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HomeMy WebLinkAboutEDA AGN 12-06-04 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. columbia-heights, mn. us EDA COMMISSIONERS Don Murzyn Jr. Patricia Jindra Julienne Wyckoff Bruce Nawrocki Bobby Williams Tammera Ericson Bruce Kelzenberg SPECIAL MEETING ECONOMIC DEVELOPMENT AUTHORITY CITY HALL, CONFERENCE ROOM 2 590 40TI'I AVENUE, COLUMBIA HEIGHTS, MN 6:30 PM MONDAY, DECEMBER 6, 2004 AGENDA Adopt Resolution 2004-18, Consideration of a Pledge Agreement for the G.O. Tax Increment Funding Bonds MOTION: Move to waive the reading of Resolution 2004-18, there being an ample amount of copies available to the public. MOTION: Move to Adopt Resolution 2004-18, a Resolution Authorizing Execution of a Tax Increment Pledge Agreement with the City of Columbia Heights, Minnesota relating to the General Obligation Tax Increment Refunding Bonds, Series 2004A of the City of Columbia Heights, Minnesota. Adjournment 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 ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: December 6, 2004 AGENDA SECTION: Items for Consideration ORIGINATING EXECUTIVE NO: 1 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2004-18, Consideration BY: Robert Streetar BY: of a Pledge Agreement for the G.O. Tax DATE: December 1, 2004 Increment Funding Bonds BACKGROUND: The pledge agreement is necessary for the EDA to formally grant the City the first rights to the tax increment to pay the G.O. Tax Increment Refunding Bonds of 2004A. RECOMMENDATION: Staff recommends adoption of Resolution 2004-18 for consideration of a Pledge Agreement for the G.O. Tax Increment Funding Bonds. RECOMMENDED MOTION: Move to waive the reading of Resolution 2004-18, there being an ample amount of copies available to the public. RECOMMENDED MOTION: Move to Adopt Resolution 2004-18, a Resolution Authorizing Execution of a Tax Increment Pledge Agreement with the City of Columbia Heights, Minnesota relating to the General Obligation Tax Increment Refunding Bonds, Series 2004A of the City of Columbia Heights, Minnesota. Attachments EDA ACTION: h:\consent Form2004\EDA Res.2004-18 G.O. TIF Bonds TAX INCREMENT PLEDGE AGREEMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY and CITY OF COLUMBIA RIGHTS, MINNESOTA Relating to: $1,985,000 City of Columbia Heights, Minnesota General Obligation Tax Increment Refunding Bonds Series 2004A This document drafted by: KENNEDY & GRAVEN, CHARTERED (BWJ) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 612-337-9300 THIS TAX INCREMENT PLEDGE AGREEMENT (this "Agreement") is made and entered into as of the 6th day of December, 2004, by and between the CITY OF COLUMBIA HEIGHTS, a home rule charter city and a political subdivision of the State of Minnesota (the "City"), and the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHOR/TY, a body corporate and politic and political subdivision of the State of Minnesota (the "EDA"). RECITALS WHEREAS, the EDA has been established pursuant to Minnesota Statutes, Sections 469.090 through 469.108, as amended (the "EDA Act"), to promote development and redevelopment within the City of Columbia Heights, a home rule charter city and a political subdivision of the State of Minnesota (the "City"); and WHEREAS, the EDA's goals include recognizing the practical impediments to development and redevelopment in areas of the community which are fully developed and offering public assistance for projects which advance its goals; and WHEREAS, the EDA further recognizes that there are special development and redevelopment challenges with regard to property in certain areas of the community which contain institutional uses which are beyond their useful life and which are in need of redevelopment; and WHEREAS, the City Council of the City and the Housing and Redevelopment Authority in and for the City (the "HRA") previously established the Central Business District Revitalization District ("TIF District Nos. A3 and C7") and University Avenue Redevelopment Project ("TIF District No. C8") (together, the "TIF Districts") within the Downtown CBD Redevelopment Project (the "Project") in accordance with Minnesota Statutes, Sections 469.001 to 469.047 and predecessor statutes (the "HRA Act") and 469.174 through 469.1799, as amended and predecessor statutes (the "TIF Act"); and WHEREAS, the control, authority and operation of the TIF Districts and the Project were transferred from the HRA to the EDA by a resolution of the City Council of the City pursuant to Minnesota Statutes, Section 469.094, as amended; WHEREAS, in order to help finance a portion of the public redevelopment costs of the Project, the City previously issued, pursuant to Section 469.178, subdivision 2, as amended, and Minnesota Statutes, Chapter 475, as amended (collectively, the "Act"), the City's General Obligation Tax Increment Capital Appreciation Bonds of 1990, Series A, dated August 23, 1990 (the "Prior Bonds"); and WHEREAS, the Prior Bonds were issued pursuant to the Resolution No. 90-38, adopted by the City Council of the City on July 23, 1990 (the "Prior Bonds Resolution"); and WHEREAS, pursuant to the Act, the City has agreed to refund the Prior Bonds through the issuance of the City's General Obligation Tax Increment Refunding Bonds, Series 2004A, in the original aggregate principal amount of $1,985,000 (the "Bonds"); and WHEREAS, pursuant to Ordinance No. 1476, and a resolution of the City Council of the City approved November 22, 2004 (the "Bond Resolution"), the City has authorized the issuance, sale and delivery of the Bonds and the City has awarded the Bonds to the original purchaser thereof; and WHEREAS, pursuant to a resolution of the Board of Commissioners of the EDA (the "EDA Resolution") and the terms of this Pledge Agreement, the EDA has agreed to pledge the tax increment revenues derived from the TIF Districts to the City for the payment of the principal of, premium, if any, and interest on the Bonds; and WHEREAS, pursuant to Section 469.178, Subdivision 2, of the TIF Act, any agreement to pledge tax increment revenues must be haade by written agreement by and between EDA and the City and must be filed with the Manager of ProPerty Records and Taxation of Anoka County, Minnesota (the "County"); NOW, THEREFORE, the City and EDA mutually agree to the following: (1) Issuance of Bon{ls. The City will sell the Bonds in accordance with the Bond Resolution. The EDA authorizes and directs the City to give notice of redemption of the outstanding principal amount of the Prior Bonds on September 1, 2006 (the "Redemption Date") in accordance with the Bond Resolution and the Escrow Agreement (as defined in the Bond Resolution). (2) Use Proceeds. The proceeds from the sale of the Bonds will be applied in accordance with the Bond Resolution. The EDA specifically authorizes and directs the City to deposit the proceeds of the Bonds (less any deductions specified in the Bond Resolution or the Escrow Agreement) in the Escrow Account maintained by the Escrow Agent, as such terms are defined in the Bond Resolution. Amounts in the Escrow Account are irrevocably pledged to pay principal of and interest on the Bonds until the Redemption Date, and to redeem the outstanding Prior Bonds on the Redemption Date. (3) Pledge of Tax Increment. Prior to the Redemption Date, tax increment from TIF District Nos. A3 and C7 remains pledged to pay principal of and interest on the Prior Bonds in accordance with the Prior Bonds Resolution. Commencing on the Redemption Date, the EDA pledges to the payment of the principal of and interest on the Bonds (a) the tax increments derived from the TIF District Nos. A3 and C7, and (b) to the extent permitted by law, the tax increments derived from TIF District No. C8; such pledge being in the amount from the TIF Districts combined that is sufficient to pay 105% of the principal and interest due on the Bonds from time to time (the "Pledged Tax Increment"). (4) Transfer of Funds. Not less than three (3) business days prior to each debt service payment date for the Bonds, there shall be transferred from the tax increment accounts for the TIF Districts to the debt service fund maintained by the City for the payment of the Bonds (the "Series 2004A Debt Service Fund") an amount of Pledged Tax Increment which when taken together with amounts already on deposit in such Series 2004A Debt Service Fund, is equal to the principal of and interest on the Bonds to become due on the subject payment date. The Executive Director is authorized to determine which TIF District the payment is drawn from. Any Pledged Tax Increment in excess of 105% of the principal and interest due with respect to the Bonds on any payment date may be retained by EDA in the tax increment account for the TIF Districts and applied to any public redevelopment costs of the TIF District in accordance with the TIF Act and Minnesota law. (5) EDA use of Pledged Tax Increment, Pari _ty Uses. Without regard to anything in this Agreement to the contrary, Plet!ged Tax Increment shall be available (at the EDA's option on a parity, superior or subordinate basis) to pay principal of and interest on both the Bonds and any other obligations issued by the City, EDA or any other public body to finance public redevelopment costs paid or incurred by EDA or the City in the TIF District. The EDA reserves the right to release all or any portion of Pledged Tax Increment from the pledge under this Agreement (including without limitation the release of Pledged Tax Increment from any specific parcel within the TIF District) to the extent permitted by law, provided that in no event may EDA reduce the pledge of Pledged Tax Increment such that Pledged Tax Increment is reasonably expected to pay less than 20 percent of principal of and interest on the Bonds. 2 (6) Filing with Hennepin County. An executed copy of this Agreement shall be filed with the Manager of Property Records and Taxation of the County pursuant to the requirement contained in Section 469.178, Subdivision 2 of the TIF Act. (7) Governing Law. This Agreement shall be governed by the laws of the State of Minnesota. (8) Term of Agreement. This Agreement shall remain in full force and effect from the date of execution of this Agreement until such time as no Bonds are outstanding. (9) Counterparts. This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same instnmaent, and any of the parties hereto may execute this Agreement by signing any such counterpart. (10) Time of Essence. Time is of the essence of this Agreement and all dates and time periods specified herein or therein shall be strictly observed. (11) Gender and Number. Words used in this indicating gender or number shall be read as context may require. (12) Captions. The headings or captions of the Articles, sections, paragraphs, and subdivisions of this Agreement are for convenience of reference only, are not to be construed a part of this Agreement or thereof, and shall not be construed as affecting the content of any such Article, section, paragraph or subdivision. (13) Negotiated Document. This Agreement has been negotiated by the parties with full benefit of counsel and should not be construed against either party as author. (14) Severability. In case any one or more of the covenants, agreements, terms or provisions in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity of the remaining covenants, agreements, terms or provisions shall in no way be affected, prejudiced or disturbed thereby, and to this end the provisions of this Agreement are declared to be severable. (14) Entire Agreement. This Agreement represents the entire agreement between the parties concerning the subject matter of this Agreement, and all oral discussions and prior agreements are merged herein. (The remainder of this page is intentionally left blank.) 3 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President- Don Murzyn Jr. By. Its Executive Director- Walter R. Fehst The foregoing instrument as acknowledged before me this __ day of ., 2004, by Don Murzyn, Jr., President of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the Columbia Heights Economic Development Authority. Notary Public The foregoing instrument as acknowledged before me this __ day of ,2004, by Walter Fehst, Executive Director of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the Columbia Heights Economic Development Authority. Notary Public (EDA Signature Page to Tax Increment Pledge Agreement) EDA RESOLUTION NO. 2004-18 RESOLUTION AUTHORIZING EXECUTION OF A TAX INCREMENT PLEDGE AGREEMENT WITH ~ CITY OF COLUMBIA HEIGHTS, MINNESOTA RELATING TO TI:IE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2004A OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority, a body corporate and politic and a political subdivision of the State of Minnesota ("EDA"), as follows: WHEREAS, the EDA has been established pursuant to Minnesota Statutes, Sections 469.090 through 469.108, as amended (the "EDA Act"), to promote development and redevelopment within the City of Columbia Heights, a home rule charter city and a political subdivision of the State of Minnesota (the "City"); and WHEREAS, the EDA's goals include recognizing the practical impediments to development and redevelopment in areas of the community which are fully developed and offering public assistance for projects which advance its goals; and WHEREAS, the EDA further recognizes that there are special development and redevelopment challenges with regard to property in certain areas of the community which contain institutional uses which are beyond their useful life and which are in need of redevelopment or improvement; and WHEREAS, the City Council of the City and the Housing and Redevelopment Authority in and for the City ("HRA") previously established the Central Business District Revitalization District ("TIF District Nos. A3 and C7") and University Avenue Redevelopment Project ("TIF District No. C8") (together, the "TIF Districts") within the Downtown CBD Redevelopment Project (the "Project") in accordance with Minnesota Statutes, Sections 469.001 to 469.047 and predecessor statutes (the "HRA Act") and 469.174 through 469.1799, as amended and predecessor statutes (the "TIF Act"); and WHEREAS, the control, authority and operation of the TIF Districts and the Project were transferred from the HRA to the EDA by a resolution of the City Council of the City pursuant to Minnesota Statutes, Section 469.094, as amended; and WHEREAS, in order to help finance a portion of the public redevelopment costs of the Project, the City previously issued, pursuant to Section 469.178, subdivision 2, as amended, and Minnesota Statutes, Chapter 475, as amended (collectively, the "Act"), the City's General Obligation Tax Increment Capital Appreciation Bonds of 1990, Series A, dated August 23, 1990 (the "Prior Bonds"); and WHEREAS, pursuant to authority conferred to the City by the Act, the City has agreed to refund the Prior Bonds through the issuance of the City's General Obligation Tax Increment Refunding Bonds, Series 2004A, in the approximate original aggregate principal amount of $1,985,000 (the "Bonds"); and WHEREAS, on November 22, 2004, pursuant to Resolution No. 2004-82 (the "Bond Resolution") of the City Council of the City, the City has authorized the issuance, sale and delivery of the Bonds and the City has awarded the Bonds to the original purchaser thereof; and WHEREAS, the EDA has agreed to pledge certain tax increment revenues fi.om the TIF Districts to the City for the payment of the principal of, premium, if any, and interest on the Bonds; and WHEREAS, a Tax Increment Pledge Agreement, dated on or after December 1, 2004 (the "Pledge Agreement"), between EDA and the City has been presented to the EDA; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority, as follows: 1. The President and Executive Director of the EDA are hereby authorized to execute and deliver the Pledge Agreement substantially in the form on file with the City. 2. The form of the Pledge Agreement on file with EDA on the date hereof is hereby approved, with such necessary variations, omissions, and insertions as are not materially inconsistent with such form and as the President of the EDA, in his discretion, shall determine; provided that the execution thereof by the President of the EDA shall be conclusive evidence of such determination. 3. If for any reason the President of the EDA is unable to execute and deliver the Pledge Agreement or the other documents required for pledge of the tax increments to the Bonds, any other member of the governing body of the EDA, or any officer or employee of the EDA duly delegated to act on behalf of the President, may execute and deliver such documents with the same force and effect as if such documents were executed by the President. If for any reason the Executive Director of the EDA is unable to execute and deliver the Pledge Agreement or the other documents required for the pledge of the tax increments to the Bonds, any other member of the governing body of the EDA, or any officer or employee of the EDA duly delegated to act on behalf of the Executive Director, may execute and deliver such documents with the same force and effect as if such documents were executed by the Executive Director. 4. This resolution shall be effective from and after its passage. The question was on adoption of the resolution and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: WHEREUPON SAID RESOLUTION WAS DECLARED DULY PASSED AND ADOPTED THIS 6t~ DAY OF DECEMBER, 2004. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY ATTEST: Its President- Don Murzyn Jr. Its Secretary- Cher Bakken BWJ-255661vl CL162-27