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HomeMy WebLinkAboutEDA MIN 09-23-08 ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES September 23, 2008 CALL TO ORDER/ROLL CALL President, Gary L. Peterson called the meeting to order at 7:01 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek, Gerry Herringer and Bruce Kelzenberg Staff Present: Walter R. Fehst, Executive Director, Scott Clark, Deputy Executive Director and EDA Attorney, Steve Bubul Motion by Williams, Second by Diehm, to approve Scott Clark as Secretary Pro-tem. Motion Carried Unanimously. PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of August 26 and September 15, 2008 meetings and the Financial Report and Payment of Bills for the month of August 2008 on Resolution 2008-15. Nawrocki asked a series of questions on the claims list and the overall financial report. Clark would get back to the EDA regarding a revenue question relating to ad valorem taxes. Motion by Kelzenberg, second by Williams, to approve the consent agenda All ayes. Motion Carried. EDA RESOLUTION 2008.15 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STA TEMENT FOR AUGUST 2008 AND PA YMENT OF BILLS FOR THE MONTH OF AUGUST 2008. 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 band, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers Of bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of August 2008 and the list of bills for the month of August 2008 are attached hereto and made a parlofthis 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 RESOL VED by the Board of Commissioners of tfle Columbia Heights Economic Development Authority that it 11as examined the attached financial statements and list of bills, wlJich are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOL VED the financial statements are acknowledged and received and tile list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOL VED this resolution and attachments are to be made a pari of the permanent records of the Columbia Heights Economic Development Authority. Economic Development Authority Meeting Minutes Septenlbcr23,2008 Page 2 oflO BUSINESS ITEMS Resolutions 2008-12 and 13. Fourth Amendment to Contract for Private Redevelopment-Grand Central Lofts and Contract for Private Redevelopment- 4707 Central Avenue *At the September 15, 2008 EDA meeting staff informed the Commissioner's that the development under consideration suffered a setback due to not being able to secure a lease with Buffalo Wild Wings, and in turn, the project may not commence until Spring of 2009. Staff has revised the Agreements so that it covers three possible development scenarios: 1) the developer constructs immediately, the sanitary sewer expansion, the Aldi's building and the parking ramp (Phase I) and the foundation for the commercial Phase II building; 2) This fall, the developer constructs only the building foundations for both Phases, including the parking ramp. This would allow spring construction to commence in March of 2009; and 3) No work commencing until the spring of 2009, this possibility creates the change in the Agreement that work must commence by May 1, 2009 but holding the completion date at December 31,2009. It is important to note that the Pay-As-You-Go Tax Increment of $440,000 would not change and would not be issued until the entire project is complete. Clark presented to the EDA modifications to the 4th Amendment, specifically changes to the Completion Certificate Section and item 4.3 regarding the completion date for Phase 2. Herringer was not satisfied regarding the language change for 4.3 and Bubul explained that the language, as written, was constructed since the Housing Developer had no contractual obligation regarding a commencement date, only a completion date for Phase 2. The EDA agreed to no changes in language. Herringer then stated that it was his opinion that although the Agreement definitions stated "owner occupancy" regarding the housing units, that the EDA had previously agreed to insert additional language within the body of the Agreement. Bubul was directed to include this language and it was agreed that these modifications will be made and that the EDA will receive a new copy of the Agreement. Motion by Diehm, second by Kelzenberg, to waive the reading of Resolution 2008-12, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2008-12, a Resolution Approving the 4th Amendment to Contract for Private Redevelopment and Awarding the Sale of, and Providing the Form, Terms, Covenants and Directions for the Issuance of its Taxable Tax Increment Revenue Notes, Series 2008A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Nawrocki asked for a synopsis of what this Agreement was giving to the respective Economic Development Authority Meeting Minutes September 23,200& Page 3 oflO parties. Clark gave a synopsis of the same. Clark gave a brief review of the contract between the EDA and Grand Central Commons LLC. Clark specifically read the new language regarding the Metropolitan Grant to have the EDA understand that although staff was confident in gaining a one- year extension that no contractual representation was being made regarding the same. Clark also noted that new language regarding minimum assessment agreement amounts and pro-rations, Section 6.3 of the contract, was also disbursed. Herringer asked a series of questions on the tax increment note. An error was found in the tax increment note regarding maturity date and the end date of 2018 will be amended to read 2021, which is consistent with the rest of the Agreement. Bubul clarified to the EDA that a tax increment note does not carry an amortization schedule but is paid back through "available tax increment", as defined in the contract. Tax increment proceeds are first used to pay accrued interest and then principle. Clark also explained how the process works to develop the proposed tax increment amount including the review by a third party of the developer's pro forma and expected project cash flow. The EDA will receive a new copy of the Agreement upon final draft, Motion by Diehm, second by Williams, to waive the reading of Resolution 2008-13, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Williams, to Adopt Resolution 2008-13, a Resolution Approving the Contract for Private Redevelopment and Resolution Awarding the Sale of, and Providing the Form, Terms, Covenants and Directions for the Issuance of its $440,000 Taxable Tax Increment Revenue Note, Series 2008B; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. RESOLUTION NO. 2008-12 RESOLUTION APPROVING FOURTH AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2008A BE IT RESOL VED BY the Board of Commissioners rBoard'? 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 KmartlCentral A venue Tax Increment Financing District (the "TIF District") the Downtown CBO Redevelopment Project (the "project'J, 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 Aut/1orityentered into a Contract for Private Redevelopment between the Authority and New Heights Development, LLC (now known as Grand Central Properties, LLC) dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a second amendment thereto dated as of November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and intends to enter into a Fourt/J Amendment thereto referenced below (collectively, the "Agreement"). Economic Development Anthority Meeting Minntes September 23, 2008 Page 4 of 10 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 TlF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Autho/ity that it issue and seff its Taxable Tax Increment Revenue Notes in the principal amount of $700,000 (tile "Notes') for the purpose of financing certain public redevelopment costs of the Project. 1.02. Aooroval of Contract Amendment. The Fourth Amendment to Contract for Private Redevelopment between the Authority Grand Central Properties, LLC ("Grand Central Properties') is approved in substantially the form on file in City Hall, subject to modifications that do not alter the substance of the transaction that are approved by the President and Executive Director, provided that execution of tile amendment by such officials is conclusive evidence of and tbeir approval. 1.03. Issuance. Sale. and Terms of the Notes. TIle Authority hereby delegates to the Executive Directorthe determination of the date on which the Notes are to be delivered, in accordance with the Agreement. The Notes shall be issued as follows: one Note in the original principal amount of the Housing Redeveloper Portion issued to Grand Central Properties; and one Note in the original principal amount of the Commercial Redeveloper Porlion issued to Grand Central Commons, LLC ("Grand Central Commons'], as such terms are defined in, and all in accordance will1, the Agreement (Grand Central Properties and Grand Central Commons being referred to as tile "Owner" or "Owners'? The Notes shall be dated August 1 , 2008, shall mature no later than February 1, 2014, and shall bear interest at the rate of 6.0 % per annum from the date of original issue of the Note. The Notes are issued in consideration of payment by Grand Central Properties of file Public Redevelopment Costs in at least the pdncipal amount of the Notes, in accDrdance with the Agreement. SectiDn 2. Form of Note. The Notes shall be in substantially the following form, numbered R-1 and R~2, Wifll the blanks to be properly filled in as of the date of issue: UNITED STA TE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOI<A COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No, R__ $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 Date of Oriainallssue Rate 6.0% Augus11,2008 The Columbia Heights Economic Development Authority ("Authority'? for value received, certifies that it is indebted and hereby promises to pay to or registered assigns (the "Owner'), the principal sum of $ (the "Pdncipal Amount'?, as provided in the Agreement defined hereafter, together Wifll interest on the unpaid balance tllereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate". This NDte is given in accDrdance with that certain Contract for Private RedevelDpment between the Issuer and New Heights Development, LLC dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a Second Amendment thereto dated as of November 22, 2005, a Third Amendment thereto dated as of August 28, 2007 and a Fourth Amendment thereto dated as Df . 2008 (the "Agreement') and the authorizing resolution (the "Resolution') duly adopted by the Authority on August , 2008. Capitalized terms used and nDt othe/Wise defined herein have the meaning provided for suc/l terms in the Agreement unless the cDntext clearly requires otherwise. 1. Pavments. Principal and interest ("Payments') shaff be paid in installments commencing February 1, 2009 and cDntinuing Dn each February 1 and August 1 thereafter to and including February 1, 2014 ("Payment Dates';, in the amounts andfrDm the SDurces set forth in SectiDn 3 iJerein. Payments shall be applied first to accrued interest, and then to unpaid principal. NDtwithstanding anything tD the contrary herein, the balance of {Housing Redeveloper Available Tax Increment] {CDmmercial Redeveloper Available Tax Increment] on hand as of the date Df issuance of the Note shall be paid on the date of issuance. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin Dr cun"ency of the United States of America which, Dn the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Simple interest shall accrue from the date of original issue of t/Jis Note and shall be cDmputed on the basis of a year of 360 days and cbarged for actual days principal is unpaid. 3. Available Tax Increment. (All payments on this Note are payable on each Payment Date solely from and in the amount of the "Housing Redeveloper Available Tax Increment" as defined in the Agreement that has been paid to the Authority by AnDka CDunty in the six months preceding the Payment Date, subject to tbe withhDlding and cDntingent pledge of certain Tax Increment held in escrow by the AuthDrity in accordance with Section 3.4(0)(i) of the Agreement.] Economic Development Authority Meetulg Minntes September 23,2008 Page 5 of 10 [All payments on this Note are payable on each Payment Date solely from and in the amountofflJe "Commercial Redeveloper Available Tax Increment" as defined in the Agreement (lJat has been paid to the Authority by Anoka County in tfJe six months preceding the Payment Date.) The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than [Housing Redeveloper A vailabJe Tax Increment] [Commercial Redeveloper A vallable Tax Increment] and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall /Jot constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 2014. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise tile remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. ODtional PreDavment. (a) The principal sum and all accrued interest payable under tJlis Note is prepayable in whole Dr in part at any time by tile AuthDrity without premium Dr penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper ofthe Authority's written statement ofthe Excess Amount as defined in Section 3.4(c) of the Agreement, one~half of such Excess Amount will be deemed to cDnstitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Final Closing Date as defined in Section 3.4(c) of the Agreement, and will be recorded by the Registrar in its records for the Note, Upon request ofthe Owner, the Authority will deliver to the Owner a statement of the Dutstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $700,000 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 AutlJority which is payable solely from the revenues pledged to the payment hereof under the ResDlution, each Note issued under the Resolution being on parity with the other. This Note and the interest hereon shall not be deemed to constitute a general Dbligation of the State of Minnesota or any political subdivision t/Jereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shalf be obligated to pay the principal of or interest on this Note or other costs incident /Jereto except from and tD tl1e extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of tl1e 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 that pwpose at the principal office of the City Finance Director, 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, t1mre 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 Wit/1 an opinion of cDunsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements Df 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 to 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 petformed 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, CDLUMBtA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director~Walter R. Fehst President-Gary L. Peterson REGISTRA TION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Signature of Economic Development Anthority Meeting Minutes September 23,2008 Page 6 of 10 Registration Registered Owner _ City Finance Director Federal Tax I.D. No. Section 3. Terms Execution and DeJivelV. 3,01. Denomination. Pavment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fufly registered form. Principal Df and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Pavment Dates. Principal of and interest on the Note shaff be payable by mail to tile owner of record thereof as of the close of business on the fifteenth day of the mantl1 preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration. The Authority hereby appoints the City Finance Director to pelform 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 Registrar with respect tllereto shall be as fof{ows: (a) Reaister. The Registrar shall keep at its office a bond register in which the Registrar shaff provide for file registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer Df Note. Upon surrender for transfer Df the NDte duly endorsed by the registered Dwner thereDf or accompanied by a written instrument Df transfer, in form reasDnably satisfactDry tD 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 Df a liJ<e aggregate principal amount and maturity, as requested by file 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 satisfactOlY 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) CancellatiDn. TIle Note surrendered upDn any transfer shall be promptly cancelled by the Registrar and thereafter disposed Df as directed by the AuthDrity. (d) ImDrooer 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 autl1orized. TIle 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 purpDse of receiving payment of, or on account Df, the principal of and interest on such Note and for all other purposes, and all SUCll payments SD 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 Charaes. 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 ot/ler governmental charge required to be paid with respect tD 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 sl1all 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 Dftl1e reasonable expenses and charges of the Registrar in connection therewit/l; and, in the case the Note lost, stolen, or destroyed, upon filing Wit/l the Registrar of evidence satisfactory to it that such Note was lost, stolen, Dr destroyed, and of tbe ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which bDth the Authority and the Registrar sl1all 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 tl1e 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 priDr to payment. 3.04. Preoaration and DeliveN. The Note sl1all be prepared under the direction of the Executive Director and sl1a/l be executed on behalf Df the Authority by the signatures of its President and Executive Director. In case any officer whose signature shaN appear on the Note shall cease to be such officer before the delivery of the Note, such signature shaff nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When t11e Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance Witll the Agreement. Section 4. Securitv Provisions. Economic Development Authority Meeting Minutes September 23,2008 Page 7 of 10 4.01. Pledae. The Authority hereby pledges to the payment of tbe principal of and interest on the Notes a/l Housing Redeveloper Available Tax Increment and Commercial Redeveloper Available Tax Increment, as the case may be, under the terms and as defined in the Notes. Such revenues shall be applied to payment of the principal of and interest on the Notes, each Note being on parity with the other, in accordance with fhe ferms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no fonger outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to t11is 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 all Housing Redeveloper Available Tax Increment and Commercial Redeveloper Available Tax Increment; and agrees with respect to the Note issued to Grand Central Properties, to maintain and apply the escrowed Tax Increment in accordance with Section 3.4(c)(i) of the Agreement. Any amount remaining in the Bond Fund sha/J be transferred to the Authority's account for the T1F District upon termination of the Note in accordance witlJ its terms, 4.03. Additional Bonds. If the Authority issues any bonds or notes secured by Available Tax Increment, such additional bonds or notes are subordinate to the Notes in alf respects. Section 5. CertificatiDn of Proceedinas. 5.01. Cerlification of Proceedinos. The officers of the Authority are hereby authorized and directed tD prepare and furnish to the Owner of the NDte cerlified copies of all prDceedings and records of the Authority, and such other affidavits, certificates, and informatiDn as may be required to sl10w the facts relating to the legality and marketability of the Note as the same appear frDm the books and records under their custody and control or as oflJerwise known to them, and a/J such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the AutllOrity as to the facts recited t/Jerein. Section 6. Effective Date. This resolutiDn s/Jafl be effective upon execution of the Fourth Amendment to the Agreement. RESOLUTION NO. 2008-13 RESOLUTION APPROVING CONTRACT FOR PRIVA TE REDEVELOPMENT AND RESOLUTION A WARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $440,000 TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2008B BE IT RESOL VED BY the Board of Commissioners ("Board'? of the Columbia Heights Economic Development AuthDrity, Columbia Heights, Minnesota (the "Authority'? as follows: Section 1. Authorization. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmarl/Central Avenue Tax Increment Financing District (the "TIF Districf? the Downtown CaD Redevelopment Project (the "Projecf?, and have adDpted a tax increment financing plan for the purpose of financing certain improvements within t/Je Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and self its bonds for the purpose of financing a pDrtion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TlF District and pledged tD 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 in the maximum prinCipal amountof$440,OOO (the "Note'? for tlJe purpose of financing certain public redevelopment costs of the Project. 1.02. Aooroval of Aareement. The Contract fDr Private Redevelopment (the "Agreemenf? between the AuthDrity Grand Central Commons, LLC fGrand Central Properties'? is approved in substantially the form on file in City Hall, subject to mDdifications that do not alter the substance of the transaction that are approved by the President and Executive Director, provided that execution of tile amendment by SUCl1 officials is conclusive evidence of and tlleir apprDval. ' 1.03, Issuance Sale, and Terms of the Note. The Authority hereby delegates to the Executive Directorthe determination of the date on whicl1 the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Grand Central Commons LLC ("Owner'? The Note shall be dated as of the date of delivery, shall mature no later than February 1, 2018 and shall bear interest at the rate of 7.0% per annum from the date of original issue of the Note. The Note is issued in consideration of payment by Owner of certain Public Redevelopment Costs in at least the principal amount of the Note, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly fiffed in and tIJe principal amount and payment schedule adjusted as of the date of issue: UNITEO STA TE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-1 $ Economic Development Authority Meeting Minutes September 23, 2008 Page 8 of 10 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 20_ Date Df Oriaina/lssue Rate 7.0% ,20_ The Columbia Heights Economic Development Authority (''Authority'? farva/ue received, cerlifies that it is indebted and hereby promises to pay to Grand Central Commons LLC or registered assigns (the "Owner'), the principal sum 0($ orso 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_percent per annum (the "Stated Rate'? Tllis Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of , 2008 (the "Agreement') and the authorizing resolution (the "Resolution'} duly adopted by the Authority on ,2008. Capitalized terms used and not otherwise defined herein Ilave the meaning provided fDr such terms in the Agreement unless the cDntext clealty requires Dtherwise. 1. Payments. Principal and interest ("Payments'} shall be paid Dn August 1, 2010 and each February 1 and August 1 thereafter to and including February 1, 2021 ("Payment Dates'} in the amounts and 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 written notice to the Authority. Payments on this Note are payable in any cDin 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 1, 2010 (and nDt otherwise paid from Available Tax Increment) will be compounded semiannually on February 1 and August 1 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. All payments Dn this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," which means, on each Payment Date, 90 percent of the Tax Increment attributable to the Commercial Property as defined in the Agreement that is paid to the Authority by Anoka County in the six months preceding the Payment Date. The AuthDrity shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source Dther than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a defauft hereunder as long as the Authority pays principal and interest hereon to the extent of SUCll pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1,2021. 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 Ilerein by reference. 5. ODtiona' Preoavment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the AuthDrity without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment othenvise required to be made under this Note. (b) Upon receipt by Redeveloperofthe Authority's written statement of tile Excess Amount as defined in Section 3.4(e) of the Agreement, one-half of such Excess Amount wi/J be deemed to constitute, and wi/J be applied to, prepayment of the principal amount of this Nate. Such deemed prepayment is effective as of the Calculation Date as defined in Section 3.4(e) of the Agreement, andwiJ/ be recDrded by the Registrar in its records for the Note. Upon request of the Owner, the Authority wi/J deliver to the Owner a statement Df the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $ 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 tD and in fuf/ 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 solefy from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereDn shall not be deemed to constitute a general Dbligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the AuthDrity. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay tile prinCipal of or interest Dn this Note or other costs incident heretD 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 tile AUtllOrity kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly Economic Development Authority Meeting Minutes September 23,2008 Page 9 of 10 aut/Jorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory fa the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by tile Owner of any fax, fee, orgovemmenta/ 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 tile same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided Witll an opinion of counselor a cerlificafe of the transferor, in a form satisfactory to the AutlJOrity, 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 al/ acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to /lappen, and to 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 bappened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heigllts Economic Development Authority /lave caused this Note to be executed with tbe manual signatures of its President and Executive Director, afJ as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director-Walter R. Fehst President-Gary L. Peterson REGISTRA TlON 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 Registered Owner _ Signature of Registration City Chief Financial Officer Grand Central Commons LLC Federal Tax ID. No. Section 3. Terms Execution and Deliverv. 3.01. Denomination. Pavment. The Note shafJ be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fuJ/y registered form. Principal of and interest on the Note shaJ/ be payable by check Dr draft issued by the Registrar described herein. 3.02. Dates: Interest pavment Dates. Principal of and interest on the Note shaJ/ be payable by mail tD the owner of record thereof as of the close of business on the fifteenth day Df the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration. 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 AutllDrity and the Registrar with respect thereto shaJ/ be as fofJows: (a) Reaister. The Registrar shalf keep at its office a bond register in which tile Registrar s/laJ/ provide for the registratiDn Df ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon sUlTender for transfer Df 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 Df 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 counsel Dr a certificate of the transferor, in a form satisfactory to tile Authority, that such transfer is exempt from registration and prDspectus 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 shaJ/ be promptly cancelled by the Registrar and thereafter disposed of as directed by the AuthDrity. (d) ImDraDer or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse tD transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legallyaut/lOrized. Economic Development Authority Meeting Minutes September 23,2008 Page 10 000 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 nof, for the purpose of receiving payment of, Of on account of, the prin.cipal of and interest on such Note and for al/ other purposes, and all such payments so made to any such registered owner or upon the owner's order sha/J be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent Df the sum or sums so paid. (t) Taxes. Fees and Charaes. 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 SUCll 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 wcl1 Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of tl1e Registrar in connection therewit/1,' and, in tile case the Note fast, stolen, or destroyed, upon filing Willl 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 botl1 the Authority and the Registrar shall 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 Ilas 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 Delive/v. The Note shall be prepared under the direction of the Executive Director and shall 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, sucl] 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 sllall be delivered by the Executive Director to the Owner tllereof in accordance with the Agreement. Section 4. Securitv Provisions. 4.01. Pledoe. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment under the terms and as defined in the Note. A vailable Tax Increment shall be applied tD payment Df the principal of and interest on the Note in accordance with the terms of the form of Note set fo/1h in SectiDn 2 Dfthis resolution. 4.02. BDnd Fund. Until the date the Note is no longer outstanding and nD 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 fDr no purpose other than the payment of the principal of and interest on the Note. The AuthDrity irrevocably agrees to appropriate to the Bond Fund in each year all Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the T1F District upon termination of the Note in accordance with jts terms. 4.03. Additional Bonds. If tile Authority issues any bonds or notes secured by Available Tax Increment, such additional bonds or notes are subDrdinate to the Note in all respects. Section 5. Certification of Proceedinas. 5.01. Certification of Proceedinas. The officers oftha 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 Dther 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 furnis/led, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon execution of the Agreement. ADJOURNMENT President, Peterson, adjourned the meeting at 7:50 p.m. Respectfully su itted; Scott Clark H: \EDAm in utes2008\9-23-2008