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HomeMy WebLinkAbout1999.07.06 RESO 1999-0012RESOLUTION 1999-12 RESOLUTION RECITING A PROPOSAL FOR AN INDUSTRIAL DEVELOPMENT PROJECT GIVING PRELIMINARY APPROVAL TO THE PROJECT PURSUANT TO MINNESOTA STATUTES, SECTION 469.154, AND AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR ALLOCATION AND FOR APPROVAL OF THE PROJECT TO THE DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT AND FOR PREPARATION OF NECESSARY DOCUMENTS (ASSURANCE MANUFACTURING COMPANY, INC., PROJECT) WIIEREAS, (a) The purpose of Minnesota Statutes, Sections 469.152 to 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; (b) 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; (c) The City Council of the City of Hugo (the "City") has received from Nor - Lakes Services Midwest, Inc., a Minnesota corporation (the "Company") a proposal that the City undertake to finance a Project hereinafter described, through the issuance of revenue bonds (hereinafter the "Bonds") pursuant to the Act; (d) The City desires to facilitate the selective development of the community and surrounding area, retain and improve the tax base in the City, 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 in the City and help maintain a positive relationship between assessed valuation and debt and enhance the image and reputation of the community; (e) The Project to be financed by the Bonds is the acquisition of land in the Bald Eagle Industrial Park and the construction thereon of an approximately 78,000 sq. ft. facility for the manufacture of lubricating oil and the acquisition and installation of equipment therein (the "Project"). 1062072.1 (f) The City has been advised by representatives of 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; (g) 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 Hugo, Minnesota, as follows: 1. The Council hereby gives preliminary approval to the proposal of Company -that the City undertake the Project pursuant to the Act, subject to holding a public hearing with respect to the Project, and pursuant to a revenue agreement between the City and Company upon such terms and conditions with provisions for revision from time to time as necessary, so as to produce income and revenues sufficient to pay, when due, the principal of and interest on the Bonds in a total principal amount: not to exceed $4,100,000 to - be issued pursuant to the Act to finance the acquisition, construction, and installation of the Project; and such revenue agreement may also provide for the interest of Company therein to be pledged to the purchaser of the Bonds; and the City hereby undertakes preliminarily to issue its Bonds in accordance with such terms and conditions. 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 manufacturing within the meaning of Subdivision 2(a)(1) of Section 469.153 of the Act; that the Project furthers the purposes stated in Section 469.152; that the availability of the financing under the Act and willingness of the City to furnish such financing will be a substantial inducement to Company to undertake the Project, 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 surrounding area 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 surrounding communities and eventually to increase the tax base of the community. 3. The Project is hereby given preliminary approval by the City subject to holding a public hearing with respect to the Project and consideration of information, if any, presented and further subject to final approval by this Council, Company, and the purchaser of the Bonds as to the ultimate details of the financing of the Project. 1062072.1 2 4. The Mayor and staff of the City are hereby authorized and directed to submit a request for allocation of federal bonding authority for the Project. The staff are also authorized to publish notice of a public hearing on the Company's proposal at a later appropriate date in the manner required by the Act. 5. 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, including legal fees, whether or not the Project is carried to completion and whether or not volume cap is obtained will be paid by Company. 6. Briggs and Morgan, Professional Association, acting as bond counsel, is authorized to assist in the preparation and review of necessary documents relating to the Project, to consult with the City Attorney, Company and the purchaser of the Bonds as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and to submit such documents to the Council for final approval. 7. 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 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 pledged to the payment thereof, nor shall the City be subject to any liability thereon. The holder of the Bonds shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereof against any property of the City. The Bonds shall recite in substance that the Bonds including interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 8. In anticipation of the issuance of the Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, Company is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project as Company considers necessary, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds if and when delivered but otherwise without liability on the part of the City. 1062072.1 3 Adopted by the City Council of the City of Hugo, Minnesota, this 61 day of July, 1999. Attest: 1062072.1