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HomeMy WebLinkAboutEDA RES 2003-06RESOLUTION 2003-06 RESOLUTION APPROVING AND SPEC[FYYNG TERMS OF INTER-FUND LOANS FOR THE DOWNTOWN CBD AND UNIVERSITY AVENUE TI]? DISTRICTS 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 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 undertake certain activities to prepare such real property for development and redevelopment by private enterprise. C. Within the Project the Authority and City have established the Downtown CBD Tax Increment Financing District (A3, C7) and the University Avenue Redevelopment District (C8) (collectively, the "TIF Districts"). D. In order to finance certain public redevelopment costs in the project, the City of Columbia Heights has issued certain general obligation tax increment revenue bonds (the "TIF Bonds"), which are secured in part with tax increments fi.om the TIF District. E. The Authority anticipates shortfalls in tax increment needed to pay debt service on the TIF Bonds, and therefore needs to make such payments from other available EDA funds. F. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized to advance or loan money fi.om 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. G. The Authority intends to reimburse itself for such debt service payments as an interfund loan in accordance with the terms of this resolution. NOW, THEREFORE, BE 1T RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority as follows: 1. The Authority authorizes an interfund loan in the maximum mount of $850,000 the ("TI1~ Loan"), to be drawn fi.om the Parking Ramp Fund (Fund 290), the Housing Mortgage Fund (Fund 390), or any combination of those funds. Funds may be drawn at the times necessary to pay principal and interest on the TIF Bonds when due. The outstanding principal balance of the TIF Loan bears interest at the rate of 5.0 percent per annum, subject to adjustment as provided below. Interest accrues from the respective dates of each disbursement from the identified funds in order to make debt service payments on the TIF Bonds, until the principal and interest are paid in full. The interest rate payable in any year will not exceed the greater of (a) the rate specified under Minnesota Statutes, Section 270.75, or (b) the rate specified under Minnesota Statutes, Section 549.09. The interest rate for each calendar year during the term of the TIF Loan will be determined as of each SJB-226977vl CL205-18 January 1, using either the stated rate of 5.0 percent, or, if that rate exceeds the statutory maximum, the maximum rate under clauses (a) or (b) in effect as of that date. 2. Principal and interest ("Payments") shall be paid semi-annually on each August 1 and February 1 ("Payment Dates") after dispersal of funds for the TIF Loan, and thereafter to and including the earlier of(a) the date the principal and accrued interest of the TIF Loan is paid in full, or (b) the date of last receipt of tax increment fi.om the T1F Districts (as such term may be extended by legislation). Payments will be made to the respective fund fi.om which the TIF Loan was drawn, and will be in the amount and only to the extent of Available Tax Increment as hereinafter defined. Payments shall be applied first to accrued interest, and then to unpaid principal. 3. Payments on this TIF Loan are payable solely fi.om "Available Tax Increment," which shall mean, on each Payment Date, all of the tax increment generated in the preceding six (6) months with respect to the property within the TIF Districts and remitted to the Authority by Anoka County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.179. Payments on this TIF Loan are subordinate to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfimd loans secured in whole or in part with Available Tax Increment. The Finance Director is authorized to determine which specific TIF District or combination thereof will be used to make Payments on the TIF Loan. 4. The principal sum and all accrued interest payable under this T1F Loan are pre- payable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or tinting of any other regular payment otherwise required to be made under this TIF Loan. 5. This TH Loan is evidence of an intemal borrowing by the Authority in accordance with Minnesota Statutes, Section 469.178, subd. 7 and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This TIF 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 TIF Loan or other costs incident hereto except out of Available Tax Increment, 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 this TIF Loan or other costs incident hereto. The Authority shall have no obligation to pay any principal amount of the TI~ Loan or accrued interest thereon, which may remain unpaid atler the final Payment Date. 6. The Authority may amend the terms of this TIF Loan at any time by resolution of the Authority's Board of Commissioners, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. 7. The Board authorizes and directs staff to take all actions necessary to repay the outstanding balance of the TIF Loan in accordance with this resolution. SJB-226976vl 2 CL205-18 Approved by ~Board of Commissioners of the Columbia Heights Economic Development Authority this / fi* day of March, 2003. Don ~(~urzyn Jr., Pr~i(~'nt ~/ WalterR. F~hst, E'x-e~tive Director ATTEST: C~i'er~Bakken, Con'unity Development/Secretary H:XResolufions2003~EDA2003 -06 Ratifying Downtown CBD & Univ. TIF SJB-226976vl 3 CL205-18