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HomeMy WebLinkAboutEDA RES 2008-16 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2008-16 APPROVING THE TERMS OF INTERFUND LOAN IN CONNECTION WITH K-MART/CENTRAL AVENUE TIF DISTRICT BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (THE "AUTHORITY") AS FOLLOWS: Section I. Baclcground. I.OI. The Authority and City of Columbia Heights ("City") have established the K- Mart/Central Avenue Tax Increment Financing District (the "TIF District") within the Central Business District Redevelopment Project (the "Project"), and have adopted a tax increment financing plan ("TIF Plan") for the purpose of fmancing certain improvements within the Project. I.02. The Authority or City may incur certain costs related to the TIF District or Project, which costs may be financed on a temporary basis from available Authority or City funds. I.03 The City, using available City funds, intends to acquire certain propelty in the City located at 4636 Polk Street (the "Propelty") within the Project, all or a pOltion of which Propelty the Authority or City may use to further redevelopment ofthe Project. I.04. The Property is not currently within the TIF District, but the Authority intends to expand the TIF Dish'ict boundaries to include the Property, as such expansion will further the Authority's redevelopment goals and objectives. I.05. The Authority intends to reimburse the City for the cost of acquisition of the Propelty, closing costs, and demolition (together, the "Qualified Costs") from tax increments derived from the TIF District in accordance with the terms of this resolution (which tenllS are referred to collectively as the "TIF Loan"). Section 2. Terms ofTIF Loan. 2.0 I. Subject to the conditions described in Section 2.07, the Authority shall repay, to the City fund from which the Qualified Costs are initially paid or advanced, the principal amount of funds advanced not to exceed $Il6,500 together with interest on the principal amount advanced, accruing ii'om the date of each initial expenditure or advmlce. For expenditures made in 2008, the interest rate shall be 8.0%, which is the greater of (a) the rate specified under Minnesota Statutes, Section 270CAO or (b) the rate specified under Minnesota Statutes, Section 549.09 for 2008. For expenditures made in 2009, the interest rate shall be reset to the greater of (a) the rate specified under Minnesota Statutes, Section 270CAO or (b) the rate specified under Minnesota Statutes, Section 549.09 for 2009. 2.02. Principal and interest ("Payments") shall be paid semi-annually on each August I and Februm'y I ("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 accmed 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 made in the amount and only to the extent of Available Tax Increment as hereinafter defined. Payments shall be applied first to accmed interest, and then to unpaid principal. Interest accming from the date of each expenditure to the first Payment Date shall be compowlded semiannually on Febmary I and August I of each year and added to principal, unless othelwise specified by the Executive Director. 2.03. Payments on this TIF Loan are payable solely from "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 District and remitted to the Authority by Anoka County, after deduction of any tax increment allocated to administrative expenses, all in accordance with Minnesota Statutes, Sections 469.174 to 469.179. Payments on this TIF Loan are subordinate to any outstanding or future notes or obligations issued to developers or third parties secmed in whole or in part with Available Tax Increment, and ar'e on parity with any other outstanding or future interfund loans secmed in whole or in part with Available Tax Increment. 2.04. The principal sum and all accrued interest payable under tlus TIF Loan are pre- payable in whole or in part at any time by the Authority without premiunl or penalty. No partial prepayment shall affect the amount or timing of any other regular payment othelwise required to be made under tlus TIF Loan. 2.05. This TIF Loan is evidence of an internal borrowing by the Authority in accordance with Minnesota Statutes, Section 469.178, subdivision 7, arld is a limited obligation payable solely fi'om 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 linlitation, the City. 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, arld neither the full faith arld 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 TIF Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may amend the terms of this TIF Loan at any time by resolution of the Board, including a determination to forgive the outstanding principal amowlt and accmed interest to the extent pennissible under law. 2.07. Notwithstanding anything to the contrary herein, as a condition to making any payment under the TIF Loan, the Authority shall approve, and obtain City approval of a modification of the TIF Plan to include the Property within the TIF District area. 2 ATTEST: Section 3. Effective Date. This resolution is effective upon the date of its approval. / Adopted this 8'h day of December, 2008. c.... '- -.,"" r;:esident-Gary L ~~u~ "'cling Secretmy 1) 3