HomeMy WebLinkAboutCity Council Resolution 1985-248RESOLUTION NO.
RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT AND
ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT
ACT (GERALD A. WELLIK PROJECT); REFERRING THE
PROPOSAL TO THE MINNESOTA ENERGY AND
ECONOMIC DEVELOPMENT AUTHORITY FOR APPROVAL;
AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS
BE IT RESOLVED by the City Council of the City of
Plymouth, 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 acquisition of land and the construction and
equipping thereon of an approximately 32,000 square foot
addition to an existing facility to be located at 2100 Xenium
Lane in the Municipality (the Project) by Gerald A. Wellik, a
Minnesota resident (the Borrower), to be leased by the Borrower
to LSI Corporation of America, Incorporated, a Minnesota
. corporation.
1.2. At a public hearing, duly noticed and held on *,;j
1985, in accordance with the Act and Section 103(k) of the
Internal Revenue Code of 1954, as amended, on the proposal to
undertake and finance the Project, all parties who appeared at
the hearing were given an opportunity to express their views
with respect to the proposal to undertake and finance the
Project and interested persons were given the opportunity to
submit written comments to the City Clerk before the time of
the hearing. Based on the public hearing, such written
comments (if any) 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 of
Minnesota has encouraged local government units to act to
prevent such economic deterioration.
(b) The Project would further the general purposes
contemplated and described in Section 474.01 of the Act.
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(c) The existence of the Project would add to the tax •
base of the Municipality, the County and the School District in
which the Project is located and would provide increased
opportunities for employment for residents of the Municipality
and surrounding area.
(d) This Council has been advised by the Borrower,
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
constructing and 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.
(e) This Council finds on the basis of representations
by the Borrower, that the Project would not be undertaken but
for the availability of industrial development bond financing
under the Act.
(f) This Council has also been advised by Borrower
that on the basis of his discussions with potential buyers of
tax-exempt bonds, revenue bonds of the Municipality (which may
be in the form of a commercial development revenue note or
notes) could be issued and sold upon favorable rates and terms
to :`inance the Project.
(g) The Municipality is authorized by the Act to •
issue its revenue bonds to finance capital projects consisting
of properties used and useful in connection with a revenue
producing enterprise, such as that of the Borrower, and the
issuance of the bonds by the Municipality would be a
sv,bstantial inducement to the Borrower to acquire, construct
and equip the Project.
SECTION 2
Determination to Proceed with
the Project and its Financing
2.1. On the basis of the information given the Municipality to
date, it appears that it would be desirable for the
Municipality to issue its revenue bonds under the provisions of
the Act to finance the Project in the maximum aggregate face
amount of ;1,100,000.
2.2. It is hereby determined to proceed with the Project and
its financing and this Council hereby declares its present
intent to have the Municipality issue its revenue bonds under
the Act to finance the Project. Notwithstanding the foregoing,
however, the adoption of this resolution shall not be deemed to
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constitute a guarantee or a firm commitment that the
municipality or City Council will issue or cause the issuance
of such revenue bonds. The Municipality retains the right in
its sole discretion to withdraw from participation and
accordingly not issue the revenue bonds should the Municipality
at any time prior to the issuance thereof determine that it is
in the best interest of the Municipality not to issue the
revenue bonds 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. All details of
such revenue bond issue and the provisions for payment thereof
shall be subject to final approval of the Project by the
Minnesota Energy and Economic Development Authority and may be
subject to such further conditions as the Municipality may
specify. The revenue bonds, if issued, shall not constitute a
charge, lien or encumbrance, legal or equitable, upon any
property of the Municipality, except the revenues specifically
pledged to the payment thereof, and each bond, when, as and if
issued, shall recite in substance that the bond, including
interest thereon, is payable solely from the revenues and
property specifically pledged to the payment thereof, and shall
not constitute a debt of the Municipality within the meaning of
any constitutional, statutory or charter limitation.
2.3. The Application to the Minnesota Energy and Economic
• Development Authority, with attachments, is hereby approved,
and the Mayor and City Manager are authorized to execute said
documents on behalf of the Municipality.
2.4. In accordance with Section 474.10, Subdivision 7a of the
Act, the Mayor and City Manager are hereby authorized and
directed to cause the Application to be submitted to the
Minnesota Energy and Economic Development Authority for
approval of the Project. The Mayor, City Manager, City
Attorney and other officers, employees and agents of the
Municipality are hereby authorized and directed to provide the
Authority with any preliminary information needed for this
purpose. The City Attorney is authorized to initiate and
assist in the preparation of such documents as may be
appropriate to the Project, if approved by the Authority.
SECTION 3
General
3.1. If the bonds are issued and sold, the Municipality will
enter into a lease, sale or loan agreement or similar agreement
satisfying the requirements of the Act (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 of, and interest and
redemption premium, if any, on, the bonds as and when the same
shall become due and payable.
3.2. The Borrower has agreed and it is hereby determined that
any and all direct and indirect costs incurred by the
Municipality in connection with the Project, whether or not the
Project is carried to completion, and whether or not approved
by the Minnesota Energy and Economic Development Authority, and
whether or not the Municipality by resolution authorizes the
issuance of the bonds, will be paid by the Borrower upon
request.
3.3. The Mayor and City Manager are directed, if the bonds are
issued and sold, thereafter to comply with the provisions of
Section 474.01, Subdivisions 8 and 11 of the Act.
3.4. All commitments of the Municipality expressed herein are
subject to the condition that within twelve months of the date
of the adoption of this Resolution the Municipality and
Borrower shall have agreed to mutually acceptable terms and
conditions of the P.evenue 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 issued within such time, this
Resolution shall expire and be of no further effect, other than
for purposes of constituting "official action" under Treasury
Regulations, Section 1.103-8(a)(5)(iv).
Adopted this 15th day of April , 1985.
Mayor
Attest:
City Clerk
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