BY COUNCILOR STENBERG:01-0374R
RESOLUTION APPROVING A JOINT POWERS AND ALLOCATION AGREEMENT RELATING TO BANK QUALIFICATION OF REVENUE BONDS TO BE ISSUED BY THE CITY OF CLOQUET (HUMAN DEVELOPMENT CENTER PROJECT).
BE IT RESOLVED, by the city council (the "council") of the city of Duluth, St. Louis County, Minnesota (the "city"), as follows:
Section 1. General recitals.
(a) The purpose of Minnesota Statutes, Sections 469.152 through 469.165 as amended, relating to municipal industrial development (the "IDB Act"), as found and determined by the legislature, is to promote the welfare of the state of Minnesota (the "state") by the active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental action to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment;
(b) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land uses which will provide access to employment opportunities for such population;
(c) Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), authorizes a city to finance housing programs or developments upon approval of a housing program as provided in Minnesota Statutes, Section 462C.04, subdivision 2 and issue and sell revenue obligations which shall be payable exclusively from the revenues of the housing programs or developments.
Section 2. Description of the project.
(a) Representatives of the Human Development Center (the "corporation") a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "code") have advised the city that the corporation desires to finance projects by the issuance of revenue obligations, in one or more series, in an amount not to exceed $1,053,600 (the "notes") under the IDB Act and the Housing Act which are located in the city, the city of Cloquet ("Cloquet") and the city of Two Harbors ("Two Harbors"), Minnesota (collectively, the "host cities"), as described below (the "project).
|Property Location||Facility Description||Activity to be Financed||Amount|
|1406-1408 East Second Street; Duluth, MN||3-story office and residential facility||acquisition||$160,000|
|1420 East Second Street; Duluth, MN||4 person adult foster care facility||refinancing||$30,000|
|1730 East Superior Street; Duluth, MN||3-story building for office and programming for person with serious and persistent mental illness||acquisition||$240,000|
|629 First Avenue; Two Harbors, MN||1-story office building||refinancing||$138,750|
|40 11th Street; Cloquet, MN||3-story office building||refinancing||$24,000|
|acquisition and installation of new elevator||$100,000|
|1401 East First Street; Duluth, MN||3-level office building||general capital improvements||$240,000|
|1406-1408 East Second Street; Duluth, MN||3-story office and residential facility|
|1412 East Second Street; Duluth, MN||5 person adult foster care facility|
|1420 East Second Street; Duluth, MN||4 person adult foster care facility|
|629 First Avenue; Two Harbors, MN||1-story office building|
|227 Seventh Street; Two Harbors, MN||1-story office building|
|40 11th Street; Cloquet, MN||3-story office building|
|Costs of issuance||$18,150|
(b) The project will be owned and operated by the
(c) A portion of the project located in the city constitutes a multifamily housing development under the Housing Act (the "housing project").
Section 3. Recitals relating to the joint exercise
(a) Under the Housing Act, the city and the host cities are each authorized and empowered to finance housing programs or developments upon approval of a housing program as provided in Minnesota Statutes, Section 462C.04, subdivision 2 and issue and sell revenue obligations which shall be payable exclusively from the revenues of the housing programs or developments;
(b) Under the IDB Act, the city, the Duluth economic development authority ("DEDA") and the host cities are each authorized and empowered to issue revenue bonds or a revenue note to undertake and finance or refinance all or any part of the costs of a project consisting of the refinancing of debt incurred with respect to, or acquisition and betterment of health care facilities or revenue-producing facilities of organizations described in Section 501(c)(3) of the code and to refund bonds previously issued under the IDB Act;
(c) The corporation has requested that the city, DEDA and the host cities cooperate through a joint powers agreement (as permitted by Minnesota Statutes, Section 471.59) to finance the project through the issuance of the notes by Cloquet pursuant to the IDB Act and the Housing Act;
(d) A draft copy of the joint powers and allocation agreement among the city, DEDA and the host cities (the "joint powers agreement") has been submitted to the council and is on file in the office of the city clerk as Public Document No. _______.
Section 4. Recital of representations made by the
(a) The city has been advised by representatives of the corporation that:
(1) Conventional financing to pay the capital cost of the project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the project would be significantly reduced;
(2) On the basis of information submitted to the corporation and their discussions with representatives of area financial institutions and potential buyers of tax-exempt bonds, the notes could be issued and sold upon favorable rates and terms to finance the project;
(3) The corporation will experience a significant debt service cost savings through the refinancing portion of the project; and
(4) The project would not be undertaken in their present form but for the availability of financing under the IDB Act and the Housing Act;
(b) The corporation has agreed to pay any and all costs incurred by the city in connection with the issuance of the notes, whether or not such issuance is carried to completion;
(c) The corporation has represented to the city that no public official of the city has either a direct or indirect financial interest in the project nor will any public official either directly or indirectly benefit financially from the project;
(d) The corporation has caused a program to be prepared for the project in accordance with the Housing Act, a copy of which has been submitted to the council and is on file in the office of the city clerk as Public Document No. _______________ (the "program") and has caused the program to be transmitted to the Arrowhead Regional Development Commission for review and comment on behalf of the city in accordance with the requirements of the Housing Act.
Section 5. Public hearings.
(a) As required by the Housing Act, the IDB Act and Section 147(f) of the Code, notices of public hearings were published in the Duluth News Tribune, the city's official newspaper and a newspaper of general circulation in the city, calling public hearings on the program and the issuance of the notes and the proposal to undertake and finance the project;
(b) As required by the Housing Act and Section 147(f) Code, the host cities have each held public hearings, and the city has, on May 29, 2001, held a public hearing on the program and the issuance of the notes and the proposal to undertake and finance the project, at which all those appearing who desired to speak were heard and written comments were accepted. Any comments submitted by the Arrowhead Regional Development Commission to the city were presented to the city council at the public hearing.
Section 6. Findings under the IDB Act.
It is hereby found, determined, and declared as follows:
(a) The welfare of the state and the city requires the provision of necessary health care facilities so that adequate health care services are available to residents of the state and the city at reasonable cost;
(b) The city desires to facilitate the selective development of the community and help to provide the range of services and employment opportunities required by the population. The project (excluding the housing project) will assist the city in achieving those objectives; help to stabilize market valuation of the city; help maintain a positive relationship between assessed valuation and debt; and enhance the image and reputation of the community;
(c) On the basis of information made available to this council by the corporation it appears, and this council hereby finds, that:
(1) The project (excluding the housing project) constitutes properties, real and personal, used or useful in connection with a revenue producing enterprise engaged in providing health care services within the meaning of Subdivision 2 of Section 469.153 of the IDB Act;
(2) The project furthers the purposes stated in Section 469.152 of the IDB Act;
(3) The project (excluding the housing project) would not be undertaken but for the availability of financing under the IDB Act and the willingness of Cloquet to furnish such financing; and
(4) The effect of the project (excluding the housing project), if undertaken, will be to:
(A) Encourage the development of economically sound industry and commerce;
(B) Assist in the prevention of the emergence of blighted and marginal land;
(C) Help prevent chronic unemployment;
(D) Provide the range of service and employment opportunities required by the population;
(E) Help prevent the movement of talented and educated persons out of the state and to areas within the state where their services may not be as effectively used;
(F) Promote more intensive development and appropriate use of land within the city, eventually to increase the tax base of the community; and
(G) Provide adequate health care services to residents of the city at a reasonable cost;
(d) The city acknowledges, finds, determines and declares that the provision of necessary health care facilities so that adequate health care services are available to residents of the state at a reasonable cost is a public purpose.
Section 7. Findings under the Housing Act.
It is hereby found, determined, and declared as follows:
(a) The preservation of the quality of life in the city is in part dependent upon the maintenance and provision of adequate, decent, safe, sanitary and affordable housing stock;
(b) Accomplishing the goals of the program is a public purpose and will benefit the residents of the city;
(c) The need exists within the city to provide in a timely fashion additional affordable rental housing to and for the benefit of persons of low and moderate income residing and expected to reside within the city;
(d) There exists or are expected to exist persons and families within the city who are and will be able to benefit from and are in need of the program;
(e) The program is necessary in view of the limited resources that may be available to such persons relative to the expenses involved in accomplishing the type of objectives outlined in the program in the absence of one or more of the forms of assistance described herein or otherwise available pursuant to the Housing Act;
(f) The city has found and hereby reaffirms the determination that such forms of assistance are often necessary for the benefit of such persons, families and goals;
(g) The successful implementation of the objectives of the kind described in the program has been found to provide impetus for the development of other housing in the city, as well as the general development of the city by other persons who are not beneficiaries of such governmentally sponsored or assisted activities; and
(h) There exists a need for multifamily rental housing to provide rental housing opportunities for persons of low and moderate income which is not being filled by private enterprise alone due to a variety of factors, including the fact that the cost of new construction of multifamily rental units for low and moderate income persons may in many cases prove economically unfeasible, given prevailing area rental levels, and that therefore appropriate levels of public assistance may be helpful and necessary in bridging the gap.
Section 8. Approval of the program.
The program is approved in substantially the form on file in the office of the city clerk as Public Document No. _____________.
Section 9. Approval.
(a) The project and the notes are hereby given preliminary approval by the city;
(b) The proposal to undertake and finance that portion of the project located in the city but outside of the jurisdictional limits of the host cities, and the issuance of the obligations are hereby given approval by the city subject to the approval of the project by the department of trade and economic development of the state ("DTED");
(c) In accordance with Subdivision 3 of Section 469.154 of the IDB Act, the officers of the city or their designees, are authorized and directed to cooperate with Cloquet in submitting the proposal for the project to the DTED requesting approval, and other officers, employees and agents of the city are hereby authorized to provide DTED with such information as it may require.
Section 10. Limited obligation.
The notes, when and if issued for the project, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the city, DEDA or the host cities. (There will, however, be a charge, lien or encumbrance on the project, which is not an asset of the city, DEDA or the host cities.) The notes, when and if issued, shall recite in substance that the notes and the interest thereon, are payable solely from revenues received from the project and property pledged for payment thereof, and shall not constitute a debt of the city, DEDA or the host cities.
Section 11. Approval and execution of hoint powers
(a) The joint powers agreement is hereby approved in substantially the form on file in the office of the city clerk as Public Document No. _____________. The mayor is authorized and directed to execute and acknowledge the joint powers agreement on behalf of the city with such changes, insertions, and omissions therein as the city attorney may hereafter deem appropriate, such execution to be conclusive evidence of approval of such document in accordance with the terms hereof. The city clerk is authorized and directed to attest to the mayor's signature on the joint powers agreement and acknowledge and deliver the joint powers agreement on behalf of the city with such changes, insertions and omissions therein as the city attorney may hereafter deem appropriate, such execution to be conclusive evidence of approval of such document in accordance with the terms hereof;
(b) The mayor is authorized and directed to execute and deliver such other documents or certificates needed from the city in conjunction with the sale of the notes. The city clerk is authorized and directed to attest to the mayor's signature and to execute, and deliver such other documents or certificates needed from the city in conjunction with the sale of the notes;
(c) The approvals in this section are specifically subject to approval of the joint powers agreement by DEDA and the host cities and approval of the project by DTED.