06-1003r
HRA RESOLUTION NO.1 003
RESOLUTION AUTHORIZING INTERFUND LOAN FOR
ADVANCE OF CERTAIN COSTS
IN CONNECTION WITH CEDAR POINT PROJECT AREA
BE IT RESOLVED By the Board of Commissioners of the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota (the "Authority") as follows:
Section 1.
BackQround.
1.01. The Authority has established a Modification to the Redevelopment Plan for
the Richfield Redevelopment Project Area pertaining to the development of certain property
known as the Cedar Point Development, a "Redevelopment Project" pursuant to Minnesota
Statutes, Chapter 469 (the "Act").
1.02. The Authority may incur certain costs related to the Redevelopment Project,
which costs may be financed on a temporary basis from available Authority funds.
1.03. Under Section 469.178, Subdivision 7 of the Act, the Authority 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 Act.
1.04. The Authority owns or will acquire certain property (the "Redevelopment
Property") and has incurred or will incur certain costs to prepare such property for
redevelopment. .
1.05. The Authority entered into that certain Contract for Private Development
dated July 27, 2005, that certain First Amendment to Contract for Private Development
dated June 30, 2006, that certain Second Amendment to Contract for Private Development
dated July 21, 2006, that certain Third Amendment to Contract for Private Development
dated August 16, 2006, and that certain Fourth Amendment to Contract for Private
Development dated October 25, 2006 (collectively, the "Contract") with Ryan Companies
US, Inc. (the "Developer"), under which the Authority (among other things) is responsible for
reimbursing Developer for certain increased costs resulting from a delay in the negotiation
of deed restrictions applicable to certain parcels which are to be conveyed to the Developer.
1.06. The Authority's obligation, as provided in the Contract is to reimburse
Developer for increased costs incurred by Developer as a result of Ryan's delaying
construction due to the delay in obtaining satisfactory deed restrictions; up to a maximum
reimbursement obligation of $500,000. Such payment represents an advance of Authority
funds. .
1.07. The Authority hereby designates such advances as an interfund loan in
accordance with the terms of this resolution and the Act.
Section 2.
Repavment of Interfund Loan.
2.01. The Authority will reimburse itself for the advance in the principal amount not
to exceed $500,000 together with interest at the rate per annum described below (the
"Interfund Loan"). Interest accrues on the amount of each payment from the date of each
payment to the Developer. The interest rate will, without further action by the Authority, be
adjusted on January 1 of each year to reflect the greater of the rate specified under
Minnesota Statutes, Section 270C.40 and Section 549.09 in effect for that calendar year.
The rate in effect for'calendar year 2006 is 6%.
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 funds available for that purpose.
2.03. Payments on the Interfund Loan will be made solely from funds available to
the Authority and designated by the Authority from time to time for use for that purpose.
Payments shall be applied first to accrued interest, and then to unpaid principal. Interest
accruing will be compounded semiannually on February 1 and August 1 of each year and
added to principal until the first Payment Date, unless otherwise specified by the Executive
Director.
2.04. The principal sum and all accrued interest payable under this resolution is
pre-payable in whole or in part at any time by the Authority without premium or penalty.
2.05. This resolution is evidence of an internal borrowing by the Authority in
accordance with Section 469.178, subdivision 7 of the Act, and is a limited obligation
payable solely from funds pledged to the payment hereof under this resolution. The
Interfund 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. Neither the State of Minnesota, nor any political subdivision thereof shall be
obligated to pay the principal of or interest on the Interfund Loan or other costs incident
hereto except out of funds designated by the Authority to be used for that purpose.
2.06. The Authority may at any time make a determination to forgive the
outstanding principal amount and accrued interest on the Interfund Loan to the extent
permissible under law.
2.07. The Authority 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 Act.
Section 3. Disposition of Available Funds. The Executive Director is authorized and
directed to place $500,000 of Available Funds in escrow in accordance with the terms of the
Escrow and Disbursing Agreement approved as part of the Fourth Amendment to the
Contract for Private Development.
Section 4. Effective Date. This resolution is effective upon approval.
Adopted this 25th day of October, 2006
ATTEST:
~~~111.
. Sandahl, Chair
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Donna Drummond, Secretary