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HomeMy WebLinkAboutEDA AGN 02-02-04 SpecialCITY OF COLUMBIA HEIGHTS 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website at: www. ci. coh.nbia-heights, mn.us EDA COMMISSIONERS Don Murzyn Jr. Patricia Jindra Bruce Kelzenberg Julienne Wyckoff Bruce Nawrocki Bobby Williams Tammera Ericson ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING 6:30 P.M., MONDAY, FEBRUARY 2, 2004 CITY HALL, CONFERENCE ROOM 1 AGENDA 1. CALL TO ORDER/ROLL CALL 2. PLEDGE OF ALLEGIANCE. 3. ITEMS FOR CONSIDERATION A. Adopt Resolution 2004-02, Approving and Specifying terms of the Inter- Fund Loan for the NEI Property MOTION: Adopt Resolution 2004-02, a Resolution Approving and Specifying terms of the Inter-Fund Loan for the N.E.I. Property. 4. ADJOURNMENT Walter R. Fehst, Executive Director H:\edaAgenda2004\ The EDA does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its accommodation will be provided to allow individuals with disabilities to participate in all EDA services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the EDA Secretary at 706-3669 to make arrangements (TDD 706-2806) for deaf or hearing impaired only. THE CiTY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS Of DISABILITY IN EMPLOYMENT or THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPlOYer COLUMBIA HEIGHTS HOUSING AND REDEVELOPMENT AUTHORITY Meeting of February 2, 2004 AGENDA SECTION: Items for Consideration ORIGINATING DEPARTMENT EXECUTIVE NO: 3-1 Community Development DIRECTOR APPROVAL ITEM: Adopt Resolution 2004-2, Approving BY: Robert Streetar BY: and Specifying the Terms of the Inter-Fund DATE: January 30, 2004 Loan for the N.E.I. Property BACKGROUND: On January 26, 2004, the City Council approved the loan and the terms of the loan to the EDA for the purchase of the NEI property. The EDA is required to approve a resolution accepting the loan and the terms of the loan from the City Council. The terms of the loan stipulate that the City will loan to the EDA $600,000 at a rate of 4% for a term of up to 15 years. The loan is repayable from the sale of land, ortax increments should the EDA and City Council choose to create a tax increment district to promote the redevelopment of the property, or any other revenue sources available to the EDA. Please find attached the Loan Resolution approved by the City Council. RECOMMENDATION: Staff recommends adopting Resolution 2004-02, Approving and specifying terms of the Inter-Fund Loan for the N.E.I. Property. RECOMMENDED MOTION: Move to waive the reading of Resolution 2004-02, there being an ample amount of copies available to the public. RECOMMENDED MOTION: Move to Adopt Resolution 2004-02, Approving and Specifying Terms of the Inter-Fund Loan for the N.E.I. Property. Attachments EDA ACTION: H:\EDA Minutes 2004\Nei Memo RESOLUTION 2004-02 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION APPROVING AND SPECIFYING TERMS OF THE INTER-FUND LOAN FOR THE NEI 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 certain property in the Project located at 825 41st Avenue NE, known as the "NEI Property." D. The Authority and City may establish a tax increment financing district ("TIF District") under Minnesota Statutes, Sections 469.174 to 469.176 (the "TIF Act") that includes the NEI 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 finance 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 funds to the EDA in order to acquire the NEI Property, which loan may be reapaid from tax increments or other sources, all as further described in this resolution. G. By Resolution No. 2004-04 approved January 26, 2004 (the "Loan Resolution"), the City Council authorized a loan from the City to the Authority in the maximum principal amount of $600,000 (the "Loan"). NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority as follows: 1. The Authority accepts and approves the Loan from the City to the Authority as described in the Loan Resolution, and approves all terms of the Loan Resolution. 2. The Board authorizes and directs staff to take all actions and execute any collateral documents necessary to carry out the intent of this resolution. SJB-243344vl CL205-21 Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this __ day of February, 2004. President- Don Murzyn, Jr. ATTEST: Secretary- Cheryl Bakken SJB-226976v! 2 CL205-18 RESOLUTION 2004-04 CITY OF COLUMBIA HEIGHTS RESOLUTION APPROVING AND SPECIFYING TERMS OF INTER-FUND LOAN FOR NEI 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 certain property in the Project located at 825 41st Avenue NE, known as the '2qEI Property." ~ D. The Authority and City may establish a tax increment financing district ("T1F District") under Minnesota Statutes, Sections 469.174 to 469.176 (the "TIF Act") that includes the NEI 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 fi:om which such advances may be legally made in order to finance 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 funds to the EDA in order to acquire the NEI Property, which loan may be reapaid 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 follows: 1. The City authorizes a loan to the Authority in the maximum amount of $600,000 (the "Loan"), to be drawn from Fund 420 - Capital Improvement Development Fund and Fund 390 - Four Cities Single Family Mortgage Revenue Bonds, which are funds available to the City for such purposes. Such amount will be made available to the Authority at or before the closing on acquisition of the NEI Property by the Authority. 2. The outstanding principal balance oftheLoan 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 NEI 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 NEI 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 make installment 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 fi.om 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 accmed interest, and then to unpaid principal of the 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 from 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 NEI 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 NE1 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. Passed this 26th day of January 2004 Offered by: Seconded by: Roll call: Ericson Kelzenberg Ayes: Wyckoff, Williams, Nawrocki, Ericson, Kelzenberg Attest: l~atricia Muscovitz, CMC- l Deputy City Clerk/Council Secretary 2