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HomeMy WebLinkAboutResolution 988RESOLUTION #988 Member Pesek tion and moved its adoption: introduced the following resolu- RESOLUTION RELATING TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; GIVING PRELIMINARY APPROVAL TO THE PROJECT; REFERRING THE PROPOSAL TO THE COMMISSIONER OF SECURITIES FOR APPROVAL; AND AUTHORIZING EXECUTION OF A MEMORANDUM OF AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Orono, Minnesota (the City), as follows: .1. It is hereby found, determined and declared as follows: 1.1 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 deterioration. 1.2. First National Bank of Navarre, a national banking association (the Bank) and David J. Delaney, a resident of the City of Minnetrista, Minnesota (Mr. Delaney)'are considering acquisition of land within the City, construction thereon of a building and acquisition and installation therein of items of furnishings, per- sonal property and related facilities'(all such property herein- after referred to as the Project) for use as a bank and other commercial or office facilities of approximately 10,000 square feet, 1.3. The existence -of the Project would add to the tax base of the City, Hennepin County -and the school district -in _which the City is located. 1.4. This Council has been advised that conventional, commercial financing to pay the capital cost of the Project has not been obtained and is available only on a limited basis and at such high costs* of borrowing that,the economic feasibility of complet- ing and operating the Project would be significantly reduced; however, the use of municipal financing and the lower borrowing cost resulting therefrom will materially increase the economic feasibility of the Project and will constitute a substantial induce- ment to the Bank to undertake the Project. 1..5. The Bank and Mr. Delaney -have proposed that the City issue and sell its Revenue Bonds or Notes or other obligations (the Notes), pursuant to Minnesota Statutes, Chapter 474, as amended (the Act), for the purpose of financing the Project, in- cluding certain incidental expenses thereto, in the approximate • principal amount of $450,000 and to loan the proceeds realized upon the sale of the Notes to Mr. Delaney or a partnership to be I 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 apply the proceeds of -the Notes solely 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 expenses of the City incidental to the issuance and sale of the Notes. 1.6. 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 in the approximate principal amount of $450,000 could.be Issued and sold upon terms and conditions satisfactory�to'•the_City, the Bank, and Mr. Delaney to finance the Proj ect. ,.... j 1.*7. The City is authorized by the Act to issue the_ Notes to finance capital projects. consisting of properties used and useful in connection with a. -revenue-producing enterprise such as that of the Bank. 2. On, the basis of the information given the City to date, -it appears that it would be in the best interest of the City to issue-the.Notes under the provisions of the Act to, finance the Project at a cost presently. estimated to be approximately $450,000. 3. The undertaking of the Project and the issuance of" the Notes pursuant to the Act in the approximate amount of $450,'000. to finance the costs thereof all as referred to above is hereby authorized and approved by the City, subject to -the approval of the Project by the Commissioner of Securities and to the mutual agreement of this Council, the Bank, Mr. Delaney and/or the Partner- ship as to the detailed terms and conditions on which the Project will be financed and the Notes will be issued, sold and secured. .In all events, it is understood, however, that the Notes shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the Project, and each Note, when as and if issued, shall recite -in' substance that the Note, includ- ing 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:_ 4. The form of Memorandum of Agreement (the Agreement) among the City, the Partnership and Mr. Delaney relating to the issuance of the Notes to finance the *cost of the Project is hereby approved and the Mayor and City Clerk are hereby authorized and directed to execute the Memorandum of Agreement in behalf of, the' City. 5. In accordance • the Act, 'The Mayor is hereby Application for the Project w fi with -Section 474.01, Subdivision 7 of authorized and directed to submit an to the Commissioner of Securities for -2- his approval of the Project. The Mayor, City, Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized to provide 'the -Commissioner with any preliminary infor- mation hemay need for this purpose. If the Project is approved by the Commissioner, the City Attorney is authorized to initiate and assist in the preparation of such documents as may be appro- priate to the Project. 6. - Mr. Delaney and the Partnership. have agreed to pay any and all costs incurred by the City in connection with the Project whether or not -the Project is approved by the Commissioner and whether -or not the Project is carried to completion,and to indemnify the;City,-Jts officers'and employees from all liability which the'City and any officers and employees may incur in connec- tion with the Project or -issuance and sale of the Bonds. Mayor • Attest_ i y Clerk Th 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, Massengale, and Pesek and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. yid y`•hc✓<�, -3-