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HomeMy WebLinkAboutResolution - 85-138 - Preliminary Approval MIDB's Hampton Hotel - $4,500,000 - 06/04/1985 CITY Or EDEN PRAIRIE HENNEPIN COUNTY , MINNESOTA RESOLUTION NO. 85-138 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE iVIUNICIPAL INDUSTRIAL DEVELOPMENT ACT, [REFERRING THE PROPOSAL TO THE MINNESOTA DEPARTMENT OF ENERGY AND ECONOMIC DEVELOPMENT FOR APPROVAL, AND AUTHOIRIZING PREPAKATION OF NECESSARY DOCUMENTS WHEREAS, the welfare of the State of Minnesota (the "State") 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 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; and WHEREAS, technological change has caused a shift to a significant degree in the area of opportunity for educated 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 of Eden Prairie (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 compensated 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; and WHEREAS, the increase in the amount and cost of governmental services has created the need for more intensive development and use of land to provide an adequate tax base to finance these costs; and WHEREAS, a representative of EPHI Limited, a Nlinnesota limited partnership to be formed by Mitchell A. Anderson, Wallace Hustad, and Kenneth E. Nelson (the "Developer"), has advised this City Council that it desires to acquire land and construct a hotel facility (hereinafter referred to as the "Project"). The Project will be located at the southwest corner of I-494 and Flying Cloud Drive at approximately 7720 to 7780 Flying Cloud Drive in the City. The proposed project will be owned by the Developer for use in their business; and WHEREAS, 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 increase in opportunities for employment for residents of the City, including economically disadvantaged or unemployed individuals; and -1- WHLI-(E,�S, the City has been advised that conventional, commercial financing to pay the capital cost of the Project is available at such costs of .sorrowing that the economic feasibility of operating the Project would be significantly reduced, and, therefore, the City finds that but for the aid of municipal financing, and its resulting lower borrowing cost, the Project would not be underaken; and WHEREAS, this Council has been advised by a representative of the Developer that on the basis of information submitted to them and their discussions with representatives of area financial institutions and potential buyers of tax- exempt bonds, industrial development revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project; and WHEREAS, the City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds to finance the cost, in whole or in part, of the acquisition, construction, reconstruction, improvement or extension of capital projects consisting of properties used and useful in connection with a revenue producing enterprise, such as that of the Developer, and the issuance of such bor.ds by the City would be a substantial inducement to the Developer to construct its facility in the City; and WHEREAS, the applicant 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 Department of Energy and Economic Development; whether or not the Project is carried to completion; and whether or not the bonds or operative instruments are executed; and WHEREAS, 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 industrial development revenue bonds under the provisions of Chapter 474 to finance the Project of the Developer in an amount presently estimated not to exceed $4,500,000. NOW, THEREFORE, BE IT RESOLVED THAT: 1. The Project is hereby given preliminary approval by the City and the issuance of the revenue bonds for such purpose and in such amount is preliminarily approved, subject to approval of the Project by the Minnesota Department of Energy and Economic Development and to the mutual agreement of this body, the Developer and the initial purchaser of the bonds as to the details of the bonds and provisions for their payment. In all events, it is understood, however, that the bonds of the City shall not constitute a charge, lien or encumbrance legal or equitable upon any property of the City except the Project, and the bonds, when, as, and if issued, shall recite in substance that the bonds, including interest thereon, are payable solely from the revenues received from the Project and property pledged to the payment thereof, and shall not constitute a debt of the City. 2. in accordance with Minnesota. Statutes, Section 474.01, Subdivision 7a, the Mayor of the City is hereby authorized and directed to submit the proposal for the Project to the Minnesota Department of Energy and Economic Development for approval of the Project. The Mayor and other officers, employees and agents of the City are hereby authorized to provide the Minnesota Department of Energy i and Economic Development with any preliminary information needed for this -2- 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 Minnesota Department of Energy and Economic Development. 3. The law firm of Holmes & Graven, Chartered, is authorized to act as 3ond Counsel and to assist in the preparation and review of necessary documents relating to the Project and bonds issued in connection therewith. The Mayor, City Attorney, and other officers, employees and agents of the City are hereby authorized to assist bond Counsel in the preparation of such documents. 4. The documents providing for issuance and sale of the bonas shall contain a requirement in form satisfactory to the City Attorney to the effect that the Developer will pay to the City an administrative fee of one-eighth of one percent per annum during the term of the bonds. 5. In accordance with ;Minnesota Statutes, Section 474.01, Subdivision 11, the City Manager and other officers, employees and agents of the City are hereby authorized and directed to encourage the Developer to provide employment opportunities to economically disadvantaged or unemployed individuals. Such individuals may be identified by such mechanisms as are available to the City, including a first source agreement in which the Developer agrees to use a designated State employment office as a first source for employment recruitment, referral, and placement. 6. 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 Developer. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the bonds, or issue the bonds in an amount less than the amount referred to in the recitals hereof, should the City at any time prior to issuance thereof determine that it is in the best interests of the City not to issue the bonds, or to issue the bonds in an amount less than the amount referred to in the recitals hereof, 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. Additionally, the City is an entitlement issuer within the meaning of 1y84 Minnesota Laws, Chapter 582 (the "Act"); this resolution does not and shall not be deemed to constitute an agreement on the part of the City to allocate a portion of its entitlement allocation under the Act to the Project, and this resolution and the preliminary approval of the City set forth herein are contingent upon either an allocation of such entitlement allocation by the City to the Project or receipt by the City of an additional allocation of bonding authority from the Commissioner of the Department of Energy and Economic Development with respect to the Project in an amount equal to or greater than the principal amount of the bonds prior to issuance and sale of the bonds. 7. All commitments of the City expressed herein are subject to the condition that by December 31, 1985 the City and the Developer shall have agreed to mutually acceptable terms and conditions of the revenue agreement or other similar instrument, 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. i -3- / | ADOPTED by the City Council Of the City Of Eden Prairie, Minnesota , this 4th day of June 1985' -Gary Mayor ��� --- --- ATTEST uu'm u'-r!moe , City Clerk SEAL , \ / �