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HomeMy WebLinkAbout84-62 - ADMIN Resolution - City Council - 1984/05/07RESOLUTION NO. a"2 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MINNESOTA MUNICIPAL INDUS- TRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO THE MINNESOTA ENERGY AND ECONOMIC DEVELOP- MENT AUTHORITY FOR APPROVAL AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS. HE IT RESOLVED by the City Council (the "Council") of the City of St. Louis Park, Minnesota (the "City"), as fol- lows: 1. It is hereby found, determined and declared as follows: 1.1. It is the policy of the State of Minnesota (the "State") to facilitate and encourage action by local government units to prevent the economic deterio- ration of areas within the City to the point where the process can be reversed only by total redevelopment through the use of local, state and federal funds de- rived from taxation, with the attendant necessity of relocating displaced persons and of duplicating public services in other areas. 1.2. Technological change has caused a shift to a significant degree in the area of opportunity for edu- cated youth to processing, transporting, marketing, service and other industries, and unless existing and related enterprises are retained to use the available resources of 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 will deprive the City and the State of the economic and human resources needed as a base for providing governmental services and facil- ities for the remaining population. 1.3. The welfare of the State and the City requires the provision of necessary health care facilities, in- cluding nursing homes, to the end that adequate health care services be made available to residents of the State and the City at reasopable cost. 1.4. Unicare Homes, Inc., a Delaware corporation (the "Company"), has advised the Council that it desires to undertake a project which consists of the acquisition and renovation of nursing home facilities (the "Proj- ect"), located at 7900 West 28th Street and at 4415 West 362 Street in the City. 1.5. The Project will assist the City in maintain- ing the tax base and employment opportunities in the City. 1.6.,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 undermined, but that with the aid of municipal financing and its resulting low, borrowing cost the Project is economically feasible, -and the Company will thereby be better able to maintain high standards of nursing home care at a reasonable cost. The Company has represented to the City (1) that on December 23, 1983, the Company executed an agreement for the purchase of the Project by the Company, (2) that under said agreement the Company's` obligation to purchase the Project is expressly contin- gent upon the Company's obtaining industrial development bond financing therefor, (3) that said agreement pro- vides for a closing on the purchase on or before - April 2, 1984, (4) that the Company has delayed said closing solely to obtain tax-exempt financing from the City for the Project, and (5) that such tax-exempt financing is an essential element of the financial fea- sibility of the Project to the Company. Based upon, those representations, the City Council reasonably believes and hereby finds and determines that the Com- pany has from the beginning premised its undertaking of, the Project on the availability of industrial develop- ment bond financing for that purpose and that the Pro]-' ect would not have been undertaken and would not be undertaken by. the Company but for the availability of such financing. 1.7. This Council has been advised by Miller & Schroeder Municipals, Inc., of the financial feasability of the Project, as so undertaken with the assistance of the City, or of its intention to purchase nursing home or other revenue obligations of the City to finance the Project. 1.8. The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds, notes or other obligations to finance the cost, in whole or in part, of the acquisition, construction, reconstruction, improve- ment, betterment or extension of capital projects con- sisting of properties used and useful in connection with a revenue producing enterprise, including nursing home facilities, whether or not now in existence or operated for profit, as provided in Minnesota Statutes, Section 474.02, Subdivision lc, and the issuance of such obliga- - 2 - tions by the City would be a substantial inducement to the Company to undertake the Project. 2. On the basis of information given the City to date, it appears that it would be in the best interest of the City to issue its obligations (the "Bonds") under the provisions of Minnesota Statutes, Chapter 474, to finance the Project in an amount presently estimated not to exceed $10,000,000. 3. The Project and the related financing thereof by the City are hereby given preliminary approval, and the issuance of the Bonds for such purpose and in such estimated amount is hereby approved, subject to approval of the Proj- ect by the Minnesota Energy and Economic Development Author- ity (the "Authority") and to the mutual agreement of the Council, the Company and the initial purchasers of the Bonds as to the details and provision for payment of the Bonds. In all events, it is understood, however, that the Bonds shall not constitute a debt of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City except its interest in the Project, and each of the Bonds when, as and if issued shall recite in substance that it is payable solely from the revenues received from the Project and property pledged to the payment thereof. 4. In accordance 474.01, Subdivision 7a, directed to submit the Authority for approval. ployees and agents of provide the Authority with Minnesota Statutes, Section the Mayor is hereby authorized and proposal for the Project to the The Mayor and other officers, em - the City are hereby authorized to with any preliminary information needed for this purpose and are further authorized to initi- ate and assist in the preparation of such documents as may be appropriate to the Project and the financing thereof. 5. The adoption of this resolution by the Council does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Company. The City retains the right in its sole discretion to withdraw from participation and accordingly not issue the Bonds should the City determine that it is in the best interest of the City not to do so or should the parties to the transac- tion be unable to reach agreement on the terms thereof. opted by the St. Louis Park City Council on May 7, 1984. Attest City CAerk Reviewed for administration: C'tyManager Approved as to form and legality: 3 Ci orney - - Clerk's Certificate I, the undersigned, being the duly qualified and acting Clerk of the City of St. Louis Park, Minnesota, hereby cer- tify that I have carefully compared the attached and forego- ing resolution with the original thereof on file in my office and further certify that the same is a full, true and complete transcript therefrom, insofar as the same relates to the preliminary approval of a nursing home project and the financing thereof for Unicare Homes, Inc., a Delaware corporation. Mayor I certify that -COIIITcii=mb7e-r .,. P Hank,, introduced said resolution, Councilmember ,)Prrnld Martin moved its adoption, which motion was duly seconded by Councilmember Ronald Backes , and upon roll call, the "Ayes," "Abstains" and "Nays" were as follows: AYES ABSTAINS NAYS Ronald Backes Lyle Hanks Thomas Duffy Keith Meland Jerrold Martin Larry Mitchell Richard Strohl Whereupon the resolution was declared duly passed and adopted. I further certify that said resolution was duly adopted by the St. Louis Park City Council, at a duly called and regularly held regular or special meeting thereof. WITNESS my hand officially as such Clerk and the cor- porate seal of the City this 7th day of MAY , 1984. Ci y lerk St. Louis Park, Minnes a (SEAL)