HomeMy WebLinkAboutCity Council Resolution 1992-138RESOLUTION NO. 92-138
RESOLUTION RELATING TO GENERAL OBLIGATION TAX
INCREMENT BONDS OF 1984 (CARLSON PROJECT):
REFUNDING
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH,
MINNESOTA (CITY):
Section 1. Backqround; Findinas
1.01 The City has issued and sold its $7,000,000 General
Obligation Tax Increment Bonds of 1984 dated April 1, 1984
(Bonds) to finance public development costs in City
Development District No. 1 (Development District). The Bonds
are payable from tax increments from a tax increment financing
district (TIF District) within the Development District. The
full faith, credit and taxing powers of the City are pledged
to the payment of the Bonds, but the Bonds are also secured by
(i) a pledge of tax increments from property within the TIF
District; (ii) a tax increment deficiency agreement
(Agreement) by which Carlson Properties, Inc. (Company) agrees
to make good any deficiency in tax increments available for
debt service on the Bonds; and (iii) a surety bond of St. Paul
Fire and Marine Insurance Company guaranteeing payment of debt
service on the Bonds.
1.02 The outstanding Bonds mature in the amount of
$25,000 on April 1, 1992, $425,000 on April 1, 1993 and
$6,500,000 on April 1, 1994: the TIF District will produce no
tax increment after that date.
1.03 Because development by the Company in the TIF
District has not occurred as expected, there will not be
adequate tax increments available to make principal and
interest payments on April 1, 1993 and April 1, 1994.
1.04 The Company has proposed that the City refund the
outstanding Bonds with revenue bonds payable solely from tax
increments until termination of the TIF District and similarly
guaranteed by a deficiency agreement and surety bond. The
refunding bonds would mature over a twenty-year period which,
combined with lower interest rates on the refunding bonds,
would result in a more manageable debt service obligation for
the Company.
1.05 The Council has been advised by Miller & Schroeder
Financial, Inc. that the proposed refunding bonds would be
readily marketable, and bond counsel has advised that the
proposed refunding is permissible under Minnesota law if the
FI
Resolution No. 92-138
City Council finds that a public purpose will be served
thereby.
1.06 It is found and determined that the proposed
refunding will serve a public purpose by (i) removing the
City's general obligation pledge for the Bonds; (ii) enhancing
the feasibility of the Company's constructing further private
development within the Development District; and (iii)
stimulating further private and public development in the
Development District. It is the present intent of the City,
subject to the provisions of Section 2 of this resolution to
refund the Bonds as proposed.
Section 2. Approvals and Authorizations
2.01 The City gives preliminary approval to the proposal
to refund the Bonds, subject to the right of the City Council
in its sole discretion to withdraw its approval at any time.
prior to the issuance of the refunding bonds. The approval is
further subject to (i) the agreement by the City to all of the
terms and conditions of the proposed refunding bonds; (ii)
satisfactory evidence from the Company that the refunding
bonds will be secured in the same way as the Bonds (except for
the general obligation pledge and tax increment after
termination of the TIF District); and (iii) the Company
agreeing in writing to pay for all costs and expenses involved
in the refunding, including, without limitation, costs of
issuance, underwriting fees, fees and expenses of counsel
including bond counsel and reasonable City administrative
costs.
2.02 The City Manager is authorized and directed to
negotiate the terms and conditions of the refunding as
contemplated by and subject to the terms of this resolution.
Adopted by the City Council on February 24, 1992
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