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HomeMy WebLinkAboutNov 27, 1981Official Proceedings Columbia Heights City Council Special Meeting November 27, 1981 The meeting was called to order by Mayor Nawrocki at 7:00 pm. l. Roll Call: Logacz, Heintz, Norberg, Hentges, Nawrocki--present 2. Purpose of the Meeting For adoption of ordinance authorizing the issuance of Industrial Development Revenue Bonds for the "Corner Partnership" 3. Second Reading of Ordinance No.983 being an ordinance giving preliminary approval to a project under the Municipal Industrial Development Act, referring the proposal to the Commissioner of Securities and Real Estate for approval, and authorizing the preparation of necessary documents. The City Manager explained amendments to the Mayor's Statement and Application to the Commissioner of Securities that were received by the Council at this meeting. Motion by Heintz, second by Norberg to waive the reading of the ordinance there being ample copies available to the public. Roll call: Ali ayes The Corner Partnership proposes to develop an office building located on the northwest corner of 40th Avenue and Central Avenue; with the estimated total amount of the pro- posed bond issue being SI,i)00,000. Councilman Norberg inquired as to who the partners were in this venture. Doug Peterson, of the the Peterson and Kal ina I. aw Offices ad- vised him that the following firms were involved with the Corner Partnership; Halva and Williams Law offices, Peterson and Kal ina Law offices, Keith Louiselle Insurance Company and the Ashford Clinic. The Columbia Heights Credit Union will be a tenant in the building. Doug Peterson stated that if there are any costs involved the partner- ship will pay them. The Mayor asked Peterson to define 'costs' Councilman Norberg questioned item # 6 in the Mayor's statement regarding Council reviewal of the preliminary plans and drawings for the project. -Ordinance No. 98) BEING AN ORDINANCE GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO THE COMMISSIONER OF SECURITIES AND REAL ESTATE FOR APPROVAL, AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS The City of Columbia Heights does ordain: 1. It is hereby found, determined and declared as follows: 1.1. The welfare of the State of Minnesota requires active promo- tion, 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 it is the policy of the State of Minnesota to facilitate and encore;age action by local government units to prevent the economic deterioration of such areas to the point where the process can be reversed only by total redevelopment through the use of local, state and federal funds derived from taxation, with the attendant necessity of relocating displaced persons and of duplicating public services in other areas. Special Meeting November 27, }981 page 2 1.2. Technological change has caused a shift to a significant degree in the area of opportunity for educated youth to processing, transporting, marketing, service and other industries, and unless existing and related industries are retained and new industries are developed to use the available resources of the City of Columbia Heights (the ~City"), a large part of the existing investment of the community and of the state as a whole in educational and public service facilities will be lost, and the movement of talented, educated personnel of mature age to areas where their services may be effectively used and compensated and the lessening attraction of persons and businesses from other areas for purposes of industry, commerce and tourism will deprive the City and the State of the economic and human resources needed as a base for providing governmental services and facil- ities for the remaining population. 1.3. The increase in the amount and cost of governmental services requires the need for more intensive development and use of land to provide an adequate tax base to finance these costs. 1.4. A representative of The Corner Partnership (hereinafter the ~Applieant"), has advised this City Council (the "Council") that it desires to acquire land and construct a building of approximately 16,000 square feet and acquire and install equipment therefor for use as an office facility (hereinafter referred to as the ~Projeet"). 1.5. The existence of the Project in the City will contribute to more intensive development and use of land to increase the tax base of the City and overlapping taxing authorities and maintain and provide for an increase in opportunities for employment for residents of the City. 1.6. The City has been advised that conventional, commercial financing to pay the capital cost of the Project is available at such costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but that with the aid of municipal financing, and its resulting low borrowing cost, the Project is economically more feasible. 1.7. This Council has been advised by a representative of the Applicant, that on the basis of information submitted to them and their discussions with representatives of area financial institutions 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. 1.8. The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds to finance the cost, in whole or in part, of the acquisition, construction, reconstruction, improvement or extension of cap- ital projects consisting of properties used and useful in connection with a revenue producing enterprise, such as that of the Applicant, and the issuance of such bonds by the City would be a substantial inducement to the Applicant to construct its facility in the City. 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 revenue bonds under the provisions of Chapter 474 to finance the Project of the Applicant at a cost presently estimated not to exceed $1,300,000. Special Meeting November 27, 1981 page 3 3. The Project above referred to is hereby given preliminary approval by the City and the issuance of bonds for such purpose and in such amount approved, subject to approval of the Project by the Commissioner of Securities and Real Estate and to the mutual agreement of this body, the Applicant 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 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 from the Project and property pledged to the payment thereof, and shall not constitute a debt of the City. 4. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7a, the Mayor of the City is hereby authorized and directed to submit the proposal for the Project to the Commissioner of Securities and Real Estate for approval of the Project. The MaYor, Clerk, Treasurer and other officers, employees and agents of the City are hereby authorized to provide the Commissioner with any preliminary information needed 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. 5. The law firm of Holmes & Graven, Chartered, is authoriz'ed to a~-t as Bond Counsel and to assist in the preparation and review of necessary documents relating to the Project and bonds issued in connection therewith. The Mayor, Clerk-Treasurer, City Attorney, and other officers, employees and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents. 6. The City shall have the right, in its sole discretion, to withdraw from participation, and accordingly, not issue its revenue bonds for the Project, 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 its revenue bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. The decision of the City Council with respect to any of the aforementioned matters shall be incontestable. 7. This ordinance shall be in full force and effect from and after thirty (30) days after its passage. · First Reading: Second Reading: Offered by: Seconded by: Roll Call: Date of Passage: NOVEMBER 9, 1981 November 27, 1981 Heintz Logacz All Ayes November 27, 1981 Mayor .Special Meeting November 27, 1981 page 4 NOTICE OF PUBLIC HEARING ON A PROPOSED PROJECT AND THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, MINNESOTA STATUTES, CHAPTER 474, AS AMENDED THE CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTICE IS HEREBY GIVEN that the governing body of the City of Columbia Heights, Minnesota (the "City"), will meet on November 27, 1981, at ?:00 p.m. at City offices in Columbia Heights, Minnesota, for the purpos'-~ of conducting a public hearing on a proposal that the City issue its revenue bonds under the Munieipnl Industrial Development Act, Minnesota Statutes, Chapter 474, as amended, in order to finance the cost of a project. The proposed project will consist of the acquisition of land within the City, the construction thereon of a building and the acquisition and installation of equipment in connection therewith for use as an office facility to be owned by The Corner Partnership for use in its business. The estimated total amount of the proposed bond issue is $1,300,000. The bonds shall be limited obligations of the City and the bonds and interest thereon shall be payable solely from the revenues pledged to the payment thereof, except that such bonds may be secured by a mortgage and other encumbrance on the project. No holder of any such bond shall ever have the right to compel any exercise of the taxing power of the City of Columbia Heights to pay the bonds, or the interest thereon, nor to enforce payment against any property of the City except the project. A draft copy of the proposed application to the Minnesota Commissioner of Securities and Real Estate for approval of the project, together with all attachments and exhibits thereto, is available for public inspection at the City offices. Ail persons interested may appear and be heard at the time and place set forth above. [ Date of Publication] BY ORDER OF THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS CERTIFICATION OF MINUTES RELATING TO THE RESOLUTION ESTABLISHING THE DATE FOR A PUBLIC HEARING ON A PROPOSAL TO UNDERTAKE AND FINANCE A PROJECT UNDER MINNESOTA STATUTES, CHAPTER 474 City: Columbia Heights County: Anoka State: Minnesota Governing body: City Council Meeting: A meeting of the City Council of the City of Columbia Heights, held on the 27 day of November ,1981, at 7.nn p.m., in the City of Columbia Heights, Minnesota. ' ' 'Special Meeting November 27, 1981 page 5 Coune~ members present: Logacz, Helntz, Hentges, Norberg, Nawrocki Council members absent: None Documents: A copy of a resolution adopted by the City Council of the City of Columbia Heights at said meeting. Certification: I, John E. Sehedler, Clerk-Treasurer of the City of Columbia Heights, Minnesota, do hereby certify the following: Attached hereto is a true and correct copy of a resolution on file and of record in the offices of the City of Columbia Heights, which resolution was adopted by the City Council of the City of Columbia Heights, Minnesota, at the meeting referred to above. Said meeting was a regular meeting of the City Council, was open to the public, and was held at the time and place at which meetings of City Council are regularly held. Council Member He intz moved the adoption of the attached resolution. The motion for adoption of the attached resolution was seconded by Council Member Logacz . A vote being taken on the motion, the following voted in favor of the resolution: Logacz, Heintz, Hentges, Norberg, Nawrocki and the following voted against the resolution: None Whereupon said resolution was declared duly passed and adopted. The attached resolution is in full force and effect and no action has been taken by the City Council of the City of Columbia Heights which would in any way alter or amend the attached resolution. Witness my hand officially as the Clerk-Treasurer of the City of Columbia Heights, Minnesota, this day of ,1981. RESOLUTION NO. 81-65 John E. Sehedler Clerk-Treasurer RESOLUTION ESTABLISHING THE DATE FOR A PUBLIC HEARING ON A PROPOSAL TO UNDERTAKE AND FINANCE A PROJECT UNDER MINNESOTA STATUTES, CHAPTER 474 · Special Meeting November 27, ]981 page 6 WHEREAS, the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 474.01 et seq. (the "Act"), authorizes the issuance of revenue bonds to finance projects; ~'~d WHEREAS, the term "project" is defined by Section 474.02, subdivision la, of the Act to include "any properties, real or personal, used or useful in connection with a revenue producing enterprise"; and WHEREAS, a representative of The Corner Partnership (the 'Developer~) has presented this City Council with information concerning a proposed project (the "Project") to be acquired and constructed within the City of Columbia Heights (the ~City"); and WHEREAS, the Developer has requested that the City resolve to issue revenue bonds pursuant to the Act to finance the Project and has presented to the City a form of preliminary ordinance concerning such issuance with a request that such preliminary ordinance, attached hereto as Exhibit A, be considered for adoption by the City Council of the City; and WHEREAS, Section 474.01, subdivision 7b, of the Act provides that the City Council must conduct a public hearing on any proposal to undertake and finance a project; and WHEREAS, Section 474.01, subdivision 7b, of the Act provides that notice of the time and plaee of such public hearing and stating the general nature of the project and an estimate of the principal amount of bonds or other obligations to be issued to finance the project must be published at least once not less than fifteen (15) days nor more than thirty (30) days prior to the date fixed for the public hearing in the official newspaper of the City and a newspaper of general circulation in the City; and WHEREAS, Section 474.01, subdivision 7b, of the Aet provides that the notice must state that a draft copy of the proposed application (the "Application-) to the Commissioner of Securities and Real Estate of the Securities Division of the Department of Commerce of the State of Minnesota for approval of the Project, together with all attachments and exhibits, is on file with the City and available for public inspection; and WHEREAS, the Developer has presented to the City a form of public notice, attached hereto as Exhibit B, with a request that the City Council establish a date for a public hearing on the proposal to undertake and finanee the Project and to authorize publication of the form of public notice provided by the Developer; NOW, THEREFORE, BE IT RESOLVED THAT: 1. The City Council'of the City will conduct a public hearing on the proposal to undertake and finance the Project on the 27th day of November, 1981. 2. The City Manager is hereby authorized to cause a public notice, substantially in the form of the notice attached hereto as Exhibit B, to be published in the official newspaper of the City and a newspaper of general circulation in the City. 3. The City Manager is hereby authorized and directed to have available for public inspection in the offices of the City a draft copy of the proposed Application, together with all attachments and exhibits thereto. Special Meeting November 27, 1981 page 7 Passed this 9th day of November, 1981 Offered by: Seconded by: Roll call: Heintz Norberg Logacz, Heintz, Hentges, Nawrocki--aye Norberg--nay Bruce G. Nawrocki, Mayor Jo-Anne Student, Council Secretary MAYOR'S STATEMENT CONC£RNINO A PROPOSED PROJECT UNDER MINNESOTA STATUTES, CHAPTER 474 The undersigned, being the duly qualified and acting Mayor of the City of Columbia Heights, Minnesota (the "City"), certifies that the City Council of the City (the "Council') has been provided by representatives of The Corner oPartnership (the "Developer"), with certain information concerning a proposed Project under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474. On the basis of such information the Council, by ord/nanee ~dopted November 27,, 1981 (the "Preliminary Ordinance"), has given preliminary approval to the proposed Project and the financing thereof by the issuance of a revenue obligation or obLigations of the City. The following are factors considered by the CouneLl in determining to give preliminary approval to said Project= 1. The Project consists generally of: Acquisition of land, construction of a building and the acquisition and installation of equipment therefor for use as an office facility. 2. The bond counsel of the City is of the opinion that the Project constitutes a "project" within the meaning of Minnesota Statutes, Section 474.02, Subdivision la. 3. ..,liased on an estimated total cost of acquisition and construc- tion of approximately $1,300,000 it is the opinion of the CouneLl that the Project, when completed, will add significantly to the commercial and industrial tax base of the City and the County and School District in which the Project is located, 4. Representatives of the Developer estimate that, as a result of the acquisition, construction and instaktation of the Project, the Project will generate employment opportunities for approximately twenty (20) persons (in addition to those currently employed by the Developer), in the City and the surrounding area. The Council is concerned about the level of unemployment in the City and surrounding area and the resulting movement of persons to other areas where jobs are more plentiful, and believes that the existence of the Project in the City would help alleviate those problems. Special Meeting November 27, 1981 page 8 5. Representatives of the Developer estimate that the acquisi- tion, construction and installation of the Project will result in an additional payroll of approximately $314,000, based on currently prevailing wages. The Council believes that a substantial percentage of that additional payroll will be spent on housing, food and other goods and services in the City and surrounding area, thus benefiting the local housing industry and local merchants. 6. The Council has reviewed the preliminary plans and drawings for the Project (which have also been reviewed by the City Engineer) and believes that the Project, when completed, will be compatible with present and projected development in its area. 7. Nothing has come 1o the attention of the Council to indicate that the proposed financing of the Project by the City would adversely and unfairly affect any other business enterprise located in the City. 8. Pursuant to the Preliminary Ordinance of November 27 , 1981, the City will comply with the requirements of Minnesota Statutes, Section 474.01, Subd. 8. 9. The Project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 10. A public hearing was called on November 27~ , 1981, at City offices in Columbia Heights, Minnesota, at 7:00 p.m., central time, pursuant to Minnesota Statutes, Section 474.01', Subd. 7b, to consider the proposal that the City undertake and finance the Project. All interested parties were afforded an opportunity to express their views. Mayor IMPORTANT This Application must be submitted to Commissioner in duplicate. STATE OF MINNESOTA DEPARTMENT OF COMMERCE, SECURITIES AND REAL ESTATE DI~ISION APPLICATION ~roval of Municipal Industrial Revenue Bond Pro'e~ Date: _ ,1981 To: Minnesota Department of Commerce Securities Division Metro Square Building St. Paul, Minnesota 55101 The governing body of the City of Columbia Heights, Minnesota, hereby applies to the Commissioner of the Securities and Real Estate Division of the Department of Commerce, of the State of Minnesota for approval of a proposed Municipal Industrial Development Revenue Bond issue, as required by Section 1, Subdivision 7, Chapter 474, Minnesota Statutes. Spec'ia 1 Meeting November 27, 1~)81 page ~) l~e have entered into preliminary discussions with: FIRM: The Corner Partnership ADDRESS: $58-40th Avenue Northeast CITY: Columbia Heights STATE: Minnesota 55421 State of Incorporation: general partnership Attorney: Doug Paterson m eat Address: 556-40th Avenue Northeast, Columbia Heights, Minnesota 55421 This'firm is engaged primarily in (nature of business): real estate develop- The funds received from the sale of the Industrial Revenue Bonds will be used to (general nature of project): acquire land, construct a building thereon and · acquire and install equipment in connection therewith for use as an office facility. It will be located in: Columbia Heights, Minnesota The total bond· issue will not exceed approximately $1,300,000 to be applied toward payment of costs now estimated as follows: Cost Item Land Acquisition and Site Development Construction Contracts Architectural and Engineering Fees Legal Fees and Administrative Costs Interest During Construction Contingencies Commitment and Origination Fee Amount $ 102,000 890,000 61,000 61,000 71,000 68,000 47,000 It is presently estimated that construction will begin on or about March 1, 1982, and will be completed on or about December 1, 1982. When completed, there will be approximately twenty (20) new jobs created by the project at an annual payroll of approximately $314,000 based upon currently prevailing wages. The tentative loan term is 30 years, commencing March 1, 19B2. The borrower will own the project. The following exhibits are furnished with this application and are incorpo- rated herein by reference: An opinion of bond counsel that the proposal constitutes a project under .Minnesota Statutes, Chapter 474.02, subdivision la. A copy of the city council ordinance giving preliminary approval for the issuance of its revenue bonds. A comprehensive statement by the municipality indicating how the project satisfies the public purpose of Minnesota Statutes, Section 474.01-.02. ® A letter of intent to purchase the bond issue or a letter confirming the feasibility of the project from a financial standpoint. Special Meeting November 27, 1981 page l0 A statement, signed by the Mayor, to the effect that upon entering into the revenue a~'eement, the information required by Minnesota .Statutes, Section 474.01, subdivision 8, will be submitted to the Department of Economic Development. A statement signed by the Mayor, that the project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. A statement signed by the Mayor that a public hearing was conducted pursuant to Minnesota Statutes, Section 474.01, subdivision ?b. The statement shall include the date, time and place of the meeting and that all interested parties were afforded an opportunity to express their views. 3. A copy of the notice of publ/eation of the public hearing. We, the undersigned, are duly elected representatives of the City of Columbia Heights, Minnesota, and solicit your approval of this project at your earliest convenience so that we may carry it to a final conclusion. Signed by: (Principal Officers) This approval shall not be deemed to be an approval by the Commissioner or the State of the feasibility of the project or the terms of the lease to be executed or the bonds to be issued therefor. Date of approval: 4. Adiournment Motion by Logacz, All ayes second by Heintz Student, Coun'n~il Secretary Commissioner of Securities and Real Estate Minnesota Department of Commerce to adjourn the meeting at 7:15 pm. Roll call: Bruce G. Nawrocki, Mayor