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81-11 .~ CITY OF CHANHASSEN e CARVER AND HENNEPIN COUNTIES, MINNESOTA RESOLUTION Dated April 20, 1981 Motion by Councilmember Horn Resolution No. 81- 11 Seconded by Councilmember Geving RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE COMMISSIONER OF SECURITIES FOR APPROVAL; AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Chanhassen, Minnesota (the Municipality), as follows: Section 1 Recitals and Findings e 1.1 This Council has received a proposal that the Municipality finance a portion or all of the cost of a proposed project under Minnesota Statutes, Chapter 474 (the Act), consisting of the acquisition of land within the City, the demolition of a portion of the existing buildings thereon, the construction of one or more buildings thereon to be used as commercial facilities and the conversion of 50,000 square feet of existing industrial space located thereon for use as commercial space (the project) by Kraus-Anderson, Incorporated, a Minnesota corporation (hereinafter the Borrower). Allor a portion of the Project is to be leased by the Borrower to various tenants. 1.2 At a public hearing, duly noticed and held OR April 20, 1981, in accordance with the Act, on the proposal to undertake and finance the Project, 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. Based on such hearing and such other facts and circumstances as this Council deems relevant, this Council hereby finds, determines and declares as follows: b. 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 area~ of chronic unemployment, and the State has encouraged local government units to act to prevent such economic deterioration. ~ The Project would further the general pu~oses contemplated and described in Section 474.01 of the Act. a. . .-.. . . c. . d. e. f. e Section 2 The existence of the Project would add to the tax base of the Municipality, the County and School District in which the Project is located and would provide increased opportunities for employment for residents of the Municipality and surrounding area. This Council has been advised by representatives of the Borrower that conventional, commercial financing to pay the 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 significantly reduced, but that with the aid of municipal borrowing, and its resulting lower borrowing cost, the Project is economically more feasible. This Council has also been advised by representatives of the Borrower that revenue bonds of the Municipality (which may be in the form of a commercial development revenue note or notes) could be issued and sold upon favorable rates and terms to finance the Project. The Municipality is authorized by the Act 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 Borrower, and the issuance of such bonds by the Municipality would be a subs.tantial inducement to the Borrower to acquire and construct the Project. Preliminary Approval of the Project 2.1 It is desirable for the Municipality to issue its revenue bonds under the provisions of the Act to finance the Project in an amount not exeeding $8,500,000. 2.2 It is hereby determined to proceed with the Project and its financing and the Project is hereby given preliminary approval by the Municipality and the issuance of revenue bonds of the Municipality in such amount is hereby approved, subject to the approval of the Project by the Commissioner of Securities, the fulfillment of such other conditions as the Municipality may require with respect to the issuance of its bonds in connection with the Project, and the mutual agreement of this Council and the Borrower as to the details of the bond issue and provisions for their payment, and subject further to the reservation of the right by the Municipality to deny the application of the Borrower at any stage of the proceedings prior to the adoption of the final resolution authorizing issuance of the bonds. In all events, it is understood, however, that the bonds of the Municipality shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Municipality, 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 Municipality within the meaning of any consti- tutional or statuatory limitation. e -2- .., .. # . 2.3 The form of the Application to the Commissioner of Securities, with attachments, is hereby approved, and the Mayor and City Manager are authorized to execute said documents in behalf of the ~ Municipality. 2.4 In accordance with Section 474.10, Subdivision 7a of the Act, the Mayor and City Manager are hereby authorized and directed to cause said Application to be submitted to the Commissioner of Securities for approval of the project. The Mayor, City Manager, City Attorney and other officers, employees and agents of the Municipality are hereby authorized and directed to provide the Commissioner with any preliminary information the Commissioner may need for this purpose, and the City Attorney is 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. Section 3 General 3.1 If the bonds are issued and sold, the Municipality will enter into a lease, sale or loan agreement or similar agreement satisfying the requirements of the Act (the Revenue Agreement) with the Borrower. The lease rentals, installment sale payments, loan payments or other amounts payable by the Borrower to the Municipality under the Revenue Agreement shall be sufficient to pay the principal, interest and redemption premium, if any, on the bonds as and when the same shall become due and payable. e 3.2 The Borrower has agreed and it is hereby determined that any and all direct and indirect costs incurred by the Municipality in connection with this Project, whether or not the Project is carried to completion, and whether or not approved by the Commissioner of Securities, and whether or not the Municipality by resolution authroized the issuance of the bonds, will be paid by the Borrower upon request. 3.3 The Mayor and City Manager are directed, if the bonds are issued and sold, thereafter to comply with the provisions of Minnesota Statutes, Section 474.01, Subdivision 8. Adopted this 20th day of April, 1981. .,.,' c'~ \,/\ ) . k:. {.'-( L{ (. (. '- ~ ".... - - v /)erlN<:57 MAYOR // Attest'f)_ City Manager Gt,~ For Against e Hamilton Neveaux Geving Swenson Horn None -3-