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HomeMy WebLinkAboutEDA MIN 07-24-07 ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES July 24, 2007 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 8:00 p.m. Present: Gary L. Peterson, Patricia Jindra, Bobby Williams and Bruce Nawrocki, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of March 27th and May 14, 2007 meetings and the Financial Report and Payment of Bills for the months of March, April, May and June on Resolution 2007-11. Motion by Williams, second by Nawrocki, to approve the consent agenda. All ayes. Motion Carried. EDA RESOLUTION 2007-11 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH, APRil, MAY AND JUNE 2007 AND PAYMENT OF BillS FOR THE MONTHS OF MARCH, APRil, MAY and JUNE 2007. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EOA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and jf correct, to approve them by resolution and enter the resolution in Us records: and WHEREAS, the fjnancial statement for the months of March, Aprll, May, and June 2007 and the list of bills for the months of March, April, May and June 2007 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are allached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the fjnancial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 24th day of July 2007. BUSINESS ITEMS Resolution 2007-12 Approvina the Amended and Restated Contract Peterson stated two of the items on the agenda have already gone to the City Council last night for approval. Schumacher stated there are three issues associated with the Industrial Park tonight: 1) approving the amended development agreement; 2) T/F revenue bond; and 3) T/F revenue note. There are 134 units constructed in Phase 1 & 2, we are completed with Economic Development Authority Meeting Minutes July 24,2007 Page 2 of 13 the clean up of the Industrial Park with a total of 143,000 cubic yards of contaminated soil that has been removed, along with all the buildings on the 30 acre site, used $4.5 million of grants from the State, Met Council and Anoka County to help do that and cleaned up a small lot on the north end of the project. Phase 1 will be finished this fall with the addition of a 50 unit senior coop. Things are going well with Realife as they have received 25 commitments. They need 30 before it is a go. We have over $300,000 in tax base built over there versus the 47,000 we had originally. The three issues: 1) addresses issuance of the revenue bonds and technical details regarding how Tax Increment is pledged to all obligations; 2) updates description of the various phases of development and revises the construction schedule; and 3) provides for an EDA interfund tax increment loan to repay for $75,000 in environmental cost encountered in construction of the parkway. In the last 300 feet of the parkway we ran into contamination, which there was no grant money available for, so we had to take that contamination out and split the cost with Schafer Richardson, with $75,000 from the City and $75,000 from Schafer Richardson. We have approximately $156,000 left over in our grant, so it looks like we will be able to cover our cost with those funds. Steve Bubul drafted the contract and is here to answer any of your questions. Williams asked how many trucks would it take to remove the 143,000 cubic yards of contaminated dirt removed. Streetar stated it would be 7,944 trucks or 83 miles of trucks and even though, we hauled out 143,000 cubic yards of contaminated dirt, with the new Eminent Domain laws it wouldn't even come close to be considered. Schumacher stated the only hazardous material was from the foundry so we had to ship that to Michigan, which was very expensive. Williams stated we should let Szurek and Jindra know that we will come back and amend this again, as we put this into our original agreement. Fehst asked how we know if these are legitimate costs. Schumacher stated Mark Ruff at Ehlers and the ProSource let us know what materials are on the site. They weigh each truck and test the soil as it is being moved. Nawrocki stated for the record, he isn't satisfied that the costs are justified, as it amounts to adding $1.5 million more to the T1F money. Motion by Diehm, second by Williams, to Adopt Resolution 2007-12, a Resolution Approving an Amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki- nay, Jindra- aye, Kelzenberg- aye, Diehm- aye, Peterson- aye, Williams- aye, Szurek- aye. Motion Carried. Williams stated he would encourage Nawrocki to see Mark Ruff, give him his files and have him look at them, so maybe this will satisfy his questions. Peterson stated it has Economic Development Authority Meeting Minutes July 24, 2007 Page 3 of 13 been offered before. Nawrocki said "I beg your pardon", I have asked questions relative on the TlF deal and I don't get answers. Fehst stated it has been offered to you to go through the files and the actual bills by Streetar on many occasions. Nawrocki stated Streetar hasn't made that offer. RESOLUTION NO. 2007-12 RESOLUTION APPROVING AN AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND HUSET PARK OEVELOPMENT CORPORATION BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority, the City of Columbia Heights ("City") and Huset Park Development Corporation (the "Redeveloper") entered into a into a Contract for Private Redevelopment dated as of October 25, 2004 (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located east of University Avenue and south and west of Huset Park. 1.03. The parties have determined a need to modify the Contract in certain respects, and have caused to be prepared an Amended and Restated Contract for Private Redevelopment (the "Amended Contract"). 1.04. The Board has reviewed the Amended Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the besl interest of the City and its residents. Section 2. Authoritv Aooroval: Further Proceedinas. 2.01. The Amended Contract as presented to the Board is hereby in all respects approved, SUbject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the AuthoritytheAmended Contract and any documents referenced therein requiring execution by the Authority, and to carry oul, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 24th of July ,2007. Resolution 2007-13, Authorizing Issuance of Tax Increment Revenue Bonds Steve Bubul, from Kennedy & Graven stated item number five is the resolution that awards the sale of Tax Increment Revenue Bonds, which are sold to third parties and investors for approximately $3.2 million, although we think once the bonds are priced they would go for $2. 8 million, net about $2.5 million that will actually go to Huset Park to be reimbursed for various costs. These are revenue bonds, secured solely by the tax increment that comes from the whole TlF district. These are being marketed based on the expectation on the increment from all the buildings already in the ground or under construction. We have a debt service reserve fund that is also there as a layer of protection. Also the expectation is actually more increment that is needed to pay debt service another extra 25 percent. This would cover if people don't pay their taxes or market values go down. These are all risks the people buying the bonds take, not the EDA or City. Nawrocki asked if they had both resolutions last night. Bubul stated what went before the City Council was the approval ofthe $3.3 million Revenue Bonds. Economic Development Authority Meeting Minutes J lily 24, 2007 Page 4 of 13 Nawrocki stated the next item is actually increasing the maximum from the 8 to the 9 Y, percent and wondered why that wasn't on the agenda last night. Bubul stated it was discussed. The pay as you go was built into the contract at an amount of approximately 8 percent with a provision for a cost increase, which was discussed. The formal action of the council was just to approve the revenue bonds, as that is something that is required under your EDA enabling resolution. Streetar stated if we would have known what each cost would be it would have been built in that way, but we didn't know what we would get into once we starled digging. Fehst asked if everyone remembered this was in the agreement. Everyone said yes. Nawrocki stated he has the original agreement before him and wants someone to tell him where it is stated in it. Fehst stated again, he would suggest that he call Schumacher or Streetar tomorrow. Nawrocki stated it was public business and it should be handled at a public meeting. Fehst said if you read the agreement, like you say you do, and maybe didn't understand it, you could ask that question, but it was in the agreement, we are not lying to you. Streetar stated it is imporlant to point out that in the agreement it calls for when there is contamination that we make at least two efforls to apply for grants to pay for those costs, rather than using T1F. We have been very forlunate that Schumacher and ProSource have done some wonderful grant writing and collecting $4.5 million in grants. Motion by Kelzenberg, second by Diehm, to Adopt Resolution 2007-13, a Resolution Authorizing the Issuance of Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, and Providing the form, terms, pledge of revenues, and findings, covenants, and directions relating to the issuance of such obligations; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Nawrocki stated for the record, he hears a lot of references made to things that were allegedly said or stated, he goes by what is sent to him. This is a meeting where it is a matter of record and so far it isn't a matter of record. Fehst stated for the record, the paperwork is in here, we can go through those agreements, you can ask questions, come in to talk to Streetar, talk to Bubul, it is what we say it is, it is a matter of record. Williams stated you would have to be a god to know what it would cost ahead of time, it would be impossible. Nawrocki said he recognized that, but you remember when this subject first came up, I said these estimates are probably going to be low and there are going to be increases. I didn't say that I agree to those increases, as they are trying to get more money, we're paying half again as much for that building as they actually paid for it. Economic Development Authority Meeting Minutes July 24, 2007 Page 5 of 13 RESOLUTION NO. 2007-13 RESOLUTION AUTHORIZING THE ISSUANCE OF TAX INCREMENT REVENUE BONDS (HUSET PARK AREA REDEVELOPMENT PROJECT), SERIES 2007, AND PROVIDING THE FORM, TERMS, PLEDGE OF REVENUES, AND FINDINGS, COVENANTS, AND DIRECTiONS RELATING TO THE ISSUANCE OF SUCH OBLIGATIONS BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority, Minnesota (the "Authority"), as follows: SECTION 1. BACKGROUND 1.01. The Columbia Heights Economic Development Authority (the "Authority") and the City of Columbia Heights, Minnesota (the "City") previously established the Huset Park Area Tax Increment Financing District (the "TIF District") pursuant to authority granted by Minnesota Statutes, Sections 469.174-469.1799, as amended (the "Tax Increment Act"), within the Downtown CBO Redevelopment Project (the "Redevelopment Project"), and adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District. In order to provide for the redevelopment of the Redevelopment Project and the TIF District, the Authority entered into a Contract for Private Redevelopment, dated as of October 25, 2004, between the Authority, the City and the Redeveloper, as amended by an Amended and Restated Contract for Private Redevelopment thereto dated August 1 , 2007 (the "Contract"). 1.02. Pursuant to Section 469.178 of the Tax Increment Act, the Authority is authorized to issue and sell its bonds forthe purpose of financing or refinancing public redevelopment costs of the Redevelopment Project and to pledge tax increment revenues derived from a tax increment financing district established within the Redevelopment Project to the payment of the principal of and interest on such obligations. SECTION 2. ISSUANCE OF BONDS 2.01 In order to finance certain pUblic redevelopment costs of the Redevelopment Project, the Board hereby authorizes the issuance of tax increment revenue bonds to be designated as the 'Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project) Series 2007 (the "Bonds"), in a principal amount not to exceed $3,200,000. The Bonds shall be issued on such date and upon the terms and conditions determined by the Executive Director of the Authority (the "Executive Director"), provided that the yield on the Bonds (for arbitrage purposes) shall not exceed 5.75%. The Bonds may be designated such other name or names as determined to be appropriate by the Executive Director. The Bonds shall be issued in one or more series as the Executive Director may determine, and shall be assigned a separate series designation determined by the Executive Director for each series issued by the Authority. The Bonds are authorized to be issued as obligations the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. This authorization to issue the Bonds is effective without any additional action of the Board and shall be undertaken by the Executive Director on such date or dates and upon the terms and conditions deemed reasonable by the Executive Director. The Board hereby authorizes the sale of the Bonds to Piper, Jaffrey, & Co. (the "Underwriter") upon the offer of the Underwriter to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the Authority and the Underwriter (the "Bond Purchase Agreement"). 2.02. There have been presented to the Board forms of the following documents: (i) a Paying Agent Agreement (the "Paying Agent Agreement"), between the Authority and a paying agent to be designated by the Authority (the "Paying Agent"); and (ii) a Bond Purchase Agreement. The Paying Agent Agreement and the Bond Purchase Agreement are hereby approved in substantially the forms on file with the Authority on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that are approved by the Executive Director of the Authority. 2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered, and issued in such denominations, shall be subject to mandatory and optional redemptions and prepayment prior to maturity, shall be executed, sealed, and authenticated in such manner, shall be in such form, and shall have such other details and provisions as are prescribed in the Paying Agent Agreement. The form of the Bonds included in the Paying Agent Agreement is approved in substantially the form in the Paying Agent Agreement, subject to such changes not inconsistent with this resolution and applicable law, and subject to such changes that are approved by the Executive Director. Without limiting the generality of the foregoing, the Executive Director is authorized to approve the original aggregate principal amount of each series of Bonds to be issued under the terms of this resolution (subject to the maximum aggregate principal amount for all series authorized by this resolution), to establish the terms of redemption, the principal amounts subject to redemption, and the dales of redemption of the Bonds, and to approve other changes to the other terms of the Bonds which are deemed by the Executive Director to be in the best interests of the Authority. The issuance and delivery of the Bonds shall be conclusive evidence that the Executive Director has approved the terms and provisions of the Bonds in accordance with the authority granted by this resolution. The proceeds derived from the sale of the Bonds, and the earnings derived from the investment of such proceeds, shall be held, transferred, expended, and invested in accordance with determinations of the Executive Director 2.04. The Bonds shall be secured by the terms of the Paying Agent Agreement and shall be payable solely from Available Tax Increment (as defined in the Paying Agent Agreement) that is expressly pledged to the payment of the Bonds pursuant tothe terms of the Paying Agent Agreement. 2.05. It is hereby found, determined and declared that the issuance and sale of the Bonds, the execution and delivery by the Authority of the Paying Agent Agreement and the Bond Purchase Agreement (the "Authority Documents"), and the performance of all Economic Development Authority Meeting Minutes July 24,2007 Page 6 of 13 covenants and agreements of the Authority contained in the Authority Documents, and of all other acts required under the Constitution and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the Authority enforceable in accordance with their respective terms, are authorized by applicable Minnesota law, including, without limitation, the Tax Increment Act, and this Resolution. 2.06. Under the provisions of the Tax Increment Act, and as provided in the Paying Agent Agreement and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against any funds other than the revenues pledged to the payment thereof; the Authority shall not be subject to any liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever have the right to compel any exercise by the Authority of its taxing powers (other than as contemplated by the pledge of tax increment revenues under the terms of the Paying Agent Agreement) to pay the principal of, premium, if any, and interest on the Bonds, or to enforce payment thereof against any property of the Authority other than the property expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority other than the revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a pledge of the general or moral obligation of the Authority, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation of indebtedness. SECTION 3. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES 3.01. The Preliminary Official Statement and the Official Statement with respect to the Bonds is hereby ratified and approved. The distribution of the Preliminary Official Statement and the Official Statement prepared in conjunction with the offer and sale of the Bonds is hereby ratified and approved. In orderto provide for continuing disclosure with respect to the Bonds, to the extent deemed necessary, required, or appropriate by the Executive Director, the Executive Director may execute a certificate providing for continuing disclosure with respect to the Bonds. 3.02. The Executive Director is authorized to furnish to the purchasers of the Bonds, on the date of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such officer, the Official Statement (or other form of disclosure document) does not, as of the date of closing, and did not, as the time of sale of the Bonds, contain any untrue statement of a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Unless litigation shall have been commenced and be pending questioning the Bonds, the proceedings for approval of the Bonds, tax increment revenues generated or collected for payment of the Bonds, revenues pledged for payment of the Bonds, or the organization of the Authority, or incumbency of its officers, the Executive Director shall also execute and deliver a suitable certificate as to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds, and the signed approving legal opinion of Kennedy & Graven, Chartered, as to the validity and enforceability of the Bonds and the tax-exempt status of interest on the Bonds. 3.03. The Executive Director and other agents, officers, and employees of the Authority are hereby authorized and directed, individually and collectively, to furnish to the attorneys approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and certifications as to facts as shown by the books and records of the Authority, and the right and authority of the Authority to issue the Bonds, and all such certified copies and certifications shall be deemed representations of fact on the part of the Authority. Such officers, employees, and agents of the Authority are hereby authorized to execute and deliver, on behalf of the Authority, all other certificates, instruments, and other written documents that may be requested by bond counsel, the Underwriter, the Paying Agent, or other persons or entities in conjunction with the issuance of the Bonds and the expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the preceding sentence, such officers and employees are specifically authorized to execute and deliver one or more UCCw1 financing statements, a certificate relating to federal tax mailers including mailers relating to arbitrage and arbitrage rebate, a receipt for the proceeds derived from the sale of the Bonds, an order to the Paying Agent, a general certificate of the Authority, and an Information Return for Tax~Exempt Governmental Obligations, Form 8038 (Rev. January 2002). SECTION 4. BANK QUALIFICATION 4.01. The Authority hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and represents that the Authority does not reasonably anticipate that the Authority, the City, or any other subordinate entity of the City will issue in calendar year 2007 more than $10,000,OOOofbonds orothertaxw exempt obligations (excluding "private activity bonds" other than "qualified 501 (c)(3) bonds," as such terms are defined in the Code, and excluding certain refunding obligations, that are not included in the $10,000,000 limitation set forth in Section 265(b)(3)(C)(i) oflhe Code). SECTION 5. MISCELLANEOUS 5.01. All agreements, covenants, and obligations of the Authority contained in this resolution and in the above~referenced documents shall be deemed to be the agreements, covenants, and obligations of the Authority to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the Authority and enforceable in accordance with their terms. No agreement, covenant, or obligation contained in this resolution or in the above-referenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the Board, or of any officer, employee, or agent of the Authority in that person's individual capacity. Neither the members of the Board, nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. 5.02. Nothing in this resolution or in the abovewreferenced documents is intended or shall be constructed to confer upon any person (other than as provided in the Paying Agent Agreement, the Bonds, and the other agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision of this resolution. 5.03. If for any reason the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Autl10rity shall for any reason cease to be an officer, Economic Development Authority Meeting Minutes July 24, 2007 Page 7 of 13 employee, or agent of the Authority after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other wrillen document. If for any reason Ihe Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other wrillen documents on behalf of the Authority shall be unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other wrillen documents may be executed by a deputy or assistant to such officer, or by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to sign such document. 5.04. The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code"). The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity, which would cause the Bonds to be deemed to be "arbitrage bonds," within the meaning of Section 148 ofthe Code. Furthermore, the Authority shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not and does not become includable in gross income for federal income tax purposes. 5.05. The authority to approve, execute, and deliver future amendments to the documents executed and delivered by the Authority in connection with the transactions contemplated hereby is hereby delegated to the Executive Director, subject to the following conditions: (a) such amendments do not require the consent of the holders of the Bonds or, ifrequired, such consent has been obtained; (b) such amendments do not materially adversely affect the interests of the Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Authority; (d) such amendments are acceptable in form and substance to the Authority Attorney, bond counselor other counsel retained by the Authority to review such amendments; (e) the Authority has received, if necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the tax-exempt character of interest on the Bonds, if the Bonds are then tax~exempt obligations; and (f) such amendments do not materially prejudice the interests of the owners of the Bonds. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resoluUon. The execution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Executive Director, any instrument authorized by this paragraph to be executed and delivered by the Executive Director may be executed by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to execute and deliver such document. 6.06. Effective Date. This Resolution shall take effect and be in force from and after its approval. Adopted this 24'" day of July, 2007. Resolution 2007-14. Issuance of Tax Increment Revenue Notes, Series 2007 A Peterson stated as this item was talked about already, he would call for a motion if there weren't any more questions on this item. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2007-14, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its $6,650,000 Taxable Tax Increment Revenue Notes, Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki -nay, Jindra- aye, Szurek- aye, Williams- aye, Peterson- aye, Kelzenberg- aye, Diehm-aye. Motion Carried. RESOLUTION NO. 2007-14 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2007A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1. Authorization' Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Huset Park Area Tax Increment Financing District (the 'TIF District") the Downtown CBD Redevelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIF District, the Authority and City entered into a Contract for Private Redevelopment with Huset Park Development Corporation dated as of October 25, 2004, as amended by an Amended and Restated Contract for Private Redevelopment dated as of August 1, 2007 (the "Agreement"). Economic Development Authority Meeting Minutes July 24, 2007 Page 8 of 13 Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note, Series 2007A in the maximum principal amount of $6,650,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.02. Issuance Sale and Terms of the Note. The Authority hereby delegates to the Executive Direclorthe determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Huset Park Development Corporation ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 15, 2032 and shall bear interest at the rate of 6.0 percent per annum from the date of original issue of the Note. The Note is issued in accordance with Section 3.8 of the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 A Rate Date of Oriainallssue 6.0% ,2007 The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Huset Park Development Corporation or registered assigns (the "Owner"), solely from the sources and in the manner hereinafter provided, the principal sum of $6,650,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer, the City of Columbia Heights and Huset Park Development Corporation dated as of October 25, 2004, as amended by the Amended and Restated Contract for Private Redevelopment dated as of August 1 , 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on July 24, 2007. Capitalized terms used and nol otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Payments. Principal and interest ("Payments") shaH be paid on February 15, 2009 and each February 15 and August 15 thereafter to and including February 15, 2032 ("Payment Dates") in the amounts and payable solely from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days wrillen notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest Interest accruing from the date of original issue through and including February 15, 2009 will be compounded semiannually on February 15 and August 15 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," means the Tax Increment derived from the Redevelopment Property during the six-month period preceding each Payment Date that is paid to the Authority by Anoka County in the six months preceding the Payment Date, after deducting $16,500 and the fees of the paying agent under the Paying Agent Agreement between the Authority and Bond Trust Services Corporation dated August 1, 2007 (the "Paying Agent Agreement") entered into in connection with the Authority's Tax Increment Revenue Bonds, Series 2007 (Huset Park Area Redevelopment Project) (the "Series 2007 Bonds"). The pledge of Available Tax Increment hereunder is subordinate to (a) the pledge of Available Tax Increment to the Series 2007 Bonds from and to the extent described in the Paying Agent Agreement; and (b) any other outstanding Refinancing Notes to the extent described in the resolution or indenture under which such obligations are issued. Further, until the Parkway Interfund Loan is paid in full or defeased in accordance with its terms, 50% of the of Available Tax Increment remaining on each Payment Date, after payment or provision for payment then due on the Series 2007 Bonds and any other outstanding Refinancing Notes, is pledged to the Parkway Interfund Loan prior to the pledge of Available Tax Increment hereunder. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. Gational Preoavment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole Economic Development Authority Meeting Minutes July 24, 2007 Page 9 of 13 or in part at any time by the Authority without premium or penalty. If the Authority prepays the Note in part, the prepayment will be applied first to accrued interest and then to the outstanding principal amount of the Note. Ten days' prior notice of any such prepayment shall be given by first-call mail by the Registrar to the registered owner of the Note. No partial prepayment shall affect Ihe amount or timing of any other regular Payment otherwise required to be made under this Note. (b) The Note may be deemed prepaid in whole or in part in accordance with Section 3.9 of the Agreement. Upon any such prepayment, the Authority will deliver to the Owner a statement of the amount applied to prepayment under Section 3.9 and the outstanding principal balance of the Note after application of the deemed prepayment. Any deemed prepayment under this paragraph will be applied under the same procedures described in paragraph (a) above. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $6,650,000 issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note 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. Neitherthe State of Minnesota, nor any political subdivision thereof shall be Obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, 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 Note or other costs incident hereto. 7. Reaistration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for thai purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and 10 be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director-Walter R. Fehst President~Gary L. Peterson REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Date of Signature of Registration City Chief Financial Officer Registered Owner _ Huset Park Development Corporation Federal Tax 1.0. No. Section 3. Terms Execution and Deliverv. 3.01. Denomination Pavment. The Note shall be issued as a single typewritten note numbered R-1 The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. Economic Development Authority Meeting Minutes July 24, 2007 Page 10 of 13 3.02. Dates' Interest Pavment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. ReaistraUon. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrarwith respect thereto shall be as follows: (a) Reaister. The Registrar shall keep at its office a bond register in which the Registrar shall provide forthe registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Imorooer or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes. Fees and Cllaraes. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated Lost. Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrarshall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preoaration and Deliverv. The Note shall be prepared under the direction of the Executive Director and shalf be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Securitv Provisions. 4.01. Pledae. The Authority hereby pledges to the payment of the principal of and interest on the Note Available Tax Increment under the terms and as defined in the Nole. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment to the extent described in Section 3 of the Note. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. The Authority may issue Refinancing Notes as described in the Agreement on a superior basis to the Note, and may issue additional Initial Notes as described in the Agreement on a parity basis with the Note. Economic Development Authority Meeting Minutes July 24, 2007 Page II of 13 Section 5. Certification of Proceedinas. 5.01. Certification of Proceedinas. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this 24'" day of July, 2007. Resolution 2007-15. Providina for the Sale of $5,040,000 Public Facilitv Lease Revenue Bonds (Municipal liQuor Stores Proiect). Series 2007 A No.1 Bill Elrite, Finance Director stated this is almost the final stage in the Liquor Store construction project where the EDA is approving a resolution for the sale of bonds. Back on March 2th he came to the EDA with a resolution and the intent to bond. He passed out a sheet giving the updated, projected costs on the project. Some of the costs have gone up, such as the soft costs, legal fees, testing fees and construction costs along with demolition, furniture, and fixtures up approximately $5,000. The footnote on that page is an item he brought up some time ago and relates a little more to the City Council than the EDA, but he is recommending some of the overages and contingencies if needed, be funded internally on a short term internal loan, rather than adding them to the bonding expense and dedicate a large portion of our profits for the first two years to operation. Szurek stated she did not understand the repayment was called a lease payment, and asked is it the amount of what the lease would have been or is it the amount the liquor store has to pay back to the EDA. Ruff stated the lease payment is equal to the debt service. The structure is that the EDA owns the building and leases it to the City. Szurek asked if the amount of $380, 000/ year, is per store. Ruff stated that is for both stores and the exact amount would be determined at the special meeting to be held on Monday, August 27 of the EDA and at the City Council meetings. Nawrocki asked Ruff to tell him about the Delphin index. Ruff stated the Delphin is another index, which is the average that bonds are selling for around the country. They are selling from. 15 to .4 percent above general obligation bonds. It depends on what the market is at that time. What you stated last night was an average of. 3 percent, which falls right into the range that I have described. Nawrocki stated the information they got last night was that the bond buyers for this kind of bond would probably not look at the A-1 rating we would have with general obligation. Ruff stated that is part of the reason the interest rate is higher, because of that, it doesn't add on to the differential. Nawrocki stated he still wasn't satisfied that he gave him accurate information on the Delphin index, going with the .3 percent; $5 million over 20 years, it is $150,000 additional cost. The manager last night said, in 20 years $150,000 won't be anything, it is to me. Fehst stated he did not say that. He tried to explain to him before what present value means. Economic Development Authority Meeting Minutes July 24, 2007 Pagel2ofl3 Diehm asked Nawrocki what the inaccurate information he received was. Nawrocki stated he wasn't given the accurate information, he asked for information on the current sale, he was only given estimates, he asked for information on recent sales on a given day. Diehm stated she is just trying to understand what inaccurate information his was given. Nawrocki again stated he wasn't given the accurate information. Williams stated we are actually saving our credit for our City, we are saving our bonds, and we can do more for our City. Nawrocki stated that is the main reason you are going this way, because you didn't want the good citizens of the community to have access to be able to use our charter as they would on a general obligation bond. Diehm stated she didn't think he could tell us to vote that way. Nawrocki stated he has talked with these folks, and in his mind, the reason for going this route is to escape the ability of the taxpayers to petition to have this as a referendum on the ballot. Fehst stated as one of those taxpayers, I wouldn't want the full faith in credit of those bonds pledged against my taxes for those buildings, and it would be astoundingly out of place with what we should be doing as fiscal judiciary officials. Williams stated other cities do this all the time. Motion by Williams, second by Szurek, to wave the reading of Resolution 2007-15, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Williams, second by Szurek, to Adopt Resolution 2007-15, a Resolution providing for the sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki-Nay, Jindra- aye, Kelzenberg-aye, Williams- aye, Peterson- aye, Diehm- aye, Szurek-aye. Resolution No. 2007-15 Resolution Providing for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A WHEREAS, the City Council of the City of Columbia Heights, Minnesota (the "City"), has heretofore determined that it is necessary and expedient for the Columbia Heights Economic Development Authority (the "EOA'") to issue its $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007 A (the "Bonds"), to finance the construction of a two new municipal liquor stores; and WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as its independent financial advisor for the Bonds; NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Columbia Heights, Minnesota, as follows: 1. Authorization; Findings. The EDA hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening. The EDA Board shalf meet at 6:30 p.m. and the City Council shall meet at 7:00 p.m. on August 27, 2007, for the purpose of considering proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. Economic Development Authority Meeting Minutes July 24,2007 Pagel3ofl3 This resolution passed this 24th day of July, 2007 Peterson stated, there will be a special meeting of the EDA at 6:30pm on August 27, 2007, prior to City Council to approve the Liquor Store proposals and awarding the sale of the bonds. ADJOURNMENT President, Peterson, adjourned the meeting at 8:43 p.m. Respectfully submitted, Ch~~ Community Development Secretary H :\EDAminutes2007\7 -24-2007