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HomeMy WebLinkAbout7175 (Res)67 e J RESOLUTION NO. 7175 RESOLUTION GIVING PRELUIINARY APPROVAL TD A PROJECT UNDER THE MUMD€SOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, AUTHORIZING SUBMISSION OF AN APPLICATION TO THE MINNESOTA DEPAR INF OF ENERGY, PLANING AND DEVELOPMENT FOR APPROVAL THEREOF AND AUTHORIZING EXECUTION OF A M1ESDRANUM OF AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS IN CONNECTION WITH THE PROTECT. BE IT RESOLVED by the City Council (this "Council") of the City of Stillwater, Minnesota (the "City") , as follows: SBCTICN 1 RECITALS AND FINDINGS 1.1 This Council called a public hearing on a proposal presented to it that the City undertake and finance a project pursuant to the Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended (the "Act") consisting of the acquisition of land located at 251 South Third Street in the City, the construction of a commercial office building and related facilities thereon and the purchase of equipment therefor (the "Project"). Under the proposal, Vera Joyce, an individual (the ' up,.wnt"), will enter into a loan agreement (the 'loan Agreement') with the City whereby the City agrees to issue and sell its $650,000 Commercial Development Revenue Fond in the form of a single debt instnnrent (the "Bond") to partially finance the Project and to loan the proceeds of such sale to the Proponent who agrees to construct the Project. The Doan Agreement will require the Proponent to pay amounts sufficient to pay the principal of and interest on the Bond. The Bond will be issued and sold to an institutional investor, as a tax exempt mortgage financing, and will be seared by a mortgage and other encumbrances on the Project. The Proponent will retain title to and owanership of the Project and will lease the Project to various tenants under lease terms sufficient to provide for the payment of principal of and interest on the Bad. The interest of the Proponent in the leases and the interest of the City in the Loan Agreement will be assigned to the holder of the Bond as additional security for the Bond. The Bond will be issued and sold in accordance with the Act and will provide that the Bad is payable solely from wets received by the City pursuant to the Loan Agreement and other property pledged to tis payment. The Bad will not be a general obligation of the City or be payable from any other property or funds of the City. 1.2 At a public hearing, duly called, notices and held on May 3, 1983, in accordance with the Act, all parties desiring to appear were afforded an opportunity to be heard. Based on such public hearing and on such other facts and circumstances as this Council deem relevant, this Council hereby finds, determines and declares as follows: a. The purpose of the Act as found and determined by the state legislature is to promote the welfare of the state by the active attraction, encouragement and development of econanically sound industry and coerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic umenployme t. Factors necessitating the active promotion and development of economically sand industry and coerce are the increasing concentration of population in the metropolitan areas, the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land use which will provide an adequate tax base to finance these increased costs and access to employment opportunities for such population. b. The welfare of the residents of the state requires the active promotion, attraction, encouragement and development of economically sound industry and camerce through goverTmmtal acts; the encouragement of employment opportunities for citizens of the state and the City; and the development of industry to use available resources of the City, in order to retain the benefit of its existing investment in educational and public service facilities. c. The Project would further the foregoing purposes of the Act as contemplated by and described in Section 474.01 of the Act. d. The City is authorized by the Act to issue its industrial development revenue bonds to finance capital projects consisting of properties used or useful in connection witha revere producing enterprise, such as that of the Project e. Ibis Council has been advised by the First National Bank of Stillwater and the United Bank of Menomonie, agents for the Proponent, that conventional, ccumnercial financing to partially finance the cost of the Project is available on such a limited basis and at such high interest rates that the econamic feasibility of operating the Project would be significantly reduced. However, with the aid of a mnicipal borrower, and its resulting lower borrowing oost,the economic feasibility of the Project would be substantially increased and that the issuance of the Bond by the City would be a significant inducement to the Proponent to construct the Project in the City. f. The existence of the Project would add to the tax base of the City and of the County and school district in which the Project is located and would provide increased employment opportunities pities for residences of the City and the surrounding area. SECTION 2 Preliminary Approval of Project 2.1 On the basis of information provided to this Coumcol, it appears that it would be in the best interest of the City to issue the Bond in accordance with the Act, in an amount not to exceed $650,000, in order to partially finance the cost of the Project. 2.2 The Project is hereby given preliminary approval and the issuance of the Bond by the City in the foregoing amount is also hereby approved, subject to approval of the Project by the Commissioner of the Department of Energy, Placing and Development, Minnesota Department of Commerce (the "Comdssioner") the fulfillment of such other conditions as the City nay require with respect to the issuance of the (continued on page 68) • • • 68 • • RESOLUTION NO. 7175 - continued Bond in connection with the Project; and the mutual agreement of this Council, the Proponent and the purchaser of the Bond as to the structuring of the financing and as to the terms and conditions of any of the documents required for the transaction. 2.3 Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the expenditure of any finds of the City on the Project other than the revenues derived therefrom or othenaise granted to the City for this purpose. The Bond shall not constitute a charge, lien or encnbrance, legal or equitable, upon any property or funds of the City, except the Project and the revenue and proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon. No holder of the Bond shall have the right to compel any exercise of the taxing power of the City to pay the outstanding principal of or interest an the Bond, or to enforce payment thereof against any property of the City except the Project. The Bond shall recite on its fact that the principal of and interest on the Bond is payable solely from the revenue and proceeds pledged to the payment therm£. The Bond shall not constitute a debt of the Citywithin the meaning of any constitu- tional or statutory limitation. 2.4 The foams of Memorandum of Agreement between the City and the Proponent and the Application for Approval of Municipal Industrial Revenue Bond Project by the City to the Commissioner, together with all attachments and exhibits thereto, substantially in the forms presented herewith, are hereby approved, and the Mayor and City Clerk are authorized to execute said documents on behalf of the City and, in accordance with Section 474.01, Subdivison 7a of the Act, are hereby authorized and directed to cause said Application to be submitted to the Cwmd.ssioner for approval of the Project. The Mayor, City Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized and directed to provide the C ,missioner with any preliminary information the Camvissioner nay need for this purpose. 2.5 Mackall, Crotmse fi Moore, acting as bond counsel, is authorized to assist in the preparation and review of all documents relating to the Project. to consult with the City Attorney, the Proponent and the purchaser of the Bond as to the maturity, interest rate and other terms and provisions of the Bond and as to the covenants and other provisions of the operative donments; and to submit such docunents to this Council for final approval. SECTIO 1 3 General 3.1 The Proponent of the Project has agreed to pay any and all costs incrred by the City in connectionwith the Project whether or not the Project is approved by the Co assimer; whether or not the Project is carried to completion; and whether or not the Bond or operative instnments are executed. 3.2 The Proponent of the Project is hereby authorized to enter into such contracts as may be necessary for the construction of the Project by any means available to her and in the manner she determines without advertisement for bids as nay be required for the construction or acquisition of other omicipal facilities. 3,3 In anticipation of the approval of the Project by the Commissioner and the issuance of the Bond to finance a portion of the Project, and in order that cmpletictn of the Project will not be unduly delayed when approved, the Proponent is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bond as the Proponent considers necessary, including the use of interim financing subject to the reimburse- ment from the proceeds of the Bond if and when issued but otherwise without liability on the part of the City. Adopted by the City Council of the City of Stillwater, Minnesota, the 3rd day of May, 1983. Published: May 10, -1983 Attest: ,e city Clerk ler AP_ Mayor PI 0 0 • • •