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HomeMy WebLinkAboutResolution 79-15CITY OF CiTY OF COLUMBIA HEIGHTS 590 40th AveJ N.E. ' Columbi~- Heights,JW',J__554~ .......... (612) 788.9221 _' . "SERVICE IS OUR BUSINESS" RESOLUTION 79-15 RESOLUTION RELATING TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, GIVING PRELIMINARY APPROVAL TO THE PROJECT: REFERRING THE PROPOSAL TO THE COMMISSION OF SECURITIES FOR APPROVAL, AND AUTHORIZING EXECUTION OF A MEMORANDUM OF AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council of the City of Columbia Heights Minnesota (the City) as follows: ' It is hereby found, determined and declared as follows: 1.1 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 areas of chronic unemployment, and the State has encouraged local government units to act to prevent such economic deterioration. i.2 Crest View Lutheran Home, a Minnesota non-profit corporation (the Home), which now owns and operates within the City a 122 bed nursing home (the Existing Facility) on a site of approximately 10 acres (the Land), now proposes to construct, furnish and equip on the Land a retirement congregate housing facility of approximately 150 units (the Project). 1.3 The Home finds it necessary to borrow funds to pay the cost of constructing the Project, and in its efforts to borrow funds for such purpose has found that the most advantageous method of financing available to the Home is through the issuance of revenue bonds of the City under the provisions of Minnesota Statutes, Chapter 474, as amended (the Act). The Home has further determined that to improve the security for such revenue bonds, and thereby permit the revenue bonds to be issued at the lowest possible interest rates, it may be desirable that the revenue bonds be issued in an amount sufficient not only to pay the cost of construction, furnishing and equipping the Project but also sufficient to discharge certain outstanding Land and the Existing Facility (the Oustanding Debt), in order that the revenue bonds could be secured by a mortgage lien against the Land, the Existing Facility and the Project. The Home now estimates the cost of constructing the Project and discharing the Outstanding Debt would be approximately $9,200,000. Bruce G. Nawrocki, Mayor E. "Sebe" Heintz, Councilmember Walter Logacz, Councilmember Gayle R. Norberg, Councilmember Kenneth E. Hentges, Councilmember EQUAL OPPORTUNITY EMPLOYER 7 ?-/3" -2- 1.4 The Existing Facility provides a health care service of significant value to the residents of the City, as well as offering employment to a number of residents of the City and surrounding area, and the Project, if in being, would enhance the value of the services provided by the Existing Facility as well as provide increased opportunities for employment for residents of the City and surrounding area. 1.5 This Council has been advised by a representative of the Home 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 Existing Facility and the Project would be significantly reduced, but that with the aid of municipal borrowing, and its resulting low borrowing cost, the economic feasibility of operating the Existing Facility and the Project are significantly improved. 1.6 This Council has also been advised by representatives of Piper, Jaffray & Hopwood Incorporated, Minneapolis, Minnesota, investment bankers and dealers in municipal bonds, that on the basis of information submitted to them and their discussions with representatives of the Home and potential buyers of tax-exempt bonds, industrial development revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project and to discharge the Outstanding Debt. 2. On the basis of information given the City to date, it appears that it would be in the best interest of the City to issue its industrial development revenu~ bonds under the provisions of the Act for the purposes described above. It is presently estimated that the amount of the revenue bonds to be issued for such purposes would not exceed $9,200,000. 3. The issuance of bonds for such purposes and in such amount is hereby approved and authorized, subject to the approval by the Commissioner of Securities, and subject to the mutual agreement of this Council, the Home and the initial purchasers of the bonds as to the details of the bond issue and provisions for their payment. In all events, it is understood, however, that the bonds of the City shall not constitute a charge, lien or encumbrance, legal or equitable upon any property of the City except the Land, Existing Facility and 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 and property pledged to the payment thereof, and shall not constitute a debt of the City. 4. The form of Memorandum of Agreement relating to the issuance of revenue bonds of the City for the purpose herein described is hereby approved and the Mayor and City Manager are hereby authorized and directed to execute the Memorandum of Agreement in behalf of the City. 5. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7, the City Manager is hereby authorized and directed to submit the proposal for the Project to the Commissioner of Securities for his approval of the Project. The Mayor, City Manager, City Clerk-Treasurer, City Attorney and other officers, employees and agents of the City are hereby authorized to provide the Commissioner with any preliminary information he 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. Passed this 9th day of April, 1979. Offered by: Hent§es Seconded by: Logacz Roll Call: All Ayes Bruce G Nawrock~, Mayor C~nci 1 Secretary