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1989-067 1..' . \ \ CITY OF HOPKI NS Hennepin County, Minnesota . RESOLUTION NO: 89-67 RESOLUTION RECITING A PROPOSAL FOR AN INDUSTRIAL FACILITIES DEVELOPMENT PROJECT, GIVING PRELIMINARY APPROVAL TO THE PROJECT PURSUANT TO MINNESOTA STATUTES SECTION 469.154, AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR APPROVAL OF THE PROJECT TO THE COMMISSIONER OF THE DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT OF THE STATE OF MINNESOTA, AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH THE PROJECT (POWELL CANDY COMPANY) (a) WHEREAS, the purpose of Minnesota Statutes, Sect10ns 469.152 through 469.165, relating to municipal 1ndustrial development (the "Act"), as found and determined by the legislature, is to promote the welfare of the state by the active attract10n 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; and (b) WHEREAS, factors necessitat1ng the active promotion and development of economically sound industry and commerce are the 1ncreasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental serV1ces 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; and (c) WHEREAS, the City Council of the City of Hopkins, Minnesota (the "City"), has received from Powell's Fine Candies, Inc., a corporation organized under the laws of the State of Minnesota (the "Company"), a proposal that the City assist in financing a Project hereinafter described, through the issuance of a Revenue Bond or Bonds (hereinafter referred to in this resolution as "Revenue Bonds") pursuant to the Act; and (d) WHEREAS, the City desires to facilitate the selec- tive 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; and (e) WHEREAS, the Company is currently engaged in the business of the manufacture of candy; and the Project to be financed by the Revenue Bonds is an approximately 60,000 square ~ ~ foot expansion of the Company's existing facility located on the northwest corner of Excelsior Boulevard and Powell Road in the City and consists of the construction of buildings and improvements thereon and the installation of equipment therein, all to be constructed pursuant to the Company's specifications and to be owned and operated by the Company (the "Project"), and will result in the employment of approximately 90 additional persons to work within the new facilities; and (f) WHEREAS, the City has been advised by representa- tives of the Company that conventional, commercial financing to pay the capital cost of the Project is available only on a limited bas1s and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced without the availability of industrial development bond financing; and (g) WHEREAS, before giv1ng final approval to the Project it is necessary for the C1ty to hold a public hearing follow1ng publ1cation of not1ce, all as required by Section 469.154, Subdivision 4, of the Act, at which public hearing all those who appear who desire to speak or wish to submit written comments will be heard; and (h) WHEREAS, 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 Hopkins, Minnesota, as follows: 1. The Council hereby gives preliminary approval to the proposal of the Company that the City undertake the Project pursuant to the Act and pursuant to a revenue agreement between the City and Company containing such terms and conditions (with provisions for revision from time to time as necessary) as may be necessary to produce income and revenues sufficient to pay, when due, the principal of and interest on the Revenue Bonds in the maximum aggregate principal amount of $3,000,000, to be issued pursuant to the Act to finance the acquisition, construction and equipping of the Project. Said revenue agreement may also provide for the entire interest of the Company therein to be mortgaged to the purchaser of the Revenue Bonds. The City hereby undertakes preliminarily to issue its Revenue Bonds in accordance with such terms and conditions, subject to consideration of discussion at the public hearing. 2. On the basis of 1nformation 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 -2- one or more revenue producing enterprises engaged in any business within the meaning of Subdivision 2(b) of Section 469.153 of the Act; that the Project furthers the purposes stated in Section 469.l52 of the Act; that the willingness of the City to furnish such financing makes the Project economically more feasible; 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 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 serV1ces 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 holding the public hearing, the approval of the Project by the Commissioner of the Department of Trade and Economic Development or such other state officer having authority to grant approval (the "Commissioner"), the receipt of federal allocation of authority to issue tax-exempt financing and subject to final approval by this Council, the Company, and the purchaser of the Revenue Bonds as to the ultimate deta1ls of the financing of the Project. 4. The City staff is authorized to publish a notice of public hearing in the form attached hereto as Exhibit A in the legal newspaper of the City calling for a public hearing on September 5 , 1989. 5. In accordance with Subdivision 3 of Section 469.154 of the Act, the Mayor or Manager of the City is hereby authorized and directed to submit an application for federal allocation and to submit the proposal for the Project to the Commissioner requesting his approval, and other officers, employees and agents of the City are hereby authorized to provide the Commissioner with such preliminary information as he may require. 6. 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 Commissioner, will be paid by the Company. 7. Briggs and Morgan, Professional Association, acting as bond counsel, and Norwest Corporate Finance, are authorized to assist in the preparation and review of necessary documents relating to the Project, to consult with the City Attorney, the Company and the purchaser of the Revenue Bonds as to the maturities, interest rates and other terms and provisions of the -3- .' .. " Revenue Bonds and as to the covenants and other prov1s1ons of the necessary documents, and to submit such documents to the Council for final approval. 8. 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 Revenue 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 Revenue Bonds shall never have the right to compel any exercise of the tax1ng power of the City to pay the outstanding principal of the Revenue Bonds or the interest thereon, or to enforce payment thereof against any property of the City. The Revenue Bonds shall rec1te in substance that the Revenue Bonds, including interest thereon, are payable solely from the revenue and proceeds pledged' to the payment thereof. The Revenue Bonds shall not constitute a debt of the C1ty within the meaning of any constitutional or statutory limitation. . 9. In ant1cipation of the approval by the Commissioner and the 1ssuance of the Revenue Bonds to finance all or a portion of the Project, and in anticipation that the C1ty will procure and devote to the Revenue Bonds an adequate allocation of authority to issue private activity bonds, and in order that completion of the Project w1ll not be unduly delayed when approved, the Company is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Revenue Bonds as the Company considers necessary, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Revenue Bonds if and when delivered but otherwise without liability on the part of the City. Adopted by the City Council of the City of Hopkins, Minnesota, this 7th day of August, 1989. x Attest: 0?~~ J-.4Ls.~ lerk -4-