Resolution 81-2979- Authorizing Execution of Preliminary Agreement By and Between Cty of Hpks and K-Tel Investment0
RESOLUTION NO. .L -.2979
A RESOLUTION AUTHORIZING THE EXECUTION OE'•A
PRELIMINARY AGREEMENT BY AND RETWEEN THE CITY
OF HOPKINS, MINNESOTA, AND K -TEL INVESTMENT,
RELATING TO THE' ISSUANCE OF INDUSTRIAL
DEVELOPMENT RFVENUE BONDS.
WHEREAS, the City Council of the City of Hopkins,
Minnesota (the "City is authorized and empowered by the
provisions of the Minnesota Municipal Industrial Development
Act, Chapter 474, Minnesota Statutes, as amended (the "Act
to issue its revenue bonds to finance the cost of the
C I acquisition, construction and improvement of anv properties,
real or personal, used or useful in connection with a revenue
producing enterprise: and
WHEREAS, the Act declares that the welfare of the State
of Minnesota reauires the active p romotion, attraction,
encouraaement, and development of economically sound industry
and commerce through governmental acts to prevent, so far as
possible, the emergence of blighted and marginal lands and areas
of chronic unemployment, and the state has encouraged local
government units, such as the City, to prevent such economic
4) deterioration: and
WHEREAS, the factors necessitatina the active promotion
and development of economically sound industry and commerce
include the increasing concentration of population in our urban
4 1 and metropolitan areas with the consequent increase in the amount
and cost of governmental services rpauired in such areas, the
need for more intensive development and use of land to provide
an adeauate tax base Co finance these increased costs and the
need to sustain proper living conditions and access to employment
opportunities for such a population: and
WHEREAS, the City proposes to issue its industrial
development revenue bonds (which may be in the form of a single
debt instrument or may be in one or more series or in part in
the form of a note or notes and in part in the form of bonds,
any of the foreaoina being referred to herein as the "Bonds
pursuant to the provisions of the Act as then in effect to assist
in financing the cost of the acaulsition of land and the
construction and eauippinq of a 10,700 square foot facility
thereon (the "Proiect to be located in the City of Hopkins,
Minnesota (the "City and to be owned or leased from the City
by K -Tel Investment, a Minnesota general partnership (the
"Contractina Party and to be leased or subleased by the
Contracting Party to West Electric, Inc., a Minnesota corporation
(the "Company and other tenants. for use as an office /warehouse
4 facility; and
WHEREAS. the Contracting Party has represented to the
City that conventional, commercial financing is available on
a very limited basis and at such high cost that the economic
feasibility of building and operating the Proiect would be
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significantly i mpaired, but the Contracting Party has also
represented to the Ci ty that the financing of the Proiect under
the Act will be economically more feasible and will encouraae
the Contracting Party to construct and equip the Proiect; and
WHEREAS, it is deemed necessary and advisable for the
promotion and development of industry and commerce in the City
that the Proiect be undertaken at the earliest practicable date,
and the Contracting Party has reauested satisfactory assurances
from the City that the proceeds of the sale of Bonds of the
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City in an aggregate amount suffi to finance the Protect,
currently estimated not to exceed 5350,000.00, will be made
available; and
and
WHEREAS, the City deems it necessary and advisable that
it take such actions as may be reauired under the Act as then
in effect to authorize and issue Bonds to finance the cost of
the Prolect, currently estimated not to exceed $350,000.00;
WHEREAS, a form of agreement, designated as a
"Preliminary Agreement," has been prerared under which the
Q Contracting Party has stated its willingness to arrange for
the acvuisition of land and the construction and equipping of
the Project thereon and to enter into contracts therefor and,
at the time of delivery of the Bonds, to convey, grant or lease
the Proiect to the City, and /or agree to complete the
construction and equinrino of the Protect. and to enter into
a lease of the Prolect from the City, or a contract to purchase
the Project from the City, or a loan or financing agreement
with the City with respect Co the Protect, or any combination
of the foreooina, or anv other form of "revenue agreement,"
as defined in the Act, under which the Contracting Party will
be obligated (directly or through its notes or other secured
or unsecured debt obligations executed and delivered to evidence
its obligations thereunder) to make periodic payments sufficient
Co nay the principal of, interest on and redemption premium,
if any, on the Bonds as and when the same shall become due and
C I) payable, and such lease, contract or agreement shall contain
such other provisions as may he required by the Act as then
in effect and such other provisions as shall be mutually
acceptable to the City and the Contractina Party; and
WHEREAS, the Act provides that no protect shall be
undertaken until the Commissioner of Securities has approved
the Proiect, on the basis of such preliminary information as
and policies of the Act: and
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the Commissioner may require, as tending to further the purposes
WHEREAS, the Act provides that prior to submitting an
application Co the Commissioner of Securities reauestin4 approval
of the Project, the City Council of the City shall conduct a
Public hearing on the proposal Co undertake and finance the
Prolect, notice of which hearing is to be published at least
0 once not less than 15 days nor more than 30 days prior to the
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date fixed for said hearing, in the official newspaper and a
newspaper of general circulation of the City: and
WHEREAS, such public hearing was conducted on
October 20 1981, at _Lap_ o'clock _p.m. at Hopkins City
Hall duly noticed, and held in accordance with
law. and as a result of said public hearing the City has
determined to proceed with the Proiect:
NOW, THEREFORE, Be It Reso]ved by the City Council of
the City of Hopkins, Minnesota, as follows:
ZaZiian_1, That this City Council hereby finds that
the Proiect constitutes properties, real or personal, used or
useful in connection with revenue producing enterprises engaged
in businesses within the meaning of Subdivision la of Section
474.02 of the Act, that the Proiect will promote, attract,
encourage and develop economically sound industry and commerce
in the City, will help to prevent the emergence of blighted
and marginal lands and areas of chronic unemployment in the
City, will promote the need for more intensive development and
use of land which will enable the City to provide a range of
employment opportunities reauired by the population of the City,
and will otherwise further the purposes of Section 474.01 of
the Act.
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That in order to provide for the acauisition
f land and the construction and eauippino of the Protect in
the City, with the resultina public benefits which will flow
therefrom, it is deemed necessary and advisable that Bonds be
issued in an amount sufficient to finance the Protect, currently
estimated not to exceed 5350,000.00. and that the Preliminary
Agreement hereinafter referred to be approved and executed for
and on behalf of the C3 tv.
action 3. That the Preliminary Agreement by and between
the Contracting Party and the City, substantially in the form
4: and with the contents set forth in EXhibit_A attached hereto,
be and the same is hereby approved and authorized.
&ectirn_A. That the Mayor and City Manager are hereby
authorized and directed to execute, and the City Clerk is hereby
authorized to attest and to affix the seal of the City to, the
Preliminary Agreement substantially in the form and with the
contents set forth in Exhibit_2 attached hereto.
5tin__5. That in accordance with the Act, the savor
and City Manaaer are hereby authorized and directed Co submit
0 the proposal for the Protect to the Commissioner of Securities
for approval of the Protect. The Mayor and City Manager,
Stolpestad, Brown Smith, P.A. (actin° as bond counsel to the
City) and officers, employees and agents of the City are hereby
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authorized to provide the Commissioner with any preliminary
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0 information the Commissioner may require for this purpose, and
Stolpestad, Brown Smith, P.A. 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.
d
Zesti∎ii 6 That the City will issue and sell industrial
development revenue Bonds in an amount sufficient to finance
the costs of the Project, currently estimated not to exceed
$350,000.00, subject to the execution of the Preliminary
Agreement herein authorized, the approval of the Project by
4:) in the Preliminary Agreement.
the Commissioner of Securities and the conditions specified
Z. t1so.Il_2. The Contracting Party has agreed Co pay
directly or through the City any and all costs incurred by the
City in connection with the Project whether or not the Project
is approved by the Commission of Securities; whether or not
the Project is carried Co completion: and whether or not the
Bonds or operative instruments are executed.
Z____. n_B. The adoption of this Resolution does not
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constitute a guarantee or a firm commitment that the City will
4 issue the Bonds as reauested by the Contracting Party. The
City retains the right in its sole discretion Co withdraw from
participation and accordingly not issue the Bonds should the
City at any time prior to the issuance thereof determine that
it is in the best interest of the City not to issue the Bonds
Q or should the parties to the transaction he unable to reach
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aareement as to the terms and conditions of env of the documents
required for the transaction.
conflict herewith are hereby repealed to the extent of such
conflict.
(SEAL)
Attest:
City Clerk
ES`ct.iQIl_2. That all resolutions and parts thereof in
Passed and approved October 2 0 1 9 8 1
R
Manager
�f'�F
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EXHIBIT A
PRELIMINARY AGREEMENT
THIS PRELIMINARY AGREEMENT is between the City of
Hopkins, Minnesota, warty of the first part (hereinafter referred
to as the "City and K -Tel Investment, a Minnesota general
partnership, party of the second oart (hereinafter referred
Co as the "Contractino Party
1. Ettlizina=_Zt.ateaent. Among the matters of mutual
inducement which have resulted in the execution of this Agreement
are the following:
a. The City is a municipality authorized and
empowered by the provisions of the Minnesota Municipal Industrial
Development Act, Chapter 474, Minnesota Statutes, as amended
(the "Act to issue its revenue bonds for the purpose of
financing the cost of the acquisition, construction and
"improvement of any properties, real or personal, used or useful
in connection with a revenue producing enterprise.
b. To promote, attract and develop economically
sound industry and commerce in and near the City of Hopkins,
Hennepin County, Minnesota (the "City and to promote more
intensive development and use of land within the-City and to
help the City provide and improve an adeouate tax base to finance
the increased cost of governmental services and 'CO provide the
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range of employment opportunities renui red by its ponu] ation
and Co further the other Purposes set forth in the Act, the
City proposes to assist in financing the acouisition of land
and the construction and equipping of a 10,700 square foot
facility thereon (the "Project Co be owned or leased from
the City by the Contracting Party. and to be leased or subleased
by the Contracting Party to West Electric, Inc., a P innesota
corporation (the "Company and other tenants, for use as an
office /warehouse facility.
c. Representatives of the City have indicated the
willingness of the City to proceed with and effect such financing
as an inducement to the Contracting Party to locate the Project
in the City and the City has advised the Contracting Party that,
subject to due compliance with all requirements of law (including
the holding of a public hearing on the proposal to undertake
and finance the Project) and the obtaining of all necessary
consents and approvals (including the approval of the Project
by the Commissioner of Securities) and to the happening of all
acts, conditions and things required Co exist, happen and be
performed precedent to and in connection with such financing
in due time, form and manner as required by law, the City, by
virtue of the Act as then in effect, will issue and sell its
industrial development revenue bonds (which may be in the form
of a single debt instrument or may be in one or more series
or in part in the form of a note or notes and in part in the
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form of 'ones, any of the f_orec c ira being referred to herein
as the "Bonds in an aggregate rurincioal amount not exceeding
$400,000 to pay the costs of acquiring the land and constructing
and equipping the Project. Based on such indications, the
Contracting Party is willing to forego other financing proposals
to locate the Project elsewhere and to enter into such agreements
as may be necessary for the acquisition of the land and the
construction and equipoinq of the Project.
d. The City considers that the acquisition of the
land and the construction and equipping of the Project by the
Contracting Party for use by the Company will promote the
4:) development of commercial ern.plovment 0000rtunities for the
inhabitants of the City, increase the City's industry and
commerce and acid to the welfare and prosperity of the City and
that of its inhabitants.
2. rtakinsa_an_the_Eart_ tht_Ei.tz Subject t o
the conditions above stated, the City agrees as follows:
a. That it will authorize, or cause to be
authorized, the issuance and sale of the Bonds, pursuant to
the terms of the Act as then in force, in an aggregate principal
amount not to exceed $400,000, which amount is necessary to
finance the costs of the Project, and apply the proceeds therefor
to pay the costs of the Project, including reimbursement to
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and the issuance of the Bonds.
the City of all expenses incurred in connection with the Projert
b. That it will adopt, or cause Co be adopted,
from time to time, such proceedings and authorize the execution
of such documents as may be necessary or advisable for the
authorization, issuance and sale of the Bonds and the financing
of the acquisition of the land and the construction and equipping
of the Project, as aforesaid, includina a lease agreement, a
sale agreement, a loan or financing agreement or any other form
of "revenue agreement" pursuant to the provisions of the Act
then in effect (any of the foregoing being referred to herein
as the "Revenue Agreement all as shall be authorized by law
and mutually satisfactory Co the City and the Contracting Party.
c. That the aggregate basic amounts (i.e., the
amounts to'be used to pay the principal, interest and premium,
if any, on any Bonds) payable by the Contracting Party under
the Revenue Agreement (directly or through notes or other secured
or unsecured debt obligations of the Contracting Party executed
and delivered to evidence its obligations thereunder) pursuant
to which the Project will be financed, shall he such sums as
shall be sufficient to pay the principal of and interest and
redemption premium, if any, on the Bonds as and when the same
shall become due and payable.
d. That it will take, or cause to be taken, such
other acts and adopt such further proceedings as may be required
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to implement the aforesaid unrertakincs or as it may deem
1 6 1) apropriate e in pursuance thereof.
3. Dn,d?Stakin4.s_2n_lhP 2aLt __nf_thz_Cnft..L.LC..ifQ_EaLXY•
Subject to the conditions above stated, the Contracting Party
agrees as follows:
a. That it will use all reasonable efforts to find
one or more purchasers for the Bonds.
b. That it will enter into a contract or contracts
for the acquisition of the land and the construction and
equipping of the Prolect.
c. That contemporaneously with the delivery of
the Bonds it will enter into a Revenue Agreement with the City
under the terms of which the Contracting Party will obligate
itself to pay (directly or through its notes or other secured
or unsecured debt obligations of the Contracting Party executed
and delivered to evidence its obligations thereunder) sums
sufficient in the aggregate to Pay the cnrincipal of and interest
and redemption premium, if any, on the Bonds as and when the
same shall become due and payable, any such Revenue Agreement
Co contain such provisions as shall be required by law and as
shall be mutually acceptable to the City•and the Contracting
Party.
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d. That it will take such further action as may
be reauired to implement its aforesaid unrertakinas or as it
may deem appropriate in pursuance thereof.
4. enemal_EL4yiaisun
a. All commitments of the City under paragraph
2 hereof and of the Contractinc Party under paragraph 3 hereof
are subiect to the condition that on or before one year from
the date hereof (or such other date as shall be mutualiv
satisfactory to the City and the Contracting Party), the City
and the Contracting Party shall have agreed Co mutually
acceptable terms for the Bonds and of the sale and deli very
thereof, and mutually acceptable terms and condi tions of the
contracts and agreements referred to in paragraph 3 and the
proceedings referred to in paragraphs 2 and 3 hereof, and all
necessary consents shall have been obtained.
b. If the events set forth in (a) of this paragraph
do not take place within the time set forth or any extension
thereof, the Contracting Party agrees that it will, at the
request of the City, reimburse the City for all reasonable and
necessary direct out -of- packet expenses which the City may incur
at the request of the Contracting Party arising from the
execution of this Agreement and the performance by the City
of its obligations hereunder, and will pay the preliminary fees
of bond counsel, and this Agreement shall thereupon terminate.
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assist in the preparation of such documents as may he appropriate
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to the Project, if it is approved by the Commissioner.
ZQctj,ion__._FZ. That the City will issue and sell industrial
development revenue Bonds in an amount sufficient to finance
the costs of the Project, currently estimated not to exceed
$400,000, subject to the execution of the Preliminary Agreement
herein authorized, the approval of the Project by the
Commissioner of Securities and the conditions specified in the
Preliminary Agreement.
(SEAL]
Z t.thn__2. That all resolutions and parts thereof in
0 conflict herewith are hereby repealed to the extent of such
conflict.
October 20,
Passed and approved 1981.
9 Attest:
City Clerk
�Nw
Mayor
Manacer
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4 STATE OF MINNESOTA
T U
Q
COUNTY OF HENNEPIN
I, the undersigned, being the duly Qualified and acting
City Clerk of the City of Hopkins Minnesota, DO HEREBY CERTIFY
that I have compared the attache- and foregoing extract of
minutes with the original thereof on file in my office, and
that the same is a full, true and complete transcript of the
minutes of a meeting of the City Council of said City duly called
and held on the date therein indicated, insofar as such minutes
relate to a resolution giving preliminary approval to an
4 1 industrial development project.
[SEAL]
WITNESS my hand and seal of said City Clerk this
20th day o f October 1981.
City Clerk