RES 1979-41 t
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411 RESOLUTION 79-41
RESOLUTION RECITING A PROPOSAL FOR A
COMMERCIAL FACILITIES DEVELOPMENT PROJECT
GIVING PRELIMINARY APPROVAL TO THE PROJECT
PURSUANT TO THE MINNESOTA
MUNICIPAL INDUSTRIAL DEVELOPMENT ACT
AUTHORIZING THE SUBMISSION OF AN APPLICATION
FOR APPROVAL OF SAID PROJECT TO THE
COMMISSIONER OF SECURITIES
OF THE STATE OF MINNESOTA
AND AUTHORIZING THE PREPARATION OF
NECESSARY DOCUMENTS AND MATERIALS
IN CONNECTION WITH SAID PROJECT
WHEREAS,
(a) The purpose of Chapter 474, Minnesota
Statutes, known as the Minnesota Municipal Industrial.
Development- Act ( the "Act" ) as found and determined by the
legislature is to promote the welfare of the state by the
active attraction and encouragement and development of economi-
cally sound industry and commerce to prevent so far as possible
the emergence of blighted and marginal lands and areas of
• chronic unemployment;
(b) Factors necessitating the active promotion
and development of economically sound industry and commerce are
the increasing concentration of population in the metropolitan
areas and 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;
(c) The City Council of the City of Elk River
( "the City") has received from S. D. Smith, Margaret I. Smith,
Ronald D. Smith, Judy A. Lewman and John M. Lewman, ( the
"Corny") f'_;,, { ... Ci i I i,.��r-rt 'i�� t r) f inane('. a
Project he::einaf.ter descri reed, through the issuance of revenue
bonds in the form of a single debt instrument ( "the Note" )
pursuant to the Act;
(d) "The City desires to facilitate the selec-
tive development of the community, retain and improve its tax
base and help it provide the range of services and employment
opportuni.t::.es required by its population; and said Project will
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assist the City in achieving those objectives. Said Project
will help to increase assessed valuation of the City and help
maintain a positive relationship between assessed valuation and
debt and enhance the image and reputation of the City;
(e) Company is engaged in the business of land
development. The Project to he financed by the Note is a
shopping center to be located in the City of Elk River and
consists of the acquisition of land and the construction of
buildings and improvements thereon and the installation of
equipment therein, and will result in the employment of
additional persons to work within the new facilities;
( f) The City has been advised by representa-
tives of Company 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 Company has also advised this Council that with
the aid of municipal financing, and its resulting low bor-
rowing cost, the Project is economically more feasible;
(g) Pursuant to a resolution of the City
Council adopted on , 1979, a public hearing on the
Project was held on December 10 , 1979, after notice was
published, and materials made available for public inspection
• at City Hall , all as required by Minnesota Statutes,
Section 474. 01, Subdivision 7b at which public hearing all
those appearing at said hearing so desired to speak were heard.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Elk River, Minnesota, as follows:
1. The Council hereby gives preliminary approval to the
proposal of Company that the City undertake the Project
pursuant to the Minnesota Municipal Industrial Development Act
(Chapter 474, Minnesota Statutes) , consisting of the acqui-
sition, construction and equipping of facilities within the '
City pursuant to Company' s specifications suitable for the
operations described above and to a revenue agreement between
the City and Company upon such terms and conditions with
provisions for revision from time to time as necessary, so as
to produce income and revenues sufficient to pay, when due, the
principal of and interest on the proposed Note in the total
principal amount of ''approximately $725,000 to be issued
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pursuant to the Act to finance the acquisition, construction
and equipping of said Project; and said agreement may also
provide for the entire interest of Company therein to be
mortgaged to the purchaser of the Note; and the City hereby
undertakes preliminarily to issue its Note in accordance with
such terms and conditions;
2. On the basis of information available to this Council
it appears, and the Council hereby finds, that said Project
constitutes properties, real and personal, used or useful in
connection with one or more revenue producing enterprises en-
gaged in any business within the meaning of Subdivision la of
Section 474.02 of the Act; that the Project furthers the
purposes stated in Section 474. 01, Minnesota Statutes; that the
availability of the financing under the Act and willingness of
the City to . furnish such financing will be a substantial
inducement to Company tq undertake the Project, and that the
effect of the Project, if undertaken, will be to encourage the
development of economically sound industry and commerce, to
assist in the prevention of the emergence of blighted and
marginal land, to help prevent chronic unemployment, to help
the City retain and improve its tax base and provide the range
of service and employment opportunities required by its
population, to help prevent the movement of talented and
educated persons out of the state and to areas within the State
410 where their services may not be as effectively used, to promote
more intensive development and use of land within the City and
to eventually increase the City' s tax base;
3. Said Project is hereby given preliminary approval by
the City subject to the approval of the Project by the Com-
missioner of Securities, and subject to final approval by this
Council, Company, and the purchaser of the Note .as to the ulti-
mate details of the financing of the Project;
4. In accordance with Subdivision 7a of Section 474. 01
Minnesota Statutes, the Mayor of the City is hereby authorized
and directed to submit the proposal for the above described
Project to the Commissioner of Securities, requesting his ap-
proval , and other officers, employees and agents of the City
are hereby authorized to provide the Commissioner with such
preliminary information as ,he may require;
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5. Company has agreed and it is hereby determined that
any and all costs incurred by the City in connection with the
III financing of the Project whether or not the Project is carried
to completion and whether or not approved by the Commissioner
will be paid by Company;
6 . Briggs and Morgan, Professional Association, acting as
bond counsel, are authorized to assist in the preparation and
review of necessary documents relating to the Project, to
consult with the City Attorney, Company and the purchaser of
the Note as to the maturities, interest rates and other terms
and provisions of the Note and as to the covenants and other
provisions of the necessary documents and to submit such -
documents to the Council for final approval;
7. Nothing in this resolution or in the documents pre-
pared pursuant hereto shall authorize the expenditure of. any
municipal funds on the Project other than the revenues derived
from the Project or otherwise granted to the City for this
purpose. The Note shall not constitute a charge, lien or
encumbrance, legal or equitable, upon any property or funds of
the City except the revenue and proceeds pledged to the payment
thereof, nor shall the City be subject to any liability
thereon. The holder of the Note shall never have the right to
compel any exercise of the taxing power of the City to pay the
outstanding principal on the Note or the interest thereon, or
to enforce payment thereof against any property of the City.
II/ The Note shall recite in substance that the Note, including •
=Interest thereon, is payable solely from the revenue and
proceeds pledged to the payment thereof. The Note shall not
constitute a debt of the City within the meaning of any -
r_onstitutional or statutory limitation; .
8. In anticipation of the approval by the Commissioner of
Securities and the issuance of the ,rote to finance all or a
portion of the Project, and in order that completion of the .
Project will not be unduly delayed when approved, Company is
hereby authorized to make such expenditures and advances toward
payment of that portion of the costs of the Project to be ficed .
from the proceeds of the Note as Company considers necessary,
including the use of interim, short-term financing, subject to
reimbursement from the proceeds of the Note if and when
delivered bwt otherwise withoet liability on the part of the
City;. ■
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• 9. The actions of the City Clerk in causing public notice
of the public hearing and in describing the general nature of
the Project and estimating the principal amount of bonds to be
issued to finance the Project and in preparing a draft of the
proposed application to the Commissioner of Securities, State
of Minnesota, for approval of the Project, which has been
available for inspection by the public at the City Hall from
and after the publication of notice of the hearing, are in all
respects ratified and confirmed.
Adopted by the City Council of the City of Elk River,
Minnesota, this 10th day of December, 1979.
Mayor
Attest :
City Administrator/Clerk
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