HomeMy WebLinkAbout2000-11-20 AGENDAFile Copy
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NOVEMBER 20, 2000
SPECIAL MEETING - 12:00 P.M.
CALL TO ORDER — Mayor
ROLL CA�L — City Clerk
1. BUSINESS ITEMS
A. Consider adopting a resolution giving preliminary approval to an industrial
development project on behalf of Advance Corporation, and consider
authorizing payment of an application fee and deposit with the Minnesota
Department of Trade and Economic Development for the sale of industrial
revenue bonda related to this project.
Staff Recommendation: Adopt the resolution, and authonze the payments.
ADJOURNMENT
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MEMO
TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
FROM: Steve Barrett, Management Analyst /��`�
DATE: Friday, November 17, 2000 l����� /
RE: PRELIMINARY RESOLUTION — ADVANCE CORP.
PRELIMINARY RESOLUTION
This memo serves to explain the necessity for the speciai meeting scheduled for
Monday, November 20.
During the October 18, 2000 City Gouncil meeting, a preliminary resolution was
adopted supporting the project and the use of industrial revenue bonds in tne amount of
$3.25 million. Since that time, Advance Corporation expressed a desire to increase
their industrial revenue bond allocation to $3.5 million. This meant we needed to re-
schedule the pubiic hearing and adopt a new preliminary resolution to reflect the new
aliocation amount. These items were postponed until the December 6 Councii meeting.
(The public hearing was originally scheduled for the November 15 meeting. See the
attached memo from Michelle Wotfe relating to the hearing and resolution.) A new
public hearing notice was submitted to the Bulletin, reflecting the new allocation amount,
and will appear in the November 22 issue.
After postponing the public hearing and new preliminary resolution, it was
brought to my attention that the bond allocation application must be submitted to the
state by Monday, November 20, 4:30 PM in order to qualify for 2000 allocation. The
application materials must include a preliminary resolution by the City which accurately
reflects the allocation amount.
The public heari�g on the industrial revenue bonds will still take place on
December 6. Nevertheless, we need a new preliminary resolution which reflects a bond
allocation of $3.5 million. As discussed during the October 18 Council meeting,
adoption of this preliminary resolution does not constitute a firm commitment that the
City will issue the bonds as requested. However, adoption aliows the City and the
company to proceed with the process.
The preliminary resolution before you is identical to the resolution adopted at the
October 18 City Councii meeting, with iwo exceptions: (1) the bond allocation amounf
has been changed to $3.5 million; and (2) the date for the pubiic hearing has been
moved to December 6.
APPL.ICATION FEE AND DEPOSIT
The application for industrial revenue bonds requires two checks from the City:
(1) an application fee of $700; and (2) a deposit equal to 2% of the total allocation,
which equals $70,000. Advance Corporation will provide checks to the City in these
amounts by Monday. November 20. Therefore the Cit�will not incur any direct costs
related to the bond allocation application.
3. REQUESTED ACTION
Approve the updated preliminary resolution relating to the project put fortn by
Advance Corporation; and approve the two checks necessary ta process the
application.
i will be present at the meeting on Monday, November 20 to answer any
questions regarding the process outlined above. In the meantime, I can be reached at
651-458-2883 (office) or 651-283-3065 (cell.)
Attachments: Memo from Michelle Woife re: previously scheduled pubiic hearing
Prelimi�ary Resolution
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To: Honorable Mayor and City Council
From: Michelle Wolfe, Assistant City Administrator
Date: 10/17/00
Re: Resolution Calling for Public Hearing: Industrial Revenue Bonds
Staff has been working with representatives of Advance Corporation since early
September. On this same age�da is an item requesting authority to enter into a�etter of
Intent with this company, to proceed with development of a 44,400 squaee foot facility in
the Industrial Park.
Advance Corporation is interested in pursuing Industrial Revenue Bonds (AKA Industrial
Development Bonds.) The City of Cottage Grove would assist Advance Corporation with
accessing the state bond allocation. This is a revenue bond utilizing the company's
mortgage as the revenue stream and the City does not have any financial risk. In 1998,
the City Councii approved a resolution establishing policy for imposing administrative
fees for tax-exempt bonds, which would be foliowed in this process. This policy was
followed for the Allina Medical Ciinic (FKA River Valiey Clinic) in 1998.
As the project progresses, the site plan will be developed and submitted for review, and
a development agreement will be prepared. The development agreement wili be placed
on a future agenda for City Council approval. During this same time period, we need to
proceed with the revenue bond process, as there is a limited pool available for the
calendar year 2000. The first step in the process is the hold a public hearing, which has
been scheduled for November 18. Official notice will be published by November 1 in the
City's official publication, the Washington County Bulletin. Attached is a resolution giving
preliminary approval to the project and calling for the public hearing on November 18.
As noted in paragraph 7, adoption of this resolution does not constitute a firm
commitment that the City will issue the bonds as requested. However, adoption allows
the City and the company to proceed with the process.
REQUESTED ACTION
Approve the attached resolution giving preliminary approval to and industrial
development project on behalf of Advance Corporation.
K:\ECOnomic Development�2000 LeadsWdvance Corp\Call public hearing.doc
RESOI.UTION NO. 00-238
RESOLUTION GIVING PRELIMINARY APPROVAL TO INDUSTRIAL
�EVELOPMENT PROJECT ON BEHALF OF ADVANCE CORPORATIOiV
WHEREAS, Advance Corporation (the "Company") has submitted an application to
the City requesting industrial developme�t bond fina�cing for a project (the "Project")
generally described as the acquisition, construction and equipping of an approximately
44,000 square foot manufacturing facility to be located directly northeast of the intersection
of 97th Street and Ideal Avenue in the City, to be owned and operated by the Company;
and
WHEREAS, the acquisition and construction of the Project will maintain and provide
for an increase in opportunities for employment for residents of the City, including
economically disadvantaged or unemployed individuals; and
WHEREAS, the Council has been advised by the Company 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
acquisition and construction of the Project; and
WHEREAS, pursuant to Minnesota Statutes, Sections 469.152 to 469.165, as
amended (the "Act"), the City is authorized to issue its revenue bonds to finance all or part
of the cost of the Project;
NOW, THEREFORE, BE IT RESOLVED THAT:
1. The Project and the issuance of industrial development revenue bonds for such
purposes and in an amount not to exceed $3,500,000 are hereby given preliminary
approval by the City, subject to the approval of the Project by the Minnesota Department of
Trade and Economic Development pursuant to the Act, and subject to the mutual
agreement of this body, the Company and the initial purchaser of the bonds as to the
details of the bonds 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, a�d the bonds, when,
as, and if issued, shall recite in substance that the bonds, including interest thereon, are
payable soleiy from the revenues received from the Project and property pledged to the
payment thereof, and shall not constitute a debt of the City.
2. As required by the Act a�d by Section 147(� of the Internal Revenue Code of
1986, as amended, this Council will conduct a public hearing on the Project and the
proposal to issue the bonds therefor. The hearing will be conducted on Wednesday,
December 6, 2000, at 7:30 p.m. The City Administrator or the City Administrator's
designee is authorized to cause notice of the hearing to be published as provided in the
Act.
3. The Company may incur expenditures on the Project prior to the issuance of the
bo�uis therefor, and such expenditures may be reimbursed from proceeds of the bonds,
when issued. This resolution shall constitute an "officiai intenY' to reimburse such
expenditures for purposes of Treasury Regulations, Sections 1.103-8T(a)(5) and 1.150-2.
4. The law firm of Kennedy & 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 City Administrator and other
officers, employees and agents of the City are hereby authorized to assist Bond Counsel
in the preparatio� of such documents.
5. John G. Kinnard & Co. is authorized to act as Underwriter for the bonds. The City
Administrator and other o�cers, employees and agents of the City are hereby authorized
to assist the Undenvriter in the preparation of documents necessary in connection with the
issuance of the bonds.
6. The Company has agreed to pay directly or through the City any and all cost
incurred by the City in connection with the Project whether or not the Project is approved
by the Department of Trade and Economic Development, whether or not the Project is
carried to completion, and whether or not the bonds or operative instruments are
executed.
7. AII commitments of the City expressed herein are subject to the condition that by
March 31, 2001 the CiYy and the Company shall have agreed to mutually acceptable terms
and conditions of the loan agreement, the bonds and of the other instruments and
proceedings relating to the bonds and their issuance and sale. If the events set forth
herein do not take place within the time set forth above, or any extension thereof, and the
bonds are not sold within such time, this Resolution shall expire and be of no further efFect.
8. The adoption of this Resolution does not constitute a guaranty or firm
commitment that the City will issue the bonds as requested by the Company. The City
retains the right in its sole discretion to withdraw from participation and accordingly not to
issue the bonds, or issue the bonds in an amount less that the amount referred to herein,
should the City at any time prior to issuance thereof determine that it is in the best interest
of the City �ot to issue the bonds, or to issue the bonds in an amount Iess than the amount
referred to in paragraph 1 hereof, 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.
Passed this 20th day of November 2000.
John D. Denzer, Mayor
Attest:
Caron M. Stransky, City Clerk