15-1199r HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,MINNESOTA
RESOLUTION NO. 1199
RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS
IN CONNECTION WITH PROPERTY LOCATED WITHIN CEDAR AVENUE TAX
INCREMENT FINANCING DISTRICT
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. Background.
1.01. Pursuant to Minnesota Statutes, Section 469.174 through 469.1794, as amended(the"TIF
Act"), and Laws of Minnesota for 2005, Chapter 152, Article 2, Section 25 (the "Special Law"),the City
of Richfield, Minnesota (the "City") and the Authority established the Cedar Avenue Tax Increment
Financing District (a redevelopment district) (the "TIF District") within the Richfield Redevelopment
Project Area(the"Redevelopment Project"),which is administered by the Authority.
1.02. In accordance with the Special Law, activities undertaken in the TIF District
(including acquisition of property) are deemed to be the costs of correcting conditions that allow the
designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10 of
the TIF Act, therefore, no further findings are required to meet the blight standard set forth in Section
469.174, subdivision 10 of the TIF Act.
1.03. Under Section 469.178, subdivision 7 of the TIF Act, the Authority is authorized to
advance or loan money from any fund from which such advances may be legally made (each such
advance being referred to as an "interfund loan") in order to finance expenditures that are eligible to be
paid with tax increments under the TIF Act.
1.04. The Authority has determined to acquire various properties within the TIF District for
redevelopment purposes. The total cost of the acquisitions is expected to be$565,000.
1.05. In order to finance the acquisition of property, the Authority has determined to use funds
available in its Development Fund in the amount of$565,000 through an Interfund Loan (the "Interfund
Loan") in accordance with the terms hereof. The Interfund Loan is expected to be drawn down as
properties are purchased over time.
1.06. The Authority intends to use tax increment revenues derived from the TIF District to
repay all or a portion of the Interfund Loan.
Section 2. Terms of Interfund Loan.
2.01. The Interfund Loan shall be made from the Development Fund, or any other fund
designated by the Authority,to the Authority's TIF Fund for the TIF District.
2.02. The Interfund Loan is repayable solely from and to the extent that Available Tax
Increment is available. "Available Tax Increment"means, on each Payment Date(as defined herein), all of
the tax increment 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 the TIF Act. Payments on
the Interfund Loan are on parity with any other outstanding or future interfund loans secured in whole or in
part with Available Tax Increment.
2.03. Provided that there is Available Tax Increment to repay the Interfund Loan to the City,
principal and interest ("Payments") on the Interfund Loan shall be paid semiannually on February 1 and
August 1 (each a"Payment Date"), commencing on the first Payment Date after the advance of the Interfund
Loan. Payments shall continue until the earlier of (a) the date the principal and accrued interest of the
Interfund Loan is paid in full, or(b)the date of last receipt of tax increment from the TIF District. Payments
on the Interfund Loan will be made in the amount and only to the extent of Available Tax Increment.
Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the
date of each expenditure to the first Payment Date will be compounded semiannually on February 1 and
August 1 of each year and added to principal,unless otherwise specified by the Interfund Loan form.
2.04. The Interfund Loan shall bear interest at the Authority's then current internal rate of
return on the principal amount advanced, accruing from the date of each initial expenditure; provided,
however that the interest rate shall not exceed the greater of the interest rates specified under Minnesota
Statutes, Section 270C.40 or Minnesota Statutes, Section 549.09 as of the date the advance is authorized.
The maximum interest rate in effect for calendar year 2015 is 4.0%.
2.05. The principal sum and all accrued interest payable under this resolution is prepayable in
whole or in part at any time by the Authority without premium or penalty.
2.06. This resolution is evidence of an internal borrowing by the Authority in accordance with
Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable from Available Tax
Increment pledged to the payment hereof under this resolution or any other sources of funds the Authority
may use to pay the Payments. 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.
2.07. The Authority, with the cooperation of the City, 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. subdivision 7 of the TIF Act.
Section 3. Interfund Loans Authorized.
3.01. The Interfund Loan with the terms set forth in Section 2 hereof is hereby approved.
3.02. Authority staff and officials are hereby authorized and directed to execute any documents
and take any other actions necessary to carry out the intent of this resolution.
Section 4. Effective Date. This resolution is effective upon approval.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 16th day of March, 2015.
LitnA
Mary B. Su.pple,
ATTEST:
4 ,„,
Doris Rubenstein, Secretary