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HomeMy WebLinkAboutEDA MIN 12-08-08 Economic Development Authority (EDA) Special Meeting Minutes December 8, 2008 CALL TO ORDER/ROLL CALL President, Gary L. Peterson called the meeting to order at 6:55 p.m. Present: Gary L. Peterson, Tml1mera Diehm, Bruce Kelzenberg, Bruce Nawrocki, Bobby Williams, Gerry Heninger. Mm'laine Szurek City Manager, Conl1mmity Development Director, Assistant Community Development Director Absent: Staff: PLEDGE OF ALLEGIANCE Res.2008-16. Approving the Terms ofInterfund Loan in Connection with K-Mart/Central Avenue TIF District Staff introduced the resolution before the EDA to approve terms of ml Interfund Loan in connection with K -mart/Central Avenue TIP district. The interfund loan is for the purchase of a duplex located at 4636 Polk Street. Motion by Diehm, second by Kelzenberg, to waive the Reading of Resolution 2008-16, there being ffil ml1ple amount of copies available to the public. All ayes. Motion Canied. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2008-16, a Resolution Approving the terms of an hlterfund Loml in connection with K-Mart/Central A venue TIP District. Discussion: NawTocld conmlented that it is premature to use these funds. He is not sure if we should buy the property at 4636 Polk Street. Clark explained the language of the resolution. Upon Vote: Peterson- aye, Herringer-aye, Kelzenberg -aye, Williams -aye, Nawrocld -nay, Diehm-aye. Motion Cm'l'ied. RESOLUTIONNo. 2008-16 APPROVING THE TERMS OF INTERFUND LOAN IN CONNECTION WITH K-MARTICENTRALAVENUE TIF DIS'FRICT BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF lHE COLUMBIA HEIGIlTS ECONOMIC DEVELOPMENT AUTHORF/'Y (THE ''AUTI10RITY'~ AS FOLLOWS: Section 1. Backeround. 1.01. The Authority and City a/Columbia Heights ("City") have established the K~Mal'tlCeJltral Avenue 1m Increment Financing Dish'ict (the "TIF Distrid') within the Central Business District Redevelopment Project (the "Project''), and have adopted a fax increment financing plan (UTIF Plan ') for the pmpose of financing ceJ'tain improvements within the Project, 1.02. The Authority or City may incur certain costs related to the TIF District or Project, which costs may befillanced on a temporary basisfrolll available Authority 01' City fund,;. 1.03 The City, using available City funds, intends to acquire certain property in the City located at 4636 Polk Street (the "Property ") wifhin the Project, all or a portion oJwhich Property the Authority or City may use to further redevelopment oj the Project. 1.04. The Property is not currently within the TI1" District, but the Authority intends to expand the TIF District boundaries to include the Property, as such expansioJl1l'illjUrther the Authority's redevelopment goals and objectit'es. 1.05. The Authority intends (0 reimburse the City for the cost oj acquisition oJthe Property, closing costs, and demolition (together, the "Qualified Costs ") Jrom tax increments derived fl'D/1I the TIF District in accordance with the terms oj this resolutio/1 (llJhich terms are referred (0 collectively as the "11F Loan ''). Section 2. Terms 0(1'11" Loan. 2.01. Subject to the conditions described in Section 2.07, the Authority shall repay, to the CityJundfl'om which the Qualified Costs are initially paid or advanced, the principal amount ofJunds advanced not to exceed $116,500 together with interest on the principal amount advanced, accruingfl'om the date of each initial e>.penditure 01' advance. For expenditures made in 2008, the interest rate shall be B.O%, which is the greater oj (a) the rate specified under Minnesota Statutes, Section 270C.40 or (b) the rate specified under Minnesota Statutes, Section 549.09 Jar 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, Sectio11549.09 Jor 2009, 2.02. Principal and i/1terest ("Payments") shall be paid sellli~anl1ually 011 each August 1 and FebrualY 1 ("Payment Dates''), commencing 0/1 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 oJthe TIF Loan is paid infull, or (b) the date oJlast receipt oJtax illcrementfl'om the 111" District. Payments will be made in the amount and only to the ate/1t oj Available Tax hlcrement as hereinqfter defined. Payments shall be appliedfil'st to accrued interest, and Ihen fa unpaid principal. Interest accruingfrom the date oj each eJ.penditure to the first Payment Date shall be compounded semiannually 011 February 1 and August 1 of each year alld added to principal, tllIless othel1Fise specified by the Execl/tive Director, 2.03. Payments on this TIF Loan are payable solely ji'om "Available Tax Increment, "which shall mean, on each Payment Date, all oj the tax increment generated in the preceding six (6) /lIonths with re~pect to the property within the TIF District and remitted to the Authority by Anoka County, after deduction oj any tax increment allocated to administrative eJ.penses, all i/7 accordance with Minnesota Stalutes, Sections 469.174 to 469.179. Payments on this 1'11" Loan are subordinate to any outstanding orJuhlre notes 01' obligations issued to developers or third parties secured ill whole or in part lI'ithAvailable Tax Increment, and are on parity with any other outstanding ol'Juture infe/jill1d loans secured in whole or i/7 part with Available Tax Increment. 2.04. The principal Sllll/ and all accrued interest payable under this TIF Loan are pre-payable in whole or in part at allY time by the Authority without premium or penalty. No partial prepayment shall affect the all/Ollnt or timing of any other regular payment othelll1ise required to be made under this TIF Loan. 2.05. This TIF Loan is evidence oj an intemal borrowing by the Authority in accordance with Minnesota Statutes, Section 469.178, subdivision 7, and is a limited obligation payable solely fl'om Available Tax Increment pledged to the payment hereoJ under this resolution This l1F Loan and the interest hereoll shall not be deemed to constitute a general obligation oj the State of Minnesota or any political subdivision thereof, including, withollt limitation, the City. Neither the State of MiHnesota, nor any political subdivision thereof shall be obligated to pay the principal oj OJ' interest on this TI1" Loan or other costs incident hereto exceptOllt oj Available Tax Increment, and neither thejUllfaith and credit nor the taxillgpower of the State of Minnesota or any political subdivision thereof is pledged to the payment oj the principal oj or interest 011 this 1'11" Loan o}' other costs incident hereto. The Authority shall have no obligalion to pay any principal amount of the 11F Loall or accrued interest thereon, which may remain unpaid after thefinal Payment Date, 2.06. The Authority may amend the lerllls oj this TIF Loan at any time by resolution of the Board, including a determination to forgive the outstandingprincipal all/ount and accrued interest to the extent permissible under law, 2.07. NohlJithstanding anything to the cont/'O/y herein, as a condition 10 maf.dllg any payment under the TIF Loan, the Authority shall approve, and obtain City approval oj a modification oj the 111" Plan to illcl/lde the Property within the 1'11" District area. Section 3. bYfective Date. This resolution is effective upon the date oj its approval. Adopted this gh day of December, 2008. ~~wC~ Acting Recording Secretary Sheila Cartney, Assistant Community Development Director