HomeMy WebLinkAboutCity Council Resolution 1977-4881.1. 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 deterio
ration.
1.2. Norstan, Inc., a Minnesota -corporation (here-
inafter, the Company), has advised this Council of its desire
to acquire certain land, comprising approximately - 6.5 acres
within the City, including existing improvements thereon, and
to construct and equip thereon one or more buildings (such
land and improvements, buildings and equipment being hereinafter
referred to as the Project), for use by the Company or one of
its subsidiary corporations in its business of manufacturing gears
and -the sale ,and distribution of telephone systems.
1.3. The existence of the Project within the City
would significantly increase the tax base of the City, County
and school district in which the City is located, and would
provide opportunities for employment for residents of the City
and surrounding area.
1.4. 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 economic feasibility of operating the Project
would be significantly reduced, but that with the aid of muni-
cipal financing, and its resulting low borrowing cost, the
Project is economically more feasible.
1.5. This Council has been advised by a representa-
tive of Cronin & Marcotte, Inc., of Minneapolis, Minnesota, in --
vestment bankers and dealers in municipal bonds, that on the
basis of information submitted to them and their discussions
D
Resolution No. 77-488
ri.
with representatives of
exempt bonds, industrial
could be issued and sold
nance the Project.
the Company and potential buyers of tax -
development revenue bonds of the City
upon favorable rates and terms to fi-
1.6. The City is authorized by Minnesota Statutes,
Chapter 474, to issue its revenue bonds to finance capital
projecta consisting of properties used and useful in connection
with a revenue producing enterprise, such as that of the Com-
pany, and the issuance of such bonds by the City would be a
substantial inducement to the Company to construct its facility
within the City.
2. 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
Company at a cost presently estimated to be approximately
$1,500,000.
3. The Project above referred to is hereby given
preliminary approval by the City and the issuance of bonds for
such purpose and in such amount approved, subject to approval
of the Project by the Commissioner of Securities and to the
mutual agreement of this body, the Company and the initial
purchasers of the bonds as to the details of the bond issue 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 each bond, when, as, and if
issued, shall recite in substance that the bond, including in-
terest 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 City.
4. The form of Memorandum of Agreement relating to
the issuance of revenue bonds of the City to finance the cost
of the Project is hereby approved and the Mayor is hereby au-
thorized and directed to execute the Memorandum of Agreement in
behalf of the City.
5. In accordance with Minnesota Statutes, Section
474.01, Subdivision 7, the Mayor is hereby authorized and di-
rected to submit the proposal for the Project to the Commis-
sioner of Securities for his approval of the Project. The Mayor,
City Clerk, City Attorney and other officers, employees and
agents of the City are hereby authorized to provide the Commis-
sioner with any preliminary information he may need for this
-2-
-3-