HomeMy WebLinkAboutEDA AGN 06-13-16 SpecialCH COLUMBIA
HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY AGENDA
SPECIAL MEETING
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
MONDAY JUNE 13, 2016
6:30 pm
City Hall
Conference Room 1
590 40th Avenue NE
Columbia Heights, MN 55421
BUSINESS ITEMS
4. Authorization to Issuance of Tax Increment Revenue Refunding Bonds (Huset Park
Area Redevelopment Project), Series 2016, and Providing the Form, Terms, Pledge of
Revenues, and Findings, Covenants, and Directions Relating to the Issuance of Such
Obligations — Resolution 2016 -14
Motion: Move to waive the reading of Resolution 2016 -14, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2016 -14, Resolution to Issue Tax Increment Revenue
Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016, and Providing
the Form, Terms, Pledge of Revenues, and Findings, Covenants, and Directions Relating
to the Issuance of Such Obligations.
5. Approval of Post - Issuance Compliance Procedure and Policy for Tax - Exempt
Governmental Bonds — Resolution 2016 -15
Motion: Move to waive the reading of Resolution 2016 -15, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2016 -15, Resolution Approving Post- Issuance
Compliance Procedure and Policy for Tax - Exempt Governmental Bonds.
The next regularly scheduled EDA meeting will be held on August 1, 2016.
PUBLIC HEARINGS
6. Consideration of Sale of Scattered Site Property Located at 4011 Sth Street —
Resolution 2016 -16
Motion: Move to waive the reading of Resolution 2016 -16, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2016 -16, Resolution approving a Purchase and
Redevelopment Agreement between the Columbia Heights Economic Development
Authority and Timbercraft Enterprises, Inc. for the sale of 4011 5th Street.
OTHER BUSINESS
7. Adjourn
The next regular EDA meeting on July 4, 2016 at City Hall will be canceled
CH COLUMBIA
HEIGHTS
AGENDA SECTION
BUSINESS ITEMS
ITEM NO.
4
MEETING DATE
JUNE 13, 2016
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
ITEM:
Authorization to Issuance of Tax Increment Revenue Refunding Bonds ( Huset Park Area
Redevelopment Project), Series 2016, and Providing the Form, Terms, Pledge of Revenues, and
Findings, Covenants, and Directions Relating to the Issuance of Such Obligations
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Martha Ingram /Joe Hogeboom, June 8,
BY /DATE:
2016
This report provides a brief history of the Columbia Heights Economic Development Authority's $2,890,000
Tax Increment Revenue Bonds ( Huset Park Area Redevelopment Project), Series 2007, which currently remain
outstanding in the amount of $2,475,000 (the "Current Bonds "), as well as a summary of the process required
to refund the Current Bonds. The Current Bonds were issued in connection with certain public infrastructure
improvements constructed as part of the Huset Park Tax Increment Financing District (the "TIF District "),
pursuant to the Amended and Restated Contract for Private Redevelopment between the Columbia Heights
Economic Development Authority ( "EDA "), the City of Columbia Heights ( "City'), and BNC National Bank, as
successor in interest to Huset Park Development Corporation ( "BNC "), dated as of August 1, 2007, as amended
(the "Prior Contract "), and pursuant to the Second Amended and Restated Contract for Private
Redevelopment between the EDA, the City, and Columbia Heights Leased Housing Associates I, LLLP (the
"Redeveloper "), dated as of October 30, 2015 (the "Contract ").
The EDA issued the Current Bonds pursuant to the Prior Contract. The EDA pledged tax increment generated
by all improvements to be constructed on the Redevelopment Property to the payment of debt service on the
Current Bonds. The Current Bonds were issued after the first phases of construction required under the Prior
Contract were complete, and the par amount of the Current Bonds was based on the flow of tax increment
generated by the completed phases, such that tax increment generated by the completed phases of
construction has always been sufficient to pay principal and interest in full on each payment date.
The EDA also issued its Taxable Tax Increment Revenue Note, Series 2007A, in the principal amount of
$6,650,000 (the "TIF Note ") to Huset Park Development Corporation ( "HPDC "), to reimburse HPDC for certain
public redevelopment costs incurred by HPDC in development of the housing improvements within the TIF
District. Like the Current Bonds, the TIF Note is also secured by tax increment generated within the TIF
District, but on a subordinate basis to the Current Bonds. Since HPDC defaulted under the Prior Contract and
never completed any improvements beyond the first phases, there has not been enough tax increment
generated within the TIF District to pay any debt service on the TIF Note. Therefore, the TIF Note remains
outstanding in the full original principal amount. The TIF Note was assigned to the Redeveloper on October 30,
2015 at the real estate closing on the Redevelopment Property from BNC to the Redeveloper, and is now held
by the Redeveloper.
The Contract with the Redeveloper, which the EDA and City Council approved in April of this year, provides
that the EDA will agree to refund the Current Bonds if requested by the Redeveloper (see pertinent language
in the attached Exhibit A). The Redeveloper has now made this request. Refunding the Current Bonds is
financially beneficial to the Redeveloper because bonds issued to refund the Current Bonds (the "Refunding
Bonds ") will carry lower interest rates, which means that the debt service payments on the Refunding Bonds
City of Columbia Heights - EDA Letter
City of Columbia Heights - EDA Letter Page 2
will be lower. This will result in some tax increment remaining after payment on the Refunding Bonds, which
will be used to pay down the TIF Note (in addition, you will recall that the Contract requires the Redeveloper
to construct a senior housing facility within the TIF District, which will generate additional tax increment that
will also be used to pay principal and interest on the TIF Note). The Redeveloper recognizes that refunding the
Current Bonds primarily benefits the Redeveloper, and has therefore agreed to pay all actual costs of issuance
related to the issuance of the Refunding Bonds. The EDA will not pay any costs related to the refunding. In
addition, the Redeveloper will pay an administrative fee of $100,000 to the EDA to be allocated to other
redevelopment purposes within the City.
The Redeveloper has engaged Dougherty & Company as underwriter (i.e. purchaser) for the Refunding Bonds.
In order to refund the Current Bonds, the EDA must adopt a resolution awarding the sale of the Refunding
Bonds to Dougherty and approving several documents required in connection with the refunding, and the
EDA's action must be approved by the City Council. These actions were discussed by the Economic
Development Authority on June 6, 2016. The actions are now to be considered by the EDA and City Council on
this evening. Stacie Kvilvang from Ehlers & Associates, the City and EDA's municipal advisor, and an associate
from Kennedy and Graven will be present at both the EDA and the Council meetings to answer any questions
the EDA and /or City Council may have about the legal documents, the financial aspects of the process, or the
contractual arrangement providing for this refunding.
ATTACHMENTS:
1. First Amendment to Paying Agent Agreement, dated June 1, 2016 (6 pages)
2. Resolution 2016 -14 (8 pages)
Second Draft
June 9, 2016
FIRST AMENDMENT TO PAYING AGENT AGREEMENT
between
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY,
as Issuer,
and
BOND TRUST SERVICES CORPORATION,
as Paying Agent
Dated as of June 1, 2016
Relating to:
Columbia Heights Economic Development Authority
Tax Increment Revenue Refunding Bonds
(Huset Park Area Redevelopment Project)
Series 2016
This document drafted by:
Kennedy & Graven, Chartered (MNI)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, Minnesota 55402 -1458
48062542 MNI CL205-63
FIRST AMENDMENT TO PAYING AGENT AGREEMENT
THIS FIRST AMENDMENT TO PAYING AGENT AGREEMENT is dated as of June 1, 2016
(the "First Amendment to Agreement "), between the COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY, a municipal corporation organized and existing under its the laws of
the State of Minnesota (the "Issuer "), and BOND TRUST SERVICES CORPORATION, a Minnesota
limited purpose trust company, duly established, existing and authorized to accept and execute trusts of
the character herein set out, with its principal office in the City of Roseville, Minnesota (the "Paying
Agent "), amends the Paying Agent Agreement, dated as of August 1, 2007 (the "Original Agreement,"
and together with the First Amendment to Agreement, the "Agreement "), between the Issuer and the
Paying Agent:
I I XG) I K11 f.9
The Issuer and the City of Columbia Heights (the "City ") previously established the Huset Park
Area Tax Increment Financing District (the "TIF District ") pursuant to authority granted by Minnesota
Statutes, Sections 469.174 through 469.1794, as amended (the "Tax Increment Act "), within the
Downtown CBD Redevelopment Project (the "Redevelopment Project "), and adopted a tax increment
financing plan for the purpose of financing certain improvements within the TIF District. In order to
provide for the redevelopment of the Redevelopment Project and the TIF District, the Authority entered
into an Amended and Restated Contract for Private Redevelopment, dated as of August 1, 2007, between
the Authority, the City, and BNC National Bank, as successor in interest to Huset Park Development
Corporation ( "BNC "), dated as of August 1, 2007, as amended, and pursuant to the Second Amended and
Restated Contract for Private Redevelopment, dated October 30, 2015 (the "Contract") between the
Issuer, the City, and Columbia Heights Leased Housing Associates I, LLLP, a Minnesota limited liability
limited partnership (the "Redeveloper ").
Pursuant to Section 469.178 of the Tax Increment Act, the Issuer is authorized to issue and sell its
bonds or notes for the purpose of financing or refinancing public redevelopment costs in a project (which
includes the Redevelopment Project established and administered under Minnesota Statues,
Sections 469.001 through 469.047, as amended) and to pledge tax increment revenues derived from a tax
increment financing district established within the Redevelopment Project to the payment of the principal
of and interest on such obligations.
On August 3, 2007, the Authority issued its Tax Increment Revenue Bonds ( Huset Park Area
Redevelopment Project), Series 2007 (the "Prior Bonds "), in the original aggregate principal amount of
$2,890,000, pursuant to the TIF Act, Minnesota Statutes, Sections 469.001 through 469.047, as amended,
and Minnesota Statutes, Sections 469.090 through 469.1082, as amended (collectively, the "Act"). The
Authority applied the proceeds of the Prior Bonds to finance certain public redevelopment costs of the
Redevelopment Project (the "Project Costs "). The Prior Bonds are currently outstanding in the principal
amount of $2,475,000 and are subject to redemption at the option of the Authority on or after
August 15, 2015, at a price of par plus accrued interest.
Pursuant to the Act, the terms of Resolution No. 2016 -14, adopted by the Board of
Commissioners of the Issuer on June 13, 2016, and the terms and conditions of this First Amendment to
Agreement, the Issuer will issue its Tax Increment Revenue Refunding Bonds ( Huset Park Area
Redevelopment Project), Series 2016 (the "Bonds "), in the original aggregate principal amount of
$ , and will apply the proceeds derived from the sale of the Bonds to (i) refinance the
Project Costs through the redemption and prepayment of the outstanding Prior Bonds; (ii) pay costs of
issuance and related costs with respect to the Bonds; and (iii) fund a reserve fund.
480625v2 MNI CL205 -63
The execution and delivery of this First Amendment to Agreement and the issuance of the Bonds
by the Issuer have been in all respects duly and validly authorized by the Issuer.
ARTICLE ONE
AMENDMENTS TO ORIGINAL AGREEMENT
Section 1 -1. Definitions.
(a) The following definitions in Section 1 -I of the Original Agreement are amended to read
as follows:
"Available Tax Increment" means the Tax Increment derived from all of the property included in
the TIF District during the six -month period preceding each Payment Date after deducting $16,500 and
the fees of the Paying Agent described in Section 7 -2 hereof.
"Bond Purchase Agreement" means the Bond Purchase Agreement, dated June _, 2016,
between the Issuer and the Purchaser providing for the purchase of the Bonds, and any amendments to
supplements thereto.
"Bond" or "Bonds" means the Tax Increment Revenue Refunding Bonds (Huset Park Area
Redevelopment Project), Series 2016, issued by the Issuer pursuant to the First Amendment to
Agreement.
"Bond Year" means initially the period from the date of Bond Closing to and including
February 15, 2017, and thereafter each twelve -month period beginning on each February 16 and ending
on February 15 of the following year.
"Contract" means the Second Amended and Restated Contract for Private Redevelopment, dated
October 30, 2015, between the Issuer, the City, and the Redeveloper, and as the same may be amended
from time to time.
"Excess Available Tax Increment" means, as of each Payment Date, the Available Tax Increment
that is in excess of the amount needed to pay debt service due on the Bonds on such Payment Date, after
taking into account any amounts then on deposit in the Bond Fund.
"Payment Date" means each February 15 and August 15, commencing on August 15, 2016.
"Purchaser" means Dougherty & Company LLC.
"Redeveloper" means Columbia Heights Leased Housing Associates I, LLLP, a Minnesota
limited liability limited partnership, its successors and assigns.
"Tax Increment" means that portion of the real property taxes which is paid with respect to the all
of the property included in the TIF District and which is remitted to the Authority as tax increment
pursuant to the Tax Increment Act. The term Tax Increment does not include any amounts retained by or
payable to the State auditor under Section 469.177, subd. I 1 of the Tax Increment Act, or any amounts
described in Section 469.174, subd. 25, clauses (2) through (4) of the Tax Increment Act.
480625v2 MNI CL205 -63
(b) The following definitions are added to Section 1 -1 of the Original Agreement:
"Agreement" means the Original Agreement, as amended by the First Amendment to Agreement,
and as may be further amended or supplemented.
"First Amendment to Agreement" means the First Amendment to Paying Agent Agreement,
dated as of June 1, 2016, between the Issuer and the Paying Agent, and as may be amended or
supplemented.
"Original Agreement" means the Paying Agent Agreement, dated as of August 1, 2007, between
the Issuer and the Paying Agent.
"Prior Bonds" means the Tax Increment Revenue Bonds (Huset Park Redevelopment Project),
Series 2007, issued by the Authority on August 3, 2007, in the original aggregate principal amount of
August 3, 2007.
"Redemption Fund" means the Fund by that name created and established by Article Five of this
Agreement.
Section 1 -2. Exhibits. Exhibit A of the Original Agreement is hereby deleted in its entirety
and replaced with the attached EXHIBIT A.
Section 1 -3. Amendments to Article Two of the Original Agreement. Section 2 -3 of the
Original Agreement is hereby deleted and replaced with the following:
Section 2 -3. Principal Amount, Designation, Interest Rates. Maturities.
(a) The Bonds shall be issued under and secured by this Agreement and designated
the "Tax Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project),
Series 2016." The Bonds shall be issued in the aggregate principal amount of $
and dated as of the date of original issue.
(b) The Bonds shall be issued in fully registered form, numbered separately
consecutively upward, and the Bonds shall bear interest from their date of issue, payable each
Payment Date. If a default has occurred in the payment of any interest, the Paying Agent shall
establish a special Record Date for such payment as hereinafter provided. Interest on the Bonds
shall be computed on the basis of a 360 -day year with twelve (12) months of thirty (30) days.
(c) The Bonds shall mature on the dates listed below, in the following respective
principal amounts, and shall bear interest at the rates per annum for each stated maturity of the
Bonds as set forth below opposite the respective stated maturities:
480625v2 MNI CL205 -63
Stated Maturity Principal Amount Interest Rate
(d) To the extent lawful, interest shall accrue on all principal of and interest on the
Bonds not paid when due at the rate of interest accruing on the Bonds immediately prior to such
default.
(e) The Bonds shall be subject to redemption and prepayment prior to maturity as
provided in Article Three.
Section 14. Amendments to Article Three of the Original Agreement. Section 3 -1 of the
Original Agreement is hereby deleted and replaced with the following:
Section 3 -1. Redemption. The Bonds are subject to redemption prior to maturity as
follows:
(a) Optional Redemption. The Bonds may be redeemed, in whole or in part, in
principal increments of $1,000, at the option of the Issuer on or after 15, 20_, on
any date for which timely notice of redemption can be given, at a Redemption Price equal to
101% of the principal amount of the Bonds so redeemed plus interest accrued thereon to the
Redemption Date; and on or after 15,20 —, on any date for which timely notice
of redemption can be given, at a Redemption Price equal to the principal amount of the Bonds so
redeemed plus interest accrued thereon to the Redemption Date. Bonds shall be subject to
optional redemption pursuant to this Section 3 -1(a) only if funds to implement such redemption
are deposited in the Bond Fund on or before the date on which notice of redemption is required to
be given by Section 3 -4.
(b) Scheduled Mandatory Redemption. The Bonds maturing on
15, 20_ are subject to scheduled mandatory redemption on the mandatory sinking
fund redemption dates and in the principal amounts set forth in the following tables, at a
redemption price equal to the principal amount thereof plus accrued interest to the redemption
date, without premium, subject to pro rata reduction of such scheduled mandatory redemption
payments to the extent that such Bonds are redeemed prior to maturity otherwise than pursuant to
such scheduled mandatory redemption:
Sinking Fund Installment Date
15,20 Term Bond Principal Amount
* Maturity
480625v2 MNI CL205 -63 4
M Mandatory Redemption from Excess Available Tax Increment. The Bonds are
subject to mandatory redemption, in principal increments of $1,000, on each Payment Date on
which the conditions of Section 5- 3(b)(ii) hereof exist, at a redemption price equal to the principal
amount of the Bonds to be redeemed plus accrued interest to the redemption date, without
premium, from Excess Available Tax Increment held in the Prepayment Fund as required by
Section 5- 3(b)(ii) hereof.
Section 1 -5. Amendments to Article Four of the Original Agreement.
(a) Clause (e) of Section 4 -2 of the Original Agreement is hereby deleted and replaced with
the following:
(e) The Issuer shall calculate debt service coverage on the Bonds and any Additional
Obligations as of each February 1, commencing February 1, 20_. Debt service coverage shall
be calculated as the Available Tax Increment received by the Issuer as of the prior August 15
Payment Date plus the Available Tax Increment received by the Issuer for payment on the
immediately next February 15 Payment Date, divided by the total principal and interest due on
such two Payment Dates. Written notice of such debt service coverage shall be delivered to the
Purchaser on or before each February 2, and to any Bondholder promptly upon receipt of a
written request therefor.
(b) Section 4 -3 of the Original Agreement is hereby deleted and replaced with the following:
Section 4 -3. Additional Obligations. The Subordinate Note has been issued. Other
than the Subordinate Note, the Authority may not issue any additional bonds or notes secured by
a parity or subordinate pledge of the Available Tax Increment ( "Additional Obligations ").
Section 1 -6. Amendments to Article Five of the Original Agreement.
(a) Section 5 -2 of the Original Agreement is hereby deleted and replaced with the following:
Section 5 -2. Application of Proceeds. On the Bond Closing, the Issuer will receive
proceeds of the Bonds in the amount of $ (the par amount of the Bonds, plus
original issue premium of $ , less original issue discount of $ , less the
Purchaser's discount of $ ). The Issuer shall deposit or disburse such proceeds of the
Bonds as follows:
(a) $ to the Costs of Issuance Fund;
(b) $ to the Reserve Fund; and
(c) $ to the Redemption Fund.
(b) Clause (a) of Section 5 -3 of the Original Agreement is hereby deleted and replaced with
the following:
(a) Upon receipt during each Bond Year, the Issuer shall deposit Available Tax
Increment into the Bond Fund in the amount that, together with any funds on deposit in the Bond
Fund, is necessary to pay principal and interest on the Bonds in that Bond Year.
480625v2 MNI CL205 -63
(c) Clause (b)(i) of Section 5 -3 is hereby deleted and replaced with the following:
(i) If on that February 15, the Available Tax Increment in the most recently
completed Bond Year was at least 110% of the principal and interest due with the respect
to the Bonds during that Bond Year, Excess Available Tax Increment is released from the
pledge to the Bonds and may be used by the Issuer for any purpose under law.
(d) Section 5 -4 of the Original Agreement is hereby deemed to apply to the Prior Bonds only
(e) Section 5 -5 of the Original Agreement is hereby deemed to apply to the Prior Bonds only
(f) The Original Agreement is hereby amended to add the following Section 5 -11:
Section 5 -11. Redemption Fund. The Issuer shall deposit in the Redemption Fund the
amounts referred to in Section 5 -2(c) hereof. Such amounts, along with $ transferred
from the Reserve Fund created for the Prior Bonds, will be deposited in the Bond Fund created for
the Prior Bonds to redeem and prepay the outstanding Prior Bonds on 2016.
Section 1 -7. Amendments to Article Six of the Original Agreement. Section 6 -1 of the
Original Agreement is hereby deleted and replaced with the following:
Section 6 -1. Defeasance. When all Bonds have been discharged as provided in this
Section, all pledges, covenants and other rights granted by Resolution No. 2016 - to the
Holders shall, to the extent permitted by law, cease. The Issuer may discharge its obligations
with respect to any Bonds which are due on any date by irrevocably depositing with the Paying
Agent on or before that date a sum sufficient for the payment thereof in full; or if any Bond
should not be paid when due, it may nevertheless be discharged by depositing with the Paying
Agent a sum sufficient for the payment thereof in full with interest accrued to the date of such
deposit. The Issuer may also discharge its obligations with respect to any prepayable Bonds
called for redemption on any date when they are prepayable according to their terms, by
depositing with the Paying Agent on or before that date a sum sufficient for the payment thereof
in full, provided that notice of redemption thereof has been duly given. The Issuer may also at
any time discharge its obligations with respect to any Bonds, subject to the provisions of law now
or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a
suitable banking institution qualified by law as an escrow agent for this purpose, cash or
securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest
payable at such times and at such rates and maturing on such dates as shall be required, without
regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if
notice of redemption as herein required has been duly provided for, to such earlier redemption
date.
Section 1 -8. Amendments to Article Seven of the Original Agreement. Section 7 -2 of the
Original Agreement is hereby deleted and replaced with the following:
Section 7 -2. Fees. Charges. and Expenses of the Paving Agent. The Paying Agent
shall be entitled to payment and/or reimbursement for reasonable fees for its services rendered
hereunder and all necessary advances, counsel fees, and other expenses reasonable or necessarily
made or incurred by it in connection with such service. The annual fee of the Paying Agent shall
be $650, plus $100 in any Bond Year in which Excess Available Tax Increment is deposited in
the Prepayment Fund under Section 5- 3(b)(ii) hereof. The Issuer shall pay to the Paying Agent,
480625v2 MNI CL205 -63
on the date of the execution and delivery of this Agreement, the amount of $ , which
represents the Paying Agent's fee through 15, 20 .
ARTICLE TWO
MISCELLANEOUS
Section 2 -1. Effective Date. This First Amendment to Agreement shall be effective as of
June 2016.
Section 2 -2. Confirmation of Agreement. Except as specifically amended by this First
Amendment to Agreement, the Original Agreement is hereby ratified and confirmed, and remains in full
force and effect.
Section 2 -3. Severability. If any provision of this First Amendment to Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
Section 2 -4. Countemarts. This First Amendment to Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
(The remainder of this page is intentionally left blank.)
480625v2 MNI CL205 -63
IN WITNESS WHEREOF, the Issuer has caused this First Amendment to Paying Agent
Agreement to be signed in its name and on its behalf by its board of commissioners, and to evidence its
acceptance of the trusts hereby created, Bond Trust Services Corporation, as Paying Agent, has caused
these presents to be signed in its name and behalf by its duly authorized officers, all as of the date and
year first written above.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
480625v2 MNI CL205 -63 S -1
Execution page of the Paying Agent to the First Amendment to Paying Agent Agreement, dated as of the
date and year first written above, between the Columbia Heights Economic Development Authority, as
Issuer, and Bond Trust Services Corporation, as Paying Agent.
BOND TRUST SERVICES CORPORATION
By
Its
480625v2 MNl CL205 -63 S -2
EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF MINNESOTA
ANOKA COUNTY
Columbia Heights Economic Development Authority
Tax Increment Revenue Refunding Bond
(Huset Park Area Redevelopment Project)
Series 2016
Maturity Date
15, 20
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Date of Issuance
June _, 2016
CEDE & CO.
Interest Rate
CUSIP
DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that the Columbia Heights Economic
Development Authority, a public body corporate and politic organized and existing under the laws of the
State of Minnesota (the "Issuer"), certifies that it is indebted and for value received promises to pay to the
registered owner specified above, or registered assigns, in the manner hereinafter set forth but only out of
its Bond Fund or Prepayment Fund the principal amount specified above, on the stated maturity date
specified above, unless called for earlier redemption, and to pay interest thereon semiannually on
February 15 and August 15 of each year (each a "Payment Date "), commencing August 15, 2016, at the
rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until
the principal sum is paid or has been provided for. This Bond will bear interest from the most recent
Payment Date to which interest has been paid or, if no interest has been paid, from the date of original
issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and
surrender hereof at the principal corporate trust office of Bond Trust Services Corporation, as Paying
Agent (the "Paying Agent," which term includes any successor to its functions under the Paying Agent
Agreement hereinafter referred to), acting as paying agent, or any successor paying agent duly appointed
by the Issuer, Interest on this Bond will be paid on each Payment Date by check or draft drawn upon the
Paying Agent mailed (or under certain conditions specified in the Paying Agent Agreement sent by wire
transfer) to the person in whose name this Bond is registered (the "Holder" or `Bondholder") on the
registration books of the Issuer maintained by the Paying Agent and at the address appearing thereon at
the close of business on the fifteenth day of the calendar month preceding such Payment Date (the
"Regular Record Date "). Any interest not so timely paid shall cease to be payable to the person who is
the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder
hereof at the close of business on a date (the "Special Record Date ") fixed by the Paying Agent whenever
money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall
480625v2 MNI CL205 -63 A -1
be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and
interest on this Bond are payable in lawful money of the United States of America.
If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a
Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New
York, or the city where the principal office of the Paying Agent is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and
payment on such date shall have the same force and effect as if made on the nominal date of payment.
This Bond is one of an issue in the aggregate principal amount of $ (the "Bonds'),
all of like date of original issue and tenor, except as to number, maturity, interest rate, denomination, and
redemption privilege, issued under and equally and ratably secured and entitled to the protection given by
the First Amendment to Paying Agent Agreement, dated as of June 1, 2016 (the "Paying Agent
Agreement "), between the Issuer and the Paying Agent, which amends the Paying Agent Agreement,
dated as of August 1, 2007, between the Issuer and the Paying Agent. The Bonds are issued pursuant to
Minnesota Statutes, Section 469.178, to refinance certain public redevelopment costs of a project under
and pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and 469.090 through 469.1081, as
amended, and other applicable law (collectively, the "Act "). Reference is made to the Paying Agent
Agreement, for a description of the provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Issuer and Paying Agent and the rights of the Holders of
the Bonds, and the terms upon which the Bonds are issued and secured.
The Bonds are subject to redemption as follows:
(a) Optional Redemption. The Bonds may be redeemed, in whole or in part, in principal
increments of $1,000, at the option of the Issuer on or after 15, 20_ , on any date for which
timely notice of redemption can be given, at a redemption price equal to 101% of the principal amount of
the Bonds so redeemed plus interest accrued thereon to the redemption date; and on or after
15, 20_, on any date for which timely notice of redemption can be given, at a redemption
price equal the principal amount of the Bonds so redeemed plus interest accrued thereon to the
redemption date.
(b) Scheduled Mandatory Redemption. The Bonds maturing on 15, 20 , are
subject to scheduled mandatory redemption on the mandatory sinking fund redemption dates and in the
principal amounts set forth in the following tables, at a redemption price equal to the principal amount
thereof plus accrued interest to the redemption date, without premium, subject to pro rata reduction of
such scheduled mandatory redemption payments to the extent that such Bonds are redeemed prior to
maturity otherwise than pursuant to such scheduled mandatory redemption:
[Insert Mandatory Sinking Fund Redemption Schedule]
(c) Mandatory Redemption from Excess Available Tax Increment. The Bonds are subject to
mandatory redemption, and shall be redeemed and prepaid in inverse order of maturity in principal
increments of $1,000, on each Payment Date on which the conditions specified in Section 5- 3(b)(ii) of the
Paying Agent Agreement exist, at a redemption price equal to the principal amount of the Bonds to be
redeemed plus accrued interest to the redemption date, without premium, from Excess Available Tax
Increment held in the Prepayment Fund as required by Section 5- 3(b)(ii) of the Paying Agent Agreement.
In the case of redemption of less than all Bonds Outstanding pursuant to paragraph (a) above, the
Paying Agent shall select the maturities of the Bonds to be redeemed, and the principal amount (in
480625v2 MNI CL205-63 A -2
increments of $1,000) to be redeemed from each maturity. If less than all of the Outstanding principal
amount of the Bonds of a specific maturity are to be redeemed, the specific Bonds to be redeemed shall be
selected by the Paying Agent at random or in such manner as the Paying Agent shall deem fair and
appropriate in increments of $1,000 or any integral multiple thereof.
Notice of redemption shall be given by first class mail, postage prepaid, mailed not less than
fifteen (15) days prior to the Redemption Date, to each Holder of Bonds to be redeemed at the address of
the Holder appearing in the Bond Register. For Bonds registered to Cede & Co., as nominee of DTC,
notice of redemption may instead by given by electronic notice, sent not less than fifteen (15) days prior
to the Redemption Date. No defect in or failure to give notice by mail to any Holder shall affect the
validity of the proceedings for redemption of any Bond held by any Holder to which proper notice by
mail has been given.
The Bonds are issued pursuant to and in full compliance with the Constitution and laws of the
State of Minnesota, particularly the Act, and pursuant to a resolution adopted by the Board of
Commissioners of the Issuer on June 13, 2016 (the "Resolution "). The Bonds are special obligations
payable solely from Available Tax Increment and certain other funds pledged to the payment of the
Bonds and interest thereon.
The Bonds are issued by the Issuer to aid in refinancing a project under the Act. The Bonds do
not constitute a general or moral obligation of the State of Minnesota or its political subdivisions,
including the Issuer. The Bonds, including interest thereon, are payable solely from the revenues and
assets expressly pledged to the payment thereof. The Bonds shall not constitute a debt of the Issuer
within the meaning of any constitutional or statutory limitation of indebtedness.
As provided in the Paying Agent Agreement and subject to certain limitations therein set forth,
this Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at
the principal office of the Paying Agent upon presentation and surrender hereof to the Paying Agent, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and
Paying Agent duly executed by, the Holder hereof or his, her or its attorney duly authorized in writing.
Thereupon the Issuer shall execute and the Paying Agent shall authenticate and deliver, in exchange for
this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in
blank or to "bearer" or similar designation) of the same series, of an authorized denomination or
denominations, for the same aggregate principal amount and of the same stated maturity and interest rate.
The Bonds are issued as fully registered bonds in the denomination of $100,000 and integral
multiples of $1,000 in excess of $25,000. The Bonds are exchangeable for one or more Bonds of the
same series, aggregate principal amount, interest rate and maturity date, upon surrender thereof by the
Holder at the principal office of the Paying Agent, in the manner and upon payment of the charges
provided in the Paying Agent Agreement.
The Paying Agent may require payment of a sum sufficient to cover any tax, fee or other
governmental charge required to be made in connection with the transfer or exchange of this Bond.
The Issuer, Paying Agent and any agent of the Issuer or Paying Agent may treat the person in
whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein
provided (except as otherwise provided with respect to the Record Date) and for all other purposes,
whether or not this Bond shall be overdue, and the Issuer, Paying Agent and agents of the Issuer or
Paying Agent shall not be affected by notice to the contrary.
480625v2 MNI CL205 -63 A -3
The Bonds have been designated by the Issuer as "qualified tax- exempt obligations" for purposes
of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended.
Capitalized terms which are used but not defined herein shall have the same meanings given them
in, or pursuant to, the Paying Agent Agreement.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any security
or benefit under the Paying Agent Agreement unless the Certificate of Authentication hereon shall have
been executed by the Paying Agent.
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 happen and to be performed, precedent to
and in the execution and delivery of the Paying Agent Agreement and in the issuance of this Bond, have
been done, have happened and have been performed, in regular and due form, time and manner as
required by law, and that this Bond, together with all other obligations of the Issuer outstanding on the
Date of Original Issue hereof and on the date of its issuance and delivery to the purchaser, does not
exceed any constitutional or statutory limitation of indebtedness.
IN WITNESS WHEREOF, the Columbia Heights Economic Development Authority has caused
this Bond to be executed in its name and on its behalf by the facsimile signatures of its authorized
officers, as of the Date of Issuance.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
PAYING AGENT'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within- mentioned Paying Agent Agreement.
BOND TRUST SERVICES CORPORATION,
as Paying Agent
Date: June_, 2016
Responsible Agent
480625v2 MNI CL205 -63 A -4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Please Print or Typewrite Name and Address of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
Please Insert Social Security Number or
Other Identifying Number of Assignee.
Signature Guaranteed:
Notice: The signature to this assignment must
correspond with the name as it appears on the face
of this Bond in every particular, without alteration
or any change whatever.
NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities
Transfer Agent Medallion Program ( "STAMP "), the Stock Exchange Medallion Program ( "SEMP "), the
New York Stock Exchange, Inc. Medallion Signatures Program ( "MSP ") or other such "signature
guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STEMP,
SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended.
The Registrar will not effect transfer of this Bond unless the information concerning the assignee
requested below is provided.
Name and Address:
(Include information for all joint owners if this Bond is held by
joint account.)
480625v2 MNI CL205 -63 A -5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or regulations
TEN COM — as tenants in common
JT TEN — as joint tenants with right
of survivorship and not as tenants in
common
TEN ENT — as tenants by entireties
UNIF GIFT MIN ACT —
Custodian
(Cust) (Minor)
under Uniform Gifts or Transfers to Minors Act
(State)
Additional abbreviations may also be used though not in the above list.
480625v2 MNI CL205 -63 A -6
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-14
RESOLUTION AUTHORIZING THE ISSUANCE OF TAX INCREMENT
REVENUE REFUNDING BONDS (HUSET PARK AREA
REDEVELOPMENT PROJECT), SERIES 2016, AND PROVIDING THE
FORM, TERMS, PLEDGE OF REVENUES, AND FINDINGS,
COVENANTS, AND DIRECTIONS RELATING TO THE ISSUANCE OF
SUCH OBLIGATIONS
BE IT RESOLVED by the Board of Commissioners (the `Board ") of the Columbia Heights
Economic Development Authority (the "Authority "), as follows:
SECTION 1. BACKGROUND.
1.01. The Columbia Heights Economic Development Authority (the "Authority ") and the City
of Columbia Heights, Minnesota (the "City ") previously established the Huset Park Area Tax Increment
Financing District (the "TIF District') pursuant to authority granted by Minnesota Statutes,
Sections 469.174 through 469.1794, as amended (the "Tax Increment Act'), within the Downtown CBD
Redevelopment Project (the "Redevelopment Project'), and adopted a tax increment financing plan for
the purpose of financing certain improvements within the TIF District. In order to provide for the
redevelopment of the Redevelopment Project and the TIF District, the Authority entered into an
Amended and Restated Contract for Private Redevelopment, dated as of August 1, 2007, between the
Authority, the City, and BNC National Bank, as successor in interest to Huset Park Development
Corporation, dated as of August 1, 2007, as amended, and pursuant to the Second Amended and Restated
Contract for Private Redevelopment, dated October 30, 2015 (the "Contract') between the Authority, the
City, and Columbia Heights Leased Housing Associates I, LLLP, a Minnesota limited liability limited
partnership (the "Redeveloper ").
1.02. Pursuant to Section 469.178 of the Tax Increment Act, the Authority is authorized to
issue and sell its bonds for the purpose of financing or refinancing public redevelopment costs of the
Redevelopment Project and to pledge tax increment revenues derived from a tax increment financing
district established within the Redevelopment Project to the payment of the principal of and interest on
such obligations.
1.03. On August 3, 2007, the Authority issued its Tax Increment Revenue Bonds ( Huset Park
Area Redevelopment Project), Series 2007 (the "Prior Bonds "), in the original aggregate principal
amount of $2,890,000, pursuant to the TIF Act, Minnesota Statutes, Sections 469.001 through 469.047,
as amended, and Minnesota Statutes, Sections 469.090 through 469.1082, as amended (collectively, the
"Act'). The Authority applied the proceeds of the Prior Bonds to finance certain public redevelopment
costs of the Redevelopment Project (the "Project Costs "). The Prior Bonds are currently outstanding in
the principal amount of $2,475,000 and are subject to redemption at the option of the Authority on or
after August 15, 2015, at a price of par plus accrued interest.
SECTION 2. ISSUANCE OF BONDS.
2.01. In order to refinance the Project Costs through the redemption and prepayment of the
outstanding Prior Bonds, pay costs of issuance and related costs with respect to the Bonds, and fund a
480618v2 MNI CL205 -63
reserve fund, the Board hereby authorizes the issuance of its Tax Increment Revenue Refunding Bonds
(Huset Park Area Redevelopment Project), Series 2016 (the "Bonds "), in a principal amount not to
exceed $2,800,000. The Bonds shall be issued on such date and upon the terms and conditions
determined by the Executive Director of the Authority (the "Executive Director "), provided that the yield
on the Bonds (for arbitrage purposes) shall not exceed 3.375 %. The Bonds may be designated such other
name or names as determined to be appropriate by the Executive Director. The Bonds shall be issued in
one or more series as the Executive Director may determine, and shall be assigned a separate series
designation determined by the Executive Director for each series issued by the Authority. The Bonds are
authorized to be issued as obligations the interest on which is not includable in gross income for federal
and State of Minnesota income tax purposes. This authorization to issue the Bonds is effective without
any additional action of the Board and shall be undertaken by the Executive Director on such date or
dates and upon the terms and conditions deemed reasonable by the Executive Director. The Board
hereby authorizes the sale of the Bonds to Dougherty & Company LLC (the "Underwriter ") upon the
offer of the Underwriter to purchase the Bonds in accordance with the terms of a Bond Purchase
Agreement between the Authority and the Underwriter (the "Bond Purchase Agreement') and
conforming to the parameters set forth in this paragraph.
2.02. There have been presented to the Board forms of the following documents: (i) a First
Amendment to Paying Agent Agreement (the "Paying Agent Agreement "), between the Authority and
Bond Trust Services Corporation (the "Paying Agent'), which amends the Paying Agent Agreement with
respect to the Prior Bonds, dated as of August 1, 2007, between the Authority and the Paying Agent; and
(ii) a Bond Purchase Agreement. The Paying Agent Agreement and the Bond Purchase Agreement are
hereby approved in substantially the forms on file with the Authority on the date hereof, subject to such
changes not inconsistent with this resolution and applicable law that are approved by the Executive
Director of the Authority. Upon approval by the Executive Director of the Paying Agent Agreement and
Bond Purchase Agreement, the Chair and the Executive Director are authorized and directed to execute
such documents on behalf of the Authority.
2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered,
and issued in such denominations, shall be subject to mandatory and optional redemptions and
prepayment prior to maturity, shall be executed, and authenticated in such manner, shall be in such form,
and shall have such other details and provisions as are prescribed in the Paying Agent Agreement. The
form of the Bonds included in the Paying Agent Agreement is approved in substantially the form in the
Paying Agent Agreement, subject to such changes not inconsistent with this resolution and applicable
law, and subject to such changes as are approved by the Executive Director. Without limiting the
generality of the foregoing, the Executive Director is authorized to approve the original aggregate
principal amount of each series of Bonds to be issued under the terms of this resolution (subject to the
maximum aggregate principal amount for all series authorized by this resolution), to establish the terms
of redemption, the principal amounts subject to redemption, and the dates of redemption of the Bonds,
and to approve other changes to the other terms of the Bonds which are deemed by the Executive
Director to be in the best interests of the Authority. The issuance and delivery of the Bonds shall be
conclusive evidence that the Executive Director has approved the terms and provisions of the Bonds in
accordance with the authority granted by this resolution. The proceeds derived from the sale of the
Bonds, and the earnings derived from the investment of such proceeds, shall be held, transferred,
expended, and invested in accordance with determinations of the Executive Director. Upon approval by
the Executive Director of the Bonds, the Chair and the Executive Director are authorized and directed to
execute such Bonds on behalf of the Authority.
2.04. The Bonds shall be secured by the terms of the Paying Agent Agreement and shall be
payable solely from Available Tax Increment (as defined in the Paying Agent Agreement) that is
480618v2 MNI CL205 -63 2
expressly pledged to the payment of the Bonds pursuant to the terms of the Paying Agent Agreement.
The covenants, representations and warranties of the Authority contained in the Paying Agent Agreement
are expressly incorporated herein for the benefit of the holders of the Bonds.
2.05. It is hereby found, determined and declared that the issuance and sale of the Bonds, the
execution and delivery by the Authority of the Paying Agent Agreement and the Bond Purchase
Agreement (the "Authority Documents "), and the performance of all covenants and agreements of the
Authority contained in the Authority Documents, and of all other acts required under the Constitution
and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the
Authority enforceable in accordance with their respective terms, are authorized by applicable Minnesota
law, including, without limitation, the Tax Increment Act, and this Resolution.
2.06. Under the provisions of the Tax Increment Act, and as provided in the Paying Agent
Agreement and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against
any funds other than the revenues pledged to the payment thereof; the Authority shall not be subject to
any liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever
have the right to compel any exercise by the Authority of its taxing powers (other than as contemplated
by the pledge of tax increment revenues under the terms of the Paying Agent Agreement) to pay the
principal of, premium, if any, and interest on the Bonds, or to enforce payment thereof against any
property of the Authority other than the property expressly pledged thereto; the Bonds shall not
constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority other
than the revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a
pledge of the general or moral obligation of the Authority, and that the Bonds, including interest thereon,
are payable solely from the revenues pledged to the payment thereof, and the Bonds shall not constitute a
debt of the Authority within the meaning of any constitutional or statutory limitation of indebtedness.
SECTION 3. REFUNDING OF PRIOR BONDS; FINDINGS; REDEMPTION OF PRIOR BONDS.
3.01. The outstanding Prior Bonds will be called for redemption on August 15, 2016, or the
first date on which timely notice of redemption can be given (the "Redemption Date "), in the principal
amount of $2,475,000 plus accrued interest to the Redemption Date. It is hereby found and determined
that based upon information presently available from the Authority's municipal advisor, the issuance of
the Bonds will result in a reduction of debt service costs to the Authority.
3.02. It is hereby found and determined that the proceeds of the Bonds deposited in the
Redemption Fund created under the Paying Agent Agreement, along with any other funds on hand in the
reserve fund established for the Prior Bonds, will be sufficient to prepay all of the principal of, interest
on and redemption premium (if any) on the Prior Bonds on the Redemption Date.
3.03. The Prior Bonds maturing after the Redemption Date will be redeemed and prepaid on
the Redemption Date. The Prior Bonds will be redeemed and prepaid in accordance with their terms and
in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption
attached hereto as EXHIBIT A, which terms and conditions are hereby approved and incorporated herein
by reference. The registrar for the Prior Bonds is authorized and directed to send a copy of the respective
Notice of Call for Redemption to each registered holder of the Prior Bonds at least thirty (30) days prior
to the Redemption Date.
48061W MNI CL205 -63 Q
SECTION 4. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES.
4.01. The Authority approves the preparation and distribution of a Preliminary Official
Statement and an Official Statement with respect to the offer and sale of the Bonds. In order to provide
for continuing disclosure with respect to the Bonds, to the extent deemed necessary, required, or
appropriate by the Executive Director, the Executive Director may execute a certificate providing for
continuing disclosure with respect to the Bonds.
4.02. The Executive Director is authorized to furnish to the purchasers of the Bonds, on the
date of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such officer, the
Official Statement (or other form of disclosure document) does not, as of the date of closing, and did not,
as the time of sale of the Bonds, contain any untrue statement of a material fact necessary in order to
make the statements made therein, in light of the circumstances under which they were made, not
misleading. Unless litigation shall have been commenced and be pending questioning the Bonds, the
proceedings for approval of the Bonds, tax increment revenues generated or collected for payment of the
Bonds, revenues pledged for payment of the Bonds, or the organization of the Authority, or incumbency
of its officers, the Chair and the Executive Director shall also execute and deliver a suitable certificate as
to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as
to payment for and delivery of the Bonds, and the signed approving legal opinion of Kennedy & Graven,
Chartered, as to the validity and enforceability of the Bonds and the tax - exempt status of interest on the
Bonds.
4.03. The Chair, the Executive Director, and other agents, officers, and employees of the
Authority are hereby authorized and directed, individually and collectively, to furnish to the attorneys
approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and
certifications as to facts as shown by the books and records of the Authority, and the right and authority
of the Authority to issue the Bonds, and all such certified copies and certifications shall be deemed
representations of fact on the part of the Authority. Such officers, employees, and agents of the
Authority are hereby authorized to execute and deliver, on behalf of the Authority, all other certificates,
instruments, and other written documents that may be requested by bond counsel, the Underwriter, the
Paying Agent, or other persons or entities in conjunction with the issuance of the Bonds and the
expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the
preceding sentence, such officers and employees are specifically authorized to execute and deliver a
certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, a
receipt for the proceeds derived from the sale of the Bonds, an order to the Paying Agent, a general
certificate of the Authority, and an Information Return for Tax - Exempt Governmental Obligations,
Form 8038 -G (Rev. September 2011).
SECTION 5. BANK QUALIFICATION. The Authority hereby designates the Bonds as "qualified
tax - exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code "), and represents that the Authority does not reasonably anticipate that the
Authority, the City, or any other subordinate entity of the City will issue in calendar year 2016 more than
$10,000,000 of bonds or other tax - exempt obligations (excluding "private activity bonds" other than
"qualified 501(c)(3) bonds," as such terms are defined in the Code, and excluding certain refunding
obligations, that are not included in the $10,000,000 limitation set forth in Section 265(b)(3)(C)(i) of the
Code).
480618v2 MNI CL205 -63 4
SECTION 6. MISCELLANEOUS.
6.01. All agreements, covenants, and obligations of the Authority contained in this resolution
and in the above - referenced documents shall be deemed to be the agreements, covenants, and obligations
of the Authority to the full extent authorized or permitted by law, and all such agreements, covenants,
and obligations shall be binding on the Authority and enforceable in accordance with their terms. No
agreement, covenant, or obligation contained in this resolution or in the above - referenced documents
shall be deemed to be an agreement, covenant, or obligation of any member of the Board, or of any
officer, employee, or agent of the Authority in that person's individual capacity. Neither the members of
the Board, nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to
any personal liability or accountability by reason of the issuance of the Bonds.
6.02. Nothing in this resolution or in the above - referenced documents is intended or shall be
constructed to confer upon any person (other than as provided in the Paying Agent Agreement, the
Bonds, and the other agreements, instruments, and documents hereby approved) any right, remedy, or
claim, legal or equitable, under and by reason of this resolution or any provision of this resolution.
6.03. If for any reason the Chair or the Executive Director, or any other officers, employees, or
agents of the Authority authorized to execute certificates, instruments, or other written documents on
behalf of the Authority shall for any reason cease to be an officer, employee, or agent of the Authority
after the execution by such person of any certificate, instrument, or other written document, such fact
shall not affect the validity or enforceability of such certificate, instrument, or other written document. If
for any reason the Chair or the Executive Director, or any other officers, employees, or agents of the
Authority authorized to execute certificates, instruments, or other written documents on behalf of the
Authority shall be unavailable to execute such certificates, instruments, or other written documents for
any reason, such certificates, instruments, or other written documents may be executed by a deputy or
assistant to such officer, or by such other officer of the Authority as in the opinion of the Authority
Attorney is authorized to sign such document.
6.04. The Authority shall not take any action or authorize any action to be taken in connection
with the application or investment of the proceeds of the Bonds or any related activity which would cause
the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Code.
The Authority shall not take any action or authorize any action to be taken in connection with the
application or investment of the proceeds of the Bonds or any related activity which would cause the
Bonds to be deemed to be "arbitrage bonds," within the meaning of Section 148 of the Code.
Furthermore, the Authority shall take all such actions as may be required under the Code to ensure that
interest on the Bonds is not and does not become includable in gross income for federal income tax
purposes.
6.05. The authority to approve, execute, and deliver future amendments to the documents
executed and delivered by the Authority in connection with the transactions contemplated hereby is
hereby delegated to the Executive Director, subject to the following conditions: (a) such amendments do
not require the consent of the holders of the Bonds or, if required, such consent has been obtained;
(b) such amendments do not materially adversely affect the interests of the Authority as the issuer of the
Bonds; (c) such amendments do not contravene or violate any policy of the Authority; (d) such
amendments are acceptable in form and substance to the Authority Attorney, bond counsel or other
counsel retained by the Authority to review such amendments; (e) the Authority has received, if
necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the
tax- exempt character of interest on the Bonds, if the Bonds are then tax- exempt obligations; and (f) such
amendments do not materially prejudice the interests of the owners of the Bonds. The authorization
480618v2 MNI CL205 -63
hereby given shall be further construed as authorization for the execution and delivery of such
certificates and related items as may be required to demonstrate compliance with the agreements being
amended and the terms of this resolution. The execution of any instrument by the Executive Director
shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In
the absence of the Executive Director, any instrument authorized by this paragraph to be executed and
delivered by the Executive Director may be executed by such other officer of the Authority as in the
opinion of the Authority Attorney is authorized to execute and deliver such document.
SECTION 7. Effective Date. This Resolution shall take effect and be in force from and after its
approval, subject to approval by the City Council of the City of the Authority's proposed issuance of the
Bonds.
Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this
13`s day of June, 2016.
Gary L. Peterson, President
Attest:
Walter R. Fehst, Executive Director
480618v2 MNI CL205 -63
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$2,890,000
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
TAX INCREMENT REVENUE BONDS
(HUSET PARK AREA REDEVELOPMENT PROJECT)
SERIES 2007
NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Columbia
Heights Economic Development Authority (the "Authority "), there have been called for redemption and
prepayment on
August 15, 2016
all outstanding bonds (the "Bonds ") of the Authority designated as Tax Increment Revenue Bonds (Huset
Park Area Redevelopment Project), Series 2007, dated August 3, 2007, having stated maturity dates of
February 1 in the years 2017 through 2032, both inclusive, totaling $2,475,000 in principal amount, and
with the following CUSIP numbers:
Year of Maturity
2017
2022
2032
Amount
CUSIP Number
$ 80,000
197690 AA8
510,000
197690 AB6
1,885,000
197690 AD2
The Bonds are being called at a price of par plus accrued interest to August 15, 2016, on which date
all interest on said Bonds will cease to accrue. The redemption of the Bonds is contingent upon the
receipt by Bond Trust Services Corporation (the "Paying Agent "), of sufficient funds, on or before
the redemption date, for the redemption of all Bonds. If such funds are not received in accordance
with the preceding sentence then the redemption will be cancelled. Holders of the Bonds hereby
called for redemption are requested to present their Bonds for payment at the main office of Bond Trust
Services Corporation, 3060 Centre Pointe Drive, Roseville, Minnesota 55113, on or before
August 15,2016:
Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act
of 2003, the registrar is required to withhold a specified percentage of the principal amount of the
redemption price payable to the holder of any Bonds subject to redemption and prepayment on the
redemption date, unless the registrar is provided with the Social Security Number or Federal Employer
Identification Number of the holder, properly certified. Submission of a fully executed Request for
Taxpayer Identification Number and Certification, Form W -9, will satisfy the requirements of this
paragraph.
480618v2 MNI CI.205 -63 A -1
Dated: , 2016.
BY ORDER OF THE BOARD OF
COMMISSIONERS OF THE COLUMBIA
HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY
By: /s/ Walter R. Fehst
Executive Director
Columbia Heights Economic Development
Authority
480618v2 MNI CL205 -63 A -2
CH COLUMBIA
HEIGHTS
AGENDA SECTION
BUSINESS ITEMS
ITEM NO.
5
MEETING DATE
JUNE 13, 2016
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
ITEM:
Approval of Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Martha Ingram, June 1, 2016
BY /DATE:
The Columbia Heights Economic Development Authority (the "Authority ") is an issuer of tax - exempt
governmental bonds. Over time, the Internal Revenue Service (the "IRS ") has developed a series of
regulations that require issuers of such bonds to take certain actions after the bonds have been issued to
ensure that the bonds remain tax - exempt. The IRS has also begun to investigate whether issuers of
tax - exempt bonds are complying with these regulations. For example, in early 2009, the IRS mailed its
Governmental Bond Financings Compliance Check Questionnaire, Form 14002 to two hundred governmental
entities that had issued tax - exempt bonds in 2005. A major focus of the IRS questionnaire is whether the
governing body of the issuer responding to the questionnaire has adopted written procedures for its required
post- issuance compliance actions. The questions in this questionnaire provide clear guidance from the IRS on
the post- issuance actions that are expected from issuers of tax - exempt governmental bonds, the records that
the IRS expects such issuers to retain, and the period of time such records are expected to be retained. The
IRS has suggested that it may send this or a similar questionnaire to more issuers in the near future.
In September 2011, the IRS revised its Form 8038 -G, which is the informational tax return that issuers of tax -
exempt governmental bonds are required to submit in connection with each bond issue. The new version of
the Form 8038 -G requires the issuer to certify whether it has written procedures in place for its post- issuance
compliance activities. In addition, if a problem with the tax exemption of the bonds is identified at some
point, the IRS has indicated it will allow reduced closing agreement amounts under its Voluntary Closing
Agreement Program for issuers who implement written post- issuance compliance procedures.
Our office has prepared a model policy which, if implemented and followed, will meet IRS requirements for
post- issuance compliance. I strongly recommend that the Board of Commissioners of the Authority adopt this
policy, and that it follow the adopted policy with regard to all of its tax - exempt bonds. If you have any
questions about post- issuance compliance or the proposed policy, please do not hesitate to call me at
(612) 337 -9231.
ATTACHMENTS:
1. Post Issue Compliance Procedure and Policy for Tax Exempt Governmental Bonds, dated June 1, 2016
(5 pages)
2. Resolution 2016 -15 (1 page)
City of Columbia Heights - EDA Letter
Columbia Heights Economic Development Authority
POST - ISSUANCE COMPLIANCE PROCEDURE AND POLICY
FOR TAX - EXEMPT GOVERNMENTAL BONDS
June 13, 2016
480657v] MM CL205 -63
Post- Issuance Compliance Procedure and Policy
for Tax - Exempt Governmental Bonds
The Columbia Heights Economic Development Authority (the "Authority ") issues tax - exempt
governmental bonds to finance capital improvements. As an issuer of tax - exempt governmental bonds,
the Authority is required by the terms of Sections 103 and 141 -150 of the Internal Revenue Code of 1986,
as amended (the "Code "), and the Treasury Regulations promulgated thereunder (the "Treasury
Regulations "), to take certain actions subsequent to the issuance of such bonds to ensure the continuing
tax - exempt status of such bonds. In addition, Section 6001 of the Code and Section 1.6001 -1(a) of the
Treasury Regulations, impose record retention requirements on the Authority with respect to its tax -
exempt governmental bonds. This Post - Issuance Compliance Procedure and Policy for Tax - Exempt
Governmental Bonds (the "Policy ") has been approved and adopted by the Authority to ensure that the
Authority complies with its post - issuance compliance obligations under applicable provisions of the Code
and Treasury Regulations.
1. Effective Date and Term. The effective date of this Policy is June 13, 2016, and shall
remain in effect until superseded or terminated by the Authority.
2. Responsible Parties. The Executive Director of the Authority shall be the party primarily
responsible for ensuring that the Authority successfully carries out its post - issuance compliance
requirements under applicable provisions of the Code and Treasury Regulations. The Executive Director
will be assisted by the Finance Department and other staff of the City of Columbia Heights, Minnesota
(the "City") and by Authority staff and officials when appropriate. The Executive Director of the
Authority will also be assisted in carrying out post - issuance compliance requirements by the following
organizations:
(a) Bond Counsel (the law firm primarily responsible for providing bond counsel
services for the Authority);
(b) Municipal Advisor (the organization utilized from time to time for providing
financial advisor services to the Authority);
(c) Paying Agent (the person, organization, or Authority officer primarily
responsible for providing paying agent services for the Authority); and
(d) Rebate Analyst (the organization primarily responsible for providing rebate
analyst services for the Authority).
The Executive Director shall be responsible for assigning post - issuance compliance responsibilities to the
Finance Department and other staff of the City, staff of the Authority, Bond Counsel, Municipal Advisor,
Paying Agent, and Rebate Analyst. The Executive Director shall utilize such other professional service
organizations as are necessary to ensure compliance with the post - issuance compliance requirements of
the Authority. The Executive Director shall provide training and educational resources to Authority staff
who are responsible for ensuring compliance with any portion of the post - issuance compliance
requirements of this Policy.
3. Post - Issuance Compliance Actions. The Executive Director shall take the following
post- issuance compliance actions or shall verify that the following post- issuance compliance actions have
been taken on behalf of the Authority with respect to each issue of tax - exempt governmental bonds issued
by the Authority:
480657vt MNI CL205 -63
(a) The Executive Director shall prepare a transcript of principal documents (this
action will be the primary responsibility of Bond Counsel).
(b) The Executive Director shall file with the Internal Revenue Service (the "IRS "),
within the time limit imposed by Section 149(e) of the Code and applicable Treasury Regulations,
an Information Return for Tax - Exempt Governmental Obligations, Form 8038 -G (this action will
be the primary responsibility of Bond Counsel).
(c) The Executive Director shall prepare an "allocation memorandum" for each issue
of tax- exempt governmental bonds in accordance with the provisions of Treasury Regulations,
Section 1.148- 6(d)(1), that accounts for the allocation of the proceeds of the tax - exempt bonds to
expenditures not later than the earlier of
(i) eighteen (18) months after the later of (A) the date the expenditure is
paid, or (B) the date the project, if any, that is financed by the tax - exempt bond issue is
placed in service; or
(ii) the date sixty (60) days after the earlier of (A) the fifth anniversary of the
issue date of the tax - exempt bond issue, or (B) the date sixty (60) days after the
retirement of the tax- exempt bond issue.
Preparation of the allocation memorandum will be the primary responsibility of the Executive
Director (in consultation with Bond Counsel, and, if employed with respect to the tax - exempt
issue, the Municipal Advisor).
(d) The Executive Director, in consultation with Bond Counsel, shall identify
proceeds of tax- exempt governmental bonds that must be yield- restricted and shall monitor the
investments of any yield - restricted funds to ensure that the yield on such investments does not
exceed the yield to which such investments are restricted.
(e) In consultation with Bond Counsel, the Executive Director shall determine
whether the Authority is subject to the rebate requirements of Section 148(f) of the Code with
respect to each issue of tax - exempt governmental bonds. In consultation with Bond Counsel, the
Executive Director shall determine, with respect to each issue of tax - exempt governmental bonds
of the Authority, whether the Authority is eligible for any of the temporary periods for
unrestricted investments and is eligible for any of the spending exceptions to the rebate
requirements. The Executive Director shall contact the Rebate Analyst (and, if appropriate, Bond
Counsel) prior to the fifth anniversary of the date of issuance of each issue of tax- exempt
governmental bonds of the Authority and each fifth anniversary thereafter to arrange for
calculations of the rebate requirements with respect to such tax- exempt governmental bonds. If a
rebate payment is required to be paid by the Authority, the Executive Director shall prepare or
cause to be prepared the Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage
Rebate, Form 8038 -T, and submit such Form 8038 -T to the IRS with the required rebate payment.
If the Authority is authorized to recover a rebate payment previously paid, the Executive Director
shall prepare or cause to be prepared the Request for Recovery of Overpayments Under Arbitrage
Rebate Provisions, Form 8038 -R, with respect to such rebate recovery, and submit such
Form 8038 -R to the IRS.
4. Procedures for Monitoring, Verification, and Inspections. The Executive Director shall
institute such procedures as the Executive Director shall deem necessary and appropriate to monitor the
4806570 MNI CL205 -63 2
use of the proceeds of tax- exempt governmental bonds issued by the Authority, to verify that certain post -
issuance compliance actions have been taken by the Authority, and to provide for the inspection of the
facilities financed with the proceeds of such bonds. At a minimum, the Executive Director shall establish
the following procedures:
(a) The Executive Director shall monitor the use of the proceeds of tax - exempt
governmental bonds to: (i) ensure compliance with the expenditure and investment requirements
under the temporary period provisions set forth in Treasury Regulations, Section 1.148 -2(e);
(ii) ensure compliance with the safe harbor restrictions on the acquisition of investments set forth
in Treasury Regulations, Section 1.148 -5(d); (iii) ensure that the investments of any yield -
restricted funds do not exceed the yield to which such investments are restricted; and
(iv) determine whether there has been compliance with the spend -down requirements under the
spending exceptions to the rebate requirements set forth in Treasury Regulations,
Section 1.148 -7.
(b) The Executive Director shall monitor the use of all bond-financed facilities in
order to: (i) determine whether private business uses of bond - financed facilities have exceeded
the de minimus limits set forth in Section 141(b) of the Code as a result of leases and subleases,
licenses, management contracts, research contracts, naming rights agreements, or other
arrangements that provide special legal entitlements to nongovernmental persons; and
(ii) determine whether private security or payments that exceed the de minimus limits set forth in
Section 141(b) of the Code have been provided by nongovernmental persons with respect to such
bond - financed facilities. The Executive Director shall provide training and educational resources
to any Authority staff who have the primary responsibility for the operation, maintenance, or
inspection of bond - financed facilities with regard to the limitations on the private business use of
bond-financed facilities and as to the limitations on the private security or payments with respect
to bond - financed facilities.
(c) The Executive Director shall undertake the following with respect to each
outstanding issue of tax - exempt governmental bonds of the Authority: (i) an annual review of the
books and records maintained by the Authority with respect to such bonds; and (ii) an annual
physical inspection of the facilities financed with the proceeds of such bonds, conducted by the
Executive Director with the assistance of any Authority staff who have the primary responsibility
for the operation, maintenance, or inspection of such bond - financed facilities.
5. Record Retention Requirements. The Executive Director shall collect and retain the
following records with respect to each issue of tax - exempt governmental bonds of the Authority and with
respect to the facilities financed with the proceeds of such bonds: (i) audited financial statements of the
Authority; (ii) appraisals, demand surveys, or feasibility studies with respect to the facilities to be
financed with the proceeds of such bonds; (iii) publications, brochures, and newspaper articles related to
the bond financing; (iv) trustee or paying agent statements; (v) records of all investments and the gains (or
losses) from such investments; (vi) paying agent or trustee statements regarding investments and
investment earnings; (vii) reimbursement resolutions and expenditures reimbursed with the proceeds of
such bonds; (viii) allocations of proceeds to expenditures (including costs of issuance) and the dates and
amounts of such expenditures (including requisitions, draw schedules, draw requests, invoices, bills, and
cancelled checks with respect to such expenditures); (ix) contracts entered into for the construction,
renovation, or purchase of bond - financed facilities; (x) an asset list or schedule of all bond - financed
depreciable property and any depreciation schedules with respect to such assets or property; (xi) records
of the purchases and sales of bond - financed assets; (xii) private business uses of bond - financed facilities
that arise subsequent to the date of issue through leases and subleases, licenses, management contracts,
research contracts, naming rights agreements, or other arrangements that provide special legal
4806570 MNI CL205 -63 3
entitlements to nongovernmental persons and copies of any such agreements or instruments;
(xiii) arbitrage rebate reports and records of rebate and yield reduction payments; (xiv) resolutions or
other actions taken by the governing body subsequent to the date of issue with respect to such bonds;
(xv) formal elections authorized by the Code or Treasury Regulations that are taken with respect to such
bonds; (xvi) relevant correspondence, including letters, faxes or emails, relating to such bonds;
(xvii) documents related to guaranteed investment contracts or certificates of deposit, credit enhancement
transactions, and financial derivatives entered into subsequent to the date of issue; (xviii) bidding of
financial products for investment securities; (xix) copies of all Form 8038 -Ts, Form 8038 -Rs, and
Form 8038 -CPs filed with the IRS and any other forms or documents filed with the IRS; (xx) the
transcript prepared with respect to such tax- exempt governmental bonds, including but not limited to
(a) official statements, private placement documents, or other offering documents, (b) minutes and
resolutions, orders, or ordinances or other similar authorization for the issuance of such bonds, and
(c) certification of the issue price of such bonds; and (xxi) documents related to government grants
associated with the construction, renovation, or purchase of bond - financed facilities.
The records collected by the Executive Director shall be stored in any format deemed appropriate
by the Executive Director and shall be retained for a period equal to the life of the tax- exempt
governmental bonds with respect to which the records are collected (which shall include the life of any
bonds issued to refund any portion of such tax- exempt governmental bonds or to refund any refunding
bonds) plus three (3) years. The Executive Director shall also collect and retain reports of any IRS
examination of the Authority or any of its bond financings.
6. Remedies. In consultation with Bond Counsel, the Executive Director shall become
acquainted with the remedial actions (including redemption or defeasance) under Treasury Regulations,
Section 1.141 -12, to be utilized in the event that private business use of bond - financed facilities exceeds
the de minimus limits under Section 141(b)(1) of the Code. In consultation with Bond Counsel, the
Executive Director shall become acquainted with the Tax Exempt Bonds Voluntary Closing Agreement
Program described in Notice 2008 -31, 2008 -11 I.R.B. 592, to be utilized as a means for an issuer to
correct any post - issuance infractions of the Code and Treasury Regulations with respect to outstanding
tax - exempt bonds.
7. Continuing Disclosure Obligations. In addition to its post- issuance compliance
requirements under applicable provisions of the Code and Treasury Regulations, the Authority has agreed
to provide continuing disclosure, such as annual financial information and material event notices,
pursuant to a continuing disclosure certificate or similar document (the "Continuing Disclosure
Document ") prepared by Bond Counsel and made a part of the transcript with respect to each issue of
bonds of the Authority that is subject to such continuing disclosure requirements. The Continuing
Disclosure Documents are executed by the Authority to assist the underwriters of the Authority's bonds in
meeting their obligations under Securities and Exchange Commission Regulation, 17 C.F.R.
Section 240.15c2 -12, as in effect and interpreted from time to time ( "Rule 15c2 -12 "). The continuing
disclosure obligations of the Authority are governed by the Continuing Disclosure Documents and by the
terms of Rule 15c2 -12. The Executive Director is primarily responsible for undertaking such continuing
disclosure obligations and to monitor compliance with such obligations.
8. Other Post - Issuance Actions. If, in consultation with Bond Counsel, Municipal Advisor,
Paying Agent, Rebate Analyst, the Executive Director, the Authority Attorney, or the Board of
Commissioners, the Executive Director determines that any additional action not identified in this Policy
must be taken by the Executive Director to ensure the continuing tax - exempt status of any issue of
governmental bonds of the Authority, the Executive Director shall take such action if the Executive
Director has the authority to do so. If, after consultation with Bond Counsel, Municipal Advisor, Paying
Agent, Rebate Analyst, the Executive Director, the Authority Attorney, or the Board of Commissioners,
450657A MNI CL205 -63 4
the Executive Director and the Executive Director determine that this Policy must be amended or
supplemented to ensure the continuing tax- exempt status of any issue of governmental bonds of the
Authority, the Executive Director shall recommend to the Board of Commissioners that this Policy be so
amended or supplemented.
9. Taxable Governmental Bonds. Most of the provisions of this Policy, other than the
provisions of Section 7, are not applicable to governmental bonds the interest on which is includable in
gross income for federal income tax purposes. However, if an issue of taxable governmental bonds is
later refunded with the proceeds of an issue of tax - exempt governmental refunding bonds, then the uses of
the proceeds of the taxable governmental bonds and the uses of the facilities financed with the proceeds
of the taxable governmental bonds will be relevant to the tax - exempt status of the governmental refunding
bonds. Therefore, if there is any reasonable possibility that an issue of taxable governmental bonds may
be refunded, in whole or in part, with the proceeds of an issue of tax - exempt governmental bonds, for
purposes of this Policy, the Executive Director shall treat the issue of taxable governmental bonds as if
such issue were an issue of tax - exempt governmental bonds and shall carry out and comply with the
requirements of this Policy with respect to such taxable governmental bonds. The Executive Director
shall seek the advice of Bond Counsel as to whether there is any reasonable possibility of issuing tax -
exempt governmental bonds to refund an issue of taxable governmental bonds.
10. Qualified 501(c)(3) Bonds. If the Authority issues bonds to finance a facility to be
owned by the Authority but which may be used, in whole or in substantial part, by a nongovernmental
organization that is exempt from federal income taxation under Section 501(a) of the Code as a result of
the application of Section 501(c)(3) of the Code (a "501(c)(3) Organization'), the Authority may elect to
issue the bonds as "qualified 501(c)(3) bonds" the interest on which is exempt from federal income
taxation under Sections 103 and 145 of the Code and applicable Treasury Regulations. Although such
qualified 501(c)(3) bonds are not governmental bonds, at the election of the Executive Director, for
purposes of this Policy, the Executive Director shall treat such issue of qualified 501(c)(3) bonds as if
such issue were an issue of tax - exempt governmental bonds and shall carry out and comply with the
requirements of this Policy with respect to such qualified 501(c)(3) bonds.
450657v1 MNI CL205 -63
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-15
RESOLUTION APPROVING POST- ISSUANCE COMPLIANCE
PROCEDURE AND POLICY FOR TAX- EXEMPT
GOVERNMENTALBONDS
BE IT RESOLVED By the Board of Commissioners (the `Board of Commissioners ") of the
Columbia Heights Economic Development Authority, a body corporate and politic and political subdivision
of the State of Minnesota (the "Authority "), as follows:
Section 1. Recitals.
1.01. The Authority from time to time issues tax- exempt governmental bonds to finance various
public capital improvements.
1.02. Under Sections 103 and 140 to 150 of the Internal Revenue Code of 1986, as amended (the
"Code ") and related regulations, the Authority is required to take certain actions after the issuance of such
bonds to ensure that interest on those bonds remains tax- exempt.
1.03. The Authority has determined to adopt written procedures regarding how the Authority will
carry out its bond compliance responsibilities, and to that end has caused to be prepared a document titled
Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds (the "Policy ").
1.04. The Board of Commissioners has reviewed the Policy has determined that it is in the best
interest of the Authority to adopt the Policy.
Section 2. Policy Approved.
2.01. The Board of Commissioners approves the Policy in substantially the form on file with the
Executive Director.
2.02. Authority staff are authorized to take all actions necessary to carry out the Policy.
Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this
131° day of June, 2016.
President
ATTEST:
Secretary
480658v1 MNI CI205 -63
CH COLUMBIA
HEIGHTS
AGENDA SECTION
PUBLIC HEARING
ITEM NO.
6
MEETING DATE
JUNE 13, 2016
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
ITEM:
Scattered Site TIF District — Consideration of Lot Sale Authorization 40115`° Street
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Keith M Dahl, June 9, 2016
BY /DATE:
BACKGROUND:
Over the years, the Columbia Heights Economic Development Authority (EDA) has acquired property within
the City of Columbia Heights for economic development purposes. In 2009, the EDA approved the "Scattered
Site Housing Program" in an effort to address foreclosure issues and remediate the emergence of blight within
Columbia Height's neighborhoods. The program was setup to purchase blighted residential properties,
demolish the house, and then sell the vacant lots to families seeking new construction of single - family homes.
In 2013, the EDA approved Resolution 2013 -07, a resolution approving plan for conveyance of certain
scattered site lots owned by the EDA. The EDA intended to convey twelve properties to contractors that will
construct homes, and to that end has engaged the services of Re /Max Synergy through an Exclusive Right to
Sell Listing Contract. The property located at 40115th Street Columbia Heights, MN 55421 is one of the twelve
properties intended to be conveyed to a contractor, however the aforementioned property was and is owned
by the City. In order for the EDA to convey this property to Timbercraft, the City needs to approve Ordinance
1631 conveying 4011 5th Street from the City to the EDA.
Initially, Timbercraft wanted to close on this property on May 25, 2016, however while preparing closing
documents it was determined that the EDA was not the fee owner. Timbercraft has a buyer for the subject
property and wants to close on this as soon as possible for construction to begin late spring/ early fall.
The resolution before the EDA tonight is approving a Purchase and Redevelopment Agreement between the
EDA and Timbercraft for the property located at 40115 1h Street that is contingent upon the City of Columbia
Heights transferring title of the property to the EDA.
STAFF RECOMMENDATION:
Staff recommends approval of Resolution 2016 -16, authorizing approval of the Purchase and Redevelopment
Agreement with Timbercraft Enterprises Inc. for the conveyance of 40115 th Street, Columbia Heights, MN
55421.
RECOMMENDED MOTION(S):
Motion: Move to waive the reading of Resolution 2016 -16, there being ample copies available to the public.
Motion: Move to adopt Resolution 2016 -16, Resolution approving a Purchase and Redevelopment
Agreements with Timbercraft Enterprises Inc. for the conveyance of 40115 th Street, Columbia Heights, MN
55421.
ATTACHMENTS:
1. Resolution 2016 -16
2. Purchase Agreement
City of Columbia Heights - EDA Letter
AMENDED AND RESTATED
PURCHASE AND REDEVELOPMENT AGREEMENT
4011 5'h Street, Columbia Heights, Minnesota
1. Parties. This Purchase Agreement is made as of , 2016 (the
"Agreement') between the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY, a public body corporate and politic under the laws of Minnesota having its
office located at 590 40TH Avenue NE, Columbia Heights, MN (the "Seller'), and
TimberCraft Enterprises, hie., a Minnesota corporation (the `Buyer'). This Agreement amends
and supersedes the Purchase and Redevelopment Agreement between Seller and Buyer dated
May 7, 2016 in all respects.
2. Offer /Acceptance. Buyer offers to purchase and Seller agrees to sell real property legally
described as follows (the "Property):
Lot 18, Block 52, Columbia Heights Annex to Minneapolis, Anoka County,
Minnesota.
The sale of the Property by Seller to Buyer is expressly contingent upon the
conveyance of the Property by the City of Columbia Heights to Seller.
3. Price and Terms. The price for the Property is Seven Thousand Five Hundred Dollars
($7,500.00) which Buyer shall pay as follows: Earnest money of $500.00 by cla=ck, receipt of
which is hereby acknowledged by Seller, and the balance of $7,000.00 to be paid by certified
check on the Date of Closing. The "Date of Closing" shall be , or such other
earlier or later date as the parties mutually agree.
4. Personal Property Included in Sale. There are no items of personal property or fixtures
owned by Seller and currently located on the Property for purposes of this sale.
5. Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title to the
Property to Buyer, in substantially the form attached as Exhibit A (the "Deed').
480938vl CL205 -49
6. Real Estate Taxes and Special Assessments. The parties agree and understand that the
Property is exempt from real estate taxes for taxes payable in the current year. Seller shall pay
on Date of Closing all special assessments levied against the Property as of the date of this
Agreement, including those certified for payment with taxes due and payable in 2016. Seller
represents that there are no special assessments pending as of the date of this Agreement. If
special assessment becomes pending after the date of this Agreement and before the Date of
Closing, Buyer may, as Buyer's option:
A. Assume payment of the pending special assessment without adjustment to the purchase
Agreement price of the Property, or
B. Require Seller to pay the pending special assessment and Buyer shall pay a
conmrensurate increase in the purchase price of the Property, which increase shall be
the same as the estanated amount of the assessment; or
C. Declare this Agreement will and void by notice to Seller, and earnest money shall be
refinnded to Buyer.
7. Closing Costs and Related Items. The Seller shall be responsible for the following costs: (a)
recording fees and conservation fees for all instruments required to establish marketable title in
Seller; (b) deed transfer taxes and conservation fees required to be paid in connection with the
Deed be given by Seller; and (c) Seller's broker fees. Buyer shall be responsible for the
payment of the following costs: (d) recording fees required to be paid in connection with the
Deed to be given by Seller; (e) the cost of the registered property abstract or updated abstract,
or in the absence of an abstract, and the premium for an owner's policy of title insurance, and
(1) closing fee, if any. Each party shall be responsible for its own attorneys' fees and costs.
8. Sewer and Water. Seller wan•ants that city sewer is available at the Property fine, and that city
water is available in the right of way adjacent to the Property. Seller makes no warranty
regarding the conditions of any existing water stub from the main to the Property fine. Seller
advises Buyer to inspect the condition of the water stub.
9. Condition of Property. Buyer acknowledges that they have inspected or have had the
opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has the
right, at its own expense to take soil samples for the purpose of determining if the soil is suitable
for construction of the dwelling described in section 14 below. If the soil is determined to be
unacceptable the Buyer may rescind this Agreement by written notice to the Seller, in which
case the Agreement shall be null and void and all earnest money paid hereunder shall be
ref ended to the Buyer. Seller makes no warranties as to the condition of the Property.
10. Marketability of Title. As soon as reasonably practicable after the date of this Agreement,
Seller shall funissh to Buyer a registered property abstract or an updated abstract oftitle to the
Property, certified to date to include proper searches covering bankruptcies, state and federal
2
480938v1 CL205 -49
judgment and liens. In the absence of an abstract of title, the Seller will provide a title
commihnent and title insurance. Buyer shall have fifteen (15) business days after receipt of the
abstract or title commitment to examine the same and to deliver written objections to title, if any,
to Seller. Seller shall have the greater of (u) the number of days remaining until the Date of
Closing or (n) thirty (30) days to have such objections removed or satisfied.
11. Title Clearance and Remedies. If Seller shall fall to have title objections timely
removed, the Buyer may, at its sole election (a) terminate this Agreement without any liability on
its part; in which event the earnest money shall be promptly refianded in exchange for a quit
claim deed to the Property from Buyer; or (b) take title to the Property subject to such
objections.
If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the
Agreements herein, Seller may elect either of the following options, as permitted by law:
A. Cancel this Agreement as provided by statute and retain all payments made hereunder
as liquidated damages. The parties acknowledge their intention that airy note given
pursuant to this contract is a down payment note, and may be presented for payment
notwithstanding cancellation;
B. Seek specific performance within six months after such right of action arises, including
costs and reasonable attorney's fees, as permitted by law.
If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the
Agreements herein, Buyer may, as permitted by law:
C. Seek damages from Seller including costs and reasonable attorneys fees;
D. Seek specific performance within six months after such right of action arises.
12. Well Disclosure. Seller certifies that Seller does not know of any wells on the Property.
13. Individual Sewage Treatment System Disclosure. Seller certifies that there is no individual
sewage treatment system on or serving the Property.
14. Construction and Sale of Dwelling. Buyer agrees that it will construct a new single fannly
dwelling on the Property, intended for sale to a person or persons for residential occupancy (an
"Owner Occupant'). This covenant shall survive the delivery ofthe Deed.
A. The single family dwelling described in this Section is referred to as the "Minimum
Improvements."
480938v1 CL205 -49
B. The Minimum Improvemertts shall consist of a house with approximately 1248 square
feet, 3 bedrooms, and shall be constructed substantially in accordance with the
Scattered Site Housing Program Design Requirements on file in City Hall Construction
plans must be approved by the Conn utity Development Department prior to
commencement of construction Construction of the Minimum Improvements must be
substantially completed by December 31, 2016. Construction will be considered
substantially complete when the final certificate of occupancy has been issued by the
City of Columbia Heights building official
C. Promptly after substantial completion of the Minimum hnprovements in accordance with
those provisions of the Agreement relating solely to the obligations of the Buyer to
construct such Minimum Improvements (including the date for completion thereol), the
Seller will fimtish the Buyer with a Certificate of Completion, in substantially the form
attached hereto as Exhibit B, for such improvements. Such certification by the Seller
shall be (and it shall be so provided in the Deed and in the certification itself) a
conclusive determination of satisfaction and termination of the Agreements and
covenants in the Agreement and in the Deed with respect to the obligations of the Buyer
and its successors and assigns, to constraint the Minimum Improvements and the dates
for completion thereof
The certificate provided for in this Section of this Agreement shall be in such form as win
enable it to be recorded in the proper office for the recordation of deeds and other
instruments pertaining to the Property. If the Seller shall refuse or fail to provide any
certification in accordance with the provisions of this Section, the Seller shall, within
thirty (30) days after written request by the Buyer, provide the Buyer with a written
statement, indicating in adequate detail in what respects the Buyer has failed to complete
the Mi in mi Improvements in accordance with the provisions of the Agreement, or is
otherwise in default, and what measures or acts it Will be necessary, in the opinion of the
Seller for the Buyer to take or perform in order to obtain such certification
D. The Buyer represents and agrees that until issuance of the Certificate of Completion for
the Minimum Improvements:
(1) Except for any sale to an Owner Occupant, the Buyer has not made or
created and will not make or create or suffer to be made or created any total or partial
sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other
mode or form of or with respect to this Agreement or the Property or any part thereof
or any interest therein, or any contract or Agreement to do any of the same, to any
person or entity (collectively, a `Transfer'), without the prior written approval of the
Seller's board of commissioners. The term "Transfer" does not include encumbrances
made or granted by way of security for, and only for, the purpose of obtaining
construction, interim or permanent financing necessary to enable the Buyer or any
4
480938v1 CL205 -49
successor in interest to the Property, or any part thereof; to construct the Mininn m
Improvements or component thereof
(2) If the Buyer seeks to effect a Transfer to any person or entity other than
an Owner Occupant prior to issuance of the Certificate of Completion, the Seller shall
be entitled to require as conditions to such Transfer that:
(r) any proposed transferee shall have the qualifications and
financial responsibility, in the reasonable judgment of the Seller, necessary and
adequate to RM the obligations undertaken in this Agreement by the Buyer as
to the portion of the Property to be transferred; and
(u) Arty proposed transferee, by instrument in writing satisfactory to
the Seller and in form recordable in the public land records of Anoka County,
Minnesota, shall, for itself and its successors and assigns, and expressly for the
benefit of the Seller, have expressly assumed all of the obligations of the Buyer
under this Agreement as to the portion of the Property to be transferred and
agreed to be subject to all the conditions and restrictions to which the Buyer is
subject as to such portion; provided, however, that the fact that any transferee
of or any other successor in interest whatsoever to, the Property, or any part
thereof; shall riot, for whatever reason, have assumed such obligations or so
agreed, and shall not (unless and only to the extent otherwise specifically
provided in this Agreement or agreed to in writing by the Seller) deprive the
Seller of any rights or remedies or controls with respect to the Property, the
Mininaun Improvements or any part thereof or the construction of the Mininnnn
Improvements; it being the intent of the parties as expressed in this Agreement
that (to the Ulest extent permitted at law and in equity and excepting only in the
mariner and to the extent specifically provided otherwise in this Agreement) no
transfer of or change with respect to, ownership in the Property or any part
thereof; or any interest therein, however consummated or occurrurg, and
whether voluntary or involuntary, shall operate, legally, or practically, to deprive
or limit the Seller of or with respect to any rights or remedies on controls
provided in or resulting from this Agreement with respect to the Property that
the Seller would have had, had there been no such transfer or change. In the
absence of specific written Agreement by the Seller to the contrary, no such
transfer or approval by the Seller thereof shall be deemed to relieve the Buyer,
or any other party bond in any way by this Agreement or otherwise with
respect to the Property, from any of its obligations with respect thereto.
(iu) Any and all instnanents and other legal documents involved in
effecting the transfer of any interest in this Agreement or the Property governed
by this subsection E. shall be in a form reasonably satisfactory to the Seller.
5
480938A CL205 -49
(3) If the conditions described in paragraph (2) above are satisfied then the
Transfer will be approved and the Buyer shall be released from its obligation under this
Agreement, as to the portion of the Property that is transferred, assigned, or otherwise
conveyed. The provislons of this paragraph (3) apply to all subsequent transferors.
(4) Upon issuance of the Certificate of Completion, the Buyer may Transfer
the Property and/or the Buyer's rights and obligations under this Agreement with respect
to such Property without the prior written consent of the Seller [, except to the extent
required under paragraph F of this Section].
E. The Buyer, and its successors and assigns, agree that they (a) will use the Minimum
Improvements only as a single fiunily dwelling, and in the case of an Owner Occupant,
will occupy the Property as a residence, (b) will not rent the Property to any person or
entity, (c) will not seek exemption from real estate taxes on the Property under State
law, and (d) will not transfer or permit transfer of the Property to any entity whose
ownership or operation of the Property would result in the Property being exempt from
real estate taxes under State law (other than any portion thereof dedicated or conveyed
to the City of Columbia Heights or Seller in accordance with this Agreement). The
covenants in this paragraph nur with the land, survive both delivery of the Deed and
issuance of the Certificate of Completion for the Minimum hnprovements, and shall
remain in effect for ten years after the Date of Closing.
F. The Buyer shall use its best efforts to convey the Property (either before or after
issuance of the Certificate of Completion) to an Owner Occupant whose household
income does not exceed (a) 100% of median income in the case of one or two person
household Owner Occupants, or (b) 115% of median income in the case of three or
more person Owner Occupants. The term `Sredian income" means the median income
in the seven -county metropolitan area, or the State as a whole, whichever is greater,
using income data available from the Minnesota Housing Finance Agency as of the date
of closing on sale to the Owner Occupant. Prior to closing on sale the Property by
Buyer to an Owner Occupant, Buyer shall:
(1) Notify the Seller in writing whether the proposed Owner Occupant will meet
the income qualifications under this paragraph; and
(2) If the proposed Owner Occupant will not meet the income limits, describe
Buyer's efforts to find an income- qualified buyer; and
(2) If the proposed Owner Occupant will meet the income limits, submit to
Seller evidence of Owner Occupant's income in a form satisfactory to Seller, evidencing
compliance with the income lurits described above. The covenant in this Section
applies only to the first sale of the Property to an Owner Occupant, and does not apply
to any subsequent sale by an Owner Occupant to any other person or party.
6
480938v1 CL205 -49
15. Revestiug Title in Seller upon Happening of Event Subsequent to Conveyance to
Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the
Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum
Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fads to carry
out its obligations with respect to the construction of the Minimum Improvements (including the
nature and the date for the completion thereof), or abandons or substantially suspends
construction work, and any such failure, abandonment, or suspension shall not be cured, ended,
or remedied within thirty (30) days after written demand from the Seller to the Buyer to do so,
then the Seller shall have the right to re -enter and take possession of the Property and to
terminate (and revest in the Seller) the estate conveyed by the Deed to the Buyer, it being the
intent of this provision, together with other provisions of the Agreement, that the conveyance of
the Property to the Buyer shall be made upon, and that the Deed shall contain a condition
subsequent to the efti;ct that in the event of any default on the part of the Buyer and failure on
the part of the Buyer to remedy, end, or abrogate such default within the period and in the
manner stated in such subdivisions, the Seller at its option may declare a temiration in favor of
the Seller of the title, and of all the rights and interests in and to the Property conveyed to the
Buyer, and that such title and all rights and interests of the Buyer, and any assigns or successors
in interest to and in the Property, shall revert to the Seller, but only if the events stated in this
Section have not been cured within the time periods provided above.
Notwithstanding anything to the contrary contained in this Section, the Seller shall have no right
to reenter or retake title to and possession of portion of the Property for which a Certificate of
Completion has been issued.
For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the
reasonable control of the Buyer as a result thereof which are the direct result of strikes, other
labor troubles, prolonged adverse weather or acts of God, free or other casualty to the Minurnan
Improvements, litigation commenced by third parties which, by injunction or other similar
judicial action, directly results in delays, or acts of any federal, state or local governmental unit
(other than the Seller in exercising its rights ruder this Agreement) which directly results in
delays. Unavoidable Delays shall not include delays in the Buyer's obtaining of permQs or
govemmental approvals necessary to enable construction of the Minimum Improvements by the
dates such construction is required under this section of this Agreement.
16. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Seller
of title to and/or possession of the Property or arry part thereof as provided in Section 16, the
Seller shall apply the purchase price paid by the Buyer under Section 4 of this Agreement as
follows:
(a) First, to reimburse the Seller for all costs and expenses incurred by the Seller, including
but not limited to proportionate salaries of personnel, in connection with the recapture,
management, and resale of the Property or part thereof (but less any income derived by
7
480938v1 CL205 -49
the Seller from the Property or part thereof in connection with such management); an
taxes, assessments, and water and sewer charges with respect to the Property or part
thereof (or, in the event the Property is exempt from taxation or assessment or such
charge during the period of ownership thereof by the Seller, an amount, ifpaid, equal to
such taxes, assessments, or charges (as determined by the Seller assessing official) as
would have been payable if the Property were not so exempt); any payments made or
necessary to be made to discharge any encurrbrances or liens existing on the Property
or part thereof at the time of revestmg of title thereto in the Seller or to discharge or
prevent from attaching or being made any subsequent encumbrances or liens due to
obligations, defaults or acts ofthe Buyer, its successors or transferees; any expenditures
made or obligations incurred with respect to the making or completion of the Minimum
Improvements or any part thereof on the Property or part thereof and any amounts
otherwise owing the Seller by the Buyer and its successor or transferee; and
(b) Second, to reimburse the Buyer for the balance of the purchase price remaining after the
reimbursements specified in paragraph (a) above. Such reimbursement chaff be paid to
the Buyer upon delivery of an executed, recordable warranty deed to the Property by
the Buyer to the Seller.
17. Time is of the essence for all provisions of this contract.
18. Notices. All notices required herein shall be in writing and delivered personally or mailed to the
address shown at paragraph I above and, if mailed, are effective as of the date of mail*.
19. Minnesota Law. This contract shall be governed by the laws of the State of Minnesota.
20. Specific Performance. This Agreement may be specifically enforced by the parties, provided
that an action is brought within one year of the date of alleged breach of this Agreement.
21. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or Buyer
is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission
to exercise any right or power accruing upon any default shall in pair any such right or power or
shall be construed to be a waiver thereof; but any such right and power may be exercised from
time to time and as often as may be deemed expedient.
22. No Merger of Representations, Warranties. All representations and warranties contained
in this Purchase Agreement shall not be merged into any instruments ants or conveyance delivered at
closing, and the parties shall be bound accordingly.
23. Recording. This Agreement shall be filed of record with the Anoka County Registrar of Titles
or Office of Recorder, as the case may be. Buyer shall pay all recording costs.
480938vl CL205 -49
480938v1 CL205 -49
In witness of the foregoing, the parties have executed this Agreement on the year and date
written above.
SELLER: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
0
Its President
STATE OF MINNESOTA
} ss.
COUNTY OF ANOKA
0
Its Executive Director
The foregoing was acknowledged before me this day of 20_, by Gary
Peterson and Walter Febst, the President and Executive Director, respectively, of Columbia Heights
Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on
behalf of the public body corporate and politic.
Notary Public
BUYER: TIMBERCRAFT ENTERPRISES, INC.
By.
STATE OF MINNESOTA
} ss.
COUNTY OF ANOKA
The foregoing was acknowledged before me this
, the
Minnesota corporation, on behalf of the corporation
This document drafted by.
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
Minneapolis, MN 55402
10
480938vl CL205 -49
_ day of 20_, by
of TimberCraft Enterprises, Inc., a
Notary Public
11
480938v1 CL205 -49
EXHIBIT A
to
PURCHASE AND REDEVELOPMENT AGREEMENT
FORM OF QUIT CLAIM DEED
Deed Tax Due: $
ECRU
Date:
THIS INDENTURE, between the Columbia Heights Economic Development Authority, a
Minnesota, a public body corporate and politic (the "Grantor'), and , a Minnesota
(the "Grantee').
WITNESSETH, that Grantor, in consideration of the sum of $ and other good and
valaable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain,
quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land
lying and being in the County of Anoka and State of Minnesota described as follows, to -wit (such tract
or parcel of land is hereinafter referred to as the "Property'):
Lot 18, Block 52, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota.
Check here if part or all of the land is Registered (Torrens) a
To have and to hold the same, together with all the hereditaments and appurtenances thereunto
belonging.
SECTION 1.
It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions
and provisions of an Agreement recorded herewith entered into between the Grantor and Grantee on
the of , 20_, identified as "Amended and Restated Purchase and
Redevelopment Agreement" (hereafter referred to as the "Agreement') and that the Grantee shall not
convey this Property, or any part thereof; except as pemvtted by the Agreement until a certificate of
completion releasing the Grantee from certain obligations of said Agreement as to this Property or such
part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way
prevent the Grantee from mortgaging this Property in order to obtain fluids for the purchase of the
Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the
Agreement) in confontiily with the Agreement, any applicable development program and applicable
provisions of the zoning ordinance of the City of Columbia Heights, Minnesota, or for the refinancing of
the same.
A -I
480938v1 CL205 -49
It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to
completion the redevelopment of the Property through the construction of the Minurnun hnprovements
thereon, as provided in the Agreement.
Promptly after completion of the Mininnun Improvements in accordance with the provisions of
the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such
certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive
determination of satisfaction and termination of the Agreements and covenants of the Agreement and of
this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the
Minimurn Improvements and the dates for the beginning ing and completion thereof Such certification and
such detennimtion shall not constitute evidence of compliance with or satisfaction of arty obligation of
the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance
the purchase of the Property hereby conveyed or the Minun rn Improvements, or any part thereof
All certifications provided for herein shall be in such form as will enable them to be recorded
with the County Recorder, or Registrar ofTitles, Anoka County, Minnesota. If the Grantor shall refuse
or fall to provide any such certification in accordance with the provisions of the Agreement and this
Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee
with a written statement indicating in adequate detail in what respects the Grantee has failed to complete
the Minfi n rn hnprovements in accordance with the provisions of the Agreement or is otherwise in
default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to
take or perform in order to obtain such certification.
SECTION 2.
The Grantee's rights and interest in the Property are subject to the terms and conditions of
Sections 14A, 14B and 15 of the Agreement relating to the Grantor's right to re-enter and revest in
Grantor title to the Property under conditions specified therein, including but not limited to termination of
such right upon issuance of Certificate ofCompletion as defined in the Agreement.
SECTION 3.
The Grantee agrees for itself and its successors and assigns to or of the Property or arty part
thereof; hereinbefore described, that the Grantee and such successors and assigns shall comply with
Section 14E of the Agreement for a period often years after the date hereof
It is intended and agreed that the above and foregoing Agreements and covenants shall be
covenants running with the land for the respective terms herein provided, and that they shall, in any
event, and without regard to technical classification or designation, legal or otherwise, and except only
as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and
equity for the benefit and in favor o1; and enforceable by, the Grantor against the Grantee, its successors
and assigns, and every successor in interest to the Property, or any part thereof or any interest therein,
and any party in possession or occupancy of the Property or any part thereof
A -2
480938v1 CL205 -49
In amplification, and not in restriction ot; the provisions of the preceding section, it is intended
and agreed that the Grantor shall be deerned a beneficiary of the Agreements and covenants provided
herein, both for and in its own right, and also for the purposes of protecting the interest of the
connrnmity and the other parties, public or private, in whose favor or for whose benefit these
Agreements and covenants have been provided. Such Agreements and covenants shall rim in favor of
the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any
land or interest therein to, or in favor ot; which such Agreements and covenants relate. The Grantor
shall have the right, in the event of any breach of any such Agreement or covenant to exercise all the
rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings
to enforce the curing of such breach of Agreement or covenant, to which it or airy other beneficiaries of
such Agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter
the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure
to comply with its obligations under this Section 3.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf
by its President and Executive Director, the date written above.
[R] The Seller certifies that the Seller does
not know of arty wells on the described
real property.
❑ A well disclosure certificate
accorr>panies this document or has been
electronically filed. (If electronically
filed, insert WDC number.
❑ I am famrliar with the property described
in this instrument and I certify that the
status and number of wells on the
described real property have not
changed since the last previously fled
well disclosure certificate.
4809380 CL205 -49
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
A -3
By
Gary Peterson
Its President
By
Walter Febst
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF )
On this day of 2016, before me, a notary public within and for
County, personally appeared Gary Peterson and Walter Fehst to me personally known who by me duly
sworn, did say that they are the President and Executive Director, respectively, of the Col unbia Heights
Economic Development Authority (the "Authority) named in the foregoing mstnunent; that said
instnnnent was signed on behalf of said Authority pursuant to a resolution of its governing body, and
said Gary Peterson and Walter Fehst acknowledged said instnunent to be the free act and deed of said
Authority.
Notary Public
This instrument was drafted by: Tax Statements should be sent to:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612)337 -9300
A -4
480938v1 CL205 -49
I *1416 111.11 a
To
PURCHASE AND REDEVELOPMENT AGREEMENT
FORM OF CERTIFICATE OF COMPLETION
WHEREAS, the Columbia Heights Economic Development Authority, a public body, corporate
and politic (the "Grantor'), conveyed land in Anoka County, Minnesota to , a
(the "Grantee'), by a Deed recorded in the Office of the Courtly Recorder
[and in the Office of the Registrar of Titles] in and for the County ofAnoka and State of Minnesota, as
Document Numbers and , respectively;
and
WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections I and
2 of said Deed; and
WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a
nmanner deemed sufficient by the Grantor to permit the execution and recording of this certification;
NOW, THEREFORE, this is to certify that an building construction and other physical
improvements specified to be done and made by the Grantee have been completed and the above
covenants and conditions in said Deed and the Agreements and covenants in Sections 14A and 14B of
the Agreement (as described in said Deed) have been performed by the Grantee therein, and the
Courtly Recorder [and the Registrar of Titles] in and for the County of Anoka and State ofMnmesota
are hereby authorized to accept for recording and to record, the Sling of this instrument, to be a
conclusive determination of the satisfactory ternmumation of the covenants and conditions of Sections 14A
and 14B of the Agreement and the covenants and restrictions set forth in Sections 1 and 2 of said Deed;
provided that the covenants set forth in Sections 14E of the Agreement, and in Section 3 of the Deed,
remain in full force and effect through the period stated thereon
B -1
480938v1 CL205 -49
Dated: , 20
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMEN AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
The foregoing instnunent was acknowledged before me this day of
20_, by and , the President and Executive
Director, respectively, of the Columbia Heigbts Economy Development Authority, on behalf of the
authority.
Notary Public
This document drafted by:
KENNEDY & GRAVEN, CHARTERED
470 U.S. Bank Plana
Minneapolis, MN 55402
(612) 337 -9300
B-2
4809380 CL20549
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-16
RESOLUTION APPROVING A PURCHASE AND REDEVELOPMENT
AGREEMENT (INCLUDING THE SALE OF LAND) BETWEEN THE
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND
TIMBERCRAFT ENTERPRISES, INC.
BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights
Economic Development Authority ( "Authority ") as follows:
Section 1. Recitals.
1.01. The Authority has determined a need to exercise the powers of a housing and
redevelopment authority, pursuant to Minnesota Statutes, Sections 469.090 to 469.108 ( "EDA
Act "), and has previously established its Central Business District Redevelopment Project (the
"Project") within the City of Columbia Heights (the "City") and its City-Wide Scattered Site Tax
Increment Financing District (the "TIF District ") within the Project, and has developed program
design guidelines in connection with the construction of homes within the TIF District (the
"Guidelines ").
1.02. The Authority and TimberCraft Enterprises, hic. (the "Buyer ") have proposed to
enter into an Amended Purchase and Redevelopment Agreement (the "Contract "), setting forth the
terms and conditions of sale and redevelopment of certain property within the TIF District, currently
owned by the City, located at 4011 5d' Street NE and described as Lot 18, Block 52, Columbia
Heights Annex to Minneapolis, Anoka County, Minnesota (the "Property").
1.03. Pursuant to the Contract, the Buyer will acquire the Property and will construct a
single- family home, subject further to the Guidelines and to the City's zoning and building codes
and policies.
1.04. On this date, the City Council of the City is scheduled to consider an ordinance
approving the conveyance of the Property to the Authority (the "Ordinance "). The conveyance
of the Property by the Authority to the Buyer is contingent on the conveyance of the Property by
the City to the Authority.
1.05. The Authority has on this date conducted a duly noticed public hearing regarding the
sale of the Property to the Buyer, at which all interested persons were given an opportunity to be
heard.
1.06. The Authority finds and determines that conveyance of the Property to the Buyer has
no relationship to the City's comprehensive plan, in that no amendment or modification of the
comprehensive plan is required for the conveyance or redevelopment of the Property. The activities
of the parties under the Contract implement housing goals established for the TIF District pursuant
to the Tax Increment Financing Plan for the TIF District.
480983v1 MNICI205 -64
1.07. The Board has reviewed the Contract and finds that the execution thereof and
performance of the Authority's obligations thereunder are in the public interest and will further the
objectives of its general plan of economic development and redevelopment, because it will further
the above - stated housing goals.
Section 2. Authority Annroval: Further Proceedings.
2.01. The Contract as presented to the Board, including the sale of the Property described
therein, is hereby in all respects approved, subject to approval of the Ordinance by the City Council
and subject to modifications that do not alter the substance of the transaction and that are approved
by the President and Executive Director, provided that execution of the documents by such officials
shall be conclusive evidence of approval.
2.02. The President and Executive Director are hereby authorized to execute on behalf of
the Authority the Contract and any documents referenced therein requiring execution by the
Authority, including without limitation the deed, and to cant' out, on behalf of the Authority, its
obligations thereunder.
2.03. Authority and City staff are authorized and directed to take all actions to implement
the Contract.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 13th day of June, 2016.
President
ATTEST:
Secretary
480983A MNIC1205 -64 2