HomeMy WebLinkAbout6.e. Industrial Development Bonds for HRA/Spectro Alloys �� i _
CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: APRIL 15, 1997
AGENDA: INDUSTRIAL DEVELOPMENT BONDS FOR AGENDA SECTION:
HRA/SPECTRO ALLOYS CONSENT
PREPARED BY: THOMAS D. BURT, CITY ADMINISTRATOR AGEND
��� � 6 � �
ATTACHMENTS: RESOLUTION, B A C K G R 0 U N D APPROVED BY: '
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The Dakota County Housing and Redevelopment Authority is issuing industrial development bonds for Spectro
Alloys. As the community in which these bonds are being issued, the HRA has asked that the attached resolution
be approved. The resolution clearly states in item 3. that the resolution does not obligate the City to any liability
for payment, but simply that the bonds will be administered in the City of Rosemount.
RECOMMENDED ACTION:
MOTION to approve A RESOLUTION GIVING APPROVAL TO THE ISSUANCE BY THE
DAKOTA COUNTY HOUSING AND REDEVELOPMENT AUTHORITY OF INDUSTRIAL
DEVELOPMENT BOND5 FOR THE BENEFIT OF SPECTRO ALLOYS CORPORATION.
COUNCIL ACTION:
.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 1997-
A RESOLUTION GIVING APPROVAL TO THE ISSUANCE
BY THE DAKOTA COUNTY HOUSING AND REDEVELOPEMENT AUTHORITY
OF INDUSTRIAL DEVELOPMENT BONDS FOR THE BENEFIT OF
SPECTRO ALLOYS CORPORATION
WHEREAS, Spectro Alloys Corporation(the"Company") owns a manufacturing facility located
at 13220 Doyle Path, Rosemount, Minnesota; and
WHEREAS,the Company proposes to expand and improve the manufacturing capacity of its
facility through the purchase of certain improvements and equipment (the"Project"), and to
finance the improvements and equipment through the issuance by The Dakota County Housing
and Redevelopment Authority ("DCHRA") of industrial development bonds pursuant to
Minnesota Statutes 469.162 to 469.165 in a principal amount not to exceed $3,000,000; and
WHEREAS, the Project has been approved by the Minnesota Department of Trade and
Economic Development, and the Minnesota Department of Finance has allocated $3,000,000 of
t�-exempt bonding authority to the financing of this Project; and
WHEREAS, the DCHRA Board of Commissioners held a public hearing on December 10, 1996,
at which time all those who desired to speak were heard and in connection with which written
comments were taken in advance; and
WHEREAS,the Board of Commissioners adopted resolutions on June 9, 1995 and
October 15,1996, respectively, giving its preliminary approval to the Project; and
WHEREAS, it is necessary under Section 146 of the Internal Revenue Code af 1986, as '
amended, that the City of Rosemount give its approval to the proposed financing; '
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount,
Minnesota, as follows:
1. The City of Rosemount, Minnesota hereby approves the issuance of t�-exempt industrial
development bonds for the benefit of Spectro Alloys Corporation by the Dakota County Housing
and Redevelopment Authority.
2. The Mayor and City Clerk are hereby authorized and directed to provide to The Dakota
County Housing and Redevelopment Authority, or its bond counsel, such certified copies of this
resolution and other certificates or items as may be necessary to evidence the approval granted by
this resolution.
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RESOLUTION 1997-
3. It is hereby understood that approval of the issuance of industrial development bonds for the
benefit of Spectro Alloys Corporation does not involve any pledge of the assets, revenues or
taxing powers of the City of Rosemount, and the City of Rosemount shall not be liable on account
of the bonds or notes issued for the benefit of Spectro Alloys Corporation in any manner
whatsoever.
ADOPTED the 15th day of April, 1997.
Cathy Busho, Mayor
ATTEST:
Susan M. Walsh, City Clerk
Motion by: Second by:
Voted in favor:
Voted against:
Members Absent:
2
�PR-11-97 FRI 09;08 AM DAKOTA COUNTY HRA FAX N0� 6124238180 P, 02
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it�SOY,LTTION NO.97-�376
22ESOLUTION'APPY2pVING ISSUANCE p�'INDUSTRYAL DL+^VELUPMENT
I2EVENUE NOTE SpECTRQ A�LOYS CORP,A1V'D AUT'HORIZING
":"HE�X�CUTdQN AN])DELYV�RY OF DUCUMENTS I7ELATED THERETO
I. E�ck ound�
The Czty af Itosemouttt has reyuested that the I�RA assist with the fznat�ciag af new
equipment for Spec�o Alloys so the company can expaud its operations in Rosemowzt.
Spectra Alloys is competing with orher companies in Wisconsin,Tllinnis and Nlichigan in
rec�clin�aiuminum and manttfacturing ;x�go��y�Gh are sold to companies such as Torv
and the autoznabile industry, Spectro Alloys anticipates tl�at its expan.sion will create 36
nevv jobs at an annual payroll of 51,680,QQ4.
The HTtA has the authority to issue tax ex�mp#Indnsttiall�evelapment Bonds and,loan
the proceeds to Spectro Ailoys far equiprnent purchase.
'The HRA gave preliminaty approval to the issuanc�c��Industrial Develapment Bonds on
June 9, 1995. The HRpi ext�nded sucb.pxetiminary approrral an 4cfober 15, I9�6, axid
subsequently held a public he�ring r�n December 10, 199d. The follo�xring xtesolution
gives fmal approval t�the issuance of bond.s.
Y�. I�u� Concerns�
A- Spectro Alloys obtained an allocation of$3,04�,OQ4 in tax exempt l�nding authority
from the State of 1vlinnesata. �onds must be issued by May 6, 1997 to preserve this
bonding authority.
B. The principal amouat of the bands will be no�are than$3,000,000, The in,terest is
anticipat�d t�be appro�matel�r 7.025%. The actuai interest r�will be detern�ined ��
at�tte time Qf sale by FINO'VA Go�vernment Finance,Inc.and approved by the �',
8arrower. The tenn of the bonds is 8 years. ,
C. The bands will not coaa�stitute a charge,lien or encumbrance a on the�IR,A Uakota I
p ,
County, or the City af Rasemount. The bonds will be payable solely frou2 revenues
of the F3orrower.
�. The bonds are beung privately placed with FINQVA Goveznment�in,ance,Tn�c.,a
commercial lending and Ieasing orgawi2,�xion. �INOVA will purchase a}1 of the
bonds and hold the note directly,eliminating the need for a Truste�in this trar�saction.
E. Approval&om thc City of Rosemount is necessary,
I=-� $�mt2lend tion:
. It is recommended that th�Dakota Caunty�TRA Boazd of Commissioners adopt the
attached Rcsolutiau.