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HomeMy WebLinkAbout2025-093 4300 2026A Authorizing SaleCITY OF COLUMBIA HEIGHTS, MINNESOTA RESOLUTION NO.2025-93 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2026A, IN THE PROPOSED AGGREGATE PRINCIPAL AMOUNT OF $7,635,000 BE IT RESOLVED By the City Council of the City of Columbia Heights, Minnesota (the "City") as follows: Section 1. Authorization. (a) The City has established, and the Columbia Heights Economic Development Authority (the "Authority") administers, the Alatus TIF District (the "TIF District"), a redevelopment district within the Downtown Central Business Redevelopment Project (the "Redevelopment Project") within the City, pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"), and adopted a tax increment financing plan for the TIF District (the "TIF Plan"). (b) Pursuant to the authority conferred by Section 469.178, subdivision 5 of the TIF Act and Minnesota Statutes, Chapter 475, as amended (the "Municipal Debt Act"), including Section 475.61, subdivision 6, the City issued its Taxable General Obligation Temporary Tax Increment Bonds, Series 2021A (the "Series 2021A Bond"), dated July 29, 2021, in the original aggregate principal amount of $5,935,000, 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, including but not limited to a bridge loan provided to Alatus Columbia Heights II LLC, a Delaware limited liability company (the "Developer"), for land acquisition, demolition, and related costs (the "Project Costs"), and the Developer agreed to pay the City's financing and other related costs related to issuing the Series 2021A Bond. (c) The City and the Authority entered into a Tax Increment Pledge Agreement, dated July 29, 2021 (the "Original Pledge Agreement"), relating to the payment of principal of and interest on the Series 2021 A Bond and providing for the pledge of tax increment revenues generated from the TIF District to secure the payment of principal of, premium, if any, and interest on the Series 2021 A Bond. (d) Prior to the maturity of the Series 2021A Bond, the City determined it to be necessary to provide additional temporary financing for the Project Costs and to issue an additional series of temporary bonds for such purpose. (e) Pursuant to the authority conferred by the TIF Act, including Section 469.178, subdivision 5, and the Municipal Debt Act, including Sections 475.61, subdivision 6, and 475.67, subdivision 3, and a resolution adopted by the City Council of the City on November 27, 2023, the City issued its Taxable General Obligation Temporary Tax Increment Refunding Bonds, Series 2023A (the "Series 2023A Bond"), in the original aggregate principal amount of $6,615,000, to refund the Series 2021A Bond prior to maturity and provide additional temporary financing for the Project Costs. (f) In connection with the issuance of the Series 2023A Bond, the City and the Authority entered into the Amended and Restated Tax Increment Pledge Agreement, dated December 14, 2023 (the "First Amended Pledge Agreement"), which amended and restated the Original Pledge Agreement, 4931-3203-1358A providing for the pledge of tax increment revenues generated from the TIF District to secure the payment of principal of, premium, if any, and interest on the Series 2023A Bond. (g) The Series 2023A Bond matures on February 1, 2026 and is payable on such date from tax increments resulting in increases in the taxable value of real property in the TIF District and/or from proceeds of permanent bonds to be issued by the City prior to such maturity. (h) The City is authorized by Section 475.67, subdivision 3 of the Municipal Debt Act to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service costs to the City or for the extension or adjustment of maturities in relation to the resources available for their payment. (i) The City has determined the need to issue permanent bonds to refinance the Series 2023A Bond, thereby providing permanent financing for the Project Costs. Therefore, the City proposes to issue its Taxable General Obligation Tax Increment Refunding Bonds, Series 2026A (the "Bonds"), in the proposed aggregate principal amount of $7,635,000, which shall be an amount sufficient to pay (i) the principal of, interest on, and premium, if any, on the Series 2023A Bond on the redemption date thereof, (ii) interest on the Bonds for a period not exceeding three years from their date of issue or such other maximum period under the Municipal Debt Act, and (iii) costs of issuance, pursuant to the TIF Act, including Section 469.178, subdivision 5, and the Municipal Debt Act, including Section 475.67, subdivision 3. The proceeds of the Bonds will be used to refund the Series 2023A Bond prior to maturity and provide permanent financing for the Project Costs. 0) The City is authorized by Section 475.60, subdivision 2(6) of the Municipal Debt Act to negotiate the sale of the Bonds, it being determined, on the advice of bond counsel, that interest on the Bonds cannot be represented to be excluded from gross income for purposes of federal income taxation. (k) At its meeting on November 10, 2025, the Board of Commissioners of the Authority approved a resolution authorizing the execution and delivery of a Second Amended and Restated Tax Increment Pledge Agreement (the "Second Amended Pledge Agreement") between the Authority and the City, which amends and restates the Original Pledge Agreement, as amended and restated by the First Amended Pledge Agreement, relating to the payment of principal and interest on the Bonds and providing for the pledge of tax increment revenues generated from the TIF District to secure the payment of principal of, premium, if any, and interest on the Bonds. Section 2. Sale of the Bonds. To refund the Series 2023A Bond and provide permanent financing for the Project Costs, the City Council finds it necessary and desirable for the reduction of debt service costs to issue and sell the Bonds pursuant to the TIF Act and the Municipal Debt Act (together, the "Act") in the proposed aggregate principal amount of $7,635,000. The Bonds will be issued, sold, and delivered in accordance with the Terms of Proposal to be prepared in connection with the offering and the sale of the Bonds. Section 3. Authority of Municipal Advisor. Ehlers and Associates, Inc. (the "Municipal Advisor") is authorized and directed to negotiate the sale of the Bonds. The City Council will meet on Monday, January 12, 2026 (or such other date as the City Council shall deem appropriate) to consider proposals for the purchase of the Bonds and to take any other appropriate action with respect to the Bonds. Section 4. Authority of Bond Counsel. The law firm of Kutak Rock LLP, Minneapolis, Minnesota, as bond counsel for the City ("Bond Counsel"), is authorized to act as bond counsel and to assist in the preparation and review of necessary documents, certificates, and instruments relating to the Bonds. 4931-3203-1358.1 The officers, employees, and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents, certificates, and instruments. Section 5. Covenants. In the resolution awarding the sale of the Bonds, the City Council will set forth the covenants and undertakings required by the Act and will consider the execution and delivery of the Second Amended Pledge Agreement, in the form to be presented to the City Council on such date. Section 6. Official Statement. In connection with the sale of the Bonds, the officers or employees of the City are authorized and directed to cooperate with the Municipal Advisor and participate in the preparation of an official statement for the Bonds and to deliver it on behalf of the City upon its completion. (The remainder of this page is intentionally left blank.) 4931-3203-1358.1 Approved this 81 day of December, 2025, by the City Council of the City of Columbia Heights, Minnesota. Offered by: Spriggs Seconded by: Deneen Roll Call: All Ayes, Deneen Absent ATTEST: Sara , City Clerk 4931-3203-1358.1 4A4d-afMdrcFdez Simul ,Mayor