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HomeMy WebLinkAbout98-89 - ADMIN Resolution - City Council - 1998/07/06RESOLUTION NO. 98-89 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; AUTHORIZING THE EXECUTION AND DELIVERY OF AN AGREEMENT AS TO INDEMNITY AND PAYMENT OF EXPENSES; AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE 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 1.1 This Council has received a proposal that the City issue its revenue bonds and refunding revenue bonds to refinance a portion or all of the cost of a project (collectively, the "Project") under its Home Rule Charter and Minnesota Statutes, Sections 469.152 to 169.165, as amended (the "Act"), on behalf of Sholom Home West, Inc. (the `Borrower"), consisting of the issuance of up to $7,000,000 revenue bonds on behalf of the Borrower. 1.2 The Project consists of a three-story brick exterior skilled nursing home containing 170 beds located in the City at 3620 Philips Parkway owned and operated by the Borrower. 1.3 This Council has been advised by representatives of the Borrower that (i) conventional commercial financing to refinance the cost of the Project is available only on a limited basis and at such high costs of borrowing that, with the aid of municipal borrowing, and its resulting lower borrowing cost, the Project is economically more feasible, and (ii) the refinancing of the Project would not be undertaken but for the availability of tax exempt revenue bond financing. 1.4 This Council has also been advised by Noiwest Investment Services, Inc. that, on the basis of their discussions with potential buyers of tax-exempt bonds, revenue bonds and refunding revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. SECTION 2 Determination to Proceed with the Project and its Financing 2.1 On the basis of the information given the City to date, it appears that it would be desirable of the City to issue its revenue bonds under the provisions of the Act to refinance the Project in the maximum aggregate principal amount of $7,000,000 2.2 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 its Home Rule Charter and the Act to refinance the Project. 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 issue 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 bonds, 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. 2.3 The Application to the Minnesota Department of Trade and Economic Development in substantially the form on file with the City (the "Application"), with all attachments and exhibits, is hereby approved, and the Mayor, City Manager and City Clerk are authorized to execute said documents on behalf of the City, with such changes, additions or deletions as the Mayor, City Manager and the City Clerk deem appropriate. 2.4 In accordance with Section 469.154, Subd. 3 of the Act, the Mayor, City Manger and 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 Special 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. 2.5 This resolution and the intentions set forth herein are subject to the members of the Borrower entering into the Agreement as to Indemnity and Payment of Expenses, between the City and the Obligated Group substantially in the form approved by this resolution with such changes as approved by the City Manager. 2.6 Briggs and Morgan, Professional Association is hereby designated as Bond Counsel and is authorized to proceed with the preparation of documents as directed by the Borrower. r i,5 SECTION 3 Authorization of An Agreement as to Indemnity and Payment of Expenses 6 3.1 The form of Agreement as to Indemnity and Payment of Expenses presented to this meeting is hereby approved in substantially the form so presented for use in connection with the revenue bonds which may be issued to refinance the Project, and the Mayor, City Manager and City Clerk are hereby authorized to execute such an agreement by and between the City and the City of Shakopee with such changes, additions or deletions as the Mayor, City Manager and Clerk deem appropriate. SECTION 4 General 4.1 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 ol: and interest and redemption premium, if any, on the bonds as and when the same become due and payable. 4.2 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. Attest: Ci ' Clerk Reviewed for Administration: 7 /.u.L ity Manager Adopted by the City Council July 6, 1998