96-8393r
RESOLUTION NO. 8393
RESOLUTION ADOPTING PRIVATE
ACTIVITY TAX EXEMPT FINANCING GUIDELINES
WHEREAS, the City of Richfield has the authority to issue bonds and notes to
assist in the financing of various private development activities with the City; and
WHEREAS, providing of such financing assistance can be of a significant benefit
to the activity financed; and should also be a valuable tool to the City in encouraging
and fastening certain types of development; and
WHEREAS, the public objectives can best be accomplished through the
administration of consistent guidelines; and
WHEREAS, the City Council has reviewed guidelines for private activity financing
as proposed by the City staff and is fully informed as to its content; and
WHEREAS, the Richfield Housing and Redevelopment Authority has reviewed
and approved said guidelines.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Richfield that the document entitled Private Activity Tax Exempt Financing Guidelines, a
copy of which is attached as Exhibit A, is hereby approved and adopted.
Adopted by the City Council of the City of Richfield, Minnesota this 23th day of
September, 1996.
~~~
Martin J. Kirs ,Mayor
ATTEST:
~~ f? WPA--
Thomas P. Ferber, City Clerk
CITY OF RICHFIELD, MINNESOTA
PRIVATE ACTIVITY
TAX EXEMPT FINANCING GUIDELINES
City Council Resolution No. 8393
September 23 , 1996
.*
City of Richfield
6700 Portland Avenue
Richfield, MN 55423-2598
Exhibit A
Resolution No. 8393
TAX EXEMPT FINANCING GUIDELINES
Table of Contents
Paqe
Part I General . . . 1
Part II Guidelines 2
Part III Miscellaneous Matters . . 6
Part IV Application for Tax-Exempt Financing
(Commercial, Industrial or Health Care) . . . . . . . 8
Part V
Application for Tax-Exempt Financing
(Multi-Family Housing) . . . . .
11
Part VI Addendum to Application for Tax-Exempt Financing 14
Part VII Indemnification Letter of Agreement . . . . . . . . 18
PRIVATE ACTIVITY
TAX EXEMPT FINANCING GUIDELINES
PART I
GENERAL
Under the Minnesota Municipal Industrial Development Act, Minnesota
Statutes, Sections 469.152 to 469.165 (the "IDR Act"), the City of
Richfield has authority to issue industrial, commercial, and health
care revenue bonds or notes to attract or promote economically
sound industry and commerce to the City.
Under Minnesota Statutes, Chapter 462C (the "Housing Act"), the
City is authorized to issue housing revenue bonds to finance multi-
family residential housing projects for low and moderate income
persons and elderly persons. proj ects must be embodied in a
Housing Program, as defined in the Housing Act.
The Council is aware that such financing for certain private
activities may be of benefit to the City and will consider requests
for tax exempt financing subject to these Guidelines. The Council
considers tax exempt financing to be a privilege, not a right.
It is the judgment of the Council that tax exempt financing is to
be used on a selective basis to encourage certain development that
offers a benefit to the City as a whole, including significant
employment and housing opportunities. It is the applicant's
responsibility to demonstrate the benefit to the City, both in
writing and at the public hearing. The applicant should understand
that although approval may have been granted by the City for the
issuance of financing for a similar project or a similar debt
structure, that is not a basis upon which approval will be granted.
Each application will be judged on the merits of the project as it
relates to the public purposes of the Housing Act or the IDR Act
and the benefit to the City at the time the request for financing
is being considered. ..
If tax exempt financing is to be issued by the Richfield Housing
and Redevelopment Authority, the Authority will conform to these
guidelines.
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PART I I
GUIDELINES
1. The Council will consider tax exempt financing for commercial,
industrial and health care proj ects under the IDR Act and
housing projects under the Housing Act. An applicant for tax
exempt financing pursuant to the IDR Act must submit to the
City the application set forth in Part IV of these Guidelines.
An applicant for tax exempt financing pursuant to the Housing
Act must submit to the City the application set forth in Part
V of these Guidelines.
2. Projects must be compatible with the overall development plans
and objectives of the City and comply with the zoning and land
use regulations of the City.
3. An application will not be considered by the Council until
tentative City Code findings and requirements have been made
with respect to zoning, building plans, platting, streets, and
utility services. The application must be accompanied by the
addendum set forth in Part VI of these Guidelines and must
provide information as to the project's need for municipal
services including, but not limited to, street improvements,
water and sewer services, and police and fire protection. A
report based on a review of the proj ect by the Community
Development Department must be presented to the Council prior
to consideration of a resolution giving preliminary approval
to the project.
4. The project must be a positive benefit to the City. The
project must be of a nature that the City wishes to attract,
or an existing business which the City wishes to have expand
within the City, considering emploYment opportunities,
incentive for further development, impact on City services,
and support for the industrial, commercial or health care
operations currently located in the City. A housing project
must provide significant housing opportunities for low and
moderate income persons or the elderly.
5. The Council will, if requested, grant an applicant a pre-
application review. The purpose of the pre-application review
is to inform potential applicants of the possibility of
certain rejection. The fact that the project is not rejected
at the pre-application stage is not to be construed as
approval of the project nor as an indication that the project
will be approved upon formal request to the Council. Requests
for tax exempt financing may be rejected by the City whether
or not the project was submitted to a pre-application review
and regardless of the outcome or recommendation of that pre-
application review.
A request for pre-application review must be in writing,
addressed to the City Manager, and set forth the name of the
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project, the type ,of improvement intended and the name,
address and telephone number of the person who will be
representing the potential applicant at the pre-application
review, together with such additional information as the
applicant desires to submit.
6. The applicant must select a financial adviser reasonably
acceptable to the City or an underwriter to assist the
applicant in preparing all necessary application documents and
materials. The financial adviser will submit a letter that
establishes the financial feasibility of the project.
Applications may, in the alternative, include a signed letter
from a responsible financial institution indicating that the
project is economically feasible and viable and stating that
bonds can be successfully sold for the project or that an
individual or institution intends to purchase all of the
bonds.
The applicant must receive approval from the appropriate state
agencies, secure financing and commence construction within
one year of the date of the resolution giving preliminary
approval to the proj ect or the housing program. Upon
application, the Council may approve an extension of the
preliminary approval.
The City will appoint bond counsel for the bond issue, which
will normally be the City's regularly retained bond counsel.
7. Pursuant to the lDR Act and the Housing Act, consideration of
an application for tax exempt financing must be done at a
public hearing held by the Council. Modifications to the
proj ect after the public hearing and preliminary approval must
be consistent with the scope of the project as proposed at the
time of preliminary approval.
8. The City is to be reimbursed and held harmless for and from
any out-of-pocket expenses related to the tax exempt financing
including, but not limited to, legal fees, financial analyst
fees, bond counsel fees, and the City staff's expenses in
connection with the application. A non-refundable filing fee
in the amount of $5000 to insure reimbursement of the above
expenses must be included with the submission of the
application. The applicant must execute a letter to the City
undertaking to pay all such expenses even if they exceed the
deposit. A form of the required letter is set forth as Part
VII of these Guidelines.
9. Prior to closing and delivery of the bonds for the project,
the applicant must pay, or commit to pay as the case may be,
administrative fees determined as follows:
(i) Industrial, commercial and health care projects:
3
to the City, a one-time fee equal to 1/2% of the first
five million dollars of bonds plus 1/4% on the remaining
balance, with a maximum fee of $35,000.00.
(ii) Housing projects
A one time fee will be paid by the applicant to the
Richfield Housing and Redevelopment Authority at the time
of the bond sale closing in the amount of 1% of the
bonds, not to exceed $35,000.00:
10. The City Manager must annually submit to the Council a summary
report of all project applications made in that year and
financings completed for the year. The report must include:
a. Total number of applications processed;
b. Total number and dollar volume of proposed projects;
c. Total amount of bonds issued;
d. Amount of tax base provided;
e. Number of jobs created; and
f. Number of new housing units constructed and occupied.
11. Applications for financing must be made on the forms attached
to these Guidelines. In addition, the applicant must furnish
a description of the project, a plot plan, elevation of
proposed buildings, landscape, lighting, and site preparation,
together with a brief description of applicant and the
proposed financing in such form as required at the time of
application.
13. The Council may, in its sole discretion, impose conditions
exceeding those required under the City building code in
respect to exterior building '.materials, landscaping, signage
lighting, and such other aspects as the Council may consider
appropriate on a case-by-case basis.
14. The Council may, in its sole discretion, withdraw its
preliminary approval of a project any time if in its judgment
the purposes of the Act will not be served by going forward
with the project and its financing.
4
PART III
MISCELLANEOUS MATTERS
1. Ratinqs. The City will give its most favorable consideration
to proposed tax exempt bond issues that have the same rating
as the City's obligations by Moody's Investment Service or
Standard & Poor's Corporation. Issues carrying lower ratings
or non-rated issues may be sold only to institutional or other
investors on a private placement basis and must be in
denominations of at least $100,000. The Council may depart
from this guideline when in its judgment the project is of a
level of merit and public purpose to justify the departure;
and in case of such a departure the Council must state its
reasons therefor in the resolution awarding the sale of the
bonds.
2. Refundinqs. The Council will normally approve the refunding
of a tax-exempt issue but only upon a showing by the applicant
of (i) substantial debt service savings, (ii) the removal of
bond covenants significantly impairing the financial
feasibility of the project, or (iii) both (i) and (ii). In
the case of refundings of bonds for which the administrative
fees listed in paragraph 9 of Part II have been and are being
paid, no new administrative fees are required; but the non-
refundable application fee must be paid together with all City
expenses in excess of that fee.
In the case of refundings of bonds where no administrative fee
has been paid, the administrative fees listed in paragraph 9
of Part II must. be paid. The application form is to be
appropriately modified.
3. Subsequent Proceedinqs. Where changes to the underlying
documents or credit facilities of outstanding bond issues are
to be made and require Council action, no administrative fee
is charged but a non-refundable fee of $2,500 must be
deposited with the City to cover administrative costs. No
formal application form is required.
4. Issue by Another Political Subdivision. The City will
consider requests for tax exempt financing of projects in the
City by other political subdivisions. In these cases the non~
refundable application fee must be paid and all procedures
through the approval of the preliminary resolution followed.
No administrative fee is charged.
5. City Contact. Initial contacts about tax-exempt financing are
made by contacting:
5
Assistant City Manager
City of Richfield
6700 Portland Avenue
Richfield, MN 55423-2598
(612) 861-9702
All subsequent correspondence is to be similarly addressed
with a copy to bond counsel:
Kennedy & Graven Chartered
Attorneys at Law
470 Pillsbury Center
Minneapolis, MN 55402
Attention: David J. Kennedy
or other bond counsel appointed by the City.
6. Deadlines. The Council conducts all tax exempt financing
matters at regularly scheduled Council meetings held on the
first and third Monday of each month. Documents for Council
consideration must be at the City office on the Tuesday
proceeding the Council meeting at which the matter is to be
considered. No exceptions to this requirement will be made.
In the case of a publicly offered bond issue the documents,
when submitted, may specify a maximum price and maximum
effective interest rate if prices and rates have not yet been
established.
6
PART IV
APPLICATION FOR
TAX-EXEMPT FINANCING
(Commercial, Industrial or Health Care)
1. APPLICANT
a. Business Name -
b. Business Address -
c.
partnership,
sole
Business Form {corporation,
proprietorship, etc.} -
d. Authorized Representative -
e. Principal contact person and telephone number -
2. PURPOSE OF REQUESTED FINANCING:
a. ~ew Facility {describe} -
b. Expansion (describe) -
c. Refunding {attach explanatory letter}
3. GIVE BRIEF DESCRIPTION OF NATURE OF BUSINESS, PRINCIPAL
PRODUCTS, ETC.:
~
4. ESTIMATED PROJECT COSTS: {Not required for refunding}
Land $
Building
Equipment
Architectural, Engineering
Costs of Issuance
Capitalized Interest,
including discount
Other
Total Financing Requested $
7
5.
AMOUNT OF FINANCING ~ REQUESTED:
project costs)
$
% of
6. TYPE OF FINANCING PROPOSED:
Bonds
Tax Exempt Mortgage
Expected Term of Financing
Years
Security:
Mortgage
Letter of Credit
Guaranty (third party)
Guaranty (personal)
Unsecured
Other (specify)
7.
BUSINESS PROFILE:
(Not required for refunding)
a. Is the business located in the City of Richfield now?
b. Number of employees in City:
1) Before this project -
2) After this project -
c. Approximate annual sales -
d. Length of time in business
Length of time in business in City -
e. Do you have plants in other locations? If so, where?
8. NAMES OF:
a. Corporate Counsel (name and contact person) -
b. Underwriter-
c. Underwriter's Counsel -
9. WHAT IS YOUR TARGET DATE FOR:
a. Construction start -
b. Construction completion -
8
10. Attachments (Items b., c., d., e., f. and h. prepared by Bond
Counsel) :
a. Project description materials -
b. Draft resolution calling for public hearing -
c. Draft comprehensive statement of Mayor -
d. Notice of public hearing -
e. Draft preliminary resolution -
f. Draft application to Department of Trade and Economic
Development with necessary attachments -
g. Financial feasibility letter -
h. Preliminary bond counsel opinion -
i. Initial filing fee ($5,000) -
j. Planning Commission recommendation and background
material -
k. Indemnification Letter of Agreement
The applicant further states that it has been furnished a copy
of the City of Richfield's Private Activity Tax Exempt
Financing Guidelines and is aware of its content and agrees to
be bound by its terms and the terms of the indemnification
letter.
Applicant
BY
DATE
For Further Information Contact:
Assistant City Manager
City of Richfield
6700 Portland Avenue
Richfield, MN 55423-2598
(612) 861-9702
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PART V
APPLICATION FOR TAX-EXEMPT FINANCING
(Multi-Family Housing)
APPLICANT:
CONTACT PERSON:
ADDRESS:
TITLE:
PHONE NUMBER
( )
PROJECT LOCATION:
PROJECT NAME:
DATE OF APPLICATION:
PROJECT INFORMATION RENT UNITS
Efficiency $
One Bedroom $
Two Bedroom $
Three Bedroom $
Parking ( inc I uded in rent/
not included in rent) $
Laundry .. $
Utilities included in monthly rent:
OPERATING EXPENSES
% of Gross (Annual)
TOTAL PROJECT COST: $
DEBT SERVICE: $
LAND VALUE: $
DEVELOPER EQUITY:
*HARD COSTS:
$
$
$
SOFT COSTS:
* (Hard Costs are all project costs the IRS has determined to be
eligible items for depreciation.)
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ANTICIPATED INTEREST RATES:
AMORTIZATION SCHEDULE:
HRB:
%-
3D-Year Amortization Schedule?
If the project was convention-
ally financed, what interest
rate would you expect to pay?
%
Yes
No
(Circle One)
Other:
SALES ASSUMPTION:
DEPRECIATION METHOD:
How many years do you plan to
hold the property before you
sell?
years. At what percent do you
feel the value of the project
will appreciate?
Years:
Type:
Amount of Total Basis: $
EQUIPMENT:
$
washers/dryers)
of project cost is for equipment
(e.g. ,
ANTICIPATED INCREASES:
ANTICIPATED VACANCY RATE:
% per year
Firs~ Year:
%
Revenue:
Expenses:
% per year
After First Year:
%
CONSTRUCTION SCHEDULE
Anticipated construction commencement date:
Anticipated construction completion date:
ADDITIONAL INFORMATION:
."
I certify that the information provided above is correct and
contains no misrepresentations or falsifications, omissions or
concealments of material facts and that the information given is
true and complete to the best of my knowledge.
Signature
Date
Title
11
The following items must be attached to the application:
APPENDIX A
A brief description of the organizational structure of Applicant,
including parent subsidiary and affiliate organizations (if
applicant is other than an individual) .
APPENDIX B
Statement of Applicant's business history, including any multi-
family rental projects.
APPENDIX C
The name, address, and telephone number of:
1. The Applicant's legal counsel
2. The Applicant's accountant
3. The architect of the proposed Project
4. The engineer of the proposed Project
5. The general contractor of the proposed Project
APPENDIX D
1. Present ownership of the proposed Project site and Applicant's
interest therein.
2. Present zoning of the Project site and a description of what
city land use approvals are needed for this project.
3 . The proj ected number of new employees to be added to the
Applicant's permanent work force because of the Project.
4. Other financing attempted or available to the Project including
any interim financing.
5. Statement regarding whether or not this proj ect has all
required city approvals. If the project does not have all of
the required approvals, list the approvals still needed and a
tentative time schedule. :
APPENDIX E
Indemnification Letter of Agreement.
APPENDIX F
Proforma Analysis of the Project
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PART VI
ADDENDUM TO APPLICATION FOR
TAX-EXEMPT FINANCING
(Not required for refundings)
CITY OF RICHFIELD
Checklist of Required Submissions for Project Review
1. The following information, where applicable, must be submitted
for review by the Development Review Committee at least three
weeks prior to the Planning Commission meeting at which it is
to be considered.
a. A copy of the application
b. A copy of the proposed plat (at scale of 1" - 100')
c.
county)
Legal description (lot, section, township, village,
d. Name of proposed subdivision, if applicable.
e. Graphic scale
f . North arrow
g. Date
h.Property owners name and address
i. Covenants, liens, and encumbrances
j . Name and address of licensed professional engineer,
surveyor, and/or land planner involved in the preparation
of the sketch plat or proposed plan.
k. Location of property lines
l. Existing easements
m. Burial grounds
n. Railroad rights-of-way
o. Water courses
p. Existing wooded areas
13
q. Trees, eight inches or more in diameter measured four
feet above ground level
r. Location, width and names of all existing or platted
streets or other public ways within or immediately
adjacent to tract
s. Names of adjoining property owners from the latest
County, City, or Township assessment roles wi thin 300
feet of any perimeter boundary of the subdivision
t. Location, sizes, elevations, and slopes of existing
sewers, water mains , culverts, and other underground
structures within the tract and immediately adjacent
thereto
u. Existing permanent buildings
v. Utility poles on or immediately adjacent to the site and
utility right-of-way
w. Approximate topography, at the same scale as the sketch
plan
x. The approximate location and widths of proposed streets
y. Preliminary proposals for connection with existing water
supply and sanitary sewer systems, preliminary provisions
for collecting and discharging surface water drainage
z. The approximate location, dimensions, and areas of all
proposed or existing lots
aa. The approximate location, dimensions, and areas of all
parcels of land proposed to be set aside for park or
playground use or other public use or for the use of
property owners in the ~Foposed subdivision
bb. The location of temporary stakes to enable the Planning
Commission to find and appraise features of the sketch
plat in the field
cc. Whenever the sketch plan covers only a part of an
applicant's contiguous holdings, the applicant shall
submit, at a scale of not more that 200'=1", a sketch in
pen or pencil of the proposed subdivision area, together
with its proposed street systems and an indication of the
probable future street and drainage system for the
remaining portion of the tract.
dd. A vicinity map showing streets and other general
development of the surrounding area at a scale of
1"=100'. The sketch plat must show all school district
14
lines and zoning district lines with the zones properly
designated.
2. Required submissions for building permit review:
Certificate of Survev
a. Parcel number as recorded at the County
b. All land divisions to be recorded at County prior to
obtaining building permit
c. Parcel square footage
d. A location map showing this parcel's location within the
plat
Site Plan
a. Existing topography at a scale of not less than 1" =100'
with two foot contour intervals
b. All required building and parking setbacks should be
illustrated on the plan
c. Building locations and square footages
d. Existing vegetation and other natural features including
water bodies or water courses, rock outcrops, etc.
Landscaoe Plan
a. The location of all areas to be sodded or seeded
b. The location and size of plantings, indicate both common
and botanical names
c. Planting details which tlearly illustrate the manner in
which each different material will be planted
Liqhtinq Plan
a. Type of fixture, type of lighting (high pressure sodium,
metal halide, etc.), and intensity of proposed lighting
system
b. Location and height of all fixtures
c. The petitioner should also supply an Isolux diagram
(available from lighting distributor) to illustrate at
least the intensity of light at the property lines.
However, on maj or proj ects it is advisable for the
petitioner to supply the plan showing the photometric
contours of varying light intensity throughout the site.
lS
Siqnaqe
a. The location, size, and design of all signs including a
description of all materials to be used 1n the
construction of said signs. Any proposed use of color,
or use of lighting should be clearly described and
illustrated.
b. In the case of major developments the City encourages the
development of signage programs to govern the use of
signs throughout the project. For additional information
regarding such programs, please contact the Planning
Department.
Parkinq
a. Number of spaces provided, floor area, and occupant load
b. Concrete curb area and design
c. Bituminous area and design
d. Parking lot striping
e. Location of handicapped parking
Buildinq Plans
a. Floor layouts
b. Building elevations (front, sides, and rear, including
detailed explanation and illustration of all exterior
building materials)
c. Rooftop unit screening (architecturally designed and
compatible with building)
Trash Handlinq
"
Requirements of Zoning Ordinance (inside or screened)
16
PART VI I
INDEMNIFICATION LETTER OF AGREEMENT
The Mayor of the City of Richfield
and Members of the City Council
6700 Portland Avenue
Richfield, MN 55423-2598
RE: Application of for Tax Exempt Revenue Bond
Financing by the City of Richfield
Dear Mayor and Members of the City Council:
This
letter of agreement is given by
under the laws of
City of Richfield
an application for
project described in
a
("Applicant"), as
in connection with its
tax exempt revenue bond
the application.
required by the
consideration of
financing for the
Applicant hereby covenants, warrants and agrees as follows:
1. Applicant agrees to payor reimburse the City for any and all
costs and expenses which the City may incur in connection with
its consideration of the project and the granting of tax exempt
revenue bond financing therefor, whether or not the project is
preliminarily approved by the City, whether or not the project
is approved by the State of Minnesota, whether or not revenue
bond financing is finally approved by the City, whether or not
the bonds are issued and sold, and whether or not the project
is carried to completion.
2. Applicant agrees to indemnify and hold the City, its officers,
employees and agents harmle~s against any and all losses,
claims, damages, expenses or liabilities, including attorneys
fees incurred in their defense, to which the City, its
officers, employees and agents may become subject in connection
with the City's consideration, issuance or sale of the bonds
for Applicant's project and the carrying out of the
transactions contemplated by this agreement and any resolutions
adopted, or agreements executed by the City in connection with
the issuance of its bonds for this project.
3. Applicant hereby releases the City, its officers, agents and
employees from any claims, causes of action, losses, damages,
or liabilities which it may have against the City, its
officers, agents, and employees or which it may incur in
connection with: the City's consideration of the application
for industrial development revenue bond financing for
Applicant's project; the failure of the City, in its
discretion, to issue tax-exempt revenue bonds for Applicant's
17
project; the issuance and sale of the bonds; the construction
of the project; or any other matter or thing of any type or
nature whatsoever which may arise in connection with the
foregoing.
4. Applicant is aware of the City's application and administrative
fee structure for tax exempt financing and agrees and covenants
that all such fees will be paid in the amount and at the times
required.
Dated:
(Applicant)
By
Its
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