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HomeMy WebLinkAbout02.24.2025 EDA Special Meeting SPECIAL ECONOMIC DEVELOPMENT AUTHORITY MEETING City Hall—Shared Vision Room, 3989 Central Ave NE Monday, February 24, 2025 5:30 PM MINUTES The meeting was called to order at 5:30 pm by President James. CALL TO ORDER/ROLL CALL Members present: Connie Buesgens; Laurel Deneen; Rachel James; Amáda Márquez-Simula; Justice Spriggs; Marlaine Szurek Members absent: Lamin Dibba Staff Present: Mitchell Forney, Community Development Director; Aaron Chirpich, City Manager; Sarah LaVoie, Administrative Assistant; Sara Ion, City Clerk; Emilie Voight, Community Development Coordinator PLEDGE OF ALLEGIANCE BUSINESS ITEMS 1. Approve Assignment of TIF Note and Redevelopment Agreement for Ratio Apartments Refinance. Chirpich reported as part of the City Hall/Ratio apartments redevelopment project, the City and the City’s Economic Development Authority (EDA) approved the establishment of the NE Business Center Redevelopment Tax Increment Financing District. This district was created to provide funding for demolition, site preparation, and public improvements included in the mixed-use development. The financial assistance provided to the developer of the project BPOZ Columbia Heights LLC (Alatus), was approved and articulated in a Purchase and Redevelopment Contract (Redevelopment Agreement) that was executed on behalf of the City and the EDA. In connection with this agreement, the EDA issued a Tax Increment Revenue Note (TIF Note) in the original principal amount of $9,550,000 in favor of the developer. This TIF note was issued in September of 2021 and ultimately assigned to Colliers Bank by Alatus. The note is interest bearing and it has accrued interest since being issued in 2021. No principle has been repaid at this time. The current outstanding principal balance of the note is $10,127,407. The TIF note is expected to begin reducing in principle at the end of 2026. The note has an expiration date of 2/1/2045. Chirpich mentioned currently, Alatus is in the process of refinancing the Ratio apartments portion of the project and securing a new primary mortgage. To facilitate the refinancing, Alatus has requested that the City and EDA consent to a Collateral Assignment of the TIF City of Columbia Heights MINUTES February 24, 2025 Special Economic Development Authority Meeting Page 2 note and Redevelopment Agreement to their new lender, Newpoint Real Estate Capital LLC. In practice, the consent to assignment will ensure that the new lender receives the TIF payments in place of Colliers and they will benefit from the performance outcomes and protections articulated in the Redevelopment Agreement. Chirpich explained that the refinance closing is scheduled for February 28 th and approval of the Consent to Assignment is required to take place before closing. This action is routine in nature and is beneficial to the overall health of the project. The authority to assign the TIF note, and agreement are fundamentally supported in the Redevelopment Agreement itself. The formal action contemplated in Resolution 2025-05 is meant to promote transparency for the EDA and public. Staff recommend approval of Resolution 2025-05, approving the Consent to Assignment of the TIF note and Redevelopment Agreement. Questions/Comments from Members: Spriggs asked what the final tax benefit would be after the TIF District expires. Chirpich replied it pays about $808,000 a year with the majority going to the developer and the City. Deneen asked for clarification on the City’s ownership areas as listed in the deed for City Hall. Chirpich confirmed that the City does not own the Wings Financial area or the parking garage. Motion by Buesgens, seconded by Deneen, to waive the reading of Resolution 2025-05, there being ample copies available to the public. All ayes of present. MOTION PASSED. Motion by Buesgens, seconded by Deneen, to approve Resolution 2025-05, a Resolution of the Columbia Heights Economic Development Authority approving an assignment of TIF note and redevelopment agreement. All ayes of present. MOTION PASSED. RESOLUTION NO. 2025-05 RESOLUTION APPROVING AN ASSIGNMENT OF TIF NOTE AND REDEVELOPMENT AGREEMENT WHEREAS, the City of Columbia Heights (the “City”) and the Columbia Heights Economic Development Authority (the “Authority”) have approved the establishment of NE Business Center Tax Increment Financing District (the “TIF District”), a redevelopment district, pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended; WHEREAS, the Authority has approved certain tax increment financial assistance pursuant to a Purchase and Redevelopment Contract, dated September 28, 2020 (the “Redevelopment Agreement”) with BPOZ Columbia Heights, LLC, a Delaware limited liability company (or certain affiliates thereof, collectively, the “Redeveloper”) in order to facilitate the Redeveloper’s plans in financing the construction on certain property within the TIF District described in Schedule A of the Redevelopment Agreement (the “Redevelopment Property”) of a mixed-use facility consisting of multifamily rental housing, space intended for conveyance to the City for use as a city hall (the “City Hall Component”), City of Columbia Heights MINUTES February 24, 2025 Special Economic Development Authority Meeting Page 3 and commercial space, along with associated structured and surface parking (collectively, the “Minimum Improvements”); and WHEREAS, in connection with the Redevelopment Agreement, the Authority issued a Tax Increment Revenue Note in the original principal amount of $9,550,000.00 in favor of the Redeveloper, dated as of September 8, 2021 (as amended, modified, consolidated or restated from time to time, the “Tax Increment Revenue Note”); and WHEREAS, the City and the Redeveloper are in the process of conveying the City Hall Component from the Redeveloper to the City; and WHEREAS, in connection with its refinancing of the Minimum Improvements, excluding the City Hall Component (hereinafter, the Minimum Improvements following conveyance of the City Hall Component shall refer to the “Project”), the Redeveloper has requested that the Authority and the City consent to a Collateral Assignment of Tax Increment Revenue Note and Redevelopment Agreement “Assignment”) by and between the Redeveloper and Newpoint Real Estate Capital LLC, a Michigan limited liability company (the “Lender”), pursuant to a Consent to Collateral Assignment of Tax Increment Revenue Note and Redevelopment Agreement (the “Consent”). NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority (the “Board”), as follows: 1.01. The Board hereby approves the Assignment and the Consent in substantially the forms presented to the Board, together with any related documents necessary in connection therewith, including but not limited to any agreements referred to therein, (collectively, the “Assignment Documents”) and hereby authorizes the President and Executive Director to execute any such Assignment Documents to which the Authority is a party, on behalf of the Authority, and to carry out, on behalf of the Authority, the obligations of the Authority thereunder when all conditions precedent thereto have been satisfied. 1.02. The approval hereby given to the Assignment Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the City or the Authority and by the officers authorized herein or by the City to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate officers of the Authority shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney or other legal counsel to the Authority, may act in their behalf. 1.03. Upon execution and delivery of the Assignment Documents, the officers and employees of the Authority are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the Authority to implement the Assignment Documents, when all conditions precedent thereto have been satisfied, including without limitation the payment of tax increments to the Lender as provided therein. City of Columbia Heights MINUTES February 24, 2025 Special Economic Development Authority Meeting Page 4 1.04. The Board hereby determines that the execution and performance of the Assignment Documents will help realize the public purposes of the Act. Passed this 24th of February 2025 Offered by: Buesgens Seconded by: Deneen Roll Call: All ayes of present. MOTION PASSED. President Attest: Secretary BUSINESS UPDATES Forney announced that during the next EDA meeting, they would discuss a budget amendment Resolution. He added that the County would like to do a presentation with the EDA regarding the changes to the Anoka County ACRED. ADJOURNMENT President James adjourned the meeting at 5:42 pm. All ayes. MOTION PASSED. Respectfully submitted, ________________ _______________ Sarah LaVoie, Recording Secretary