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86-7179R55 RESOLUTION N0. 7179 ~. RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT: REFERRING THE PROPOSAL TO THE DEPARTMENT OF ENERGY, PLANNING AND DEVELOPMENT FOR APPROVAL; AAA AUTHORIZING EXECUTION -0F A MEMORANDUM OF AGREEMENT AND PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED By the City Council of the City of Richfield, Minnesota (City), as follows: 1. It is hereby found,. determined and declared as follows: 1.1 The welfare of the State of Minnesota requires active promo- tion, attraction, encouragement and development of economically sound industry and commerce through governmental acts to prevent, so far ae possible, emergency of blighted lands and areas of chronic unemployc~ent, and the. state has encouraged local government units to act to .prevent such economic deterioration. 1.2 Richfield Hotel Associates Limited Partnership, a Minnesota partnership (Company), has advised this Council of its desire to ' acquire land and to construct and equip thereon an approximately 149 .__: room, five story hotel and related site improvements (Project). 1.3 The existence of the Project within the City would signifi- c.antly increase the tax base of the City, County and school district in which the City is located, would provide opportunities for employ- ment for residents of the City and surrounding area, and assist the City in reaching its redevelopment goals in the Interstate-Lyndale- Nicollet Redevelopment Project. Area. 1.4 T'ne City has been advised by the Company ti,at conventional, commercial financing to pay the capital cost of the Project is avail- able only on a limited basis and at such high costs of borrowing that the economic feasibility of operating tha Project would be signifi- cantly reduced, but that with the aid of municipal financing, and its resulting low borrowing cost, the project is economically more feasible. 1.5 This Council has been advised by Piper, Jaffrey ~ Hopwood, Inc., Minneapolis, Minnesota, investment bankers and underwriters, that on the basis of information submitted to it and the discussions with representatives of the Company that bonds or notes to finance all or part of the cost of the Project can be successfully sold. 1.6 The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds, notes or other obligations (Bonds) to finance capital projects consisting of properties used and useful in connection with a revenue producing enterprias, such as that of the Company, and the issuance of such sends by the City would be a sub- • stantial inducement to the Company to construct the Project within the city. 2. On the basis of ii:tormation given the City to date it presently appears that it would be in the beat interess of the City to issue its industrial developm nt revenue Bonds under the provisions of Minnesota Statutes, Chapter 74 (Act) to finance the project of the Company at a cost presently e~timated to be approximately j6.600,000. 3. The Council declares that it i• its present intent to issue the Bonds. The Project above referred to i• hereby given preliminary approval by the City and the aeuanc• of Bonds for such purpose and in such. amount approved, subje t to approval of the Project by the Minnesota Energy and Economic Development Authority (Authority) and to the mutual agreement of this body, the Company and the initial pur- chasers of the bonds as to the details of the Bonds and provisions for their payment. In all events, it is understood, however, that the 3onds shall not constitute ~ charge, lien or encumbrance legal or equitable upon any property of the City except the Project, and each Bond. when, as and if issuid, shall recite in substance that the bond. including interest thereon, is payable solely from the revenues received from the Project and properly pledged to the payment thereof, and shall not constitute a de t of the City within the meaning of any constitutional, charter or statutory limitation thereon. 4. The form of Memorandum of Agreement relating to the issuance of the Bonds to finance the ost of the Project is hereby approved, and the Mayor and City Manage are hereby authorized and directed to execute the Memorandum of Agreement in behalf of the City. 5. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7A, the Mayor and City Manager are authorized and directed to submit the proposal for the Project to the Authority for approval. The Mayor, City Manager, City Clerk, City Attorney and other officers, employees, and agents. of the City and LeFevere, Lefler, Kennedy, O'Brien b Drawz, a Professiona,1 Association, as bond counsel and City Attorney, are hereby authorized to provide the Authority with any preliminary infor~ation needed for this purpose, and the City Attorney is authorized to initiate a d assist in the preparation of such documents as may be appropria¢e to th• Project, if it is approved by the Authority. Passed by the City Counc of July, 1986. oP the City of Richfield this 14th day ATTL'S~ : Thomas P. Ferber, City Clerk.