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HomeMy WebLinkAboutResolution No. 2008-313CITY OF COLUMBIA HEIGHTS RESOLUTION 2008-313 RESOLUTION APPROVING TERMS OF INTERFUND LOAN IN CONNECTION WITH K-MART/CENTRAL AVENUE TIF DISTRICT 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 Downtown Central Business District Redevelopment Project ("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 or City is authorized to acquire real property for development and redevelopment by private enterprise or public use. C. The City proposes to acquire certain property in the Project located at 4636 Polk Street (the "Property"}. D. The Authority and City intend to modify the boundaries of the K-Mart/Centrai Avenue Tax Increment Financing District ("TIF District") to include the Property in order to facilitate development of the property. 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 Property, which loan will be repaid from tax increments, all as further described in this resolution. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Columbia Heights as follows: 1. The City authorizes a loan in the maximum principal amount of $116,500 (the "Loan"), to be drawn from any unencumbered funds available to the City for such purposes. Such amount will be made available at or before the closing on acquisition of the Property by the City. 2. The outstanding principal balance of the Loan bears interest at the rate of 8.0 percent per annum for expenditures made in 2008. For expenditures made in 2009, the interest rate shall be reset to the greater of (a) the rate specified under Minnesota Statutes, Section 270C.40 or (b) the rate specified under Minnesota Statutes, Section 549.09 for 2009. Interest accrues from the date of disbursement from the identified funds in order to acquire the Property. 3. The Loan is payable from tax increments generated from the TIF District as described in the Authority's Resolution Approving the Terms of Internal Loan in Connection with K-Mart/Central Avenue TIF District, approved on the date hereof. Principal and interest ("Payments") shall be paid semi-annually on each August 1 and February 1 ("Payment Dates"), commencing on the first Payment Date after the first advance of Qualified Costs and continuing through 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 from the TIF District. Payments will be credited to the respective fund from which the Loan was drawn. All payments shall be applied first to accrued interest, and then to unpaid principal of the Loan. 4. The principal sum and alI 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. 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 a17y 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. The Loan is subject to modification of the TIF Plan to include the TIF District area. 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. Approved by the City Council of the City of Columbia Heights, Minnesota this 8th day of December, 2008. Offered by: Diehm Second by: Williams Roll call: Aye: Peterson, Williams, Diehm, Kelzenberg Nay: Nawrocki ""~"`'~~ i ayo ary L. eterson ATTEST: _._ _, . ,~ f J~,~ ft'ryt t . ~ _z. i Fi ~~_ ('n _"~ „3 atricia Muscovitz CMC `,, City Clerk 2