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HomeMy WebLinkAbout2002-008 EDAR1 1 1 Commissioner Tim Ricker introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2002 -08 RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT AND APPROVING THE ASSIGNMENT OF DEVELOPER'S RIGHTS TO CERTAIN TAX INCREMENT PAYMENTS WHEREAS, the Brooklyn Center Economic Development Authority (the "Authority has heretofore entered into a Development Agreement dated April 27, 1999 (the "Development Agreement between the Authority and Twin Lakes Business Park, a Minnesota limited liability company (the "Developer WHEREAS, the Authority agreed, pursuant to the Development Agreement, to provide tax increment assistance to the Developer to help pay the cost of the removal and remediation of certain hazardous substances on the Development Property (as defined in the Development Agreement); WHEREAS, as a result of changes to the State of Minnesota's property tax system, the amount of tax increment assistance anticipated to be received by the Developer pursuant to the Development Agreement has been significantly reduced; WHEREAS, the Developer has requested that the Authority amend the Development Agreement in certain respects; WHEREAS, there has been prepared and presented to the Authority a form of First Amendment to Development Agreement (the "First Amendment to Development Agreement pursuant to which the Authority has agreed to, among other things, to extend the final payment date of the payment of tax increments to the Developer and to pledge tax increments derived from Tax Increment District No. 4, on a parity basis, to the payment of the Tax Increment Revenue Notes issued pursuant to the Development Agreement, which Tax Increment Revenue Notes will be reissued pursuant to the First Amendment to Development Agreement (the "Tax Increment Notes WHEREAS, the Developer has requested that the Authority agree to the assignment of he Developer's right to payments under the two separate Tax Increment Revenue Notes to be reissued pursuant to the First Amendment to Development Agreement in the principal amounts of $1,666,143 and $758,056 to Joslyn Manufacturing Co., LLC, and First National Bank of Omaha, respectively (collectively, the "Assignees 1 1 EDA RESOLUTION NO. 2002 08 NOW, THEREFORE, BE IT RESOLVED by the Brooklyn Center Economic Development Authority in and for the City of Brooklyn Center: 1. The Board of Commissioners hereby approves the First Amendment to Development Agreement in substantially the form submitted, and the Executive Director and Secretary are hereby authorized and directed to execute the First Amendment to Development Agreement on behalf of the Authority, and to execute and deliver the Tax Increment Revenue Notes to be reissued under the terms and conditions of the First Amendment to Development Agreement. 2. The Board of Commissioners hereby approves and consents to the assignment of the Developer's rights in the Tax Increment Revenue Notes to the Assignees. May 28, 2002 Date Presi ti ent The motion for the adoption of the foregoing resolution was duly seconded by commissioner Ed Nelson and upon vote being taken thereon, the following voted in favor thereof: Myrna Kragness, Kay Lasman, Ed Nelson, Bob Peppe, and Tim Ricker; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. 1 1 1 EDA RESOLUTION NO. 2002 -08 1405734v2 FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BY AND BETWEEN BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY AND TWIN LAKES BUSINESS PARK This document drafted by: BRIGGS AND MORGAN (MMD) Professional Association 2200 West First National Bank Building St. Paul, Minnesota 55101 1 1 EDA RESOLUTION NO. 2002 -08 FIRST AMENDMENT TO DEVELOPMENT AGREEMENT THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (the "First Amendment made as of the 28 day of May, 2002, by and between the Brooklyn Center Economic Development Authority, Minnesota (the "Authority a body corporate and politic organized and existing under the laws of the State of Minnesota and Twin Lakes Business Park, a Minnesota limited liability company (the "Developer WITNESSETH: WHEREAS, the Authority and the Developer have heretofore entered into a Development Agreement dated as of April 27, 1999 (the "Development Agreement pursuant to which the Authority agreed to use tax increment financing to assist with certain public redevelopment costs of a project undertaken by the Developer within Tax Increment Financing District No. 4 (the "Tax Increment District and WHEREAS, the Development Agreement provided for the issuance of one or more tax increment notes payable from tax increments derived from certain real property located with the Tax Increment District, and pursuant to the Development Agreement the Authority has heretofore issued its $1,600,000 Tax Increment Revenue Note (Twin Lakes Business Park) dated December 17, 1999 (the "Series 1999 Note and its $569,938 Tax Increment Revenue Note No. 2 (Twin Lakes Business Park) dated January 25, 2002 (the "Series 2002 Note and WHEREAS, as a result of changes to the State of Minnesota's property tax system, which changes have reduced the anticipated collection of tax increments pledged to the payment of the Series 1999 Note and Series 2002 Note (collectively, the "Prior Notes the Developer has requested that the Authority agree to amend the Development Agreement and Prior Notes in accordance with the terms and provisions of this First Amendment; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other that the Development Agreement is hereby amended as follows: 1405734v2 1 EDA RESOLUTION NO. 2002 -08 1. Definitions. The following capitalized terms set forth in Section 1.1 of the Development Agreement are hereby amended as follows: "Amended Notes" means the tax increment notes to be issued in substantially the forms attached to the First Amendment to Development Agreement as Exhibits A and B; "Final Payment Date means the earlier of the date on which the principal of the Amended Notes has been paid in full or the first February 1 or August 1 following the date of termination of the Tax Increment District; First Amendment to Development Agreement means the First Amendment to Development Agreement by and between the Authority and the Developer dated May 28, 2002;" 2. A new Section 3.8 is hereby added to the Development Agreement to read as follows: "Section 3.8 Issuance of Amended Tax Increment Notes. (a) Upon execution of the First Amendment to Development Agreement the Authority will promptly issue its Tax Increment Revenue Notes in the principal amounts of $1,666,143 and $758,056 in substitution and exchange for the Series 1999 Note and Series 2002 Note respectively (the "Amended Notes The Authority will deliver the Amended Notes to the Developer or its assignee in exchange for the original copies of the Prior Notes. (b) The Amended Notes shall bear simple, non compounded interest at the rate of eight percent (8 per annum from the most recent Note Payment Date of the Prior Notes. Interest shall be computed on the basis of a 360 year of twelve (12) 30 -day months. (c) The Authority hereby pledges 97.50% of the Tax Increments generated by the Tax Increment District (the "Pledged Tax Increment to the payment of the Amended Notes, such pledge to be on a parity basis to the Amended Notes. On each Note Payment Date, the Authority shall pay to the registered holder of the Amended Notes Tax Increments. If the Tax Increments are not sufficient to pay the accrued interest then due on the Amended Notes, the unpaid interest shall be carried forward without interest. The amount of Pledged Tax Increments to applied to pay principal and interest on the respective Amended Notes shall be pro rata based on the outstanding principal amount of each of the Amended Notes. Any Pledged Tax Increments in excess of the accrued interest shall be applied to reduce the outstanding principal amount of the Amended Notes. (d) The Amended Notes shall be special and limited obligations of the Authority and not general obligations of the Authority, and only the Pledged Tax Increments shall be used to pay the principal of and interest on the Amended Notes. If, 1405734v2 2 1 1 1 EDA RESOLUTION NO. 2002 -08 on any Note Payment Date, the Pledged Tax Increments are insufficient for such purposes, the difference shall be carried forward and shall be paid if and to the extent that on a future Note Payment Date there are sufficient Pledged Tax Increments in excess of the amounts needed to pay the accrued interest then due on the Amended Notes. (e) The Authority's obligation to make payments on the Amended Notes on any Note Payment Date shall be conditioned upon the requirement that (A) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement and (B) this Agreement shall not have been terminated pursuant to Section 4.2(b). (0 The Amended Notes shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibits A and B attached to the First Amendment to Development Agreement. In the event of any conflict between the terms of the Amended Notes and the terms of this Section 3.8, the terms of the Amended Notes shall govern. The issuance of the Amended Notes pursuant and subject to the terms of the First Amendment to Development Agreement are hereby authorized and approved by the Authority. (g) The Authority hereby consents to any assignment by the Developer of the Amended Notes to the Developer's Lender or the Ground Lessor. The Developer shall promptly notify the Authority of any such assignment." 3. Upon issuance of the Amended Notes, any references in the Development Agreement to Note or Tax Increment Note shall be deemed to refer to the Amended Notes. 4. This First Amendment may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 5. This First Amendment will be governed and construed in accordance with the laws of the State. 6. Except as herein amended, all other terms and provisions of the Development Agreement shall remain in full force and effect. 1405734v2 3 1 1 1 EDA RESOLUTION NO. 2002 -08 IN WITNESS WHEREOF, the Authority has caused this First Amendment to Development Agreement to be duly executed in its name and on its behalf and the Developer has caused this Agreement to be duly executed in its name and on its behalf, on or as of the date first above written. This is a signature page to the First Amendment to Development Agreement dated May 28, 2002, by and between the Brooklyn Center Economic Development Authority and Twin Lakes Business Park. 1405734v2 4 BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY By Its By Its 1 1 EDA RESOLUTION NO. 2002 -08 TWIN LAKES BUSINESS PARK By Its This is a signature page to the First Amendment to Development Agreement dated May 28, 2002, by and between the Brooklyn Center Economic Development Authority and Twin Lakes Business Park. 1405734v2 5 1 1 EDA RESOLUTION NO. 2002 -08 1405734v2 EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY $1,666,143 AMENDED TAX INCREMENT REVENUE NOTE (TWIN LAKES BUSINESS PARK) The Brooklyn Center Economic Development Authority, Minnesota (the "Authority hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts to Twin Lakes Business Park, a Minnesota limited liability company, or its registered assigns (the "Registered Owner but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall equal from time to time the principal amount stated above, as reduced to the extent that such principal shall have been paid in whole or in part pursuant to the terms hereof and as provided in that certain Development Agreement, dated as of April 27, 1999, as the same may be amended from time to time (the "Development Agreement by and between the Brooklyn Center Economic Development Authority, Minnesota (the "Authority and Twin Lakes Business Park, a Minnesota limited liability company (the "Company The unpaid principal amount hereof shall bear interest from the date of this Note at the simple, non compounded rate of eight percent (8.00)% per annum. Interest shall be computed on the basis of a 360 -day year of twelve (12) 30 -day months. The amounts due under this Note shall be payable on each February 1 and August 1 of each year (the "Payment Dates commencing on the February 1 or August 1 first occurring after the date of issuance of this Note to and including the earlier of (a) the February 1 or August 1 on which the principal of this Note is paid in full, or (b) the first February 1 or August 1 following termination of the Tax Increment District No. 4 (the "Final Payment Date This Note is issued on a parity with the Authority's Amended Tax Increment Revenue Note No. 2 (Twin Lakes Business Park) dated 2002 (the "Parity Note On each Payment Date the Authority shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day preceding such Payment Date an amount equal to a pro rata share (based on the outstanding principal of this Note and the Parity Note) of 97.50% of the Tax Increments (as hereinafter defined) received by the Authority during the six month period preceding such Payment Date. The payments shall be applied first to pay accrued interest and then to reduce the principal of this Note. The Payment Amounts due hereon shall be payable solely from a pro rata share of tax increments (the "Tax Increments derived from Tax Increment District No. 4, and which Tax Increments are paid to the Authority and which the Authority is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.179, as the same may be amended or supplemented from time to time (the "Tax Increment Act This Note shall A -1 1 1 1 EDA RESOLUTION NO. 2002 -08 terminate and be of no further force and effect following the Final Payment Date defined above, on any date upon which the Authority shall have terminated the Development Agreement under Section 4.2(b) thereof, or on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. The Authority makes no representation or covenant, express or implied, that the Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall become payable, if said Event of Default shall thereafter have been cured; and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the Authority elects to cancel and rescind the Development Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Agreement, including without limitation Section 4.2 thereof, for a fuller statement of the rights and obligations of the Authority to pay the principal of this Note and the interest thereon, and said provisions are hereby incorporated into this Note as though set out in full herein. This Note is a special, limited revenue obligation and not a general obligation of the Authority and is payable by the City only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the City of Brooklyn Center, Minnesota, and neither the full faith and credit nor the taxing powers of the Authority are pledged to the payment of the principal of or interest on this Note and no property or other asset of the Authority, save and except the above referenced Tax Increments, is or shall be a source of payment of the Authority's obligations hereunder. This Note is issued by the Authority in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. This Note may be assigned in accordance with the provisions of the Development Agreement consent of the Authority. In order to assign the Note, the assignee shall surrender the same to the Authority either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the City. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional statutory limitation thereon. 1405734v2 A -2 1 1 EDA RESOLUTION NO. 2002 -08 IN WITNESS WHEREOF, the Brooklyn Center Economic Development Authority has caused this Note to be executed by the manual signatures of its President and Executive Director and has caused this Note to be issued on and dated 2002. By By Its President Its Executive Director 1405734v2 A -3 1 EDA RESOLUTION NO. 2002 -08 It is hereby certified that the foregoing Note, as originally issued on 2002, was on said date registered in the name of Twin Lakes Business Park, a Minnesota limited liability company, and that, at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS DATE OF SIGNATURE OF REGISTERED OWNER REGISTRATION OF SECRETARY Twin Lakes Business Park Metropolitan Center Suite 3060 333 South Seventh Street Minneapolis, Minnesota 2002 1405734v2 CERTIFICATE OF REGISTRATION A -4 1 ASSIGNMENT I FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto EDA RESOLUTION NO. 2002 -08 (Please print or typewrite name and address of Transferee. Include information for all joint owners if the Note is held by joint account) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed by: Signature(s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having member- ship in one of the major stock exchanges. Please insert Social Security Number or other identifying number of Assignee. 1405734v2 A -5 Notice: The signature(s) on this assignment must correspond with the name(s) appearing on the face of this Note in every particular, without alteration or any change whatever. 1 EDA RESOLUTION NO. 2002 -08 1405734v2 EXHIBIT B UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY $758,056 AMENDED TAX INCREMENT REVENUE NOTE NO. 2 (TWIN LAKES BUSINESS PARK) The Brooklyn Center Economic Development Authority, Minnesota (the "Authority hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts to Twin Lakes Business Park, a Minnesota limited liability company, or its registered assigns (the "Registered Owner but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall equal from time to time the principal amount stated above, as reduced to the extent that such principal shall have been paid in whole or in part pursuant to the terms hereof and as provided in that certain Development Agreement, dated as of April 27, 1999, as the same may be amended from time to time (the "Development Agreement"), by and between the Brooklyn Center Economic Development Authority, Minnesota (the "Authority and Twin Lakes Business Park, a Minnesota limited liability company (the "Company The unpaid principal amount hereof shall bear interest from the date of this Note at the simple, non compounded rate of eight percent (8.00)% per annum. Interest shall be computed on the basis of a 360 -day year of twelve (12) 30 -day months. The amounts due under this Note shall be payable on each February 1 and August 1 of each year (the "Payment Dates commencing on the February 1 or August 1 first occurring after the date of issuance of this Note to and including the earlier of (a) the February 1 or August 1 on which the principal of this Note is paid in full, or (b) the first February 1 or August 1 following termination of the Tax Increment District No. 4 (the "Final Payment Date This Note is issued on a parity with the Authority's Amended Tax Increment Revenue Note (Twin Lakes Business Park) dated 2002 (the "Parity Note On each Payment Date the Authority shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day preceding such Payment Date an amount equal to a pro rata share (based on the outstanding principal of this Note and the Parity Note.) of 97.50% of the Tax Increments (as hereinafter defined) received by the Authority during the six month period preceding such Payment Date. The payments shall be applied first to pay accrued interest on this Note and then to reduce the principal of this Note. The Payment Amounts due hereon shall be payable solely from a pro rata share of tax increments (the "Tax Increments derived from Tax Increment District No. 4, and which Tax Increments are paid to the Authority and which the Authority is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.179, as the same may be amended or supplemented from time to time (the "Tax Increment Act This Note shall B -1 1 1 1 EDA RESOLUTION NO. 2002 -08 terminate and be of no further force and effect following the Final Payment Date defined above, on any date upon which the Authority shall have terminated the Development Agreement under Section 4.2(b) thereof, or on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. The Authority makes no representation or covenant, express or implied, that the Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall become payable, if said Event of Default shall thereafter have been cured; and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the Authority elects to cancel and rescind the Development Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Agreement, including without limitation Section 4.2 thereof, for a fuller statement of the rights and obligations of the Authority to pay the principal of this Note and the interest thereon, and said provisions are hereby incorporated into this Note as though set out in full herein. This Note is a special, limited revenue obligation and not a general obligation of the Authority and is payable by the City only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the City of Brooklyn Center, Minnesota, and neither the full faith and credit nor the taxing powers of the Authority are pledged to the payment of the principal of or interest on this Note and no property or other asset of the Authority, save and except the above referenced Tax Increments, is or shall be a source of payment of the Authority's obligations hereunder. This Note is issued by the Authority in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. This Note may be assigned in accordance with the provisions of the Development Agreement consent of the Authority. In order to assign the Note, the assignee shall surrender the same to the Authority either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the City. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional statutory limitation thereon. 1405734v2 B -2 1 1 1 EDA RESOLUTION NO. 2002 -08 IN WITNESS WHEREOF, the Brooklyn Center Economic Development Authority has caused this Note to be executed by the manual signatures of its President and Executive Director and has caused this Note to be issued on and dated 2002. By B Its President Its Executive Director 1405734v2 B -3 1 1 EDA RESOLUTION NO. It is hereby certified that the foregoing Note, as originally issued on 2002, was on said date registered in the name of Twin Lakes Business Park, a Minnesota limited liability company, and that, at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS DATE OF SIGNATURE OF REGISTERED OWNER REGISTRATION OF SECRETARY Twin Lakes Business Park Metropolitan Center 333 South Seventh Street Minneapolis, Minnesota 2002 1405734v2 2002 -08 CERTIFICATE OF REGISTRATION B -4 1 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto EDA RESOLUTION NO. 2002 -08 (Please print or typewrite name and address of Transferee. Include information for all joint owners if the Note is held by joint account) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed by: Signature(s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having member- ship in one of the major stock exchanges. Please insert Social Security Number or other identifying number of Assignee. 1405734v2 B -5 Notice: The signature(s) on this assignment must correspond with the name(s) appearing on the face of this Note in every particular, without alteration or any change whatever.