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92-039 RES . . . RESOLUTION NO. 92-39 RESOLUTION RECITING A PROPOSAL FOR AN INDUSTRIAL FACILITIES DEVELOPMENT PROJECT, 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 "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 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 "City"), has received from Tescom Corporation, a corporation organized under the laws of the State of Minnesota (the "Company"), a proposal that the City assist in financing a Project hereinafter described, through the issuance of a Revenue Bond or Bonds (hereinafter referred to in this resolution as "Revenue Bonds") 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 631363 . (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, 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 continued employ- ment of the approximately 84 additional persons by 1995; 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, pursuant to a resolution of the City Council adopted on April 27, 1992, a public hearing on the Project was held on May 18, 1992, after notice was published and materials made available for public inspection at the city Hall, all as required by Section 469.154, Subdivision 4, of the Act, at which public hearing all those appearing who desired to speak were heard and written comments were 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 to the proposal of the Company that the City undertake the Project 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. Said 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. 2 . 631363 . . . 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 Project furthers the purposes stated in Section 469.152 of the Act; that the Project would be made more economically feasible with 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 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 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, 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 3 of Section 469.154 of the Act, the Mayor or Manager 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. 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. 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 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. 631363 3 Attest: . J--4~ t1. ~~~ Clerk ;/ . . 7. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the proj ect 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. Adopted by the City Council of the City of Elk River, Minnesota, this 18th day of May, 1992. 1f;y JI $4<v<,r.> Vice Mayor 631363 4