95-106RESOLUTION NO. 95-106
RESOLUTION RECITING A PROPOSAL FOR AN
INDUSTRIAL DEVELOPMENT PROJECT
GIVING PRELIMINARY APPROVAL TO THE PROJECT
PURSUANT TO THE MINNESOTA
MUNICIPAL INDUSTRIAL DEVELOPMENT ACT
AUTHORIZING THE SUBMISSION OF AN APPLICATION
FOR APPROVAL OF SAID PROJECT TO THE
DEPARTMENT OF TR3~DE AND ECONOMIC DEVELOPMENT
AND AUTHORIZING THE PREPARATION OF
NECESSARY DOCUMENTS AND MATERIALS
IN CONNECTION WITH SAID PROJECT
WHEREAS,
(a) The purpose of Minnesota Statutes, Sections
469.152 to 469.165 known as the Minnesota Municipal Industrial
Development Act (the "Act") as found and determined by the
legislature is to promote the welfare of the state by the active
attraction and encouragement and development of economically sound
industry and commerce to prevent so far as possible the emergence
of blighted and marginal lands and areas of chronic unemployment;
(b) Factors necessitating the active promotion and
development of economically sound industry and commerce are the
increasing concentration of population in the metropolitan areas
and the rapidly rising increase in the amount and cost of
governmental services required to meet the needs of the increased
population and the need for development of land use which will
provide an adequate tax base to finance these increased costs and
access to employment opportunities for such population;
(c) The City Council of the City of Chanhassen (the
"City") has received from Building Management Group, LLC a
Minnesota limited liability corporation (the "Company") a proposal
that the City undertake to finance a Project hereinafter described,
through the issuance of revenue bonds (hereinafter the "Bonds")
pursuant to the Act;
(d) The City desires to facilitate the selective
development of the community, retain and improve the tax base and
help to provide the range of services and employment opportunities
required by the population; and the Project will assist the City in
achieving those objectives. The Project will help to increase
assessed valuation of the City and help maintain a positive
relationship between assessed valuation and debt and enhance the
image and reputation of the community;
(e) The Project to be financed by the Bonds is the
acquisition of land on Lake Drive West in the Chanhassen Business
Center described as Lot 2, Block 2, Third Addition Chanhassen
Business Center and construction and equipping thereon of an
approximately 35,000 square foot manufacturing facility to be
leased to Control Products, Inc., a Minnesota corporation ("Control
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Products"). The Project is expected to employ 90 people initially
and an additional 25 people within 2 years following completion;
(f) The City has been advised by representatives of
Company 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 feasibility of
operating the Project would be significantly reduced;
(g) A public hearing on the Project was held on
October 9, 1995, after notice was published and materials made
available for public inspection at the City Hall, all as required
by Section 469.154, Subdivision 4, of the Act, at which public
hearing all those appearing who desired to speak were heard and
written comments were accepted; and
(h) No public official of the City has either a
direct or indirect financial interest in the' Project nor will any
public official either directly or indirectly benefit financially
from the Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Chanhassen, Minnesota, as follows:
1. The Council hereby gives preliminary approval to the
proposal of Company that the City undertake the Projec~ pursuant to
the Act, consisting of the acquisition and construction of
facilities within the City pursuant to Company's specifications
suitable for the operations described above and to a revenue
agreement between the City and Company upon such terms and
conditions with provisions for revision from time to time as
necessary, so as to produce income and revenues sufficient to pay,
when due, the principal of and interest on the Bonds in the total
principal amount of approximately $3,000,000 to be issued pursuant
to the Act to finance the acquisition, construction and equipping
of the Project; and said agreement may also provide for the entire
interest of Company therein to be mortgaged to the purchaser of the
Bonds; and the City hereby undertakes preliminarily to issue its
Bonds in accordance with such terms and conditions.
2. On the basis of information available to this Council it
appears, and the Council hereby finds, that the Project constitutes
properties, real and personal, used or useful in connection with
one or more revenue producing enterprises engaged in any business
within the meaning of Subdivision 2(a) of Section 469.153 of the
Act; that the Project furthers the purposes stated in Section
469.152; that the availability of the financing under the Act and
willingness of the City to furnish such financing will be a
substantial inducement to Company to undertake the Project, and
that the effect of the Project, if undertaken, will be to encourage
the development of economically sound industry and commerce, to
assist in the prevention of the emergence of blighted and marginal
land, to help prevent chronic unemployment, to help the City retain
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and improve the tax base and to provide the range of service and
employment opportunities required by the population, to help
prevent the movement of talented and educated persons out of the
state and to areas within the State where their services may not be
as effectively used, to promote more intensive development and use
of land within the City and eventually to increase the tax base of
the community.
3. The Project is hereby given preliminary approval by the
City subject to the approval of the Project by the Minnesota
Department of Trade and Economic Development ("DTED"), and subject
to final approval by this Council, Company, and the purchaser of
the Bonds as to the ultimate details of the financing of the
Project.
4. The Mayor is hereby authorized and directed to submit the
proposal for the Project to DTED requesting its approval, and other
officers, employees and agents of the City are hereby authorized to
provide DTED with such preliminary information as it may require.
5. The Company has agreed and it is hereby determined that
any and all costs incurred by the City in. connection with the
financing of the Project whether or not the Project is carried to
completion and whether or not approved by the DTED ~ill be paid by
Company~
6. Briggs and Morgan, Professional Association, acting as
bond counsel, and Norwest Bank Minnesota, National Association, as
placement agent, are authorized to assist in the preparation and
review of necessary documents relating to the Project, to consult
with the City Attorney, Company and the purchaser of the Bonds as
to the maturities, interest rates and other terms and provisions of
the Bonds and as to the covenants and other provisions of the
necessary documents and to submit such documents to the Council for
final approval.
7. Nothing in this resolution or in the documents prepared
pursuant hereto shall authorize the expenditure of any municipal
funds on the Project other than the revenues derived from the
Project or otherwise granted to the City for this purpose. The
Bonds shall not constitute a charge, lien or encumbrance, legal or
equitable, upon any property or funds of the City except the
revenue and proceeds pledged to the payment thereof, nor shall the
City be subject to any liability thereon. The holder of the Bonds
shall never have the right to compel any exercise of the taxing
power of the City to pay the outstanding principal on the Bonds or
the interest thereon, or to enforce payment thereof against any
property of the City. The Bonds shall recite in substance that the
Bonds including interest thereon, are payable solely from the
revenue and proceeds pledged to the payment thereof. The Bonds
shall not constitute a debt of the City within the meaning of any
constitutional or statutory limitation.
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8. In anticipation of the approval by DTED and the issuance
of the Bonds to finance all or a portion of the Project, and in
order that completion of the Project will not be unduly delayed
when approved, Company is hereby authorized to make such
expenditures and advances toward payment of that portion Of the
costs of the Project as Company considers necessary, including the
use of interim, short-term financing, subject to reimbursement from
the proceeds of the Bonds if and when delivered but otherwise
without liability on the part of the City.
Adopted by the City Council of the City of Chanhassen,
Minnesota, this 9th day of October, 1995.
Attest:
City Mah~r
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