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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. EDA Minutes Page 2 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. EDA Minutes Page 3 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. EDA Minutes Page 4 June 13, 2016 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 EDA Minutes Page 5 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 EDA Minutes Page 6 June 13, 2016 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. EDA Minutes Page 7 June 13, 2016 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 EDA Minutes Page 8 June 13, 2016 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). EDA Minutes Page 9 June 13, 2016 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. EDA Minutes Page 10 June 13, 2016 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 EDA Minutes Page 11 June 13, 2016 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 EDA Minutes Page 12 June 13, 2016 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. EDA Minutes Page 13 June 13, 2016 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 th 13 day of June, 2016. President ATTEST: Secretary EDA Minutes Page 14 June 13, 2016 th 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 th 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 th 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 th 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 th 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, th 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