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HomeMy WebLinkAboutOrdinance 1067ORDINANCE NO. 1067 ORDINANCE GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO THE MINNESOTA ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY 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 (the "State") 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 it is the policy of the State 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{ ~nd 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 facilities for the remaining population{ and 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; and 1.4 A representative of Fortieth & Central Financial Corporation, a Minnesota corporation (the "Developer"), has advised this City Council that it desires to undertake a project, consisting of financing the acquisition of land, the construction of a building thereon and the acquisition and installation of equipment in -1- connection with the businesses conducted therein and in related facilities for use as a commercial condominium facility located in the City (hereinafter referred to as the "Project")~ and 1.5 The existence of the Project in the City wiU 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, including economically disadvantaged or unemployed individuals; and 1.6 The City has been advised that conventional, commercial financing to pay the capital cost of the Project is ivailable 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 lower borrowing cost, the Project is economically more feasible; and 1.7 This Council has been advised by a representative of the Developer 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 Projectl and 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 capital projects consisting of properties used and useful in connection with revenue producing enterprises, such as those of the Developer and the businesses located in the project, and the issuance of such bonds by the City would be a substantial inducement to the undertaking of the Project in the City; and 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 costs of the Project of the Developer in an amount presently estimated not to exceed $3,000,000. 3. The Project is hereby given preliminary approval by the City and the issuance of the revenue bonds for such purpose and in such amount approved, subject to approval of the Project by the Minnesota Energy and Economic Development Authority and to the mutual agreement of this body, the Developer and the initial purchaser of the bonds as to the details of the bonds and provisions for their payment. In aU events, it is understood, however, that the bonds of the City shaU not constitute a charge, lien or encumbrance legal or equitable upon any property of the City except the Project, and the bonds, when, as, and ii' issued~ shaU recite in substance that the bonds, including interest thereon, are payable solely from the revenues received from the Project and property pledged to the payment thereof, and shaU 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 -2- for the Pro;jeer to the Minnesota Ener~ and Eeonomie Development Authority for approval of the Project. The Mayor and other offieers~ employees and agents of the City are hereby authorized to provide the Minnesota Ener1D' and Economic Development Authority with any preliminar~ 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 Pro;jeer, if it is approved by the Minnesota Ener~ and Economic Development Authority. 5. The law firm of Holmes & Graven, Chartered, is authorized to act 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, 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. In accordance with Minnesota Statutes, Section 474.01, Subdivision 11, the City Manager and other officers, employees and agents of the City are hereby authorized and directed to encourage the Developer to provide employment opportunities to economically disadvantaged or unemployed individuals. Such individuals'may be identified by such mechanisms as are available to the City, including a first source agreement in which the Developer agrees to use a designated State employment office as a first source for employment recruitment, referral, and placement. 7. 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. force effect from and ' 8. This Ordinance shall be in full (30) days after its passage. First Reading: NOVEMBER 1~, 1983 Mayor Second Reading: December l, 1983 Offered By: Hovl and Seconded by: Roll Call: Petkoff A11 Ayes Date of Passage: December 1, 1983 Secretary to the Co~ -3-