BY COUNCILOR GILBERT:
BE IT RESOLVED, based upon the circumstances set out in the statement of purpose, that the proper city officials are authorized to enter into the following:
(a) A Duluth recovery loan program (DRLP) loan in the amount up to $622,000 is hereby approved subject to the terms and provisions of the 1200 Fund DRLP resolution on file in the office of the city clerk as Public Document No. __________;
(b) A Minnesota investment fund (MIF) loan in the amount up to $500,000 is hereby approved subject to the terms of the application for the MIF loan;
(c) DEDA is hereby authorized to administer the infrastructure grant on behalf of the city;
(d) The proper city officials are hereby authorized to execute and deliver such documents and certificates as legal counsel for the city considers necessary or appropriate to give effect to the transactions contemplated herein.
STATEMENT OF PURPOSE: Cirrus Design Corporation (Cirrus) has proposed to expand its manufacturing facility at the Duluth International Airport (DIAP) by constructing an expansion to its manufacturing plant and by constructing other improvements (project).
Soil conditions (structural and environmental) on the sites of the expansion create additional development costs for the project (soils work).
Cirrus has requested that the Duluth economic development authority (DEDA) assist it in paying for the costs of the soils work.
Cirrus and the Duluth airport authority (DAA) have identified the need for additional parking at the DIAP for Cirrus employees, other lessees from DAA and visitors to the DIAP.
The city has applied for an infrastructure grant to enable it to finance the construction of public parking facilities at the DIAP.
Cirrus is willing to construct such parking facilities if DEDA agrees to reimburse it for the costs of construction of such parking facilities.
DEDA requested that the city of Duluth (the city) provide DEDA with a bridge loan in the amount of $622,000 to provide funds to pay for the soils correction work and parking facilities costs that would be incurred before the grant funds and other funding sources for the Project would become available (DRLP loan).
The Duluth 1200 Fund, Inc., as designated reviewer of requests for such loans recommended that the city council approve the DRLP loan at its meeting on July 28, 2005, pursuant to the resolution (1200 Fund DRLP resolution).
The city applied for a loan/grant in the amount of $500,000 from the Minnesota investment fund (the MIF loan).
The application contemplates that the MIF loan will be loaned by the city to DEDA to pay for costs of soils work.
The city has applied for an infrastructure grant (infrastructure grant) from DEED to provide funds to utilize in connection with the construction of the parking lot.
The council approved authorizing DEDA to administer the distribution of the proceeds of the infrastructure grant at its meeting on August 8, 2005.
The city council has duly considered this matter and believes that it is in the best interest of the city to:
(a) Approve the DRLP loan from the city to DEDA under the terms of the 1200 Fund DRLP resolution;
(b) Approve loaning the proceeds of the MIF loan to DEDA pursuant to the terms of the grant application for the MIF loan/grant;
(c) Authorize DEDA to administer the infrastructure grants to pay for costs of the parking lot for the project;
and to authorize proper city officials to execute and deliver the documents necessary to evidence such loans and authorization.