HomeMy WebLinkAbout2022-14 EDAR Commissioner Graves introduced the following resolution and moved its adoption:
EDA RESOLUTION NO. 2022-14
RESOLUTION APPROVING AN OPTION AGREEMENT WITH JO
COMPANIES, LLC AND A PRELIMINARY TERM SHEET FOR A
DEVELOPMENT AGREEMENT
WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota
(the "Authority") owns the parcels located in the City of Brooklyn Center (the "City") legally
described on Exhibit A attached hereto (the "Option Property"); and
WHEREAS, JO Companies, LLC, a Minnesota limited liability company (the
"Developer") has proposed to develop the Option Property into a multi-story, approximately 54-
unit apartment building with at least 40 percent of the units occupied or held for occupancy by
persons and families whose incomes do not exceed 60 percent of the area median income, and
underground and surface parking stalls (the "Development"); and
WHEREAS, the Authority and the Developer have negotiated that certain Option
Agreement (the "Option Agreement"), setting out the respective rights of the Developer to
purchase the Option Property from the Authority, contingent among other things on the Developer
obtaining financing for the Development; and
WHEREAS, the Authority and the City have undertaken a program to promote
economic development and job opportunities,promote the development and redevelopment of land
which is underutilized within the City, and promote the development of adequate and affordable
housing, and in this connection created a development district in the City; and
WHEREAS,the City and the Authority are considering establishing a tax increment
financing district which is anticipated to include the Option Property (the "TIF District") pursuant
to Minnesota Statutes Sections 469.174 to 469.1794, as amended (the "TIF Act"); and
WHEREAS, the City or the Authority may incur certain costs related to the TIF
District which may be financed on a temporary basis from available Authority funds; and
WHEREAS, under Section 469.178, subdivision 7 of the TIF Act, the City and the
Authority are authorized to advance or loan money from any fund loan from which such advances
may legally be made in order to finance expenditures that are eligible to be paid with tax increments
under the TIF Act; and
WHEREAS, the City has determined that it or the Authority must pay for
administrative costs associated with the establishment of the TIF District and certain other costs
incurred in connection with the proposed development of the TIF District(the"Cost Advances")on
a temporary basis from the City's General Fund, the Authority's General Fund, or any other fund
from which such advances, from time to time, may be legally made (the "Fund") as an interfund
loan pursuant to Minnesota Statutes Section 469.178, subdivision 7; and
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EDA RESOLUTION NO. 2022-14
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the
Economic Development Authority of Brooklyn Center, Minnesota(the "Board"), as follows:
1. Subject to all of the contingencies set forth therein, including, without limitation, the
establishment of the TIF District after all proceedings required by the TIF Act and a
public hearing on the sale of the Option Property to the Developer in accordance with
the requirements of law, the Authority hereby approves the Preliminary Term Sheet
and the Option Agreement,in substantially the forms presented to the Board,together
with any related documents necessary in connection therewith, including without
limitation, documents or certifications referenced in or attached thereto (the
"Development Documents"), and hereby authorizes the President and Executive
Director to execute,on behalf of the Authority,the Development Documents to which
the Authority is a party and to carry out, on behalf of the Authority, the Authority's
obligations thereunder when all conditions precedent thereto have been satisfied.
2. The approval hereby given to the Development Documents includes approval of such
additional details therein as may be necessary and appropriate and such modifications
thereof, deletions therefrom and additions thereto as may be necessary and
appropriate and approved by legal counsel to the Authority and by the officers
authorized herein to execute said documents prior to their execution; and said officers
are hereby authorized to approve said changes on behalf of the Authority. The
execution of any instrument by the appropriate officers of the Authority herein
authorized shall be conclusive evidence of the approval of such document in
accordance with the terms hereof. This Resolution shall not constitute an offer and
the Development Documents shall not be effective until the date of execution thereof
as provided herein. In the event of absence or disability of the authorized officers,
any of the documents authorized by this Resolution to be executed may be executed
without further act or authorization of the Board by any duly designated acting
official, or by such other officer or officers of the Board as, in the opinion of legal
counsel to the Authority, may act on their behalf.
3. The Authority hereby authorizes the expenditure of available Authority general fund
dollars for the administrative costs of the TIF District in such amount as is permitted
under the TIF Act and determined necessary and set forth in writing by the Executive
Director of the Authority for the establishment of the TIF District.
4. This Resolution is evidence of an internal borrowing by the Authority in accordance
with Section 469.178, subdivision 7 of the TIF Act in an amount equal to the Cost
Advances, and is a special, limited obligation payable solely from the respective TIF
District pledged to the payment hereof under this Resolution (collectively, the
"Interfund Loans"). The Authority will reimburse itself solely from the tax increment
from the applicable TIF District for the Cost Advances together with interest at the
rate of four percent per annum (which is the greater of the rates specified under
Section 270C.040 or 549.09,in accordance with Minnesota Statutes Section 469.178,
subdivision 7); provided, however, the Executive Director of the Authority is
authorized to specify a lower rate. Payments shall be applied first to accrued interest,
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EXHIBIT A
Legal Description of the Option Property
Parcel 1
6017 Brooklyn Boulevard
Lot 1, Block 6, Wangstad's Brooklyn Terrace, according to the recorded plat thereof, County of Hennepin,
State of Minnesota.
PID 34-119-21-43-0049
Parcel 2
6101 Brooklyn Boulevard
Lot 2, Block 6, Wangstad's Brooklyn Terrace, according to the recorded plat thereof, County of Hennepin,
State of Minnesota.
PID 34-119-21-43-0050
Parcel 3
3600 61'Avenue N.
Lot 3, Block 6, Wangstad's Brooklyn Terrace, according to the recorded plat thereof, County of Hennepin,
State of Minnesota.
PID 34-119-21-43-0051
Parcel 4
3606 61St Avenue N.
Lot 4, Block 6, Wangstad's Brooklyn Terrace, according to the recorded plat thereof, County of Hennepin,
State of Minnesota.
PID 34-119-21-43-0052
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EDA RESOLUTION NO. 2022-14
and then to unpaid principal, unless otherwise specified by the Executive Director of
the Authority. Interest accruing from the date of each Cost Advance will be
compounded semiannually on February 1 and August 1 of each year and added to
principal, unless otherwise specified by the Executive Director of the EDA.
5. Payments on the Interfund Loans may be subordinated to any outstanding or future
bonds, notes, or contacts secured in whole or in part with available tax increment and
are on a parity with any other outstanding or future interfund loans secured in whole
or in part with available tax increment. The Interfund Loans shall not be deemed to
constitute a general obligation of the State of Minnesota or any political subdivision
thereof, including,without limitation,the City, or the Authority. Neither the State of
Minnesota,nor any political subdivision thereof shall be obligated to pay the principal
of or interest on the Interfund Loans or other costs incident hereto except out of the
applicable TIF District. The Authority shall have no obligation to pay any principal
amount of the Interfund Loans or accrued interest thereon from any other source, and
such amounts may remain unpaid after the final Payment Date.
6. The Authority may at any time, make a determination to forgive the outstanding
principal amount and accrued interest on the Interfund Loans, in whole or in part, on
any date from time to time, to the extent permissible under law.
7. The Authority may from time to time amend the terms of this Resolution to the extent
permitted by law, including without limitation, amending 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.
June 27, 2022
Date 1 ent
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
Elliott
and upon vote being taken thereon, the following voted in favor thereof:
Butler, Elliott, Graves, Lawrence-Anderson
and the following voted against the same: Ryan
whereupon said resolution was declared duly passed and adopted.
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