12-20 HRA Resolution No. 1419
HRA RESOLUTION NO. 1419
RESOLUTION AUTHORIZING INTERNAL LOAN FOR ADVANCE OF CERTAIN
COSTS IN CONNECTION WITH A MULTIFAMILY HOUSING DEVELOPMENT
PROPOSED BY MWF PROPERTIES, LLC
WHEREAS, the City of Richfield, Minnesota (the “City”) and the Housing
and Redevelopment Authority in and for the City of Richfield, Minnesota (the
“Authority”) have established, and the Authority administers, the Richfield
Redevelopment Project (the “Redevelopment Project”) located within the City
and have approved a Redevelopment Plan (the “Redevelopment Plan”)
therefor, pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as
amended; and
WHEREAS, MWF Properties, LLC, a Minnesota limited liability company
(the “Developer”), intends to acquire certain property from the Authority (the
“Development Property”) and construct thereon an approximately 55-unit
multifamily housing development, including two (2) one bedroom units of housing for
people with disabilities, accompanied by supportive services for persons or families
whose income is thirty percent (30%) or less of the metro area’s median gross
income and five (5) two bedroom units reserved for persons or families whose
income is fifty percent (50%) or less of the metro area’s median gross income (the
“Minimum Improvements”); and
WHEREAS, the Authority proposes to convey property to the Developer with
a land write-down of $700,000, which land write-down can be repaid with
available sources, including pooled tax increment; and
WHEREAS, in order to make the Minimum Improvements economically feasible for
the Developer to construct, the Authority plans to reimburse the Developer for
public redevelopment costs in the amount of up to $881,848 by either (i) establishing a
housing Tax Increment Financing District (the “TIF District”) within the
Redevelopment Project pursuant to Minnesota Statutes, Section 469.174 through
469.1794, as amended (the “TIF Act”); or (ii) drawing funds from the City’s Affordable
Housing Trust Fund; and
WHEREAS, on the date hereof, the Board of Commissioners of the Authority
is considering a resolution approving the execution and delivery of a Contract for
Private Development (the “Development Agreement”) with the Developer; and
WHEREAS, the Authority may incur certain costs related to a tax
increment financing district, which costs may be financed on a temporary basis
from available Authority funds; and
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WHEREAS, 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 in order to finance expenditures that are eligible to be paid with tax
increments under the TIF Act; and
WHEREAS, if the Authority moves forward with creating the TIF District, the
Authority may pay for certain administrative costs related to the proposed TIF District
(the “Qualified Costs”), which costs may be financed on a temporary basis from
Authority funds available for such purposes, and the Authority may reimburse itself for
the Qualified Costs from tax increments derived from the property within the TIF District or
from any other available source (the “Interfund Loan”) in accordance with the terms of this
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esolution; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the
Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that:
1. The Authority shall reimburse itself for the Qualified Costs in the amount of
up to $50,000 from the Development Account or any other fund designated by the
Authority, together with interest at the rate stated below. Interest accrues on the
principal amount from the date of each advance. The maximum rate of interest
permitted to be charged is limited to the greater of the rates specified under Minnesota
Statutes, Section 270C.40 and Section 549.09 as of the date the loan or advance is
authorized, unless the written agreement states that the maximum interest rate will
fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or
Section 549.09 are from time to time adjusted. The interest rate shall be 4.0% and will
not fluctuate.
2. Principal and interest (the “Payments”) on the Interfund Loan shall be paid
semiannually on each February 1 and August 1 (each a “Payment Date”), commencing
on the first Payment Date on which the Authority has Available Tax Increment (defined
below), or on any other dates determined by the Executive Director of the Authority,
through the date of last receipt of tax increment from the TIF District.
3. Subject to Section 6 hereof, payments on this Interfund Loan are payable
solely from “Available Tax Increment,” which shall mean, on each Payment Date, tax
increment available after other obligations have been paid, or as determined by the
Executive Director of the Authority, generated in the preceding six (6) months with
respect to the property within the TIF District and remitted to the Authority by Hennepin
County, Minnesota, all in accordance with the TIF Act. Payments on this Interfund Loan
may be subordinated to any outstanding or future bonds or notes issued by the Authority
and secured in whole or in part with Available Tax Increment. The Interfund Loan shall
be paid prior to any pay-as-you-go notes or contracts secured in whole or in part with
Available Tax Increment, and any other outstanding or future interfund loans secured in
whole or in part with Available Tax Increment.
4.The principal sum and all accrued interest payable under this Interfund
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Loan are prepayable in whole or in part at any time by the Authority without premium or
penalty. No partial prepayment shall affect the amount or timing of any other regular
payment otherwise required to be made under this Interfund Loan.
5.This Interfund Loan is evidence of an internal borrowing by the Authority in
accordance with Section 469.178, subdivision 7 of the TIF Act, and, subject to Section 6
hereof,is a limited obligation payable solely from Available Tax Increment pledged to
the payment hereof under this resolution. This Interfund Loan and the interest hereon
shall not be deemed to constitute a general obligation of the State of Minnesota or any
political subdivision thereof, including, without limitation, the Authority. Neither the State
of Minnesota nor any political subdivision thereof shall be obligated to pay the principal
of or interest on this Interfund Loan or other costs incident hereto except out of
Available Tax Increment, subject to Section 6 hereof, and neither the full faith and credit
nor the taxing power of the State of Minnesota or any political subdivision thereof is
pledged to the payment of the principal of or interest on this Interfund Loan or other
costs incident hereto. The Authority shall have no obligation to pay any principal
amount of the Interfund Loan or accrued interest thereon, which may remain unpaid
after the final Payment Date.
6.In the event that the City and the Authority do not create the TIF District,
the Interfund Loan shall be repayable from any availablesource or funds.
7.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.
8.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, however,that the interest rate may not be
increased above the maximum specified in Section469.178, subdivision 7 of the TIF
Act.
9.This resolution is effective on the date hereof.
Adopted by the Housing and Redevelopment Authority in and for the City of
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Richfield, Minnesota this 20day of December, 2021.
Mary B. Supple, Chair
ATTEST:
Maria Regan Gonzalez, Secretary
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