82-027 RES Member Engstrom introduced the following
resolution and moved its adoption :
RESOLUTION 82-27 t/
RESOLUTION GIVING PRELIMINARY APPROVAL
TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL
DEVELOPMENT ACT , REFERRING THE PROPOSAL TO
THE COMMISSIONER OF ENERGY, PLANNING AND
DEVELOPMENT FOR APPROVAL AND AUTHORIZING
PREPARATION OF NECESSARY DOCUMENTS
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 develop-
ment of economically 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 of cost of governmental services re-
quired 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 opportuni-
ties for such population;
(c) The City Council of the City of Elk River (the "City") has
received from Eugene P. Donahue (the "Company") , a proposal that the
City assist in financing a Project hereinafter described, through the
issuance of a Revenue Bond or Bonds or a Revenue Note or Notes
hereinafter referred to in this resolution as "Revenue Bonds" pursuant
to the Act;
(d) The City desires to facilitate the selective development of
the community, retain and improve the tax base and help to provide the
range of services and employment opportunities required by the popu-
lation; and the Project will assist the City in achieving those ob-
jectives . The 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
community;
(e) The Company is currently engaged in the business of com-
mercial real estate ownership , development and leasing. The
Project to be financed by the Revenue Bonds is a postal service
facility to be located in the City 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
110 employment of up to 15 additional persons to work within the new
facilities;
( f) The City has been advised by representatives of the 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 the Company has also advised this
Council that with the aid of municipal financing , and its resulting
low borrowing cost, the Project is economically more feasible;
(g) The City, pursuant to Minnesota Statutes, Section 474 .01,
Subdivision 7b did place a notice, a copy of which with proof of
publication is on file in the office of the Administrator-Clerk , of
the public hearing on the proposal of the Company that the City
finance the Project hereinbefore described by the issuance of its
Revenue Bonds , said hearing to be held to determine whether it is in
the best interest of the City to proceed with the Project and the City
did conduct a public hearing pursuant to said notice on October 30 ,
1981, at 7: 30 p.m. , at which hearing all persons who appeared at the
hearing were .given an opportunity to express their views with respect
to the proposal;
( h) No public official of the City has either a direct or
indirect financial interest in the Project nor will any public
•
official either directly or indirectly benefit financially from the
Project.
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 , without any
indication upon which the Company may rely that final approval will be
given, to the proposal of the Company that the City undertake the
Project pursuant to the Minnesota Municipal Industrial Development Act
(Chapter 474 , Minnesota Statutes) , consisting of the acquisition,
construction and equipping of facilities within the City pursuant to
the Company' s specifications suitable for the operations described
above as and if approved by the City and to a revenue agreement
between the City and the 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 Revenue Bonds in the total principal amount of
approximately $400 ,000 to be issued pursuant to the Act to finance the
acquisition, construction and equpping of the Project; and said
agreement may also provide for the entire interest of the Company
therein to be mortgaged to the purchaser of the Revenue Bonds; and the
City hereby undertakes preliminarily to issue its Revenue Bonds in
accordance with such terms and conditions as are approved by the City;
2. On the basis of information presented to this Council by the
'� Company it appears that the Project constitutes properties , real and
personal , used or useful in connection with one or more revenue-
, 2.
producing enterprises engaged in any business within the meaning of
• Subdivision 1 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 the
Company to 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 the tax base and to
provide the range of service and employment opportunities required by
the population, to help prevent the movement of talented and educated
persons out of the state and to areas within the state where their
services may not be as effectively used , to promote more intensive
development and use of land within the City and eventually to increase
the tax base of the community;
3. The project is hereby given preliminary approval by the City
subject to compliance , as determined by the City in its sole
discretion, with the following :
( a ) The approval of the Project by the Commissioner of
Securities and Real Estate;
( b) Final approval by this Council , the Company , and the .
purchaser of the Revenue Bonds as to the ultimate 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 Project to the Commissioner
of Energy, Planning and Development , requesting his approval , and
other officers , employees and agents of the City are hereby authorized
to provide the Commissioner with such preliminary information as he
may require;
5 . The Company has agreed and it is hereby determined that any
and all costs incurred by the City in connection with the 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 the
Company;
6 . O 'Connor and Hannan, Attorneys at Law, acting as bond counsel ,
is authorized to assist in the preparation and review of necessary
documents relating to the Project , to consult with the Company and
the purchaser of the Revenue Bonds as to the maturities , interest
rates and other terms and provisions of the Revenue Bonds and as to
the covenants and other provisions of the necessary documents and to
submit such documents to the Council for final approval ;
•
3 .
• 7 . Nothing in this resolution or in the documents prepared
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 Revenue Bonds
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 Revenue Bonds
shall never have the right to compel any exercise of the taxing power
of the City to pay the outstanding principal on the Revenue Bonds or
the interest thereon, or to enforce payment thereof against any
property of the City. The Revenue Bonds shall recite in substance
that the Revenue Bonds , including interest thereon , are payable solely
from the revenue and proceeds pledged to the payment thereof. The
Revenue Bonds shall not constitute a debt of the City within the
meaining of any constitutional or statutory limitation.
8 . In anticipation of the approval by the Commissioner of Energy ,
Planning and Development and the issuance of the Revenue Bonds to
finance all or a portion of the Project , and in order that completion
of the Project will not be unduly delayed when approved, the Company
is hereby authorized at its risk to make such expenditures and advances
toward payment of that portion of the costs of the Project to be
financed from the proceeds of the Revenue Bonds as the Company con-
siders necessary, including the use of interim, short-term financing
• subject to reimbursement from the proceeds of the Revenue Bonds if
and when delivered but otherwise without liability on the part of
the City;
9 . The adoption of this Reoslution does not constitute a guarantee
or a firm commitment that the City will issue the Revenue Bonds as
requested by the Company. The City retains the right in its sole
descrition to withdraw from participation and accordingly not issue
the Revenue Bonds should the City at any time prior to the issuance
thereof determine that it is in the best interests of the City 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; and
10 . In accordance with Minnesota Statutes , Section 474 . 01 , Sub-
division 7a, the Mayor is hereby authorized and directed to submit
the proposal for the Project to the Commissioner of Energy , Planning
and Development for approval of the Project. The Mayor , the Admin
istrator-Clerk, the City Attorney and other officers , employees and
agents of the City are hereby authorized to provide the Commissioner of
Energy, Planning and Development with any preliminary information needed
for this purpose, and the City Attorney is authorized to initiate and
assist in the preparation of such documents as may be appropriate to
the Project if it is approved by the Commissioner of Energy, Planning
and Development.
111
4 .
III Adopted by the City Council of the City of Elk River, Minnesota ,
this 22nd day of November, 1982 .
Richard Hinkt, Mayor
Attest:
Robert C. Middaugh
City Administrator /
•
All
5 .
• Member Engstrom moved that the foregoing reso-
lution be adopted as introduced and read, which motion was
duly seconded by Member Schuldt , and upon roll
call, the "Ayes, " "Abstains" and "Nays" were as follows :
AYES ABSTAINS NAYS
Mayor Hinkle None None
Councilmember Engstrom
Councilmember Schuldt
Councilmember Toth
Councilmember Duitsman
Whereupon the resolution was declared passed and adopted
and was signed by the Mayor , whose signature was attested by
the Administrator-Clerk.
•
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