HomeMy WebLinkAboutMay 20, 1997
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CITY of ANDOVER
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o 1685 CROSSTOWN BOULEVARD NW. · ANDOVER, MINNESOTA 55304 · (612) 755-5100
ANDOVER ECONOMIC DEVELOPMENT 'AUTHORITY MEETING
MAY 20, 1997 - MINUTES
A Meeting of the Andover Economic Development Authority was called to
order by Mayor Jack McKelvey on May 20, 1997, 9:45p.m., at the Andover
City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota.
Present: Councilmembers Dehn, Knight, Kunza, Orttel
Absent: None
Also present: City Attorney, William G. Hawkins
City Engineer, Scott Erickson
City Finance Director, Jean McGann
City Administrator, Richard Fursman
Others
ESTABLISHMENT OF A REDEVELOPMENT PROJECT AREA
Ms. McGann requested the EDA initiate the process to establish a
Redevelopment ,Project Area, the first step in authorizing the issuance
of an EDA bond for the construction of the Public Works expansion.
MOTION by Knight, Seconded by Dehn, the Resolution initiating the
:''' process for adoption of a Redevelopment Plan as presented. (See
~ Resolution EDA002-97) Motion carried unanimously.
MOTION by Knight, Seconded by Dehn, to close the EDA meeting. Motion
carried unanimously. '
Mr. Fursman asked that the EDA be reopened to discuss another item. The
Authority verbally agreed.
NEGOTIATED SALE FOR BOND ISSUANCE
Mr. Fursmanexplained they are looking at approximately $2 million of
debt issuance through the EDA, payable over 10 years. In looking at the
interest rates and costs of issuance, he asked Tom Trusinski of Juran
and Moody, Inc., to look at a negotiated sale in this instance because
it is becoming more common, especially with EDA bonds. If it is not
negotiated, Staff would also be looking at a call date on June 17, 1997.
Tom Trusinski. Juran and Moodv. Inc. - explained the options are to look
at a competitive bid or at a direct negotiated sale to lock in the
interest rate on a specific date. The concept of lease purchase
financing is relatively unique. They are not General Obligation bonds,
but are in essence revenue bonds. Juran and Moody pioneered the lease
purchase financing in real estate in Minnesota in 1968. The market is
,/~\ somewhat apprehensive of these types of transactions. A negotiated sale
:~ would save in excess of $15,000 to $20,000 in up-front expenses. Also,
these bonds will not be bank qualified but purchased by investors who
get a higher yield because the bonds are riskier in nature. He felt it
would be a benefit to the City to do a direct sale to Juran and Moody.
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Andover Economic Development Authori ty Meeting
Minutes - May 20, 1997
Page 2
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(Negotiated Sale for Bond Issuance, Con tinued)
Councilmember Orttel suggested the Authority wait to make a decision
until closer to when the funds are needed. Mr. Fursman estimated if
construction begins in September, a payment may not be needed until
December.
Mr. Trusinski explained if the Authority feels the interest rates are
going to increase, it may want to lock in the rates now, or it could
wait until the costs are incurred. It would take about 30 days for a
private placement of the bonds.
The Authority and Mr. Fursman then agreed to wait until the schedule of
the building is known.
MOTION by Knight, Seconded by Orttel, to close the EDA meeting. Motion
carried unanimously.
The meeting was adjourned at 10:00 p.m.
Respectfully submitted,
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Maiòe..1la A. Peach
Recording Secretary
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