BY COUNCILOR HOGG:01-0286R
RESOLUTION DECLARING INTENT TO PROCEED WITH AIRPLANE MANUFACTURING INDUSTRY INCUBATOR PROJECT, AND TO ISSUE GENERAL OBLIGATION TAX INCREMENT REVENUE BONDS IN AN APPROXIMATE AMOUNT OF $2,700,000 TO FINANCE A PORTION OF THE COSTS THEREOF.
WHEREAS, the City of Duluth (the "City") has applied for and expects to receive a grant from the Economic Development Administration (EDA) in the amount of approximately $3,450,185 for the development of an airplane manufacturing industry incubator project (the "Project") at the Duluth International Airport; and
WHEREAS, the Project would consist of constructing an approximately 63,000 square foot manufacturing building and associated parking; and
WHEREAS, the City will be required to provide matching funds necessary to complete the Project, in an estimated amount of $2,700,000, which would provide for a portion of the Project costs, costs of issuance of the bonds and capitalized interest; and
WHEREAS, the City would intend to lease the manufacturing building to Cirrus Industries, Inc. (the "Company") pursuant to a lease; and
WHEREAS, the City anticipates financing its portion of the Projects costs by issuing general obligation tax increment revenue bonds payable in part from tax increment to be derived from such manufacturing faculty through a new tax increment district to be created on the Project site and in part from lease rental payments from the Company; and
WHEREAS, the City is authorized to issue general obligation tax increment revenue bonds pursuant to Minnesota Statutes, §§ 469.174-469.179 (the "Act") and § 469.178.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Duluth, Minnesota, as follows:
Section 1. The City Council hereby declares its intent to proceed with the grant from the EDA and the Project.
Section 2. The City Council hereby declares its intent to proceed, according to the Act, to consider establishing a tax increment district for the Project and declares its intent to issue general obligation tax increment revenue bonds pursuant to the Act in the amount of approximately $2,700,000 to provide its portion of the construction costs of the Project and to pay the costs of issuance of the bonds and to provide capitalized interest.
Section 3. The City Council hereby authorizes the City staff to proceed with the Project and to work with the City's financial adviser and bond counsel to begin the process to create a tax increment district. Final terms of the development of the Project and the issuance of the bonds shall be set forth in resolutions of the City Council.
Section 4. This resolution constitutes a declaration of official intent
under Treasury Regulations Section 1.150-2. The City reasonably expects
to reimburse expenditures with respect to the Project being financed.
It is intended that Cirrus's lease payment on the facility will cover all City debt service for the bond's life.