92-034 RES
.
.
.
RESOLUTION NO. 92-34
RESOLUTION RECITING A PROPOSAL FOR AN
INDUSTRIAL FACILITIES DEVELOPMENT PROJECT,
AUTHORIZING A PUBLIC HEARING,
GIVING PRELIMINARY APPROVAL TO THE PROJECT
PURSUANT TO THE MINNESOTA STATUTES
SECTION 469.154, AUTHORIZING THE SUBMISSION OF
AN APPLICATION FOR APPROVAL OF THE PROJECT TO THE
COMMISSIONER OF THE DEPARTMENT OF TRADE AND
ECONOMIC DEVELOPMENT OF THE STATE OF MINNESOTA,
AND AUTHORIZING THE PREPARATION OF
NECESSARY DOCUMENTS AND MATERIALS
IN CONNECTION WITH THE PROJECT
(TESCOM CORPORATION PROJECT)
(a) WHEREAS, the purpose of Minnesota Statutes, Sections
469.152 through 469.165, relating to municipal industrial
development (the lIActll), as found and determined by the
legislature, is to promote the welfare of the state by the active
attraction and encouragement and development of economically sound
industry and commerce to prevent so far as possible the emergence
of blighted and marginal lands and areas of chronic unemployment;
and
(b) WHEREAS, 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; and
(c) WHEREAS, the City Council of the city of Elk River,
Minnesota (the lICityll), has received from Tescom Corporation, a
corporation organized under the laws of the State of Minnesota (the
lICompanyll), 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 lIRevenue Bondsll) pursuant to the Act; and
(d) WHEREAS, the City desires to facilitate the selec-
tive development of the community, retain and improve the tax base
and help to provide the range of services and employment
opportunities required by the population; and the Project will
assist the City in achieving those objectives; 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; and
629585.01
.
.
.
(e) WHEREAS, the Company is currently engaged in the
business of manufacturing pressure control devices; and the Project
to be financed by the Revenue Bonds is an approximately 30,000
square foot manufacturing building to be located at the company's
existing facility at 12616 Industrial Boulevard in the City and
consists of the construction of improvements and the installation
of equipment therein and renovation of the existing facility, all
to be constructed pursuant to the Company's specifications and to
be owned and operated by the Company (the "Project"), and will
result in the emploYment of approximately 84 additional persons by
1995 at the Company's facilities; and
(f) WHEREAS, the City has been advised by representa-
tives 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, and the Company' has also advised this Council that the
Project would not be undertaken but for the availability of
industrial development bond financing; and
(g) WHEREAS, the Company has requested the City to give
preliminary approval to the Project subject to consideration of
information received at a public hearing to be held on May 18,
1992, at which public hearing all those appearing who desire to
speak will be heard and written comments will be accepted; and
(h) WHEREAS, 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, subject to
consideration of information received at the public hearing, to the
proposal of the Company that the City undertake the proj ect
pursuant to the Act and pursuant to a revenue agreement between the
City and Company containing such terms and conditions (with
provisions for revision from time to time as necessary) as may be
necessary to produce income and revenues sufficient to pay, when
due, the principal of and interest on the Revenue Bonds in the
maximum aggregate principal amount of $1,500,000, to be issued
pursuant to the Act to finance the acquisition, construction and
equipping of the Project. Such revenue agreement may also provide
for the entire interest of the Company therein to be mortgaged to
the purchaser of the Revenue Bonds. The City hereby undertakes
preliminarily to issue its Revenue Bonds in accordance with such
terms and conditions.
629585.01
.
.
.
2. On the basis of information available to this council it
appears, and the Council hereby finds, that the Project constitutes
properties, real and personal, used or useful in connection with
one or more revenue producing enterprises engaged in any business
within the meaning of Subdivision 2(b) of section 469.153 of the
Act; that the proj ect furthers the purposes stated in Section
469.152 of the Act; that the Project would not be undertaken but
for the availability of industrial development bond financing under
the Act and the willingness of the City to furnish such financing;
and that the effect of the Project, if undertaken, will be to
encourage the development of economically sound industry a~d
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 the approval of the Project by the Commissioner of
the Department of Trade and Economic Development or such other
state officer having authority to grant approval (the
"Commissioner"), and subj ect to final approval by this Council
(after consideration of information received at the public
hearing), the Company, and the purchaser of the Revenue Bonds as to
the ultimate details of the financing of the Project.
4. The City Clerk is hereby authorized and directed to cause
notice of the public hearing to be published one time in the
official newspaper and a newspaper of general circulation available
in the City not less than 15 days prior to the date fixed for the
hearing substantially in the form attached hereto.
5. In accordance with Subdivision 3 of Section 469.154 of the
Act, the Mayor or Administrator of the City is hereby authorized
and directed to submit the proposal for the Project to the
Commissioner 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.
6. 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.
7. Briggs and Morgan, Professional Association, acting as
bond counsel, and Norwest Corporate Finance, are authorized to
assist in the preparation and review of necessary documents
629585.01
.
.
.
relating to the Project, to consult with the City Attorney, 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.
8. 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 from the Project or otherwise provided by
the Company and 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 of 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 meaning of any constitutional or
statutory limitation.
9. In anticipation of the approval by the Commissioner and
the issuance of the Revenue Bonds to finance all or a portion of
the Project, and in anticipation that the City will procure and
devote to the Revenue Bonds an adequate allocation of authority to
issue private activity bonds (Which allocation is not made hereby),
and in order that completion of the Project will not be unduly
delayed when approved, the Company is hereby authorized 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 considers 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.
Adopted by the ci ty
Minnesota, this 27th day of
Attest:
~'/~4
Clerk
Council of the City of Elk
APril' 1992.
J~ A- ;;J1J
Mayor
River,
629585.01