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