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HomeMy WebLinkAboutResolution No. 072-06 1 D7210(0 RESOLUTION RECITING A PROPOSAL FOR A • THE ACQUISITION AND EQUIPPING OF'A PUBLIC (CHARTER) SCHOOL PROJECT, GIVING PRELIMINARY APPROVAL TO THE PROJECT,AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS. (STUDIO ACADEMY SCHOOL PROJECT) WHEREAS, Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "Act"), grants municipalities and redevelopment agencies the power to issue revenue bonds to finance a project for, among others, any properties, real or personal, used or useful in connection with a revenue producing enterprise,whether or not operated for profit; and WHEREAS, the City of Rochester, Minnesota, (the "Issuer" or the "City'), is a home rule charter city under section 469.153, subd. 3 of the Act, authorized to issue revenue bonds to finance projects under section 469.156 of the Act; and WHEREAS, the Issuer has received from Studio Academy Properties (the "Developer"), a proposal that it undertake to finance the Project hereinafter described, through the issuance of revenue bonds or other obligations (which may be issued in one or more series) (the "Bonds")pursuant to the Act; and WHEREAS, the Issuer desires to promote, attract, encourage and develop economically sound industry and commerce and to prevent the occurrence of conditions requiring redevelopment, and the Project will assist the Issuer in achieving these objectives; and • WHEREAS, the Developer has advised the Issuer that $5,000,000 of the Bonds will be qualified 501(c)(3) bonds under the Internal Revenue Code of 1986, as amended (the "Code") and$350,000 of the Bonds will be taxable; and WHEREAS, the Developer is a nonprofit corporation under the laws of the State of Minnesota, formed for the purpose of acquiring an existing building to be used for public (charter) school and functionally related facilities, located at 415 16'' Street S.W. in, the City of Rochester (the "Project") and leasing the Project to Studio Academy, a nonprofit corporation and public (charter) school under the laws of the State.of Minnesota. Studio Academy will sublease a portion of the Project to Adam Abdulle Academy, a nonprofit corporation and public (charter) school under the laws of the State of Minnesota. The Project will be used for educational purposes by the students of the schools; and WHEREAS, the Issuer has been advised by representatives of the Developer that conventional, commercial financing to pay the capital costs 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, but the Developer has also advised the Issuer that with the aid of municipal financing, and resulting low borrowing costs, the Project is economically more feasible; and WHEREAS, as required by the Act and Section 147(f)of the Code, the City has, on this date, February 6, 2006, held a public hearing on the issuance of the Bonds to finance the Project, after notice was published as required by Section 469.154, Subdivision 4, of the Act, on • January 20, 2006, at which public hearing all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance the Project.- 2 NOW THEREFORE, BE IT RESOLVED by the Common Council of the City of • Rochester, Minnesota, as follows: 1. Preliminary Approval. The Issuer hereby gives preliminary approval to the proposal of the Developer that the Issuer undertake the financing of the Project pursuant to Minnesota Statutes, Sections 469.152 through 469.165, as amended. The Project will be undertaken pursuant to a revenue agreement between the Issuer and Developer on such terms and conditions, with provisions for revision from time to time as necessary, as will produce income and revenues sufficient to pay, when due, the principal of, premium if any, and interest on all series of Bonds issued to provide net proceeds in a total principal amount of not more than $5,350,000. The Bonds are to be issued in one or more series, in minimum denominations of$25,000,pursuant to the Act to finance the acquisition, construction and equipping of the Project. The revenue agreement may also provide for the entire interest of the Developer therein to be mortgaged to the purchasers of the Bonds, or to a trustee or trustees for the purchasers of the Bonds or to a financial institution or government agency which provides credit enhancement for or purchases the Bonds. The Issuer hereby preliminarily authorizes the issuance of the Bonds in one or more series in accordance with such terms and conditions. 2. Findings. On the basis of information available to the Issuer and information provided by the Developer, it appears, and the Issuer hereby finds, that: (1) the Project constitutes properties, real and personal, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Subdivision 2(b) of Section 469.153 of the Act; (2) that the Project furthers the purposes stated in Minnesota Statutes, Section 469.152 of the Act; (3) the availability of financing under the Act and the willingness of the Issuer to furnish • such financing will be substantial inducement to the Developer to undertake the Project; and (4) the effect of the Project, if undertaken, will be to promote, attract, encourage and develop economically sound industry and commerce within the City, to help the City provide the range of education, service and employment opportunities required by the population, to help prevent the movement of talented and educated persons out of the state and to areas within the state where their services may be as effectively used. 3. Subject to Final Approval. The Project, and the financing of the Project by the issuance of revenue bonds, is hereby given preliminary approval by the Issuer. The adoption of this Resolution does not constitute a guaranty or a firm commitment that the City will issue the Bonds as requested by the Developer. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to herein, should the City, at any time prior to the issuance thereof, determine that it is in the best interest of the City not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in paragraph 1 hereof, or should the City, the Developer and the original purchaser of the Bonds be unable to reach agreement as to the terms and conditions of any of the documents required for issuance of the Bonds. 4. Costs Paid by Developer; Fees. The Developer has agreed, and it is hereby determined, that any and all costs incurred by the Issuer in connection with the financing for the Project, including reasonable attorneys' fees, whether or not the Project is carried to completion and whether or not the Bonds are issued,will be paid by the Developer. • 5. Bond Counsel. Fredrikson & Byron, P.A., is hereby authorized to act as bond counsel for the Bonds, and such firm, acting as bond counsel, is authorized to assist in the 3 preparation and review of necessary documents relating to the Project, to consult with Briggs & . Morgan, P.A., as the City's bond counsel, Developer and the original purchaser of the Bonds (or trustee for the purchasers of the Bonds) as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents, and to submit such documents to the Issuer for final approval. 6. Revenue Bonds. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the Issuer solely for this purpose. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Issuer except the revenues and proceeds pledged to the payment thereof under a revenue agreement, nor shall the Issuer be subject to any liability thereon. The holders and owners of the Bonds shall never have the right to compel any exercise of the taxing power of the Issuer to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereof against any property of the Issuer. The Bonds shall recite in substance that the Bonds, including the interest thereon, are payable solely from the revenues and proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation of indebtedness 7. Project Costs and Reimbursements. In anticipation of final approval of the issuance of the Bonds to finance all or a portion of the Project, the Developer may make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds as the Developer considers necessary, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds, if any, when • delivered, but otherwise without any liability on the part of the Issuer. 8. MnDEED Approval. In accordance with Section 469.154, Subdivision 3 of the Act, the Mayor and the Director of Finance are hereby authorized and directed to cause the Application to be submitted to the Minnesota Department . of Employment 'and Economic Development for approval of the Project. The Mayor and the Director of Finance and other officers, employees and agents of-the City are hereby authorized and directed to provide the. Department with any information needed for this purpose. PASSED AND ADOPTED BY THE COMMON UNCIL OF THE CITY OF ROCHESTER THIS 6TH DAY OF FEBRUARY,2006'. PRESIDENT OF SAID COMMON COUNCIL Attest City Cler Approved-this 7t' day of February,2006. o ,.p MAYOR OF SAID CITY . (Seal of the City of Rochester) 4 CERTIFICATION BY CITY CLERK ) . STATE OF MINNESOTA ) SS COUNTY OF OLMSTED ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Rochester, _ Minnesota, hereby certify that I have carefully compared the attached'and foregoing resolution with the original thereof on file in my office, and the same is a full, true and complete transcript therefrom, insofar as the same relates-to a resolution reciting a proposal for the acquisition and . equipping of a public (charter) school project, giving preliminary approval to the project, and authorizing the preparation of necessary documents and materials (Studio Academy School Project). WITNESS my hand officially as such City Clerk this 7�6 day of 2006. Judy Sche , City Clerk 5 Extract of Minutes of a Meeting of the Common Council of the City of Rochester, Minnesota Pursuant to due call and notice thereof, a regular meeting of the Common Council' of the City of Rochester, Minnesota, was duly called and held at the Government Center in Rochester on Monday,the 6th day of February, 2006, at 7:00 o'clock p.m. The following members were present: President Dennis Hanson, Counci 1 members Amy Blenker, Pat Carr, Marci-a Marcoux, Sandra Means, Bob Nowicki and the following were absent: None Member Means introduced the following resolution and moved its adoption: RECITING A PROPOSAL FOR A THE ACQUISITION AND EQUIPPING OF A PUBLIC (CHARTER) SCHOOL PROJECT, GIVING PRELIMINARY APPROVAL TO THE PROJECT, AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS (STUDIO ACADEMY SCHOOL PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by member Marcoux , and after full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: President Dennis Hanson, Counci 1 members Amy B1 enker, Pat Carr, Marcia Marcoux, Sandra Means, Bob Nowicki and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. 1