081015 EDACITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
August 10, 2015
EDA Meeting will commence upon
adjournment of the City Council Meeting
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Eric Lammle
Commissioner Jonathan London
1. Call to order — EDA Meeting of August 10, 2015
2, Roll call
3. Approval of Minutes:
• June 22, 2015
4. Resolution authorizing an interfund loan for advance of certain costs in connection with
Tax Increment Financing District 11-1 (improvement project no. 964)
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes June 22, 2015
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development
Authority to order at 9:18 p.m.
ROLL CALL Present. Kathi Hemken, President
Andy Hoffe, Commissioner
Eric Lammle, Commissioner
Jonathan London, Commissioner
Absent: John Elder, Commissioner
Staff Present: Kirk McDonald, City Manager
Aaron Chirpich, Community Development Specialist
Tim Fournier, Director of Police
Valerie Leone, City Clerk
Chris Long, City Engineer
Jeff Sargent, Director of Community Development
Steve Sondrall, City Attorney
Stacy Woods, Assistant City Attorney
APPROVAL OF Motion was made by Commissioner Hoffe, seconded by Commissioner
MINUTES London, to approve the minutes of May 26, 2015, and June 8, 2015. All
Item 3 present voted in favor. Motion carried.
IMP. PROJECT 965 President Hemken introduced for discussion EDA Item 4, Resolution
Item 4 approving purchase agreement for the acquisition of 4415 Nevada Avenue
North (project no. 965).
Mr. Aaron Chirpich, community development specialist, reported staff has
been monitoring the foreclosure proceedings on the property at 4415 Nevada
Avenue North and the home was recently listed for $67,600. He explained
staff anticipates high interest in the property due to the low asking price. Mr.
Chirpich noted in the past staff has discussed the potential to subdivide the
property into two lots. He stated subdivision of the current lot would require
rezoning of the property.
Mr. Chirpich requested authorization to present the full asking price of
$67,600 and authorization to increase the offer to $75,000 if necessary. He
recommended the use of EDA funds for the acquisition and the use of CDBG
funds for demolition -related activities.
City Manager McDonald pointed out by using EDA funds, there would be no
income restrictions on the resale of the property.
EDA Meeting
Page 1 June 22, 2015
President Hemken inquired of the proposed selling price of each home if the
lot was subdivided allowing for construction of two homes.
Mr. Chirpich stated it is anticipated the homes would sell for $250,000.
Council Member Hoffe commented on the number of complaints regarding
the current condition of the property.
Council Member London stated his preference of two single-family homes
rather than a twinhome.
Council Member Lammle inquired whether the EDA should provide
authorization to negotiate above $75,000. City Manager McDonald pointed
out an offer by a city is usually viewed as the strongest offer.
RESOLUTION 2015-08 Commissioner London introduced the following resolution and moved its
Item 4 adoption "RESOLUTION APPROVING PURCHASE AGREEMENT FOR
THE ACQUISITION OF 4415 NEVADA AVENUE NORTH (PROJECT NO.
965)." The motion for the adoption of the foregoing resolution was seconded
by Commissioner Hoffe, and upon vote being taken thereon, the following
voted in favor thereof: Hemken, Hoffe, Lammle, London; 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.
ADJOURNMENT Motion was made by Commissioner London, seconded by Commissioner
Hoffe, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 9:32 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
EDA Meeting
Page 2 June 22, 2015
EDA
Request for Action
Originating Department
Approved for Agenda
Agenda Section
Community Development
August 10, 2015
EDA
Item No.
By: Jeff Sargent, Director of CD
By: Kirk McDonald, City Manager
4
Resolution Authorizing an Interfund Loan for Advance of Certain Costs in Connection With Tax
Increment Financing District 11-1 (improvement project no. 964)
Requested Action
Staff requests that the Economic Development Authority (EDA) approve a resolution authorizing an internal
(interfund) loan to Tax Increment Financing District 11-1, located at 8400 Bass Lake Road.
Policy/Past Practice
It is the practice of the EDA to require the approval of resolutions authorizing internal loans.
Background
Ehlers is recommending that the City should approve an interfund loan resolution to cover the costs of the
redevelopment associated with the city -owned redevelopment property located next to the golf course at 8400
Bass Lake Road. The EDA has been expending funds for soil borings, marketing and administration in
preparation for future redevelopment of the site. State Statute requires that the City approve a resolution
authorizing an internal (interfund) loan to a TIF district and set the terms for reimbursement of the qualified
TIF costs to be repaid with tax increments from the TIF district. Bob Deike, the city's EDA attorney, has
prepared the attached resolution for approval. The amount recommended for the loan is $100,000.
Recommendation
Staff recommends approval of the Resolution.
Attachments
• Resolution for Interfund Loan
• Ehlers Memo
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I:\RFA\COMM DEV\Devela ment\Q &R- Interfimd Loan Resolution -8400 Bass Lake Road 8-10-15.doc
Commissioner
adoption:
NEW HOPE ECONONOMIC DEVELOPMENT AUTHORITY
CITY OF NEW HOPE
HENNEPIN COUNTY
STATE OF MINNESOTA
introduced the following resolution and moved its
RESOLUTION NO.
RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN
COSTS IN CONNECTION WITH A TAX INCREMENT FINANCING DISTRICT
CREATED BY THE CITY OF NEW HOPE AND THE NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY.
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") have created Tax Increment
Financing District No. 11-1 (the "TIF District") in order to provide a funding source to assist in
the redevelopment of certain real property in the City (the "Property"),
1.02. The Authority has determined to pay for certain costs identified in the TIF Plan
consisting of administrative and pre -development expenses, including but not limited to, fees
of attorneys, financial advisors and other consultants, and interest (collectively, the "Qualified
Costs"), which costs may be financed on a temporary basis from 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 $ UU,UUU from the EDA
Fund or other funds 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 270C.40 or Section 549.09 are from time to
time adjusted. The interest rate shall be 4% and will not fluctuate.
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 469.17$, 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: August 10, 2015
ATTEST:
Kat -Li Hemken, President
Kirk McDonald, Executive Director
Memo
To: Kirk McDonald — EDA Executive Director
From: Stacie Kvilvang
Date: August 10, 2015
Subject: interfund Loan Resolution —TiF District 11-1 (BLRApartments)
The EDA will be expending funds for the soil borings and various administrative costs for
legal and financial advisors for the above referenced property. Since the TIF district is not
currently generating any funds (property is still tax exempt), the 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 expenditures are made.
Attached is a resolution authorizing an interfund loan of up to $100,000 from the EDA's
Development Fund. The EDA will reimburse this 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, as TIF funds become available. The interest rate is set at the statutory
maximum and will not be adjusted annually.
Please contact me at 651-697-8506 with any questions.
r` EHLERS
,t
LEADERS IN PUBLIC FlNANU
www,ehiers-inc.com
Minnesota phone 651 7-6500 3060 Centre Pointe Drive
Offices also In Wisconsin and Illinois fax 651-697-8555 RowAllie, MN 55113-1122
toll free 100-552-1171