1a. Public Hearing Date, Ind Dev Rev Bond Application, Lyman Lumber 1 # . i k
1
CITY OF ..,..... ,........,,
s CHANHASSEN
I
1 A i
i
1 r_`.�. 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900
MEMORANDUM
ITO: Mayor and City Council
IFROM: Don Ashworth, City Manager
DATE: July 25 , 1988
ISUBJ: Proposed $1 Million Industrial Revenue Bonds , Lyman Lumber
Attached please find a request from Lyman Lumber for the City to
I endorse an Industrial Revenue Bond sale for their new plant
construction. IRB issues are allowed for industrial plant expan-
sions when certain bonding limitations/company revenues/type of
1 business are met. Lyman Lumber does qualify under federal regu-
lations.
An IRB, such as that proposed, represents a "no risk" position to
1
the City. The bonds are backed solely by the company selling the
bonds , i .e. Lyman Lumber. Lyman Lumber did receive IRB approval
for their first plant expansion in the early 1980 ' s . The tax
I exempt feature of IRB financing produces net interest costs of
approximately 2% lower than otherwise available.
I The State of Minnesota is currently handling the IRB allocations
(verification of qualification/state limitations) . Currently
there is sufficient money to allow for an allocation for the
Lyman project. In the State' s application process, the State
111 requires a high deposit to weed out sincere applicants from those
simply fishing. If the company making application meets all
State requirements, the deposits are released. Lyman Lumber has
I been made aware of the fact that they must fund the full amount
of the State' s deposits (the City is the one who actually makes
the application) and that their ability to receive a refund of
1 the deposit will be solely based on whether the State reimburses
the City.
I should also note that the City does have a policy of requiring
I all IRB applicants to pay one-half of 1% of the par value of the
proposed issue as an administrative fee. This amount was pre-
viously paid by Lyman and is recommended as a part of the current
Iproposal.
Recommendation: This office would recommend that the City
II Council establish a public hearing date of August 22 , 1988 to
consider whether the Council will endorse or deny Lyman Lumber' s
application for IRB financing.
I CO-1: 7(
*
DOI?SEY & WHITNEY
A PARTNERSHIP INCLUDINO PROFESSIONAL CORPORATIONS
350 PARR AVENUE 2200 FIRST BANK PLACE EAST 1200 FIRST INTERSTATE CENTER
NEW YORK,NEW YORK 10022 MINNEAPOLIS, MINNESOTA 55402 401 NORTH 315T STREET '
(212)415-9200 (612)340--2600 P 0.BOX 7188
3 ORACECHURCH STREET
BILLINGS,MONTANA 59103
TELEX 29-0605
LONDON EC3V OAT,ENGLAND TELECOPIER (612)340-2866 (406)252-3800
01-929-3334 ( )
36,RUE TRONCHET 201 DAVIDSON BUILDING
8 THIRD STREET NORTH
75009 PARIS,FRANCE GREAT FALLS,MONTANA 59401
01-42-66-59-49
(406)727-3632
340 FIRST NATIONAL BANK BUILDING JEROME P. GILLIGAN '
P O.BOX 848 (612) 340-2962 127 EAST FRONT STREET
ROCHESTER,MINNESOTA 55903 MISSOULA,MONTANA 59802
(507)288-3156
(406)721-6025
510 NORTH CENTRAL LIFE TOWER
445 MINNESOTA STREET 315 FIRST NATIONAL BANK BUILDING
ST.PAUL,MINNESOTA 9 55101 WAYZA(612)475$0303A 56391
July 20 , 1988
Mr. Don Ashworth
City Manager
City of Chanhassen
690 Coulter Street
Chanhassen, Minnesota 55317
Re: Proposed $1, 000, 000 Industrial Development
Revenue Bonds
(Lyman Lumber Company Project) 1
City of Chanhassen, Minnesota
Dear Mr. Ashworth: '
Enclosed are copies of a resolution of the City Council
calling for the public hearing on the proposed issuance of the
Bonds referred to above. The resolution provides that the
hearing will be at the August 22nd Council meeting. Contained in
the resolution is a form of notice of public hearing to be
published in the City' s official newspaper. This notice is
required to be published once not less than 14 days prior to the
date of the hearing.
After our telephone call last week I informed the
officials of Lyman Lumber concerning the City' s application. I
have been advised that it is the Company ' s present intention that
the Bonds will be privately placed. 1
I will be working with the Company in the next week to
prepare the application to the Minnesota Department of Trade and ,
Economic Development for the Bonds and the exhibits to the
Application. The Application and exhibits are to be on file with
the City and available for public inspection after the
publication of the notice of hearing. Once this material is
prepared I will forward it to you .
Officials of Lyman Lumber are not planning to be in
attendance at the July 25th Council meeting, but will be in
1 `
' DORSEY & WHITNEY
Page -2-
Mr. Don Ashworth
July 20 , 1988
attendance at the August 22nd hearing. If you think someone
should be there on July 25th, please let me know.
If you have any questions, please give me a call.
Yours tr ly,
71 4/1
Jer me P . Gilligan
' JPG:cmn
Enclosures
' cc; James Hurd
Margaret Gearhart
r
I
I
]�) J/ I
0-1 (A.0 ,v,.�Q,.� , i C-.°,.1•, fit,. ,_y f •
CERTIFICATION OF MINUTES RELATING TO
INDUSTRIAL DEVELOPMENT / ' /f-
REVENUE BONDS
Issuer: City of Chanhassen, Minnesota
Governing Body: City Council
Kind, date, time and place of meeting : A regular meeting,
held on July 25, 1988, at o ' clock .M. ,
at the City Hall .
Members present :
Members absent :
Documents Attached:
Minutes of said meeting (pages) :
RESOLUTION NO.
RESOLUTION RELATING TO A PROJECT ON BEHALF OF
LYMAN LUMBER COMPANY UNDER THE MUNICIPAL
INDUSTRIAL DEVELOPMENT ACT; CALLING FOR A PUBLIC
HEARING THEREON
I , the undersigned, being the duly qualified and
acting recording officer of the public corporation issuing the
obligations referred to in the title of this certificate,
certify that the documents attached hereto, as described above,
have been carefully compared with the original records of the
corporation in my legal custody, from which they have been
transcribed; that the documents are a correct and complete
transcript of the minutes of a meeting of the governing body of
the corporation, and correct and complete copies of all
resolutions and other actions taken and of all documents
approved by the governing body at the meeting , insofar as they
relate to the obligations ; and that the meeting was duly held
by the governing body at the time and place and was attended
throughout by the members indicated above, pursuant to call and
notice of such meeting given as required by law.
WITNESS my hand officially as such recording officer
and the seal of the City this day of
1988 .
Signature
11(SEAL) Don Ashworth, City Manager
Name and Title
I ., . .
_
I
Councilmember introduced the following
Iresolution and moved its adoption:
IRESOLUTION NO.
RESOLUTION RELATING TO A PROJECT UNDER THE
I MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; CALLING FOR
A PUBLIC HEARING THEREON
I BE IT RESOLVED by the City Council of the City of
Chanhassen, Minnesota (the Municipality) , as follows :
ISECTION 1
Recitals
I 1 . 1 . Lyman Lumber Company a Minnesota corporation (the
Borrower) , has advised this Council of its desire to construct
and equip an approximately 30, 240 square foot addition (the
I Addition) to its existing facility located at 18900 West 78th
Street in the Municipality. The initial owner and user of the
Addition will be the Borrower . The Addition is to be used
I principally for prefinishing and assembly of building products
and related storage. The construction and equipping of the
Addition is herein referred to as the "Project" .
I 1 . 2 . The Municipality is authorized by Minnesota Statutes ,
469 . 152 to 469 . 165 , as amended (the Act) , to issue its revenue
bonds to finance capital projects consisting of properties used
I and useful in connection with a revenue-producing enterprise .
The Borrower has requested the Municipality issue its revenue
bonds under the Act in an aggregate total amount not to exceed
I $1, 000 , 000 (the Bonds) to finance a portion or all of the cost
of the Project .
I
II
I
I
I
-2-
SECTION 2
Public Hearing '
2 . 1 . Section 469 . 154 , Subdivision 4 of the Act requires that
prior to submission of an Application to the Minnesota
Department of Trade and Economic Development requesting
approval of the Project as required by Section 469 . 154 ,
Subdivision 3 of the Act, this Council conduct a public hearing
on the proposal to undertake and finance the Project .
Section 147(f) of the Internal Revenue Code of 1986 , as
amended, and regulations promulgated thereunder, requires that
prior to the issuance of the Bonds, this Council approve the
Bonds and the Project, after conducting a public hearing
thereon. A public hearing on the proposal to undertake and
finance the Project through the issuance of the Bonds is hereby
called and shall be held on August 22 , 1988, at _ o ' clock
P.M. , at the City Hall .
2 . 2 . The City Manager shall cause notice of the public hearing
to be published in , the official newspaper
of the Municipality and a newspaper of general circulation in
the Municipality, at least once not less than fourteen ( 14) nor
more than thirty (30) days prior to the date fixed for the
public hearing . The notice to be published shall be in
substantially the following form:
1
-3-
NOTICE OF PUBLIC HEARING ON A PROPOSED PROJECT AND THE
' ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS
UNDER SECTIONS 469 . 152 TO 469 . 165, AS AMENDED
' CITY OF CHANHASSEN, MINNESOTA
NOTICE IS HEREBY GIVEN that the City Council of the
' City of Chanhassen, Minnesota (the City) , will meet on
August 22 , 1988 , at o ' clock P.M. , at the City Hall ,
690 Coulter Drive, in Chanhassen, Minnesota, for the purpose of
conducting a public hearing on a proposal that the City issue
revenue bonds, in one or more series , under the Municipal
Industrial Development Act, Minnesota Statutes, Sections
469 . 152 to 469 . 165 , in order to finance the cost of a project .
' The proposed project will consist of the construction and
equipping of an approximately 30 , 240 square foot addition to
the existing facility of Lyman Lumber Company, a Minnesota
corporation (the Company) , located at 18900 West 78th Street in
the City. The addition is intended to be used principally for
prefinishing and assembly of building products and related
storage. The initial owner and operator of the addition will
' be the Company. The maximum aggregate principal amount of the
proposed bond issue is $1, 000 , 000 . The bonds will be limited
obligations of the City, and the bonds and interest thereon
' will be payable solely from the revenues pledged to the payment
thereof , except that such bonds may be secured by a mortgage
and other encumbrance on the project . No holder of any such
bonds will ever have the right to compel any exercise of the
' taxing power of the City to pay the bonds or the interest
thereon, nor to enforce payment against any property of the
City except moneys payable by the Company to the City and
pledged to the payment of the bonds .
A draft copy of the proposed Application to the
' Minnesota Department of Trade and Economic Development for
approval of the project , together with draft copies of all
attachments and exhibits thereto , is available for public
inspection at the office of the City Manager between the hours
' of 8 : 00 A.M. and 4 : 30 P .M. , on normal business days .
All persons interested may appear and be heard at the
' time and place set forth above, or may file written comments
with the City Manager prior to the date of the hearing set
forth above .
Dated: July 25 , 1988 .
BY ORDER OF THE CITY COUNCIL
' By s/Don Ashworth
City Manager
1
-4-
•
•
2 . 3 . A draft copy of the proposed Application to the Minnesota
Department of Trade and Economic Development, together with '
draft copies of all attachments and exhibits thereto, are
hereby ordered placed on file with the City Manager and shall
be available for public inspection, following publication of
the notice of public hearing, between the hours of 8 : 00 A.M.
and 4 :30 P.M. , on normal business days .
Adopted this 25th day of July, 1988 . '
Mayor
Attest:
City Manager
(SEAL)
The motion for the adoption of the foregoing
resolution was duly seconded by Councilmember
and upon vote being taken thereon, the ,
following voted in favor thereof :
and the following voted against the same :
whereupon the resolution was declared duly passed and adopted. '
1
1
1
-5- '•