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City Council Resolution 1990-06RESOLUTION NO. 90-6 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT WITH TAPPERS, INC., A MINNESOTA CORPORATION, AND OTHERS GIVING PRELIMINARY APPROVAL, WITH CONDITIONS, FOR THE ISSUANCE BY THE MINNESOTA AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD OF SMALL BUSINESS DEVELOPMENT LOAN PROGRAM REVENUE BONDS TO FINANCE THE PROJECT AND PROVIDING FOR OTHER MATTERS RELATED THERETO. WHEREAS, the City Council, in and for the City of Monticello (herein, the "City"), is desirous of inducing and encouraging (i) Tapper's, Inc., a Minnesota Corporation (ii) and William R. and Barbara R. Tapper, individuals, either individually or collectively (herein, the "Applicant"), to cause to be acquired, equipped, and operated a 25,000 square foot office/production facility to be located in Monticello (described as Lot 4, Block 2, Oakwood Industrial Park, Wright County, Minnesota) (herein the "Project"); and WHEREAS, Applicant has filed an Application for the financing of the Project through the Minnesota Agricultural and Economic Development Board (the "State") by the issuance of Small Business Development Loan Bonds under the State's general bond resolution (the "Resolution") for the Minnesota Small Business Development Loan Program (the "Program"), as amended and restated by the Authority on September 24, 1986; and WHEREAS, the Minnesota Agricultural and Economic Development Board has been established pursuant to Minnesota Statutes, Chapter 41A (and including certain provisions of Minnesota Statutes 1986, Chapter 116M notwithstanding the repeal thereof) (collectively the "Act"), to act on behalf of the State of Minnesota within the scope of powers granted to it in the Act to implement loan programs under the Act by which the State, alone or in cooperation with private or public lenders, may provide adequate funds or incentives to finance or assist in the financing of projects and otherwise assist the development, construction and installation of such projects; and WHEREAS, the State has yet to act officially on the Applicant's application but is expected to do so in the near future; and WHEREAS, the Applicant has also advised the City and the State that with the aid of a business loan and other financial assistance that may be provided by the State pursuant to the Act and its resulting low borrowing cost, the Project is economically more feasible and financing for the Project is more likely to be available; and ution 90-6 2 WHEREAS, the applicant has specifically requested that the State undertake to issue its revenue bonds under the Program and resolution to finance the costs of the Project in the estimated principal amount of $820,000 and with a final maturity not to be in excess of the estimated average economic useful life of the Project; and WHEREAS, pending such action by the State, Applicant has requested this City to adopt this resolution to encourage the State to finance the Project and to serve as the appropriate substitute for a "bond resolution or other form of official action" necessary to document the Applicant's intentions and the intentions of a state of local subdivision to cause the Project to be financed with tax exempt bonds under the Internal Revenue Code of 1986, as amended; NOW, THEREFORE, BE IT RESOLVED by the City Council in and for the City of Monticello, as follows: Section 1. The City hereby acknowledges receipt of a copy of the application of the Applicant to the State (the "Application") for financial assistance with respect to the Project. Section 2. Based on the Application of the Applicant and on other submissions to the City and on other information available to the City, the City hereby finds and determines that: (1) financing of the Project by the State or the City of Monticello is necessary to permit Applicant to expand or remain in Minnesota and Applicant has demonstrated that it cannot obtain suitable financing from other sources; (2) the Project will create or retain significant numbers of jobs in the City of Monticello; (3) the Applicant has a significant potential for growth in jobs or economic activities in Minnesota during the ensuing five- year period; (4) the Applicant will maintain a significant level of productivity in Minnesota during the ensuing five-year period; and, (5) tax-exempt bonds issued by the State under its program appear to provide a more favorable means of financing for Applicant and the Project. -2- ution 90-6 3 Section 3. Subject to Section 5 hereof, and based on the financing request and other submissions to the City Council and on other information available to the City Council, the City Council of the City of Monticello hereby conditionally finds and determines, with respect to the Project that: (a) The Project will create or maintain a sufficient number and type of jobs to justify State or City participation in its financing; and (b) The Project and its development is economically advantageous to the State and the City of Monticello, the provision to meet increased demand upon public facilities as a result of the Project is reasonably assured, and energy sources to support the successful operation of the Project is adequate; and (c) The project will (1) tend to maintain or provide gainful employment opportunities within or for the people of the State and City of Monticello, (2) aid, assist and encourage the economic development or redevelopment of any political subdivision of the State and the City of Monticello and (3) maintain or diversify and expand employment promoting enterprise within the State and the City of Monticello; and (d) The Project will assist in fulfilling the purposes of the Act. Section 4. The City Council hereby gives preliminary approval to the Project and its financing by the State by the issuance of the State's Small Business Development Loan Bonds. Section 5. Subject to the conditions herein stated, the City of Monticello hereby encourages the State to give preliminary approval to the proposal that the State issue its Bonds in an amount not to exceed $820,000 to use the proceeds thereof to make the Loan to finance the costs of the Project or a portion thereof pursuant to the Act. Such issuance would be made upon such terms and conditions and with such provisions as the State may require and the proceeds of the Loan shall be used solely for costs as described in this Resolution. If the State is unwilling or unable to issue such Bonds, it is the present intention of the City to do so. Notwithstanding any other terms and provisions set forth in this Resolution to the contrary, this Resolution shall not obligate the City to issue such bonds but only shall serve as the necessary preliminary official action of the City to encourage the State to issue its Bonds for the project. -3- 4 tion 90-6 Section 6. The Bonds would be special obligations of the issuer thereof payable solely from the revenues realized from the loan agreement with respect to the Loan financed with bond pro- ceeds, from the application of amounts on deposit in any debt service reserve fund established by the issuer thereof with respect to the Bonds and from other revenues, moneys or assets specifically pledged to the benefit of the bondholders. The Bonds would not constitute a debt or loan of credit of the State or any political subdivision thereof (other than the Minnesota Agricultural and Economic Development Board> nor any political subdivision thereof shall be liable on the Bonds. Neither the faith and credit no.r the taxing power of the State or of any political subdivision thereof shall be pledged to the payment of the principal of or the interest on the Bonds. Section 7. Based on the Application of the Applicant and on other submissions to the City and on other information available to the City, the City hereby finds and determines (a) that the availability of financial assistance (in the form of the Loan) with respect to the Project under the Act and the willingness of the State or the City to furnish such financial assistance with respect to the Project would be a substantial inducement to the Applicant to undertake the Project and (b) that the Project, if undertaken, will promote the welfare and prosperity of the State and the City of Monticello by maintaining and increasing the career and job opportunities of its citizens and by protecting and enhancing the tax base on which State and the City of Monticello depend for the financing of public services. Section 8. In anticipation of the approval by the State of the Bonds and the Project and of the disbursements to the Applicant of the proceeds of the Bonds as and for the Loan pursuant to any indenture or similar instrument and loan agreement to be entered by the State with respect thereto, and in order that the completion of the Project shall not be unduly delayed when approved, the City has adopted this resolution so as to permit the Applicant, or any duly authorized person or corporation acting on the Applicant's behalf, to pay or incur qualified costs under the Act and the internal Revenue Code of 1986 (the "Code") with respect to the Project to be financed by the Loan and to pay such costs either by direct payment of such costs from proceeds of the Loan when and if funded from Bond pro- ceeds or by reimbursement to the Applicant from the proceeds of the Loan when and if funded from Bond proceeds for such costs paid directly by the Applicant or aforesaid agent of the Applicant from its own funds, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds, if and when delivered, but otherwise without liability to the State or the City. -4- tion 90-6 Section 9. In the event the State is unable or does not issue its Bonds to fund the Loan or otherwise to provide financial assistance with respect to the Project, the City is presently favorably inclined to issue Bonds for the Project but neither the City nor the State shall be liable for such failure to the Applicant or any other person with respect to any moneys disbursed or expended by the Applicant or any other person in accordance with Section 8 of this Resolution or otherwise. Section 10. The Applicant has agreed and it is hereby determined that any and all costs incurred by the City in connection with the financing of the Project, whether or not the Project is carried to completion and whether or not the Bonds are issued, shall be paid by the Applicant. Section 11. This resolution shall take effect immediately, and, subject to Section 5 hereof, shall be effective for a period of 24 months from the date of adoption, unless extended by subsequent resolution of the City of Monticello. Adopted this 12th day of February, 1990. (~ ~~~~~~ Rick Wolfst ler City Administrator Ke M s, Mayor -5-