HomeMy WebLinkAbout2025-084 Approving Alatus Fourth AR DocumentsCITY OF COLUMBIA HEIGHTS, MINNESOTA
RESOLUTION NO.2025-84
RESOLUTION APPROVING MODIFICATION OF CERTAIN
TERMS OF A LOAN FROM THE CITY TO ALATUS COLUMBIA
HEIGHTS II LLC AND APPROVING FORMS OF FOURTH
AMENDED AND RESTATED LOAN DOCUMENTS
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. In order to facilitate the acquisition by Alatus Columbia Heights II LLC, a Delaware
limited liability company (the "Borrower"), of certain property located at 4300 Central Avenue NE in the
City (the "Property"), within the Alatus TIF District (the "TIF District"), a redevelopment district located
within the Downtown Central Business Redevelopment Project in the City (the "Redevelopment Project"),
the Borrower requested a bridge loan from the City to finance a portion of the purchase price of the Property,
legal, closing, and other transaction costs associated therewith, costs of demolition, and costs associated
with reports (collectively, the "Project Costs"), all of which are qualified public redevelopment costs
reimbursable from tax increment under Minnesota Statutes, Sections 469.174 through 469.1794, as
amended (the "TIF Act").
1.02. Pursuant to the terms and conditions of a Third Amended and Restated Loan Agreement,
dated July 31, 2025, which amended and restated a Second Amended and Restated Loan Agreement, dated
December 14, 2023, which amended and restated an Amended and Restated Loan Agreement, dated
June 30, 2023, which amended and restated a Loan Agreement, dated July 29, 2021 (collectively, and as
amended and restated, the "Loan Agreement"), each between the City and the Borrower, the City modified
certain terms of a loan made to the Borrower in the sum of $7,635,000 (the "Loan"), from the proceeds of
its Taxable General Obligation Temporary Tax Increment Refunding Bonds, Series 2023A (the "Series
2023A Bond"), dated December 14, 2023, issued by the City in the original aggregate principal amount of
$6,615,000, which Series 2023A Bond refunded the Taxable General Obligation Temporary Tax Increment
Bonds, Series 2021A (the "Series 2021A Bond"), dated July 29, 2021, issued by the City in the original
aggregate principal amount of $5,935,000, to provide temporary financing for the Project Costs.
1.03. The Series 2023A Bond matures on February 1, 2026, and is subject to optional redemption
on or after August 1, 2024. The principal of the Series 2023A Bond and interest thereon are payable
primarily from tax increments resulting in increases in the taxable value of real property in the TIF District
(the "Tax Increment Revenues") and from the proceeds of definitive bonds to be issued prior to the maturity
of the Series 2023A Bond, as set forth in the resolution adopted by the City Council on November 27, 2023,
awarding the sale of the Series 2023A Bond (the "2023 Bond Resolution"). As provided in the Series
2023A Bond and the 2023 Bond Resolution, if the Series 2023A Bond cannot be paid at maturity from Tax
Increment Revenues or from other funds appropriated by the City Council, the Series 2023A Bond must be
paid from the proceeds of definitive bonds to be issued and sold prior to the maturity date of the
Series 2023A Bond.
1.04. To evidence the Loan, the Borrower delivered to the City a Third Amended and Restated
Promissory Note, dated July 31,2025, which amended and restated a Second Amended and Restated
Promissory Note, dated December 14, 2023, which amended and restated an Amended and Restated
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Promissory Note, dated June 30, 2023, which amended and restated a Promissory Note, dated July 29, 2021
(collectively, and as amended and restated, the "Note"), which Note is secured by a Third Amended and
Restated Mortgage, dated July 31, 2025, which amended and restated a Second Amended and Restated
Mortgage, dated December 14, 2023, which amended and restated an Amended and Restated Mortgage,
dated June 30, 2023, which amended and restated a Mortgage, dated July 29, 2021 (collectively, and as
amended and restated, the "Mortgage"), by the Borrower in favor of the City.
1.05 Section 2(a) of the Loan Agreement provides that the entire unpaid amount of principal of
the Loan, plus interest equal to the amount of interest paid by the City in excess of the par amount of the
Series 2023A Bond, if any, is due and payable on December 15, 2025 (the "Original Loan Payment Date"),
unless prepaid earlier. The maturity date of the Note and the Mortgage, as set forth in such documents, is
the Original Loan Payment Date (December 15, 2025).
1.06. The Borrower represented to the City that it anticipates repaying the Loan from proceeds
of short-term financing, long-term mortgage financing, a bridge loan with a long-term take-out financing
commitment, or a combination of the foregoing (the "Other Financing"), but that closing on the Other
Financing has been delayed and is expected to occur after the Original Loan Payment Date of December
15, 2025 and the maturity date of the Series 2023A Bond of February 1, 2026. Accordingly, because the
Series 2023A Bond cannot be paid at maturity, the City Council has determined to pay the Series 2023A
Bond from the proceeds of definitive bonds that will be issued and sold pursuant a resolution to be adopted
by the City Council of the City after the date hereof, awarding the sale of the City's Taxable General
Obligation Tax Increment Refunding Bonds, Series 2026A (the "Series 2026A Bond"). The Series 2026A
Bond will refund the Series 2023A Bond, and thereby provide further refinancing for the Project Costs.
The Borrower has requested that the Original Loan Payment Date be extended to December 15, 2028, which
date substantially corresponds to the anticipated optional call date of the Series 2026A Bond.
1.07. The City is proposing to: (i) increase the principal amount of the Loan payable by the
Borrower under the Fourth Amended and Restated Loan Documents (hereinafter defined) to $7,635,000,
representing the principal amount of the Series 2026A Bond to be issued by the City, the proceeds of which
will be used to redeem and prepay the Series 2023A Bond and to pay financing and other related costs with
respect to the Series 2026A Bond, and (ii) extend the Original Loan Payment Date to December 15, 2028
(the "Modified Loan Payment Date").
1.08. Forms of documents further modifying the Loan, including a Fourth Amended and
Restated Loan Agreement, a Fourth Amended and Restated Promissory Note, and a Fourth Amended and
Restated Mortgage (collectively, the "Fourth Amended and Restated Loan Documents"), have been
prepared and are on file with the City. It is the intention of the City that the Fourth Amended and Restated
Loan Documents will amend and restate the Loan Agreement, the Note, and the Mortgage (the "Original
Loan Documents"), and that the terms and conditions of the Original Loan Documents and any other
document executed by the City in connection with the Loan and the Series 2023A Bond remain in full force
and effect.
Section 2. City Approval; Other Proceedings.
2.01. The City Council hereby approves: (i) the increase in the principal amount of the Loan
payable by the Borrower to $7,635,000, representing the principal amount of the Series 2026A Bond to be
issued by the City, the proceeds of which will be used to redeem and prepay the Series 2023A Bond and to
pay financing and other related costs with respect to issuing the Series 2026A Bond, and thereby provide
definitive refinancing for the Project Costs, and (ii) the extension of the Original Loan Payment Date to the
Modified Loan Payment Date (i.e., a date not later than December 15, 2028), as set forth in the Fourth
Amended and Restated Loan Documents.
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2.02. The Fourth Amended and Restated Loan Documents 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 Fourth Amended
and Restated Loan Documents to which the City is a party (the "City's Fourth Amended and Restated Loan
Documents") by such officials shall be conclusive evidence of approval.
2.03. The Mayor and the City Manager are hereby authorized to execute on behalf of the City
the City's Fourth Amended and Restated Loan Documents, along with any documents referenced therein
requiring execution by the City, and to carry out on behalf of the City its obligations thereunder.
2.04. City staff and consultants are authorized to take any actions necessary to carry out the intent
of this resolution.
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Approved this 241 day of November, 2025, by the City Council of the City of Columbia Heights,
Minnesota.
Offered by: Buesgens
Seconded by: Spriggs
Roll Call: All Ayes
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ATTEST:
Sara on, City Clerk
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