall be construed as ob 1 igat ing the City to provide an entitlement allocation for any ,year subsequent to 1984 . Additionally, the preliminary approval of the City expressed herein is subject to the condition that on or by March 31 , 1985 the City and the Borrower shall have agreed to mutually acceptable terms and conditions of 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 . This resolution is intended to constitute " official action" within the meaning of Section 1 . 103-8 ( a ) ( 5) ( iii ) of the Income Tax Regulations so as to permit costs of the Project paid or incurred after the date hereof to qualify as eligible costs to be financed from the proceeds of the Bonds , if the Project should receive an allocation pursuant to the Act. 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 . 3- -4- AhOPTED by the Eden Prairie Citv Cou cil on 1984 . z olf g Penzel , Ma r ATTES -' i John F e , City Finance Dir for/Clerk ( SEAL) i -5-