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HomeMy WebLinkAbout2021-54CITY OF COLUMBIA ItErGrrTS, MrI\N-ESOTA RESOLUTION NO.202I.54 RESOLUTION APPROVING LOAN DOCTIMENTS WITH ALATUS LLC BE IT RESOLVED by the City Council (the "City Council") of the City of Columbia Heights, Minnesota (the "City") as follows: Section 1. Recitals. 1.01. The Columbia Heights Economic Development Authority (the "Authority") desires to promote redevelopment of certain property within the City consisting of property owned by a third party and located at 4300 Central Avenue NE (the "Third-Party Parcel"), and property adjacent to the Third-Party Parcel and currently owned by the City (the "City Parcel," and together with the Third-Party Parcel, the "Property"). 1.02. The City Council and the Board of Commissioners of the Columbia Heights Economic Development Authority (the "Authority") have approved a tax increment financing plan (the "TIF Plan") for the Alatus TIF District (the "TIF District"), a redevelopment district located within the Downtown Central Business Redevelopment Project in the City (the "Redevelopment Project"), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"). The Property is located within the TIF District. 1.03. Alatus LLC, a Minnesota limited liability company (the "Borrower"), and the Authority have entered into a Preliminary Development Agreement with respect to the redevelopment of the Property for the construction of a mixed-use (multi-family residential and commercial) development thereon. 1.04. On July 12,2021, the City will approve the issuance of its Taxable General Obligation Temporary Tax Increment Bonds, Series 2021A (the "Bonds"), in the estimated principal amount of $6,000,000, to pay all or a portion of the public redevelopment costs incurred or to be incurred within the Redevelopment Project as identified in the TIF Plan. 1.05. In order to facilitate the acquisition of the Property by the Borrower, the Borrower has requested a bridge loan from the knder to finance a portion of the purchase price of the Property, costs of demolition, and costs associated with reports, and has agreed to pay the City's financing and other related costs related to issuing the Bonds and making the loan (the "City Costs") (collectively, the "Project Costs"), all of which are qualified public redevelopment costs reimbursable from tax increment. 1.06. The Borrower and the City have negotiated a loan agreement (the "Loan Agreement") in the form presented to the City Council, memorializing the terms and conditions of the Loan, and the City Council finds that the approval and execution thereof and performance of the City's obligations thereunder are in the best interest of the City and its residents. In addition, the Borrower and the City have negotiated an escrow agreement (the "Escrow Agreement") in the form presented to the City Council, pursuant to which an escrow agent will hold a portion of the Loan in escrow to be disbursed to the Borrower to pay for Project Costs. 1.07. The Borrower's repayment obligations with respect to the Loan will be evidenced by a Promissory Note (the "Promissory Note") by the Borrower in favor of the City, and the Promissory Note will be secured by a Mortgage (the "Mortgage") by the Borrower in favor of the City. Forms of the Promissory Note and the Mortgage have been presented to the City Council. CLl62-59-719418.v1 Section 2. Authoritv Approval: Other Proceedings. 2.01. The Loan Agreement and the Escrow Agreement as presented to the City Council are hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the Mayor and the City Manager, provided that execution of the Loan Agreement and the Escrow Agreement by such officials shall be conclusive evidence of approval. 2.02. The Mayor and the City Manager are hereby authorized to execute on behalf of the City the Loan Agreement, the Escrow Agreement, and any documents referenced therein requiring execution by the City, and to carry out on behalf of the City its obligations thereunder. 2.03. City staffand consultants are authorized to take any actions necessary to carry out the intent of this resolution. Approved this 28m day of June,2021, by the City Council of the City of Columbia Heights, Minnesota. Offered by: Novitsky Seconded by: Jacobs RollCall: AllAyes (- ATTEST: Nicole Tingley, City ww Secretary 2CLl62-59-719418.v1