03-900r
14
HRA RESOLUTION NO. 900
AUTHORIZING $855,000 INTERNAL LOAN FOR
ADVANCE OF PUBLIC REDEVELOPMENT COSTS IN CONNECTION WITH
L YNDALE GATEWAY WEST TAX INCREMENT FINANCING DISTRICT
BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF RICHFIELD, MINNESOTA (the "HRA") AS FOLLOWS:
Section 1. Background.
1.01. Pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act")
the Authority previously established the Lyndale Gateway West Tax Increment Financing
District (the "TIF District") within the Richfield Redevelopment Project Area (the II Project
Area").
1.02. The Authority may incur certain costs related to the TIF District, which costs
may be financed on a temporary basis from available funds in the account for other tax
increment financing districts administered by the HRA, or from other HRA funds available for
such purposes.
1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the HRA is authorized to
advance or loan money from any fund from which such advances may be legally made in
order to finance expenditures that are eligible to be paid with tax increments under the TIF
Act.
1.04. The HRA has approved and the parties have executed an Amended and
Restated Contract for Private Redevelopment (the "Contract") between the HRA and Lyndale
Gateway LLC, ("Redeveloper") under which, among other things, the HRA will provide the
Redeveloper proceeds from general obligation tax increment bonds to be issued by the City
and an internal loan fund to finance certain Public Development Costs as defined in the
Contract.
1.05. The HRA has previously approved an internal loan (on May 19, 2003) in the
amount of $1,100,000 to finance certain Public Redevelopment Costs (as defined in the
Contract) on a temporary basis.
1.06. The City intends to issue its $4,965,000 Taxable General Obligation Temporary
Tax Increment Bonds, Series 2003A (the "Short Term Bonds") to provide financing for part of
the Public Redevelopment Costs. A portion of the Short Term Bonds will be paid with
proceeds of long-term general obligation tax increment bonds (the "Long Term Bonds") to be
issued at or before maturity of the Short Term Bonds.
1.07. The HRA has determined a need to provide additional temporary financing for
Public Redevelopment Costs through an additional internal loan (the "Loan") to be repaid in
accordance with the terms of this resolution.
Section 2. Repavment of Public Redevelopment Costs.
2.01. The HRA will provide funds to the Redeveloper for certain Public
Redevelopment Costs in accordance with the Contract, in the amount of $750,000 from
proceeds of the City's General Obligation Taxable Tax Increment Bonds, Series 1996 (the
"1996 Bonds"), and in the amount of $105,000 from proceeds of the City's General Obligation
Bonds, Series 1988 (the "Series 1988 Bonds"), for a total Loan of $855,000.
2.02. The HRA will reimburse itself for the Loan in the principal amount of $855,000,
together with (i) interest at the lesser of 5% per annum or the yield on the Series 1988 Bonds,
with respect to $105,000 of the original principal amount, and (ii) interest at the rate of 5.0%
per annum with respect to $750,000 of the original principal amount. Interest accrues from
the date of closing the Contract (hereafter, the "Closing Date"). Each interest rate is no more
than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and
Section 549.09, both in effect for calendar year 2003.
2.03. The principal and accrued interest on the Loan shall be paid on the date of
issuance of the Long Term Bonds, which payment shall be credited to the respective
accounts for the Series 1996 Bonds and the Series 1988 Bonds.
2.04. The Loan will be paid from proceeds of the Long Term Bonds.
2.05. The principal sum and all accrued interest payable under this resolution is pre-
payable in whole or in part at any time by the HRA without premium or penalty.
2.06. This resolution is evidence of an internal borrowing by the HRA in accordance
with Section 469.178, Subdivision 7 of the TIF Act, and is a limited obligation payable solely
from tax increment and other funds pledged to the payment hereof under this resolution. The
Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any
political subdivision thereof, including, without limitation, the Authority and the City of
Richfield. Neither the State of Minnesota, nor any political subdivision thereof shall be
obligated to pay the principal of or interest on the Loan or other costs incident hereto except
from the sources described in this resolution.
2.07. HRA staff and officials are authorized and directed to execute any collateral
documents and take any other actions necessary to carry out the intent of this resolution.
2.08. The HRA may at any time determine to forgive the outstanding principal
amount and accrued interest on the Loan to the extent permissible under law.
2.09. The HRA may from time to time amend the terms of this resolution to the extent
permitted by law, including without limitation amendment to the payment schedule and the
interest rate; provided that the interest rate may not be increased above the maximum
specified in Section 469.178. Subd. 7 of the TIF Act.
Section 3. Effective Date. This resolution is effective upon approval, provided,
however, that the Loan will not be made until all of the preconditions of the Contract have
been satisfied or waived by the HRA.
Approved by the Housing and Redevelopmen uthority in and for the City of
Richfield, Minnesota this 18th day of August, 2003.
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