04-18-83 agendaHOUSING AND REDEVELOPMENT AUTHORITY
Off ice of Executive Director
HRA Letter No. 12
Agenda April 18, 1983
Housing and Redevelopment
Authority Commissioners
City of Richf field
Dear Commissioners:
Subject: Sale of General Obligation Refunding Bonds
As a result of recent developments from the Department of
the Treasury and the bond market, it has become possible for
the City of Richf field to issue refunding bonds for our 1982 Rede-
velopment and 1982 Special Assessment bonds. This refunding
issue will result in interest savings to the city of approxi-
mately $252,202.
At the March 28, 1983 city council meeting, the city council
approved a resolution authorizing the sale of these bonds
($4,100,000 General Obligation Redevelopment bonds of 1982 and
$515,000 General Obligation Improvement bonds of 1982) on April
20, 1983. Enclosed for the information of the HRA is a copy of
the schedules relating to the bond issue and the existing debt
service schedules of the HRA bonds. Further description will be
provided at the HRA meeting.
Respectfully submitted,
~~ ~I~~
Karl Nollenberger
Executive Director
KN/ej a
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II. ADtIANCE REFUNDING: RESULTS
The net interest cost savings which can be realized are dependent
upon the following factors:
- interest rates on outstanding bonds
- the amount and term of bonds outstanding
- early redemption or call dates.
- premium payments on callable bonds
- interest rates on new(refunding) bonds
- structure of refunding bonds
- interest rate on securities held in the escrow account
Actual interest savings will be determined by the structuring of
the new issue and the interest rate bid on the new issue. The
financial analysis contained in this report is based upon
alternate methods of structuring the refunding bonds and current
interest rates.
Outstanding Bond Issues Analyzed
The outstanding. debt of the City has been analyzed and the
following issues were selected for advance refunding. These.
issues provide the optimal level of savings.
Amount Date
of Issue Type of Bonds Interest Rates
$4,100,000 Redevelopment 5/1/82 9.5~ - 12.50
$ 515,000 Improvement 5/1/82 9.0~ - 11.500
Interest Cost Savings
Presented below are the findings of our analysis. Actual savings
will depend upo~i the market conditions at time of sale.
Estimated Present
Scenario Savings Value
Uniform Savings $506,271 $146,118
Front End Savings $252,202 $135,169
-5-
.~
The estimated savings are. divided between the Redevelopment Bonds
of approximately $229,284 and the Improvement Bonds of
approximately $22,918.
Use of Savings
The saving will tend to give both projects more coverage and will
allow for earlier retirement of outstanding obligations. In the
case of the redevelopment project, defeasance will allow tax.
revenue to accrue to the Gity earlier. With the. improvement
district,. costs could be passed on to assessee- or after final
maturity to the City.
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ADVANCE REFUNDING
ESTIMATED DEBT PAYMENTS AND SAVINGS
CTHOUSANCIS OF DOLLARS)
2D0
117
33
}
-50
-333
-217
-300
1985- 1987 19H9 1991 1993 1995 1997 1999
j] REFUNDING GNEW~ DEBT
~] SAVINGS
7) INCREASED PAYMENTS
-.,....~s lout+ut, 1~lG,
43!25/83
FRONT ENI+ SAVINGS SCHEDllLE
BONIJ INTEREST PAYMEIITS .
START DATE; 5/01/83
X4,950,000
.GATE
?/01/$4 COUPON
F'RI1dCIF'AL BATE INTEREST
PAYMENT
YEARLY
PAYMENT
8/01/$4
2/01/$5
8/01/85
74,000
5.500X 29b,831.25
197,887.50
197,887.50 296,831.25
197,887.50
267,887.50 29b,$31.25
4b5,775.00
2/01/86
8/O1/$b 110,000
6.004X 195,962,50
195:962.50 195,962.50
305:962,50
501,925.00
2/01/87
8/01/87 120,000
6,,,00% 192,b62.50
192,662.50 192,662.50
312,bb2.50
505,325.00
2/01/88
3/01/8$ 195,000
b.7~0'/. 188,762.50
i88,Jb2.50 188,762,50
383,762,50
572,525.00
?/01!89
'/01/89 ~
17,,,000 7.000% 18?,181.25
182,18f.25 182,181.25
357,ISi.2S
539:3b2.50
/01/90
/01/90 200,000 7,250% 17.6,056,25
17b,0~6.25 176,056.25.
37b,056.25
552,112.50
/01/91
/91 260,040
7,50Q% 168,806,25
16$,806.25 168:806.25
428,806.25
597,612.50
'vl/92
01/92 ?$0,000
7.750.% 159,056.25
159,05b.25 159,456.25
439,056.5
598,112.50
GI/93
~I/93 330,004 7,800'!. 148,~06,2c
148::.06,2,, 148,206,25
478,206.25
626,412.,0
)1/94
X1/94 345,000
8,000% 135,33b.25
135:336.5 135,336.25
480,336,25
r
615,672.,,0
.y/95
1195
390,000 $.200'1. 12i,53b.25
121,53b.25 121,53b.25
511,536.25
633,072.J0
1/96
t/96
4.20,000 8.300% 105,54b,25
105,546,25 145,54b.25
525,546.25
631,092.50
!/97
/97 455,000
x.440% 8$,116.25
88,116.25 88,116.25
543,IIb.2`
~
.
631,232.50
/98
/Q8 795,G00
8.504% b9,006.25
69,006.25 69x006,25
8b4,00b.25
933,412.,,0
/99 805,000 8.750% 3''18.75
3,,,,:18.7., 35,218,75
840, 218.75
875, 437.50
•~ X4, 950,440
E4,
625,513,75
~ 59,575,5.13.75
STEIi t~EIR = $,2381%
EARS = 56,147,500 AVG MATURITY
= 11.34
3 YE'AfiS
PRELIMINARY ANALYSIS OF
Front ADVANCED REFUNDING
End Savings
Present
Estimated Value
Refunded Bonds Savin s to
- 3
5--1-
Refundin
9 Bonds 510,340,689 -
$5,432,468
I~ss Transferred Proceeds 9575,788
4,784,600
Plus Transfer
to New Debt. Service .518.000 518,000
Net Savings. + 5,301
5,301
.252..-'
202
® 135 169
S o--~e
Bonds Issued
Transferred Proceeds
Total. Sources
SOURCES AND USES OF FUNDS
Uses of Funds
Restricted Securities
Unrestricted Securities
Discount Allowance
Cost of Issuance Allocated
to Refunding Bonds
Excess to New Debt Service
Total Uses
54,950,000
518,000
5 468 000
54,779,299
518, 000
76,400
89,000
5,301
SS.46
t
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter. No. 11
Agenda April 18, 1983
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
Subject: Sale of 6601 Lyndale Avenue
At the meeting and public hearing of April 4, 1983, the
HRA decided to delay consideration of the adoption of a resolution
related to the sale of 660.1 Lyndale Avenue (Hagen Furs) to Rich-
field State Agency (RSA) until the regular HRA meeting of April
18, 1983. The resolutions related to the sale of 220~West 66th
Street (Clark Oil) to Kentucky Fried Chicken (KFC) and the sale
of 6645 Lyndale (the existing KFC facility) to RSA, were adopted
on April 4, 1983. Following is some background information re-
lated to the sale of 6601 Lyndale Avenue to the Richfield State
Agency.
In late 1979,. working in conjunction with the L/H/N rede-
velopment plan, RSA proposed an expansion of their facility which
necessitated the acquisition of KFC and the Hagen Furs properties.
Subsequently, on November 16, fi981, the HRA amended the original
L/H/N redevelopment plan to provide for the purchase of both the
KFC and Hagen Furs properties. At the same time, the HRA approved
a developer's agreement with RSA, providing that the Agency would
purchase the KFC and Hagen properties from the HRA for a price
of $150,000 and $90,000 respectively. In order to pay for the
new cost to the HRA, a tax increment agreement was included in
the developer's agreement which required the RSA to guarantee
a payment each year to the HRA equal to the debt service on the
bond issued to finance these acquisitions. This payment is to
be made until the tax increment is suff icient to pay these
costs. The HRA is obligated by contract to purchase the property
at 6601 Lyndale Avenue.
Negotiations for the purchase
have been underway since November,
at this time to adopt the attached
sale of 6601 Lyndale Avenue to RSA
er's agreement.
by the HRA of 6601 Lyndale
1981; it would be appropriate
resolution, providing for the
under the terms of the develop-
Res ectfully submitted,
~~ ~`~
Karl Nollenber er
Executive Director
KN/ej a
6601 Lyndale Avenue
HRA RESOLUTION NO.
RELATING TO THE SALE OF
HRA PROPERTY IN THE L/H/N
REDEVELOPMENT AREA
WHEREAS, the Housing and Redevelopment Authority of Richfield
("HRA") has adopted a redevelopment plan (thet1paanY)aaandH~/
Nicollet Redevelopment Plan, as amended,
WHEREAS, the Plan designates certain lands within the
redevelopment project area for acquisition and redevelopment
including lands described as follows:
That part of Lot 1, Block 3, J. N. Hawser's
Addition, Hennepin County, Minnesota, described
as follows: Beginning at the Northwest corner
of said Lot 1; thence East along the North
line to the Northeast corner thereof; thence
South along the East line of said lot a dis-
tance of 54.95 feet; thence West to a point
in the Westerly line of said lot which point
is Southwesterly from the point of beginning
a distance of 58.6 feet; thence Northeasterly
along said Westerly line to the point of
beginning, excepting therefrom all that part
of the above-described property lying Easterly
of the following described line: Beginning
at a point on the North line of the above-
described property, said point being 65.54
feet West of the Northeast corner thereof,
as measured along the North line thereof;
thence running Southerly to a point in the
South line of the above described property
said point being 65.07 feet West of the~South-
east corner of said property, as measured
along the South line thereof, subject to and
~. together with a right of a joint party wall
the center line of which is the East boundary
line of lands herein conveyed and the West
line of lands herein excepted and cost of
repairing and maintaining said common wall is
to be borne equally by owners of lands herein
conveyed and owners of land herein excepted.
(6601 Lyndale Avenue); and
WHEREAS, Minnesota Statutes 462.356 require the Planning
Commission's finding as to the conformance o.f the proposed sale
with the Comprehensive Plan; and
-2-
WHEREAS, the Richfield State Agency (the "Developer") and
the HRA entered into a Contract For The Sale Of Land For Private
Development, dated January 21st, 1982 (the "Contract"); and
WHEREAS,-the Developer has offered and. proposed to purchase
the subject property at a cost of Ninety Thousand and rio/100
Dollars (_$90,000.00) and for additional terms as contained in
the Contract; and
WHEREAS, pursuant to due notice thereof, a public hearing
was held on the proposed sale of the subject property to the
Developer and .all interested persons had an opportunity to be
heard.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority of the City of Richfield, Minnesota, as follows:
1) That the finding of the Planning Commission regarding
the sale of this property is acknowledged.
2) The sale of the subject property is consistent with and
necessary for~the redevelopment provided for in .the Plan.
3) The use value of the subject property, within the meaning
of Minn. Stat., 1978, Sec. 462.541 is Ninety Thousand
Dollars.
4) The sale<•of the property is consistent with and necessary
for the Developer to implement the Contract.
5) The HRA Executive Director is authorized and directed
to execute agreements with the Developer for and on
behalf of the HRA, which provide for the sale of the
subject property at a price of Ninety Thousand Dollars.
Passed by the Housing and Redevelopment Authority of Richfield
this:l£8th day of Z~pril , 19 8 3 .
r.
Thomas E. Harms, Chairman
ATTEST:
Joan Helmberger, Secretary