HomeMy WebLinkAboutResolution 1097 .. �
'2a;��r �7an Nest introduced the following resolution
• and moved its adoption:
RESOLUTION NO. 1097
� RESOLUTION GIVING PRELIMINARY APPROVAL
TO A PROJECT UNDER THE MUNICIPAL INDUS-
TRIAL DEVELOPMENT ACT; REFERRING THE
PROPOSAL TO THE COMMISSIONER OF SECUR-
ITIES FOR APPROVAL; AND AUTHORIZING
PREPARATION OF NECESSARY DOCUMENTS
BE IT RESOLVED by the City Council of the City of Orono,
Minnesota (the City� , as follows :
SECTION 1
Recitals and Findings
1 . 1 . By Resolution No. 988 entitled "Resolution Relating To A
Project Under The Municipal Industrial Development Act; Giving
Preliminary Approval To The Project; Referring The Prop�sal To
The Commissioner Of Securities For Approval; And Authorizing Exe-
cution Of A Memorandum Of Agreement And Preparation Of Necessary
Documents" , adopted by the City Council on January 23 , 1979 , ap-
• proval was given to a project consisting of the acquisition of
land within the City, construction thereon of a building and ac-
quisition and installation therein of items of furnishings , per-
sonal property and related facilities , for use as a bank and
other commercial or office facilities of approximately 10 , 000
square feet, and the issuance of revenue bonds or notes or other
obligations pursuant to the Act (the Notes) in an approximate
amount of $450 , 000 to finance such project, the proceeds of such
Notes to be loaned to Mr. David J. Delaney , a resident of the
City of Minnetrista, Minnesota (Mr. Delaney) , or a partnership
to be organized by Mr. Delaney (the Partnership) pursuant to a
revenue agreement wherein the Partnership and/or Mr. Delaney will
be obligated to acquire, construct and equip the project, to ap-
ply the proceeds of the Notes to_ the payment of costs thereof and
to make payments under the revenue agreement at the times and in
the amounts sufficient to provide for the prompt payment of the
principal of and the interest on the Notes and all costs and ex-
penses of the City incidental to the issuance and sale of the Notes .
1. 2 . This Council , by resolution duly adopted on August 14 , 1979 ,
called a public hearing on the proposal that the City issue its
additional Notes in the estimated amount not to exceed $250 , 000
to undertake and finance, in whole or in part, a project (the
Project) in behalf of Mr. Delaney or the Fartnership consisting
of an increase in the size of building referred to in Section l. l
• above from approximately 10 , 000 square feet to approximately
14 , 000 square feet, a proposed increase in the proportion of bank
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space in the building, and related improvements and property, and
• to finance increased costs of the project approved by Resolution
No. 988 of approximately $50 ,000 due to inflation. The total
estimated amount of Notes to be issued would then be a principal
amount not to� exceed $700,000 . '
, - 1.3. At the public hearing, duly called, noticed and held on
September 11, 1979 in� accordance with the Act, all persons were
afforded an opportunity to be heard. Based on such hearing and
such ot'her facts and circumstances as this Council deems relevant,
_ this Council hereby finds, determines and declares as follows:
(a�, The welfare of the State of Minnesota requires
active promotion, attraction, encouragement and development of
• ' economically sound industry and commerce through governmental
acts to prevent, so far as possible, emergence of blighted lands
and areas of chronic unemployment, and the State has encouraged
local government units to act to prevent such economic deteriora-
tion.
. (b1 The Project would further the purposes stated in
, Section 474 . O1. of the �Act. �
Cc). The existence of the Project would add to the tax
, base of the City and of the County and- School District in which '
the P.roject is located and would provide increased opportunities
• for employment for residents of the City and surrounding area.
• (d� This Council has been advised that conventional,
� commercial financing to pay the 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 sig-
nificantly reduced, but that with the aid of municipal borrowing,
and its resulting lower borrowing cost, the Project is economi-
cally more feasible. .
�e) � This Council has also been advised by Mr.' Delaney
that on the basis of his discussions with potential buyers of ,
tax-exempt Notes, the Notes could be issued and sold upon favor-
able rates and terms to finance the Project.
, � �fk The City is authorized by the Act to issue the
Notes to finance capital p�ojects consisting of properties used
: and useful in connection with a revenue producing enterprise.
, SECTION 2
. Preliminary Approval of Project
2.1. On the basis of information given the City to date, it ap-
pears that it would be in the best interest of the City to issue
� its Notes in the estimated total amount set forth in Section 1. 2
hereof to undertake and finance, in whole or in part, the Project. °
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2 . 2 . The Project is hereby approved by the City and the issuance
• of additional Notes in the amount not to exceed $250 , 000 is hereby
authorized and approved, subject to the approval of the Project
by the Commissioner of Securities and to the mutual agreement of
this Council , the First National Bank of Navarre, Mr. Delan.ey and/
or the Partnership as to the details of the Notes and provisions
for their payment. In all events , it is understood, however, that
the Notes of the City shall not constitute a charge , lien or en-
cumbrance, legal or equitable, upon any property of the City, ex-
cept the Project, and each Note, when, as and if issued, shall
recite in substance that the Note, including interest thereon, is
payable solely from the revenues received from the Project and �
property pledged to the payment thereof, and shall not constitute
a debt of the City.
2 . 3 . The forms of the Application to the Commissioner of Secur-
ities , with attachments , and the First Supplemental Memorandum
of Agreement, as presented to this Council , are hereby approved,
and the Mayor and City Clerk are authorized to execute said doc-
uments on behalf of the City , with such changes therein as are
approved by the Mayor and City Clerk and the City Attornev.
2 . 4 . In accordance with Section 474 . 01, Subdivision 7a � of the
Act, the Mayor and City Clerk are hereby authorized and directed
to cause said Application to be submitted to the Commissioner of
Securities for approval of the Project. The Mayor, City Clerk,
• City Attorney and other officers , employees and agents of the
City are hereby authorized and directed to provide the Commis-
sioner• with any preliminary information the Commissioner may need
for this purpose, and the City Attorney is authorized to initiate
and assist in the preparation of such documents as may be appro-
priate to the Project, if it is approved by the Commissioner.
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Mayor
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Attes ` � �
ity Clerk
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• The motion for the adoption of the foregoing resolution
was seconded by Member Butler , and upon vote being taken
thereon, the following voted in favor thereof: Mayor Van Nest,
Councilmembers Butler, P�assengale, Hurr
and the following voted against the same: None
whereupon said resolution was declared duly passed and adopted
and was signed by the Mayor and attested by the City Clerk.
Adopted by the City Council of the City of Orono, Minnesota at a
regular meeting held December 11, 1979 .
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FIRST SUPPLEMENT TO MEMORANDUM OF AGREEMENT
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THIS FIRST SU�PLEMENT TO MEMORANDUM Ok' AGREEMENT, dated
� as of , 1979 , among the City of Orono, Minnesota (the
City1 , David J. Delaney, a resident of the City of Minnetrista,
Minnesota (Mr. Delaney� , and a partnership to be organized by Mr.
Delaney Cthe Partnership� provides as follows :
1. Preliminary Statement. Aznong the matters of mutual
inducement which Y�ve resulted� in this. fi.rst supplement to memor- ,
andum of agreement are the following; ,
Caa By a Memorandum of Agreement, dated' as of January
23, 1979 , among the City, Mr. Delaney and the Partnership, the
City agreed to issue and sell its revenue bonds or notes or other
obligations �the Notes� pursuant to the authority of Chapter 474 ,
Minnesota Statutes, as amended Cthe Act}. to pay costs of a project
consisting of the acquisition of certain properties for use as a
bank and other commercial or office facilities of approximately
10, Q.00 square feet.
• � (b� Mr. Delaney and the Partnership now propose that
the building included in the project described in (a) above be
i'ncreased from approximately 10 ,000 square feet to approximately
� 14 ,000 square feet, and propose that there be an increase in the
proportion of bank space in the building and that related improve-
ments and other properties be made and acquired.
(c� Mr. Delaney and the Partnership wish to obtain sat-
isfactory assurance from the City that the proceeds of Notes
of the City will be made available to finance the cost occasioned
by the increase in the facilities as described above (�nd occasioned
by inflation in costs of the project described above of approxi-
mately $SO ,OOO� ,which increase and cost of inflation increase ,
referred to is presently estimated not to exceed $250 , 000 . •
2. Supplement to the Memorandum of Agreement. The
Memorandum of Agreement, dated as of January 23 , 1979 , is supple=
mented as follows : � .
(a� Subject to due compliance with all requirements
of law and by. virtue of such statutory authority as is now `°or
, may hereafter be conferred by �the Act, and subject to the mutual
agreement of the City, �Mr. Delaney and the purchasers of the Notes
as to the terms and conditions of the Notes and of their issuance,
the City agrees that it will issue and sell its Notes , in an ad-
ditional amount not exceeding $250 ,000 to pay the •costs of the
. increase in the "facility described above and increased costs of
approximately $50 ,OOO �in the project described in 1 (a) above due
• to inflation. � ' �
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(b� That the agreement of• the City to issue and sell
the Notes as described in 2 (a) above is subject to the same con-
• ditions and provisions as are set forth with reference to a com-
mitment of the City to issue Notes in an amount not exceeding
$450 , 000 in the Memorandum of Agreement, dated as of January 23 ,
1979 .
IN WITNESS ��IHEREOF , the parties hereto have entered
into this Agreement by their officers thereunto duly authorized
as of the date first abo�re written.
CITY OF ORONO, MINNESOTA 3
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M yor
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City Cler
DAVID J. DELANEY
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� , STATEMENTS OF MUNICIPALITY
CONCERNING
MUNICIPAL INDT3STRIAL REVENUE BOND PROJECT
Re: Proposed Additional $250 ,000 Industrial Development
� ' Revenue Bonds
(Delaney-First National Bank of Navarre .Projecta `
Municipality: City of Orono, Minnesota
Borrower: David Delaney and/or a partnership to be
organized by Mr. Delaney
TO WHOM IT MAY CONCERN:
The undersi:gned officials of the City of Orono, Minne-
sota �the City� , hereby make the following statements in support
of the attached Application for Approval of Municipal Industrial
Revenue Bond Project concerning the above-referenced Project:
!a� Statement as to Public Pur ose of Pro 'ect under Minnesota
Statutes, Chapter 474 (A�plication-Exhibit 3 . On "the basis of
information provided by representatives of the Borrower and on
the basis of the publi.c hearing held in accordance with � Section
474. 01, Subdivision 7b of the Minnesota Municipal Industrial
Development Act, Minnesota Statutes, Chapter 474 (.the Act) , the
City has given preliminary approval to �the Project and the fi-
� nancing thereof by the issuance of revenue bonds of the City.
The following are factors considered by the City Council in deter-
mining• to give preliminary approval .to the Project:
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(1�. Representatives of the Borrower state that the
Project consists generally of .an increase in the size of the
building included in the project approved by the Minnesota Com-
missioner of Securities on February 12 , 1979 , a proposed increase
in the proportion of bank space in the building, and related im-
- provements and other property. �
C2� Bond counsel is of the� opinion that the Project
constitutes a "project" within the meaning of Section 474 . 02 ,
Subdivision la of the Act:
(3) Representatives of the �Borrower estimate that, upon
completion of the Project . (and the project described in the Ap--
proval of the Minnesota .Commissioner of Securities on February
12 , 1979 , hereinafter collectively referred to as the Combined
Project) , approximately 4 additional persons will be employed in
the operation of the Combined Project and perhaps as many as 30 persons
will be �ocated in, or work out of, the office and commercial�
space included in the Combined Project. . -
(4) Re�resentatives� of the Borrower estimate that the � �
• operation of the Combined Project will result in an annual pay- �
roll of approximately $36 ,000 , based on wage rates currently in
effect, not includincy. the additional payroll which will result
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from the enterprises which will occupy the office and commercial
� space in the Combined Project. The City Council believes that a
substantial portion of that payroll will be spent on housing, food
and other goods and services in the City and surrounding area,
thus benefiting the local economy.
� (5) The Project, when in place , will add to the tax
base of the City.
(6) On the basis of the information presented to the
City Council, it is believed that the Project, when completed,
will be compatible with present and projected development in the
area.
(b) Statement as to Submission of Information Required b
Section 474 . 01 , Subdivision 8 of the Act (Application-Exhibit 5) .
Upon entering into a "revenue agreement" with resoect to the Pro-
ject, as contemplated by the Act, the City will f��rnish the Minne-
sota Department of Economic Development, on such forms as said
Department may prescribe , the information required by Section
474 . 01 , Subdivision 8 of the Act.
(c) Statement as to Nature of Pro erty Included in Pro�ect
(Application-Exhibit 6) . Based on the information provided by
representatives of the Borrower, it appears that the Project
does not include any property to be sold or affixed to or corz-
� summe� in the production of property for sale, and does not in-
clude any housing facility to be rented or used as a permanent
reside�ce.
(d) Statement as to Public Hearing (Application-Exhibit 7) . A
public hearing on the proposal to undertake and finance the Pro-
ject was conducted on November 27 , 1979, at 7 : 3� o ' clock P .M. ,
at Orono Council Chambers , pursuant to Section 474 . 01,
Subdivision 7b of the Act, and all interested parties were afforded
an opportunity to express their views .
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Mayor
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City �Clerk
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„ ; . .: � Nweqnber 1S;�1979
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� Co�nissioner of Sec�ities , :' ��' '�-
� ' , St. Paul, Mirmesota , • ° � � �� �,
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1 1, , ,� ` The'Hrnwrable City Catmcil ' � �r
,: � , . . City of Orono . , . . � ,
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� � - Orono PZinnesota .�
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, _ Re: Proposed Ccxm�rci.al Development Revenue Notes ��' .� ,
� • ° � (Delane , �
y .- First National Bank of Navarre Project) ,; i � �
� City of Orono, Mirmesota . } '� �
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, Gentlemen: ' � • � �� , _
�;i � � We , . ' �s�:• �� � :�, ' Y�'
`, . have reviewed a proposal that the City of Orano; Mixmesota, '1. .: � ; "`���
issue its C�mercial Developinent Revenue Notes in a principal sLUn, ' '`
-1 . �, pr�sently estimated at $750,000 under the prrnrisions of Minnesota ,'� '' �'�
.,� r Statutes, Chapter 474, to finance acquisition of a pro�ect for David .° ,. x '
; - ` �' Delaney. Based on the informati o r i f u rn i s h e d;us, i t appeaxs that the ,,;;, .���,��
a project described is econanica.11y feasible. ;. , ' � • � .
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, ;` The interest rate or rates rnl the Bonds wi.11�; of course, depend .- L � � ;� ,'
� ' • ' : on m�ney market conditions at th e time o f issue. However; it is �' � `
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. . �r' ;,� , , our intention at the approgriate tune,to submit 'a proposal for .' '' '' �' -
, ` � '� purchasing these Bor�cis if approved by the City of Orono, :, ` � ', ,�
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f:• ; Very truly yours�, • . '� � R �., ' :s , ;
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