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HomeMy WebLinkAbout91-193 - ADMIN Resolution - City Council - 1991/10/21F-2 RESOLUTION NO. 91-193 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT AND ITS FINANCING UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT 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 follows: SECTION 1 Recitals and Findings 1.01 This Council has received a proposal that the City issue its revenue bonds to finance a portion or all of the cost of a proposed project under its Home Rule Charter and Minnesota Statutes, Sections 469.152 to 469.165, as amended (the "Act"), on behalf of Park Nicollet Medical Foundation, a Minnesota nonprofit corporation (the "Borrower"), consisting of the issuance of up to $11,500,000 revenue bonds on behalf of the Borrower to finance a project through the refinancing of certain existing mortgages the proceeds of which financed a project which qualifies as a project under the Act and through providing additional funds to finance certain the acquisition and construction of improvements to and the reconstruction, improvement, settlement, extension, renovation and equipping of the existing project including costs associated with environmental remediation. 1.02 The project consists of the original construction and equipping of buildings totaling approximately 217,000 rentable square feet used for medical research, education, and health care. Such buildings are located on 11.41 acres of land located at 5000 West 39th Street in St. Louis Park (the "Facility") and the current renovation of the buildings of the Facility and cleanup of contaminants presently located on the site of the Facility (the "Project"). The Project financing includes the refinancing of existing mortgage loans in the amount of $6,800,000 presently held by Connecticut Mutual Life Insurance Company ("Mortgagor") on the Facility the proceeds of which were used to finance the acquisition, construction and equipping of the Facility. The Borrower owns and presently occupies a portion of the Facility, and leases the remainder of the Facility to Park Nicollet Medical Center (the "Clinic"). The Project at 5000 West 39th Street is located within the City boundaries. 1.03 At a public hearing, duly noticed and held on October 7, 1991, in accordance with the Act, on the proposal to undertake and finance the Project including the refinancing of the existing mortgage debt, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance the Project and interested persons were given the opportunity to submit written comments to the City Clerk before the time of the hearing. Based on the public hearing, such written comments (if any) and such other 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 the provision of necessary education and health care facilities, so that adequate health care services are available to residents of the State of Minnesota at reasonable cost, and the State of Minnesota has encouraged local government units to act to provide such facilities. (b) The Project would further the general purposes contemplated and described in Section 469.152 of the Act and is a public purpose for which Bonds can be issued under its Home Rule Charter. (c) The issuance of the proposed Bonds and the use of the proceeds to finance the Project including the refinancing of the existing debt is "to finance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement, betterment or extension" of a Project within the meaning of the Act. (d) This Council has been advised by representatives of the Borrower that the undertaking of the proposed Project and the issuance of the revenue bonds to finance the cost thereof will promote the public purposes and legislative objectives of the Act by providing substantial inducement for the continuation of the educational and health care operations of the Borrower in the City and surrounding areas. (e) This Council has been advised by representatives of the Borrower that it is anticipated that the Project will assist in preventing the occurrence of conditions requiring redevelopment, or aid in the redevelopment of existing areas of blighted, marginal land, and the avoidance of substantial and persistent unemployment. (f) This Council has been advised by representatives of the Borrower that (i) conventional commercial financing to pay the cost of the Project and refinancing the existing mortgage debt is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Borrower's facility would be significantly reduced, but that with the aid of municipal borrowing, and its resulting lower -2- 785:DBND-03857-371 borrowing cost, the Project is economically more feasible, and (ii) the Project would not be undertaken but for the availability of industrial development bond financing. (g) This Council has also been advised by FBS Investment Services, Inc. that, on the basis of their discussions with potential buyers of tax-exempt bonds and revenue bonds of the City revenue bonds could be issued and sold upon favorable rates and terms to finance the Project. (h) The City is authorized by the Act and its Home Rule Charter to issue its revenue bonds to finance the Project. SECTION 2 Determination to Proceed with the Project and its Financing 2.01 On the basis of the information given the City to date, it appears that it would be desirable for the City to issue its revenue bonds under the provisions of the Act to finance the Project (including the refinancing of the existing mortgage debt) in the maximum aggregate principal amount of $11,500,000. 2.02 It is hereby determined to proceed with the Project and its financing and this Council hereby declares its present intent to have the -City issue its revenue bonds under the Act to finance the Project including the refinancing of certain existing mortgage debt of the Borrower. Notwithstanding the foregoing, however, the adoption of this resolution shall not be deemed to establish a legal obligation on the part of the City or its City Council to issue such revenue bonds. All details of such revenue bond issues and the provisions for payment thereof shall be subject to final approval of the Project by the Minnesota Department of Trade and Economic Development and may be subject to such further conditions as the City may specify. The revenue bonds, if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and each bond, when, as and if issued, shall recite in substance that the bond, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation. 2.03 The Application to the Minnesota Department of Trade and Economic Development substantially in the form attached hereto as Exhibit A, with all attachments and exhibits, is hereby approved, and the Mayor and the City Manager or the City Clerk are authorized to execute said documents on behalf of the City. -3- 785:DBND-03857-371 2.04 In accordance with Section 469.154, Subdivision 3 of the Act, the Mayor, City Manager or City Clerk are hereby authorized and directed to cause the Application to be submitted to the Minnesota Department of Trade and Economic Development for approval of the Project. The Mayor, City Manager, City Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized and directed to provide the Minnesota Department of Trade and Economic Development with any preliminary information needed for this purpose. The City Attorney and/or Bond Counsel for the City is authorized to initiate and assist in the preparation of such documents as may be appropriate with respect to the issuance of the revenue bonds, if approved by the Department. 2.05 This resolution and the intentions set forth herein are subject to the Borrower entering into a lease with the Clinic whereby the Clinic leases that portion of the Facility currently leased or used by the Clinic for a term of approximately thirty (30) years, with such terms and provisions, including without limitation, rights of the Clinic, if any, to terminate the lease, not objected to by the City. 2.06 This resolution and the intentions set forth herein are subject to the Borrower, Park Nicollet Medical Center, Medcenters, Inc. and Connecticut Mutual Life Assurance Company entering into an agreement prior to the issuance of the revenue bonds contemplated hereby with the City whereby such parties agree to make certain real property tax payments on real property owned in fee by MedCenters, Inc. and sold to the Borrower pursuant to a Contract for Deed dated December 1, 1975 and recorded February 16, 1976 as Document No. 4192477 or certain minimum payments in lieu of such tax payments in such amounts and with such terms and provisions as finally agreed to by the City. 2.07 Popham, Haik, Schnobrich & Kaufman, Ltd. is hereby designated as Bond Counsel and is authorized to proceed with the preparation of documents as directed by the Borrower. SECTION 3 General 3.01 If the bonds are issued and sold, the City will enter into a loan agreement or similar agreement satisfying the requirements of the Act (the "Revenue Agreement") with the Borrower. The loan payments or other amounts payable by the Borrower to the City under the Revenue Agreement shall be sufficient to pay the principal of, and interest and redemption -4- 785:DBND-03857-371 'premium, if any, on the bonds as and when the same shall become due and payable. 3.02 The Mayor, City Manager and City Clerk are directed, if the bonds are issued and sold, thereafter to comply with the provisions of Section 469.154, Subdivisions 5 and 7 of the Act. Adopted this 21st day of October, 1991. Reviewed for administration: City Manager -5- 785:DBND-03857-371 Approved as to form and execution: AlLeAau,Sh44 City Attorney