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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. Ll 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 �Ql