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HomeMy WebLinkAboutResolution - 86-144 - Giving Preliminary Approval to MIDB's - Castle Ridge Care Center, Inc. - CITY OF EDEN PRAIRIE RESOLUTION NO. RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO TIME MINNESOTA DEPARTMENT OF ENERGY AND ECONOMIC DEVELOPMENT FOR APPROVAL, AND AUTHORIZING PREPARATION 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 requires the need for more intensive development and use of land to provide an adequate tax base to finance these costs; and WHEREAS, it is believed that local government units may in many cases prevent the occurrence of the conditions requiring redevelopment, and may be able to reduce substantially the cost of redevelopment when it becomes necessary; and WHEREAS, Castle Ridge Care Center, Inc., a Minnesota nonprofit corporation (the "Developer") has advised this City Council that it desires to construct, equip and furnish an addition to the existing Castle Ridge Care Center nursing home which is located in the City of Eden Prairie, which addition will consist of 21 assisted living units for the elderly (the "Project"); and WHEREAS, the existence of the Project in the City will contribute to more t 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 -1- opportunities for employment for residents of the City, including economically disadvantaged or unemployed individuals; and WHEREAS, the City has been advised that conventional, commercial financing to pay the capital costs of the Project is available at such casts of borrowing that the Project would not be economically feasible without the availability of industrial development bond financing; and WHEREAS, this Council has been advised by 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, pursuant to Minnesota Statutes, Chapter 474, the City is authorized 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 bonds by the City would be a substantial inducement to the Developer to construct the Project in the City; 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, in an amount presently estimated not to exceed $1,175,000 to finance the cost of the Project currently estimated to be $1,221,429. 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 purposes and in such amounts approved, subject to (a) approval of the Project by the Minnesota Department of Energy and Economic Development ("DEED") and (b) an award of issuance authority from DEED pursuant to Minnesota Statutes Chapter 474A, the Minnesota Bond Allocation Act, and (c) subject 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. The City hereby directs the staff of the City to seek an allocation of authority to issue private activity bonds pursuant to ?Minnesota Statutes, Chapter 474A. Such allocation is subject to the agreement of the parties referred to above as to the terms of the bonds. 2. It is hereby found and determined that the Project would not be undertaken but for the availability of industrial development bond financing. -2- 3. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7a and Section 474.1.6, the Mayor of the City is hereby authorized and directed to submit a proposal for the Project to DEED. The Mayor and other officers, employees and agents of the City are hereby authorized to provide DEED 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, including the preparation of any documents required by Minnesota Statutes Section 474.01 Subd. S. 4. The law firm of Holmes & Graven, Chartered, is authorized to act as Bond 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. 5. In accordance with Minnesota Statutes, Section 474.01, Subdivision 11, the City Clerk 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 Developer 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 r Project is approved by DEED, whe"her or not the Project is carried to completion, and whether or not the bonds or operative instruments are executed. 7. All commitments of the City expressed herein are subject to the condition that by December 31, 1986 the City and the Developer shall have agreed to mutually acceptable terms and conditions of the Loan 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. 8. 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 that the amount referred to in paragraph 1 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 paragraph 1 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. This Resolution and the preliminary approval of the City set forth herein are contingent upon receiving an allocation of bonding authority from the Commissioner of DEED 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. -3- r Adopted by the Eden Prairie City Council the l I day of dune, 1986, ' ,Gary et - n Mayor Attests �d Frane City Clerk -4- CITY OF EDEN PRAIRIE , MINNESOTA Application for Industrial Development Bond Financing 1 . APPLICANT: Castle Ridge Care Center , Inc. A. Business Name: Castle Ridge Care Center B. Business Address: 625 Prairie Center Drive, Eden Prairie, Minnesota 55344 . C. Business Form: Non-Profit Corporation D. State of incorporation or organization : Minnesota E. Authorized Representative: Robert H. Chandler , Chandler and Mason , Ltd. , 1407 Pioneer Building , P.O. Box 1527 , St . Paul, MN 55101 F. Phone : (612) 226-0497 2 . NAME (S) AND ADDRESSES OF MAJOR STOCKHOLDERS OR PRINCIPALS : Because this is a nonprofit corporation , there are no stockholders . The members of the Board of Directors are as follows : 1. Howard Wallin 1737 Cope Avenue East St. Paul, MN 55109 2. Phileda Nelson 7500 York Avenue South Edina , MN 55435 3. Charlotte Olson Route 2, Box 771 Isle, MN 56342 4 . Warren Anderson 7500 York Avenue South Edina , MN 55435 5 . Ronald Haar 7530 Market Place Drive Eden Prairie, MN 55344 3 . GIVE BRIEF DESCRIPTION OF NATURE OF BUSINESS , PRINCIPAL PRODUCTS , ETC. : Castle Ridge Care Center , Inc. is a non- profit corporation which currently operates a long-term nursing care facility at 625 Prairie Center Drive, Eden Prairie , Minnesota. Currently, Castle Ridge Care Center , Inc. provides a total of 60 skilled long-term care beds . 1 4 . DESCRIPTION OF PROJECT r A . Location and intended use : The Project consists of constructing , equipping and operating a 21 unit assisted living facility physically attached to the current long- term nursing care facility at 625 Prairie Center Drive, Eden Prairie, Minnesota. In addition, the Project and Castle Ridge Care Center will be equipped with heating and cooling equipment to replace that presently used with the Castle Ridge Condominiums . B . Present ownership of project site : Castle Ridge Care Center , Inc . C. Names and addresses of architect, engineer , and general contractor : 1 . The architect .is Gerald E. Mundt of Jafvert Mueller and Mundt Architects Inc. , 4969 Olson Memorial Highway, Golden Valley, Minnesota 55422-5130 . 2 . The electrical/mechanical engineers are F'eig & Associates, 9740 Irving Avenue South , Bloomington, Minnesota 55431 . The structural engineer is Allen Van Sickle, 4969 Olson Memorial Highway, Golden Valley , Minnesota 55422-5130 . 3 . The general contractor is Keller Construction , 1301 Coulee Road , Hudson, Wisconsin 54016 . 5 . ESTIMATED PROJECT COST FOR: Land $ -0- Construction contracts $ 805 , 000 . 00 Equipment acquisition and installation $ 64 , 779 . 00 Architectural and Engineering $ 74 , 250 . 00 Legal $ 40 , 000 . 00 Interest during construction $ 52 , 650 . 00 Bond reserve $ 105 , 750 . 00 Contingencies $ 20 , 000 . 00 Issuance costs $ 59 , 000 . 00 TOTAL: $1, 221, 429 . 00 6 . APPLICANT ' S EQUITY IN PROJECT: Applicant will supply a letter of credit in the amount of $105 , 750 . 00 . The Bonds will be secured by a mortgage on the i 2 the entire Castle Ridge Care Center complex including the R Project . 7 . BOND ISSUE: A. Amount of proposed bond issue : $1, 175 , 000 . 00 . B . Proposed date of sale of bond : July 3 , 1986 C. Length of bond issue and proposed maturities : Five year notes with payments of interest only. D. Proposed original purchaser of bonds: Miller and Schroeder Financial , Inc. , Northwestern Financial Center , 7900 Xerxes Avenue South , P.O. Box 789 , Minneapolis, MN 55431 . E . Name and address of trustee: First Trust Company, Inc. , First National Bank Building, St. Paul, Minnesota 55101 . F . Copy of any agreement bewteen Applicant and original purchaser : See Exhibit A attached hereto. G. Describe any interim financing sought or available: No interim financing will be sought . H . Describe nature and amount of any permanent financing in addition to bond financing : There will be no per- manent financing in addition to the bond financing . 8 . BUSINESS PROFILE : A. Are you located in the City of Eden Prairie? Yes. B . Number of employees in Eden Prairie? 1. Before this Project : 70 2. After this Project : 74 C. Approximate annual revenues : $1, 578 , 000 . 00 D. Length of time in business : Three years In Eden Prairie: Three years E . Do you have facilities in other_ locations : If so, where? Castle Ridge Care Center , Inc . is a subsidiary of Twin City Christian I3omes, Inc . , a Minnesota non-profit mem- �' 3 bership corporation which is affiliated (through a common Board of Directors) with Edenvale Residence , Inc. , a Minnesota non--profit membership corporation which opera- tes a senior citizen apartment building in Eden Prairie, Minnesota. F. Are you engaged in international trade: No. 9 . OTHER INDUSTRIAL DEVELOPMENT PROJECT (S) : A. Reference to "Applicant" includes applicant as owner , substantial user or as a related person within meaning of Section 103 (b) ( 6 ) of I .R.C. List the name (s) and location (s) of other industrial development project (s) in which the Applicant is the owner or a "substantial user" of the facilities or a " related person" . Edenvale Apartments , 13700 Valley View Road , Eden Prairie , MN B . List all cities in which the Applicant has requested industrial revenue development financing . Eden Prairie , Minnesota C. Detail the status of any request the Applicant has before any other city for industrial development revenue financing . None D. List any city which the Applicant has been refused industrial development revenue financing. None E. List any city (and the project name) where the Applicant has acquired preliminary approval to proceed but in which final approval authorizing the financing has been denied. None 4 F . If Applicant has been denied industrial development revenue financing in any other city as identified in (D) or (E) , specify the reason (s) for the denial and the na**!e ;s ; of appropriate city officials who have knowledge of the transaction . None 10 . NAMES , ADDRESS , AND TELEPHONE: A. Underwriter (if public offering) 1 . Name: Miller and Schroeder Financial Inc. 2 . Address : Northwestern Financial Center , 7900 Xerxes Avenue South , P.O. Box 789 , Minneapolis , MN 55431 3 . Telephone Number : (612) 893-8936 B . Private Placement Purchaser (if private placement) It does not appear at this time that the Bonds will be sold through a private placement. NOTE: If lender will not commit until City has passed its preliminary resolution approving the project , submit a letter from proposed lender that it has an interest in the offering subject to appropriate City approval and approval of the proper state agency. C. Bond Counsel : 1 . Name: Laura K. Mollet, Esq. Address: Holmes & Graven, Chartered, 2400 Northwestern Financial Center , 7900 Xerxes Avenue South , Minneapolis, MN 55431 Telephone Number : (612) 893-9400 D. 2 . Corporate Counsel : Name: Robert H. Chandler , Esq. Address : Chandler and Mason , Ltd. , 1407 Pioneer Building , P.O . Box 1527 , St . Paul, MN 55101 Telephone Number : (612) 228-0497 5 E. Accountant: 1 . Name : Richard Connolly 2 . Address : Larson, Alien , Weishair & Co. , 1200 Shelard Tower , 600 South County Road 18 , Minneapolis , Minnesota 55426 3 . Telephone Number: (612 ) 546-2211 11 . WHAT IS YOUR TARGET DATE FOR: A. Construction start : July 7 , 1986 B. Construction completion : March , 1987 FOR FURTHER INFORMATION CONTACT: Robert H. Chandler , Esq. , Chandler and Mason , Ltd . , 1407 Pioneer Building , P .O. Box 1527 , St. Paul , Minnesota 55101 , ( 612 ) 228-0497 . The undersigned Applicant understands that the approval or disapproval by the City of Eden Prairie for Industrial Development or Housing bond financing does not expressly or impliedly constitute any approval , variance , or waive: of any provision or requirement relating to any zoning, building , or other rule or ordinance of the City of Eden Prairie , or any other law applicable to the property included in this project. CASTLE RIDGE CARE CENTER, INC . Dated : G� ' b By I t s / l 6