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84-037 - 05-01 - Approval Project MN Municipal Industrial Development Energy and Economic Development Authority Unicare Homes Inc.Resolution 84-37 May 1, 1984 Member Stockman introduced the following resolution and moved its adoption: RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT; REFERRING THE PROPOSAL TO THE MINNESOTA ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY FOR APPROVAL AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council (the "Council") of the City of Golden Valley, Minnesota (the "City"), as follows: 1. It is hereby found, determined and declared as follows: 1.1 It is the policy of the State of Minnesota (the "State") to facilitate and encourage action by local government units to prevent the economic deterioration of areas within the City to the point where the process can be reversed only by total redevelopment through the use of local, state and federal funds derived from taxation, with the attendant necessity of relocating displaced persons and of duplicating public services in other areas. 1.2 Technological change has caused a shift to a significant degree in the area of opportunity for educated youth to processing, transporting, marketing, service and other industries, and unless existing and related enterprises are retained to use the available resources of the City, a large part of the existing investment of the community and of the State as a whole in educational and public service facilities will be lost, and the movement of talented, educated personnel of mature age to areas where their services may be effectively used and compensated will deprive the City and the State of the economic and human resources needed as a base for providing governmental services and facilities for the remaining population. 1.3 The welfare of the State and the City requires the provision of necessary health care facilities, including nursing homes, to the end that adequate health care services be made available to residents of the State and the City at reasonable cost. 1.4 Unicare Homes, Inc., a Delaware corporation (the "Company"), has advised the Council that it desires to undertake a project which consists of the acquisition and renovation of nursing home facilities (the "Project"), located at 7505 Country Club Drive in the City. 1.5 The Project will assist the City in maintaining the tax base and employment opportunities in the City. 1.6 The City has been advised that conventional, commercial financing to pay the capital cost of the Project is available at such costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but that with the aid of municipal financing and its resulting low borrowing cost the Project is economically more feasible, and the Company will thereby be better able to maintain high standards of nursing home care at a reasonable cost. Resolution 84-37 - Continued May 1, 1984 1.7 This Council has been advised by Miller & Schroeder Municipals, Inc., of the financial feasibility of the Project, as so undertaken with the assistance of the City, or of its intention to purchase nursing hone or other revenue obligations of the City to finance the Project. 1.8 The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds, notes or other obligations to finance the cost, in whole or in part, of the acquisition, construction, reconstruction, improvement, betterment or extension of capital projects consisting of properties used and useful in connection with a revenue producing enterprise, including nursing home facilities, whether or not now in existence or operated for profit, as provided in Minnesota Statutes, Section 474.02, Subdivision lc, and the issuance of such obligations by the City would be a substantial inducement to the Company to undertake the Project. 2. On the basis of information given the City to date, it appears that it would be in the best interest of the City to issue its obligations (the "Bonds") under the provisions of Minnesota Statutes, Chapter 474, to finance the Project in an amount presently estimated not to exceed $10,000,000. 3. The Project and the related financing thereof by the City are hereby given preliminary approval, and the issuance of the Bonds for such purpose and in such estimated amount is hereby approved, subject to approval of the Project by the Minnesota Energy and Economic Development Authority (the "Authority") and to the mutual agreement of the Council, the Company and the initial purchasers of the Bonds as to the details and provision for payment of the Bonds. In all events, it is understood, however, that the Bonds shall not constitute a debt of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City except its interest in the Project, and each of the Bonds when, as and if issued shall recite in substance that it is payable solely from the revenues received from the Project and properly pledged to the payment thereof. 4. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7a, the Mayor is hereby authorized and directed to submit the proposal for the Project to the Authority for approval. The Mayor and other officers, employees and agents of the City are hereby authorized to provide the Authority with any preliminary information needed for this purpose and are further authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project and the financing thereof. 5. The adoption of this resolution by the Council does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Company. The City retains the right in its sole discretion to withdraw from participation and accordingly not issue the Bonds should the City determine that it is in the best interest of the City not to do so or should the parties to the transaction be unable to reach agreement on the terms thereof. 6. The City and the Company are aware that pending federal and Minnesota legislation, including without limitation H.R. 4170 and the Minnesota Senate File 2100, may make it impossible to issue the Bonds on a tax exempt basis. The legislation may propose a volume limit for the City which may be less than the proposed amount of the Bonds and impose further restrictions with which the Project may not comply. The City hereby advises the Company and finds and determines that the Project is not a priority allocation of any volume limit which may be imposed by H.R. 4170 and that the Council in its discretion may choose to issue revenue bonds for other projects within any prescribed volume limit. Resolution 84-37 - Continued May 1, 1984 7. The Company hereby represents and the City, acting through its City Council, hereby determines and finds that the Project will not be undertaken by the Company but for the availability to the Company of the industrial development bond financing contemplated and referenced herein. Mary E.P derson, Mayor ATTEST: Johr`- 'p y, ity Clerk The motion for the adoption of the foregoing resolution was seconded by Member Thompson and upon a vote being taken thereon, the following voted in favor thereof: Anderson, Bakken, Johnson, Stockman and Thompson, and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Mayor and her signature attested by the City Clerk.