5.1. SR 07-21-2008/j
City of
Elk -~.-,
River
REQUEST FO R ACTIO N
To Item Number
Ci Council 5.1.
Agenda Section Meeting Date Prepared by
Community Development July 21, 2008 Catherine M~helich, Director of
Economic Develo ment
Item Description Reviewed by
Request for Industrial Revenue Bond for Metal Craft Machine &
Engineering, Inc. Project -Public Hearing (Continued) Reviewed by
Action Requested
Continue the Public Hearing on the issuance of Industrial Revenue Bonds for the Metal Craft Project.
Background/Discussion
In accordance with statutory requirements, the City Council opened a public hearing at its July 7, 2008
meeting to consider a request for Industrial Revenue Bond for the Metal Craft Machine & Engineering,
Inc. Project (as described in the attachments). In addition, the Council adopted a resolution granting
preliminary approval of the project.
Since the initial public hearing notice was posted, the applicant indicated additional entities to be
identified as separate borrowers on the building and equipment. Therefore, it was necessary for the City
to continue the public hearing to July 21, 2008 in order to publish a revised public notice that formally
identifies the additional borrowers prior to final approval and issuance of the bonds.
In addition to Metal Craft Machine & Engineering, Inc., the additional potential borrowers include:
Mowry Properties Holdings, LLC
• Mowry Properties, LLC
Once the bond documents are drafted, the Council will be asked at a later date for final approval and
issuance of the bonds.
Attachments
Public Hearing Notice
Staff report to Council re: Industrial Revenue Bond for Metal Craft, dated July 7, 2008
Action Motion by Second by Vote
Follow Up
S:\Industrial Siting\Metal Craft\IDB\7.21.08 Request Council Action metalcraft.doc
Legal Notice
NOTICE OF PUBLIC HEARING
ON A PROPOSED PROJECT FOR METAL CRAFT MACHINE & ENGINEERING, INC.
AND THE ISSUANCE OF REVENUE BONDS UNDER MINNESOTA STATUTES,
SECTIONS 469.152 THROUGH 469.1651.
City of Elk River, Minnesota
NOTICE IS HEREBY GIVEN, that the City Council of Elk River, Minnesota (the
"City"), will meet on July 21, 2008 at 6:30 p.m., at the City Hall, 13065 Orono Parkway, Elk
River, Minnesota, for the purpose of conducting a public hearing on a proposal that the City
issue revenue bonds (the "Bonds"), in one or more series, under Minnesota Statutes, Sections
469.152 through 469.1651, in order to finance all or a portion of the costs of constructing,
furnishing and equipping a project (the "Project") on behalf of Metal Craft Machine &
Engineering, Inc., a Minnesota corporation, Mowry Properties Holdings, LLC and Mowry
Properties, LLC, Minnesota limited liability companies, one or more of these entities will be the
borrower in connection with the issuance of the Bonds (collectively, the "Borrower"). The
Project will consist of the construction of an approximately 83,000 square foot manufacturing
facility for medical devices, including related equipment and furnishings, located at 13760
Business Center Drive in Elk River, Minnesota The approximate aggregate principal amount of
the proposed Bonds is $5,000,000. The Bonds shall be limited obligations of the City, and the
Bonds and interest thereon will be payable solely from the revenues pledged to the payment
thereof. No holder of any Bonds will ever have the right to compel any exercise of the taxing
power of the City to pay the Bonds or the interest thereon, nor to enforce payment against any
property of the City except money payable by the Borrower to the City and pledged to the
payment of the Bonds
A draft copy of the proposed Application to the Minnesota Department of Employment
and Economic Development for approval of the Project, together with draft copies of all
attachments and exhibits thereto, is available for public inspection at the office of the City
Administrator during business hours, 8:00 a.m. to 4:30 p.m., on normal business days.
All persons interested may appear and be heard at the time and place set forth above, or
may file written comments with the City Administrator prior to the date of the hearing set forth
above.
Dated: June 13, 2008.
By Order of the City Council
By: Lori Johnson
City Administrator
Publish June 18, 2008
2199304v2
.^~/
City of
Elk -~.-,
River
REQUEST FO R ACTIO N
To Item Number
Ci Council 5.2.
Agenda Section Meeting Date Prepared by
Administration July 7, 2008 Catherine Mehelich, Director of
Economic Develo ment
Item Description Reviewed by
Request for Industrial Revenue Bond for Metal Craft Machine & Tim Simon, Finance Director
Engineering, Inc. Project -Public Hearing & Resolution Reviewed by
Action Requested
Staff recommends the Council's action of the following items:
1) Open a Public Hearing on the issuance of Industrial Revenue Bonds for the proposed Metal Craft
project, and then continue the public hearing to July 21, 2008.
2) Consider approval of the attached Resolution granting prelitnuiary approval of the project.
Resolution No. 08-_, A Resolution Reciting a Proposal for an Industrial Development Project and
Indicating Preliminary Intent to Assist the Financing of the Project Pursuant to Minnesota Municipal
Industrial Development Act and (Metal Craft Project)
Background/Discussion
Staff recently received an application request from local manufacturer, Metal Craft Machine &
Engineering, Inc. for an Industrial Revenue Bond. Metal Craft is seeking authorization for the City of
Elk River to issue a 30-year tax exempt industrial development revenue bond in an amount up to
$5-million. These funds will be used as proceeds for the construction of the company's manufacturing
facility and related equipment and fiiriushings located at 13760 Business Center Drive in Elk River. The
City's issuance of this industrial development revenue bond will enable the company to obtain financing
at fixed and reduced rates.
The applicant is requesting that the Council consider approval of the attached resolution which indicates
a preliminary approval of the request. The applicant recently indicated additional entities to be identified
as separate borrowers on the building and equipment. Therefore, it is necessary for the City to continue
the public hearing to Monday, July 21, 2008 in order to formally identify and consider the additional
entities as part of a final resolution approving the project and issuance of the bonds.
Financial Impact
There will be no impact to the City since this request is for a revenue bond (conduit financing) with the
City not having t0 pledge any considerations towards debt payment. In addition, Metal Craft has paid an
C:\Users\cmehelich\AppData\Local\Microsoft\Windows\Temporazy Internet Files\OLK4635\Request Council Action metalcraft.doc
initial $5,000 application fee, the City will require an issuance fee of 1/z of 1% and all out of pocket
expenses for legal fees to underwrite the bond will be paid fox by the applicant.
Attachments
• Public Hearing Notice
• Resolution No. 08-
• Metal Craft letter dated July 2008
• Elk River Conduit Bonding Application
ACtIOn Motion by Second by Vote
FOllow Up
C:\Users\cmehelich\AppData\Local\Microsoft\Windows\Tempoxary Internet Files\OLK4635\Request Council Action metalcraft.doc