HomeMy WebLinkAboutResolution No. 2009-51CITY OF COLUMBIA HEIGHTS
RESOLUTION 2009-51
RESOLUTION APPROVING AND SPECIFYING
TERMS OF INTER-FUND LOAN FOR ACQUISITION OF 4502 WASHINGTON ST. NE
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
Redevelopment Project No. 1 ("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 is authorized to acquire real property for development
and redevelopment by private enterprise or public use.
C. The Authority proposes to acquire certain property in the Project located at 4502
Washington Ave. NE (the "Property)."
D. The Authority and City may establish ascattered-site tax increment financing district
"TIF Dastrict") ,.order Minmesata Statutes, Sections 469.174 to 469.179 (the "TIF Act",l that
includes the Property in order to facilitate development of that property; or the Authority and City
may develop the property for various public uses.
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 may be reapaid fram tax increments or other
sources, all as further described in this resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Columbia
Heights follows:
1. The City authorizes a loan to the Authority in the maximum amount of $35,000, plus
actual closing costs on acquisition of the Property and the actual costs of demolition (the "Loan"), to
be drawn from any unencumbered funds available to the City far such purposes. Such amount will
be made available to the Autharity at or before the closing on acquisition of the Property by the
Authority,
2. The outstanding principal balance of the Loan bears interest at the rate of S.0 percent
per annum, which is the maximum rate applicable under Minnesota Statues, Section 469.178, subd,
7 far calendar year 2009. Interest accrues from the date of disbursement frorr~ the identified funds in
order to acquire the Property,
3. The Loan is payable from tax increments generated from a T1F District to be created
(if any), from any other tax increments legally available for such purposes, from proceeds of the sale
of the Property (if any), and from any other revenues available to the Authority. Principal and
interest ("Payments") shall be made at the times any revenue sources are available to make
installment payments. 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 all 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. To the extent the Loan is paid with tax increment, 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 any 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 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.
7. This resolution is effective as of approval by the EDA of a resolution authorizing an
interfund loan under substantially the terms described in this resolution.
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.
Passed this 27`" day of Apri12009
Offered by: Dielnn
Second by: Williams
Roll call: Ayes: Peterson, Williams, Nawrocki, Diehm, Kelzenberg
Attest:
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~'r~~'atricia Muscavitz CMC C' Clerk
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