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051313 EDACITY OF NEW HOPE EDA MEETING VK� City Hall, 4401 Xylon Avenue North May 13, 2013 EDA Meeting will commence upon adjournment of the City Council Meeting President Kathi Hemken Commissioner John Elder Commissioner Andy Hoffe Commissioner Eric Lammle Commissioner Daniel Stauner 1. Call to order 2. Roll call 3. Approval of April 22, 2013, EDA Minutes 4. Resolution authorizing an interfund loan for advance of certain costs in connection with a tax increment financing district that may be created by the city of New Hope and the New Hope Economic Development Authority (project no. 911) 5. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes April 22, 2013 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:46 p.m. ROLL CALL Present: Kathi Hemken, President Andy Hoffe, Commissioner Eric Lammle, Commissioner Daniel Stauner, Commissioner Absent: John Elder, Commissioner Staff Present: Kirk McDonald, City Manager Curtis Jacobsen, Director of Community Development Guy Johnson, Director of Public Works Rich Johnson, Human Resources Manager Valerie Leone, City Clerk Chris Long, City Engineer Susan Rader, Director of Parks & Recreation Steve Sondrall, City Attorney APPROVE MINUTES Motion was made by Commissioner Stauner, seconded by Commissioner Lammle, to approve the Regular Meeting Minutes of February 11, 2013. Voting in favor: Hemken, Hoffe, Lammle, Stauner; Voting against: None; Absent: Elder; Abstained: None. Motion carried IMP. PROJECT 911 President Hemken introduced for discussion EDA Item 4, Resolution Item 4 authorizing application for the tax base revitalization account (TBRA) grant by the New Hope Economic Development Authority (project no. 911). The EDA expressed support in pursuing a grant opportunity to fund the removal of asbestos and hazardous materials at 7940 55th Avenue North (Winnetka Learning Center property). RESOLUTION 2013 -06 Commissioner Stauner introduced the following resolution and moved its Item 4 adoption "RESOLUTION AUTHORIZING APPLICATION FOR THE TAX BASE REVITALIZATION ACCOUNT (TBRA) GRANT BY THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY (PROJECT NO. 911)," The motion for the adoption of the foregoing resolution was seconded by Commissioner Lammle, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Hoffe, Lammle, Stauner; and the following voted against the same: None; Abstained: None; Absent: Elder, whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. EDA Meeting Page 1 April 22, 2013 ADJOURNMENT Motion was made by Commissioner Lammle, seconded by Commissioner Stauner, to adjourn the meeting. Voting in favor: Hemken, Hoffe, Lammle, Stauner; Voting against: None; Absent: Elder; Abstained: None. Motion carried The New Hope EDA adjourned at 7:47 p.m. Respectfully submitted, Valerie Leone, City Clerk EDA Meeting Page 2 April 22, 2013 EDA Originating Department 0 ' L i Approved for Agenda ( Agenda Section Community Development May 13, 2013 EDA Item No. Curtis Jacobsen, Director of CD Kirk McDonald, City Manager 1 4 Approve resolution authorizing an interfund loan for advance of certain costs in connection with a tax increment financing district that may be created by the city of New Hope and the New Hope Economic Development Authoritv. (Proiect No. 911) Requested Action Staff requests that the EDA approve resolutions authorizing an internal ( interfund) loans to a future TIF District for the properties located at 7940 55th Avenue North. Policy /Past Practice It is the practice of the EDA to require the approval of resolutions authorizing interfund loans. Background Ehlers is recommending that the EDA should approve interfund loan resolutions to cover the costs of the acquisition of the Winnetka Learning Center at 7940 55 Avenue North and its three related parcels. State Statute requires that the EDA approve a resolution authorizing an internal ( interfund) loan to a future TIF district and set the terms for reimbursement of the qualified TIF costs to be repaid with tax increments from the newly created TIF district. Recommendation Staff recommends approval of the Resolutions. Attachments • Ehlers memo • Resolution for Interfund Loan L ell � Second by I: \RFA \COMM DEV \Development \Q R - EDA Interfund Loa Reso 5 13- 13.doc Memo To: Kirk McDonald — EDA Executive Director From: Stacie Kvilvang Date: May 13, 2013 Subject: Interfund Loan Resolution — Acquisition, Demolition and Administrative Costs for Winnetka Learning Center The City and EDA will be expending funds for the acquisition, demolition and administrative costs for legal and financial advisors for the above referenced property. Since it may be a year or two before a TIF district is created (if at all) for the redevelopment, the City and EDA will need to "front" these costs. If the City and EDA want to be reimbursed for these costs at a future date from TIF funds, then an interfund loan is required before the expenditure is made. Attached is a resolution authorizing an interfund loan of up to $2,400,000 from the City's /FDA's TIF District #86 -1 and the EDA's Development Fund to the future TIF District. The City and EDA will reimburse TIF District #86 -1 and the EDA's Development Fund for the above referenced costs (as they are advanced) in the current principal amount, together with interest at the rate of 4% per annum, when land sale proceeds and TIF funds become available. The interest rate is set at the statutory maximum and will not be adjusted annually. Completing this action provides the City and EDA with the most flexibility to reimburse itself in the future if and when a TIF district is created. Please contact me at 651- 697 -8506 with any questions. t ___._......_.._..___. ._.._._.._...._._._....__._.... ._......... -- .._...... -_ ..._.___.__- ....._ EHLERS Mf €�rst sofa phone 651- 697 -8500 3060 Centre Pointe Drive fit'• 4 uEaoess N PUBLIC FINANCE also in Wisconsin and Illinois fax 651- 697 -8555 Roseville, MN 55113 -1122 toll fire 800 -552 -1171 rTh"I CITY OF NEW HOPE HENNEPIN COUNTY STATE OF Commissioner introduced the following resolution and moved its adoption: I: # 4 9 COSTS RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN CONNECTION DISTRICT CREATED BY THE CITY OF THE NEW HOPE ECONOMIC 1 (Project No. 9 BE IT RESOLVED by the Board of Commissioners (the "Board ") of the New Hope Economic Development Authority (the "Authority "), as follows: Section 1. Background 1.01. The Authority and the City of New Hope (the "City ") intend to create in the future a tax increment financing district (the "TIF District ") in order to provide a funding source to assist in the redevelopment of certain real property in the City (the "Property "), which Property has been acquired by the Authority. 1.02. The Authority has determined to pay for certain costs consisting of public improvements, including but not limited to design and planning costs and interest, and for administrative expenses, including but not limited to fees of attorney and financial advisors, and interest (collectively, the "Qualified Costs "), which costs may be financed on a temporary basis from City or Authority funds available for such purposes. 1.03. Under Minnesota Statutes, Section 469.178, Subd. 7, the Authority is authorized to advance money from the Authority's general fund or any other fund from which such advances may be legally authorized, in order to finance the Qualified Costs. 1.04. The Authority intends to reimburse itself for the funds advanced for Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terms are referred to collectively as the "Interfund Loan "). Section 2. Terms of Interfund Loan 2.01, The Authority hereby authorizes the advance of up to a total of $2,400,000 from the EDA Fund and from Tax increment Financing District No. 86 -1 or so much thereof as may be paid as Qualified Costs. The Authority shall be reimbursed for such advances together with interest at the rate stated below. Interest accrues on the principal amount from the date of each advance. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270CA0 or Section 549.09 are from time to time adjusted. The interest rate 2.02. Principal and interest ( "Payments ") on the Interfund Loan shall be paid semi - annually on each August 1 and February 1 (each a "Payment Date "), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the Authority's Executive Director, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations have been paid, or as determined by the Executive Director, generated in the preceding six (6) months with respect to the property within the TIF District and remitted to the Authority by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive, as amended. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. 2.04. The principal sum and all accrued interest payable under this Interfund Loan are pre- payable in whole or in part at any time without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. 2.05. This Interfund Loan is evidence of an internal borrowing by the Authority in accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City and Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident hereto. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may amend the terms of this Interfund Loan at any time by resolution of the Board of Commissioners, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Section 3. Effective Date This resolution is effective upon the date of its approval. The motion for the adoption of the foregoing resolution was duly seconded by Commissioner and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Dated: May 13, 2013 ATTEST: