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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