DISCLAIMER

 

06-0639R

 

RESOLUTION AUTHORIZING AN APPLICATION TO THE STATE OF MINNESOTA FOR A MINNESOTA INVESTMENT FUND GRANT IN THE AMOUNT OF UP TO $500,000 (NORTHSTAR MACHINE AND TOOL COMPANY, INC., DBA NORTHSTAR AEROSPACE).

BY COUNCILOR GILBERT:

     BE IT RESOLVED, that the city of Duluth (city) act as the legal sponsor for the project contained in the business and community development application to be submitted on September 12, 2006, and that the mayor of the city is hereby authorized to apply to the Minnesota department of trade and economic development for funding of this project on behalf of the city.

     FURTHER RESOLVED, that the city has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to ensure adequate construction, operation, maintenance and replacement of the proposed project for its design life.

     FURTHER RESOLVED, that the city has not incurred any costs and has not entered into any written agreements to purchase property.

     FURTHER RESOLVED, that the city has not violated any federal, state, or local laws pertaining to fraud, bribery, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice.

     FURTHER RESOLVED, that upon approval of its application by the state, the city may enter into an agreement with the state of Minnesota for the above-referenced project and that the city certifies that it will comply with all applicable laws and regulations as stated in all contract agreements and described on the compliance section (S-7) of the business and community development application.

     FURTHER RESOLVED, that the city has obtained credit reports and credit information from Northstar Machine and Tool Company, Inc. (Northstar Aerospace). The city and its city attorney will review the reports and information to ensure that no adverse findings or concerns regarding, but not limited to, tax liens, judgments, court actions and filings with state, federal and other regulatory agencies are identified. Failure to disclose any such adverse information could result in revocation or other legal action.

     FURTHER RESOLVED, that the proper city officials are hereby authorized to execute such agreements, and amendments thereto, as are necessary to implement the project on behalf of the city.


STATEMENT OF PURPOSE:  Northstar Machine & Tool Co., Inc., dba as Northstar Aerospace, started in business in March 1994 providing precision machined parts and assemblies to the aerospace and various other industries. Since 1998 the company has grown more than 1400%, most due to the growth of its principle customer, Cirrus Design. In 2002 the company moved into a new 20,000 sq.ft. facility from its original 10,000 sq.ft. building. With the continued demand for its products from Cirrus as well as new contracts recently awarded from Eclipse Aviation of Alburquerque, NM and Adam Aircraft of Denver, CO, the company finds it necessary to add a 20,000 sq.ft. building expansion and to expand its investment in production equipment used in the manufacturing of its products. Baseline employment is 68 FTE; with this expansion in business, employment is anticipated to rise to 200 FTE by the end of 2008.


Approval of this resolution allows for the application by the city of Duluth to the state department of employment and economic development (DEED) for a $500,000 Minnesota investment fund (MIF) grant to the city. The resolution also authorize the city to enter into necessary agreements with the state if the funding is awarded. If the grant is awarded to the city, the city may then make a loan to Northstar Aerospace. A MIF loan from the city to Northstar Aerospace represents one of three funding sources for their $1,500,000 equipment budget, with the other two sources anticipated to be a bank loan and a 1200 Fund loan. Terms and conditions of a city MIF loan to Northstar Aerospace have yet to be negotiated and would be presented to the council pursuant to Duluth’s business subsidy policy and criteria.