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HomeMy WebLinkAbout7151 - ADMIN Resolution - City Council - 1982/06/07r r 1 RESOLUTION NO. 7151 RESOLUTION AUTHORIZING THE DEVELOPMENT OF THE CITY OF SAINT LOUIS PARK SMALL BUSINESS FINANCING PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 WHEREAS, the welfare of the State of Minnesota (the "State") 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 it is the policy of the State to facilitate and encourage action by local government units to prevent the economic deterioration of such areas to the point where the process can be reversed only by total redevelopment through the use of local, state and federal funds derived from taxation, with the attendant necessity of relocating displaced persons and of duplicating public services in other areas; and WHEREAS, technological change has caused a shift •to a significant degree in the area of opportunity for educated youth to processing, transporting, market- ing, service and other industries, and unless existing and related industries are retained and new industries are developed to use the available resources of the City of Saint Louis Park (the "City"), a large part of the existing investment of the community and of the State as a whole in educational and public service facilities will be lost, and the movement of talented, educated personnel of mature age to areas .where their services may be effectively used and compensated and the lessening attraction of persons and businesses from other areas for purposes of industry, commerce and. tourism will deprive the City and the State of the economic and human resources needed as a base for providing governmental services and facilities for the remaining population; and , WHEREAS, the increase in the amount and cost of governmental services requires the need for more intensive development and use of land to provide an adequate tax base to finance these costs;•and W HEREAS, the existence of the Project, as hereinafter defined, in the City will contribute to more intensive development and use of land to increase the tax base of the City and overlapping taxing authorities and maintain and provide for an increase in opportunities for employment for, residents of the City; and WHEREAS, the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 474.01 et s_�egg. (the "Act") authorizes the issuance of revenue bonds to finance the cost—o the acquisition, construction, reconstruction, improvement, betterment or extension of projects; and WHEREAS, the term "project" is defined by Section 974.02, subdivision la; of the Act to include "any properties, real or personal, used or useful in connection with a revenue producing enterprise"; and WHEREAS, Section 474.07 of the Act authorizes the governing body of the City, after the authorization of the issuance of bonds ,pursuant to Section 474.04 of the Act, to provide funds immediately required for the purpose and not exceeding the amount of such bonds, by effecting temporary lonns upon such terms ns it shall by resolution determine, evidenced by notes, due in not exceeding 24 months from the date thereof, to be repaid with interest from the proceeds of such bonds when issued and delivered to the purchaser thereof; and WHEREAS, a representative of Darrell A. Farr Development Corporation, a Minnesota corporation (the "Developer") has presented the City Council of the City with information concerning a proposed project (the "Project") to be undertaken with the City; and WHEREAS, the Project proposed by the Developer would require the Developer to construct certain non -retail commercial office facilities (the "Facilities") within the City for acquisition, in whole or in part, by small non -retail commercial firms, corporations, partnerships or persons (the "Purchasers") wishing to locate, relocate or expand their offices within the City; and WHEREAS, the obligation of the Developer to construct the Improvements in connection with the Project would be contingent upon the City's undertaking a program (the "Small Business Finance Program" or "Program") to make available to the Purchasers of the Facilities the City's financing powers under the Act; and WHEREAS, the Developer has proposed that, under the City's Program, the City would, upon compliance by a Purchaser with the Program requirements, offer to issue its note (the "Note") pursuant to Sections 474.04 and 474.07 of the Act and loan the proceeds thereof to the Purchaser for the acquisition, in whole or in part, of an office Facility, which Note would be a revenue obligation of the City, payable solely from loan repayments received from the Purchaser; and WHEREAS, the Developer has proposed that, pursuant to the Program, the Notes would be repaid from the proceeds of one or more issue of bonds, issued pursuant to Section 474.04 (the "Bonds"), within 24 months from the date of the first Note to be repaid therefrom, which Bonds would be revenue obligations of the City, payable solely from loan repayments received under the Program from the Purchasers; and WHEREAS, prior to the issuance of any Notes or Bonds by the City under the Program, the representations and obligations of the City and the Developer to instigate the Program and construct the Facilities pursuant to the Project, and the terms under which a Purchaser would qualify to -participate in the Program would be established in a Development Agreement (the "Agreement") between the City and the Developer; and WHEREAS, the City has been advised that conventional, commercial financing to pay the capital cost of the Project is available at such costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but that with the aid of municipal financing, and its resulting lower borrowing cost, the Project is economically more feasible; and WHEREAS, the City has been advised that the Program and the Project would make financing under the Act available to the prospective Purchasers under the Program, and that such financing would not otherwise be available to such small business Purchasers without the standardization and aggregation of their financings pursuant to the Program; and t 1 W HEREAS, the Developer has requested that the City resolve to enter into the Agreement, to undertake the Program, to issue the Notes and to issue the Bonds pursuant to the Act to finance the Project, and to authorize and direct the City Manager of the City and the City Staff to enter into negotiations with the Developer and any other interested parties to that end; and WHEREAS, before entering into such an Agreement, undertaking such a Project, initiating the Program and issuing any Notes or Bonds thereunder, the City requires professional assistance to determine the marketability of the Notes and Bonds, the financial feasibility of the Program and Project, and the legality of the Project and the issuance of the Notes and Bonds; and W HEREAS, on the basis of the information given the City to date, the City finds that it would be in the best interests of the City to begin negotiations with the Developer to establish the final terms and conditions of the Agreement, the Project and the Program under which the City would issue the Notes and Bonds to finance the Purchasers' acquisition of their office Facilities in the Project in an amount presently estimated not to exceed an aggregate total of $7,000,000. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAINT LOUIS PARK, THAT: 1. The City hereby grants preliminary approval to the Project and the Program and declares its present intention to work, together with the Developer, toward reaching a final understanding on the terms of the Agreement pursuant to which the Project and the Program would be undertaken and the Notes and Bonds would be issued; provided that the City shall incur no obligation to the Developer with respect to the issuance of the Notes or Bonds until the City, the Developer and any lender or lenders who may become a party to the Agreement have reached a final understanding as to the terms thereof, and such Agreement has been approved and the execution thereof authorized by the final resolution of the City. 2. The City Manager and the staff of the City are hereby authorized and directed to take such actions as are deemed necessary to prepare for the undertaking of the Project and the Program, the preparation of the Agreement and the other necessary documents and the issuance of the revenue Notes and revenue Bonds thereunder, by the City, when, as and if authorized by the City Council of the City, to finance the Purchasers' acquisitions of the office Facilities in the Project, including specifically the hiring of Holmes & Graven, Chartered, as bond counsel and the hiring of Miller and Schroeder Municipals, Incorporated as underwriter for the Bonds. Such bond counsel will be compensated for its services out of the proceeds of the proposed issues of Notes and Bonds, when and if issued, or by the Developer in the event that the Notes or Bonds are not issued. Such underwriter will be compensated for its services out of proceeds of the proposed issue of the Bonds, when and if issued. Adopted by the City Council, June 7, 1982 C4egeO k)ig A&Ct Mayor Reviewed for administration: Appr ved as to form and legality: City Ti o rney