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HomeMy WebLinkAbout1996-240 ~~ . . . .. RESOLUTION NO. 96-240 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; THE MINNESOTA TAX INCREMENT FINANCING ACT, AND THE PROVISIONS OF MINNESOTA STATUTE ~471.191; AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Stillwater, 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), consisting of the construction and equipping of a 38.720 square foot municipality sports arena facility (the Project). 1.2. At a public meeting, duly noticed and held on October 1, 1996, in accordance with law, on the proposal to undertake and finance the Project, all parties who appeared were given an opportunity to express their views with respect to the proposal to undertake and finance the Project. Based on the meeting and such other facts and circumstances as this Council deems relevant, this Council hereby finds, determines and declares as follows: (a) The welfare of the State of Minnesota 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 the State has encouraged local government units to act to prevent such economic deterioration. (b) The welfare of the State of Minnesota and the citizens of the City requires active City involvement in providing recreational opportunities for its citizens and in furtherance thereof the City finds that the Project is a recreational facility within the meaning of Minnesota Statutes ~4 71.191. (c) This Council has been advised that conventional, commercial financing to pay the cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but that with the aid of municipal borrowing, and its resulting lower borrowing cost, the Project is economically more feasible. (d) This Council has also been advised that on the basis of its discussions with potential buyers of tax-exempt bonds, Gross Revenue Bonds of the Municipality (which may be in the form of a lease/purchase agreement) and also Tax Increment Bonds could be issued and sold upon favorable rates and terms to finance the Project. 1 .~.;.. . . . .,. SECTION 2 Preliminary Approval of the Project 2.1. On the basis of information given the Municipality to date, it appears that it would be desirable for the Municipality to issue its Gross Revenue Bonds under the provisions of Minnesota Statutes ~471.191 to finance the Project in an amount not exceeding $3,000,000 and to issue Tax Increment Bonds in an amount not exceeding $1,000,000. 2.2. It is hereby determined to proceed with the Project and its financing and the Project is hereby given preliminary approval by the Municipality and the issuance of bonds of the Municipality in such amount is hereby approved, subject to the fulfillment of such other conditions as the Municipality may require with respect to the issuance of its bonds in connection with the Project, and the mutual agreement of this Council and any holder or purchaser as to the details of the bond issue and provisions of their payment. 2.3. It is understood that the Gross Revenue Bonds of the City, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Municipality, 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. SECTION 3 General 3.1. If the Gross Revenue Bonds are issued and sold, the Municipality may enter into a lease, sale or loan agreement or similar agreement satisfying the requirements of Minnesota Statutes ~471.191 (the Revenue Agreement) with the Borrower. The lease rentals, installment sale payments, loan payments or other amounts payable 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 bonds as and when the same shall become due and payable. 3.2. If the Tax Increment Bonds are issued and sold the City will satisfy the requirements of the Tax Increment Financing Act and, if necessary amend the Development Program and Financing Plan for the District in which the Project is located and if an amendment is necessary, the City Attorney and City Treasurer and other necessary staff are directed to prepare such documents and to take such action as is necessary under the Act to make the amendment. Adopted this 1st day of October, 1996. ATTEST: i)fS1L Ii )JJ~ Mor Weldon, Clerk By 2