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HomeMy WebLinkAboutOrdinance 919Ordinance No. 919 BEING AN ORDINANCE GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACTj REFERRING THE PROPOSAL TO THE COMMISSIONER OF SECURITIES 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 encourage 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. 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. Columbia Heights Center, a Minnesota partnership or its desig- nee (hereinafter the "Applicant"), has advised this City Council (the "Council") that it desires to acquire land and construct a building or buildings and acquire and install equipment therefor for use as a shopping center facility (hereinafter referred to as the "Project"). 1.5. The existence of the Project in the City wiI1 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 are economically more feasible. 1.7. This Council has been advised by representatives of Dougherty, Dawkins, Strand & Ekstrom Incorporated, as placement agent, that on the basis of information submitted to them and their discussions with represen- tatives of area financial institutions and potential buyers of tax-exempt bonds, industria! 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 $5,635,000. 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 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. Dougherty, Dawkins, Strand & Ekstrom Incorporated, being familiar with the Project and the marketability of industrial development revenue bonds, has advised the Council that in its opinion the bonds in the approximate principal amount of $5,635,000 may be sold on terms and conditions satisfactory to the City and the Developer. 5. 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 for her 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 infor- mation she 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 Com missioner. 6. The law firm of Holmes & Graven, Chartered, is authorized to act as Bond Counsel and to assist in the preparation an~ review of necessary documents relating to the Project and bonds issued in connection therewith. '7. This ordinance shall be in full force--and effect from ~d after thirty (30) days after its passage. ~ ~/1// / Mayor First Reading: June 25, 1980 Second Reading: 3uJy 17, 1980 Offered by: Hentges Seconded by: Logacz Date of Passage: July 17, 1980 · ~ecretary to th"~Council