HomeMy WebLinkAboutResolution No. 2004-60CITY OF COLUMBIA HEIGHTS
RESOLUTION 2004-60
RESOLUTION APPROVING AND SPECIFYING
TERMS OF INTER-FUND LOAN FOR
PURCHASE OF NATH (BURGER KING) PROPERTY
RECITALS
A. The City of Columbia Heights. ("City") and its Economic Development Authority
("Authority") have undertaken a program to promote the development and redevelopment of land
which is underutilized within the City, and in this connection the Authority administers the
Redevelopment Project No. 1 ("Project") pursuant to Minnesota Statutes, Sections 469.001 to
469.047 and Sections 469.090 to 469.1081 (the "Act").
B. Pursuant to the Act, the Authority is authorized to acquire real property for development
and redevelopment by private enterprise or public use.
C. The Authority proposes to acquire the Burger King property located in the Project at
3939 Central Avenue NE (the "Property").
D. The Authority and City may establish a tax increment financing district ("TIF District")
under Minnesota Statues, Sections 469.174 to 469.176, the ("TIF Act) that includes the Property in
order to facilitate development of that property; or the Authority and City may develop the property
for various public uses.
E. Under Section 469.178, Subdivision 7 of the TIF Act, the City is authorized to advance
or loan money from any fund from which such advances may be legally made in order to fmance
expenditures that are eligible to be paid with tax increments under the TIF Act.
F. The City has determined that it is in the best interests of the City to loan lands to the
EDA in order to acquire the Property, which loan may be repaid from tax increments or other
sources, all as further described in this resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Columbia
Heights as follows:
1. The City authorizes a loan to the Authority in the maximum amount of $800,000
Such amount will be made available to the Authority at or before the closing on acquisition of the
Property by the Authority.
2. The outstanding principal balance of the Loan bears interest at the rate of 4.0 percent
per annum. Interest accrues from the date of disbursement from the identified funds in order to
acquire the Property.
3. The Loan is payable from tax increments generated from a TIF District to be created
(if any), from any other tax increments legally available for such purposes, from proceeds of the sale
of the Property (if any), and from any other revenues available to the Authority. Principal and
interest ("Payments") shall be made at the times any revenue sources are available to malce
instalhnent payments. The outstanding balance of principal and interest is due on the later of 15
years after the date of the first disbursement, or the date of last receipt of tax increment from the TIF
District (if created). Payments will be credited to the respective fund from which the Loan was
drawn. All payments shall be applied first to accrued interest, and then to unpaid principal of the
Loan.
4. The principal sum and all accrued interest payable under the Loan are pre-payable in
whole or in part at any time by the Authority without premium or penalty.
5. To the extent the Loan is paid with tax increment, the Loan is evidence of an interfund
loan in accordance with Minnesota Statutes, Section 469.178, subd. 7, and is a limited obligation
payable solely fi'om the revenues pledged to the payment hereof under this resolution. This Loan
and the interest hereon shall not be deemed to constitute a general obligation of the State of
Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither
the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal
of or interest on this Loan or other costs incident hereto except out of the pledged revenues, and
neither the full faith and credit nor the taxing power of the State of Minnesota or any political
subdivision thereof is pledged to the payment of the principal of or interest on the Loan or other
costs incident hereto.
6. If the Property acquired with proceeds of the Loan is used for a purpose that is a
prohibited expenditure of tax increment under the TIF Act (including without limitation a building
to be used primarily for conducting the business of the City, a public or private facility used for
social or recreational purposes, or a public facility used for conference purposes), then the Authority
may not make any payments on the Loan from tax increments. If the Property is used for any public
facility, the City and Authority will mutually determine how and whether the Loan is to be repaid.
7. The City may amend the terms of this Loan at any time by resolution of the City
Council, including a determination to forgive the outstanding principal amount and accrued interest
to the extent permissible under law.
8. The City Council authorizes and directs staff to take all actions and execute any collateral
documents necessary to carry out the intent of this resolution.
Dated tlfis 27th day of September, 2004.
Offered by:
Seconded by:
Roll Call:
Kelzenberg
Ericson
Ayes: Wyckoff, Ericson, Kelzenberg Nays: Williams, Nawrocki
ATTEST:
( Patricia Muscovitz, CMC C-~J~'
Deputy City Clerk/Council Secretary