78-50
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RESOLUTION 78-50
Member Geving introduced the following resolution
and moved its adoption:
RESOLUTION GIVING PRELIMINARY APPROVAL TO A
PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOP-
MENT ACT, REFERRING'THE PROPOSAL TO THE COM-
MISSIONER OF SECURITIES FOR APPROVAL, AND
AUTHORIZING EXECUTION OF A MEMORANDUr1 OF
AGREE~lliNT AND PREPARATION OF NECESSARY
DOCUMENTS
BE IT RESOLVED by the City Council of the City of Chanhassen,
Minnesota, as follows:
1. It is hereby found, determined and declared as follows:
1.1. The welfare of the State of Minnesota 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 the state has encouraged local
government units to act to prevent such economic deterioration.
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1.2. Lyman Lumber Company, a Minnesota corporation
(hereinafter, the Company), has advised this Council of its desire
to construct and equip on certain land within the City, one or
more buildings (such land, buildings and equipment being herein-
after referred to as the Project), for use by the Company as a
storage and distribution facility and component plant for lumber
products and other building materials.
1.3. The'existence of the Project within the City would
significantly increase the tax base of the City, County and school
district in which the City is located, and would provide opportunities
for employment for residents of the City and surrounding area.
1.4. The City has been advised that conventional commer-
cial 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 feasibility of operating the Project would be signifi-
cantly reduced, but that with the aid of municipal financing, and
its resulting low borrowing cost, the Project is economically more
feasible.
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1.5. This Council has been advised by a ~epresentative
of Allison-Williams Company of Minneapolis, Minnesota, investment
bankers and dealers in municipal bonds, that on the basis of informa-
tion submitted to them and their discussions with representatives
of the Company and potential buyers of tax-exempt bonds, revenue
bonds of the City could be issued and sold upon favorable rates
and terms to finance the Project.
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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 Company, and the
issuance of such bonds by the City would be a sub~tantial 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 revenue bonds under the provisions of Chapter 474 to finance
the Project of the Company at a cost presently estimated to be
approximately $1,550,000.
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 agree-
ment 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 authorized 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 Manager, City Attorney
and other officers, employees and agents of the City are hereby
authorized to provide the Commissioner ~ith any preliminary informa-
tion he may need for this purpose, and the City Attorney is author-
ized to initiate and assist in the preparation of such documents
as may be appropriate to the Proj~f it is approved by the
Commissioner. ~
d2 ~ MaYOr~\~
City Manager
Attest:
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The motion for the adoption of the foregoing resolution
4It was duly seconded by Member Neveaux , and the following
voted in favor thereof: Councilmen Pearson, Neveaux, Waritz, Geving.
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and the following voted against the same:
Mayor Hobbs.
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 Manager.
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