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HomeMy WebLinkAbout77-73Member Zaun and moved its adoption: introduced the following resolution RESOLUTION #77-73 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUS- TRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO THE COMMISSIONER OF SECURI- TIES FOR APPROVAL, AND AUTHORIZING EXECUTION OF A MEMORANDUM OF AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City), as follows: 1.1. The welfare of the State of Minnesota requires active promotion, attraction, encouragement and development of ecomically sound industry and commerce through governmental acts to prevent, so far as possible, emergence of blighted lands and areas of chronic unemployment, and the state has encouraged local government units to act to prevent such economic deterio- ration. 1.2. Merillat Industries, Inc., a Michigan corporation (hereinafter, the Company), has advised this Council of its desire to acquire certain properties in the City, consisting of land and an existing building thereon and the construction of improvements to and the acquisition and installation of personal property and equipment in said building (collectively, the Project), for use by the Company in its business of assembly and distribution of kitchen cabinets and bathroom vanities. 1.3. The land and existing building included within the Project is owned by Fredrick -Willy, Incorporated, which has dis- continued its business operations thereat. 1.4. The acquisition and improvement by the Company of the Project would significantly increase the tax base of the City and the county and school district in which the City is located, and would provide opportunities for employment for residents of the City and surrounding area. 1.5. The City has been advised 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 feasiblity of acquiring and oper- ating the Project would be significantly reduced and that the availability of municipal financing, and its resulting low borrowing cost, will be a substantial inducement for the Com- pany to acquire the Project. _,.,.a,.. },v ?iron, seconded by %,uLLI it 1.6. This Council li'-ui bv(tt a(lvi.:t(.rl 1>y n Live of The Ohio Company, of Toledo, Ohio, investment bankers and dealers in municipal bonds, that on the basis of information submitted to them and their discussions with representatives of the Company and potential buyers of tax-exempt bonds, industrial development revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. 1.6. The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds to finance capital projects consisting of properties used and useful in connection with a revenue producing enterprise, such as that of the Com- pany, and the issuance of such bonds by the City would be a su:)stantial inducement to the Company to construct its facility within the City. 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 industrial development revenue bonds under the provi- sions of Chapter 474 to finance the Project of the Company at a cost presently estimated to be approximately $3,000,000. 3. The Project above referred to is hereby given pre- liminary approval by the City and the issuance of bonds for such purpose and in such amount approved, subject to approval of the Project by the Commissioner of Securities and to the mutual agreement of this body, the Company and the initial purchasers of the bonds as to the details of the bond issue and provisions for their payment. In all events it is understood, however, that the bonds of the City shall not constitute a charge, lien or encumbrance legal or equitable upon any property of the City except the Project, and each bond, when, as, and if issued, shall recite in substance that the bond, including interest thereon, is payable solely from the revenues received from the Project and property pledged to the payment thereof, and shall not constitute a debt of the City. 4. The form of Memorandum of Agreement relating to the issuance of revenue bonds of the City to finance the cost of the Project is hereby approved and the Mayor is hereby au- thorized and directed to execute the Memorandum of Agreement in behalf of the City. 5. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7, the Mayor is hereby authorized and directed to submit the proposal for the Project to the Commissioner of Securities for his approval of the Project. The Mayor, City Administrator, City Clerk, City Attorney and other officers, employees and agents of the City are hereby authorized to pro- vide the Commissioner with any preliminary information he may -2- PW Ae f need for this purpose, and the City Attorney is hereby authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project, if it is approved by the Commissioner. Mayor City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Curry , and upon vote being taken thereon, the following voted in favor thereof • Curry, zaun and Mako and the following voted against the same: none whereupon said resolution was declared duly passed and adopted and was presented to the Mayor who approved and signed the same, which was attested by the City Clerk. -3-