HomeMy WebLinkAboutJune 13 2016 Special EDA Min
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE SPECIAL MEETING OF
JUNE 13, 2016
The meeting was called to order at 6:30 pm by Gary Peterson.
Members Present: Donna Schmitt, John Murzyn, Marlaine Szurek,, Bruce Nawrocki , Gerry
Herringer, Bobby Williams and Gary Peterson.
Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, Joe Kloiber, and Shelley
Hanson.
Also present: Martha Ingram from Kennedy & Graven and Frank Hogan from
Dougherty & Co.
PLEDGE OF ALLEGIANCE-
RECITED
BUSINESS ITEM
1.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.
th
Hogeboom explained that this issue was discussed at the June 6 meeting and that he had
provided the members with a report that provided 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.
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June 13, 2016
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 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. The actions being considered by the EDA and City Council on this date and Martha
Ingram ,an associate from Kennedy and Graven was present at both the EDA and the Council
meetings to answer any questions the EDA and/or City Council had about the legal documents,
the financial aspects of the process, or the contractual arrangement providing for this refunding.
A copy of the First Amendment to Paying Agent Agreement between Columbia Heights EDA
and Bond Trust Services Corp was included in the agenda packets for the members to review.
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June 6, 2016
Questions by members:
Nawrocki wanted confirmation that if the Tax Revenue doesn’t generate enough funds that the
City/EDA has no liability financially to the developer or bond holder. Ingram stated that is correct.
Herringer questioned the amount of interest accumulating on the outstanding note. Kloiber stated
that he can look up the exact amount for the members if they want it but the note is subordinate to
the bond and that by taking this action more money can be applied to the Note’s principal and
interest. He explained that once again the City/EDA is not responsible for the Note payments.
Motion by Williams, seconded by Nawrocki , to waive the reading of Resolution 2016-14, there
being ample copies available to the public. All ayes. MOTION PASSED.
Motion by Williams, seconded by Nawrocki, to adopt Resolution 2016-14, a 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. All ayes. MOTION PASSED.
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.
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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 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
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June 13, 2016
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
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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 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.
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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.
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
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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).
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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.
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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 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
th
Authority this 13 day of June, 2016.
__________________________________
Gary L. Peterson, President
Attest:
___________________________________
Walter R. Fehst, Executive Director
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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 Amount CUSIP Number
2017 $ 80,000 197690 AA8
2022 510,000 197690 AB6
2032 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
The redemption of the Bonds is contingent upon the
all interest on said Bonds will cease to accrue.
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.
BY ORDER OF THE BOARD OF COMMISSIONERS OF
Dated: ________________, 2016
THE COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By: /s/ Walter R. Fehst
Executive Director
Columbia Heights Economic Development Authority
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2.Approval of Post-Issuance Compliance Procedure and Policy for Tax-Exempt
Governmental Bonds- Resolution 2016-15
Ingram explained in a report that 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.
Ingram has prepared a model policy which, if implemented and followed, will meet IRS
requirements for post-issuance compliance. A copy was enclosed in the agenda packet. She
strongly recommended 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
Questions from members:
There were no questions or comments.
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Motion by Williams, seconded by Nawrocki, to waive the reading of Resolution 2016-15, there
being ample copies available to the public. All ayes MOTION PASSED.
Motion by Williams, seconded by Nawrocki, to adopt Resolution 2016-15, Resolution Approving
Post-Issuance Compliance Procedure and Policy for Tax-Exempt Governmental Bonds. All ayes.
MOTION PASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-15
RESOLUTION APPROVING POST-ISSUANCE COMPLIANCE
PROCEDURE AND POLICY FOR TAX-EXEMPT
GOVERNMENTAL BONDS
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
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13 day of June, 2016.
President
ATTEST:
Secretary
EDA Minutes
Page 14
June 13, 2016
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3. Consideration of Sale of Scattered Site Property Located at 4011 5 St-Resolution
2016-16
Dahl explained that over the last few 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 4011 5th
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 at this meeting is approving a Purchase and Redevelopment
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Agreement between the EDA and Timbercraft for the property located at 4011 5 Street that is
contingent upon the City of Columbia Heights transferring title of the property to the EDA, and
is enclosed in the agenda packet.
Staff recommends approval of Resolution 2016-16, authorizing approval of the Purchase and
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Redevelopment Agreement with Timbercraft Enterprises Inc. for the conveyance of 4011 5
Street, Columbia Heights, MN 55421.
Questions from members:
Dahl explained this is a housekeeping matter that makes the transfer to Timbercraft easier. The
scattered site program was set up by the EDA, and the exclusive right agreement with
Timbercraft is with the EDA, not the City. Ingram stated that if sold by the EDA, we have the
right of reverter clause if the developer doesn’t perform, and the City does not have that option
under State Law. Ingram told members that the proper language regarding the reverter clause
has been written into the documents regarding this property transfer.
EDA Minutes
Page 15
June 13, 2016
Dahl told members that out of the 12 sites that were part of this program, 10 have been sold, and
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this will be the 11. Timbercraft plans on constructing a home valued at $200,000 on this site.
Motion by Williams , seconded by Szurek , to waive the reading of Resolution 2016-16, there
being ample copies available to the public. All ayes. MOTION PASSED.
Motion by Williams, seconded by Szurek , to adopt Resolution 2016-16, Resolution approving a
Purchase and Redevelopment Agreements with Timbercraft Enterprises Inc. for the conveyance
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of 4011 5 Street, Columbia Heights, MN 55421. All ayes. MOTION PASSED.
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, Inc. (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,
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located at 4011 5 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.
EDA Minutes
Page 16
June 13, 2016
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.
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 Approval; 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 carry 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
EDA Minutes
Page 17
June 13, 2016
Hogeboom distributed plans that were submitted for the construction of the home at 4303 Reservoir
Blvd. The Planner has looked at the plans and the Building Official is now reviewing them so
construction can begin in the next few weeks. The home has an estimated value of $253,000 and
will be a 2 story home with an unfinished basement. It will have 2,100 finished square feet with the
potential of additional finished space, once the basement area is complete. Hogeboom stated the
house will face Reservoir Blvd and the garage will face the alley. It was noted that one sheet of the
plans depicting the upper floor was omitted, but Hogeboom thought there would be 4 bedrooms.
He will send that information to the members.
Hogeboom told members that the July meeting has been cancelled, as has the work session for the
City Council.
The meeting was adjourned at 7:48 pm.
Respectfully submitted,
Shelley Hanson
Secretary