RES 1976-118 - 00007477?�0
RESOLUTION NO. 118 -1976
A RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL
INDUSTRIAL DEVELOPMENT ACT, REFERRING THE PROPOSAL TO THE DEPARTMENT OF
ECONOMIC DEVELOPMENT FOR APPROVAL, AND AUTHORIZING EXECUTION OF A MEMORANDUM
OF AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS
BE IT RESOLVED by the City Council of the City of Fridley, Minnesota, as
follows:
1. It is hereby found, determined and declared as follows:
1.1. The welfare of the State of Minnesota 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 the state has encouraged local government
units to act to prevent such economic deterioration.
1.2. Safetran Systems Corporation, a Delaware corporation (hereinafter, the
Company), has advised this Council of its desire to construct and equip an addition
to its existing facility in the City (such addition and equipment being hereinafter
referred to as the Project), for use by the Company, in conjunction with its existing
facility on the manufacture and distribution of electro - mechanical products, primarily
for use by the railroad industry.
1.3. The existence of the Project within the City would significantly increase
the tax base of the City, County and school district in which the City is located, and
would provide opportunities for employment for residents of the City and surrounding
area.
1.4. The City has been advised that conventional, commercial financing to
pay the capital cost of the Project is available at such high 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 feasibile.
1.5. This Council has been advised by a representative of J. C. Bradford & Co.
of Nashville, Tennessee, investment bankers and dealers in municipal bonds, that on
the basis of information submitted to them and their discussions with representatives
of the Company 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.
1.6. The City is authorized by Minnesota Statutes, Chapter 474, to issue its
revenue bonds to finance capital projects consisting of properties used and useful
in connection with a revenue producing enterprise, such as that of the Company, and
the issuance of such bonds by.the City would be a substantial inducement to the
Company to construct its facility within 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 Company at a
cost presently estimated to be approximately $1,500,000.
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 Economic Development and to
the mutual agreement of this body, the Company 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 encombrance 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. The form of Memorandum of Agreement relating to the issuance of revenue
bonds of the City to finance the cost of the Project is hereby approved, and the Mayor
and City Manager are hereby authorized and directed to execute the Memorandum of
Agreement in behalf of the City.
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RESOLUTION NO. 118 -1976 (Con't.)
5. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7, the
Mayor and City Manager are hereby authorized and directed to submit the proposal
for the Project to the Commissioner of Economic Development for his approval of the
Project. The Mayor, City Manager, City Clerk, City Attorney and other officers,
employees and agents of the City are hereby authorized to provide the Commissioner
with any preliminary information he 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 Commissioner.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 6TH DAY OF
DECEMBER, 1976.
MAYOR - WILLIAM 4f. NEE
ATTEST:
CITY CLERK - MARVIN C. BRUNSELL
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