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Home My WebLink About2016-022 EDARCommissioner Lin Myszkowski introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2016-22 AUTHORIZING AN INTERFUND LOAN TO PAY THE PURCHASE PRICE OF THE LAND FOR THE SANCTUARY AT BROOKLYN CENTER PROJECT WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota ("EDA") has previously established Housing Development and Redevelopment Project No. 1 (the "Project Area") and adopted a Redevelopment Plan therefor, as amended (the "Redevelopment Plan"). The EDA has also established Tax Increment Financing (Soils Condition) District No. 4 ("TIF District No. 4") within the Project Area, and adopted a Tax Increment Financing Plan therefor (the "TIF Plan") pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"); WHEREAS, the EDA has authorized certain expenditures from TIF District No. 4 for affordable housing pursuant to Minnesota Statutes 469.1763, Subdivision 2(d) to assist housing that meets the requirement for a qualified low-income building, as that term is used in section 42 of the Internal Revenue Code; WHEREAS, pursuant to a TIF Development Agreement, dated as of November 9, 2016 (as the same may be amended from time to time, the "TIF Development Agreement"), between the EDA and The Sanctuary At Brooklyn Center, LP (the "Developer") the EDA has agreed to convey certain real property (the "Development Property") to the Developer to assist in financing a housing facility that meets the requirement for a qualified low-income building, as that term is used in section 42 of the Internal Revenue Code, in exchange for a Purchase Price Promissory Note, dated as of November 9, 2016, in the amount of $1,500,000 (the "Purchase Price Note") to which will be credited the tax increment received by the EDA from TIF District No. 4 which is not otherwise pledged to other obligations of TIF District No. 4 (the "TIF 4 Available Tax Increment") unless the Developer is obligated to repay the Purchase Price Note from Net Sale Proceeds (as defined therein); WHEREAS, under Section 469.178, Subdivision 7 of the TIF Act, the EDA 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; WHEREAS, the EDA has determined that TIF 4 Available Tax Increment is not currently available to pay the cost of the Development Property and the EDA has further determined to utilize tax increments from the EDA's Tax Increment Financing District No. 3 ("TIF District No. 3") on a temporary basis to finance the Developer's acquisition of the Development Property as an interfund loan pursuant to Minnesota Statutes, Section 469.178, Subd. 7; NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development Authority of Brooklyn Center, Minnesota ("Board") as follows: EDA RESOLUTION NO. 2016-22 1. The EDA hereby designates the use of $1,500,000 of tax increments from TIF District No. 3 to finance the Developer's acquisition of the Development Property as an interfund loan in accordance with the terms of this resolution and the TIF Act (the "TIF 3 Interfund Loan") and hereby determines to reimburse TIF District No. 3 in the amount of the $1,500,000 principal amount of the TIF 3 Interfund Loan, together with interest thereon at 3.50% per annum, which does not exceed the greater of the rates specified under Sections 270C.40 or 549.09, from TIF 4 Available Tax Increment or from Net Sale Proceeds payable under the Purchase Price Note. 2. Principal of and interest on the Interfund Loan in approximately the amounts set forth in Exhibit A ("Payments") shall be paid annually on each December 31 (each a "Payment Date"), commencing on the first Payment Date on which the EDA has TIF 4 Available Tax Increment or Net Sale Proceeds payable under the Purchase Price Note, or on any other dates determined by the City Finance Director, until the City Finance Director determines the principal of and interest on the TIF 3 Interfund Loan have been paid in full or there is no fiirther TIF 4 Available Tax Increment and no further Net Sale Proceeds payable under the Purchase Price Note. 3. Payments on the TIF 3 Interfund Loan may be subordinated to any outstanding or future bonds, notes, or contracts 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 TIF 4 Available Tax Increment. 4. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the EDA without premium or penalty. 5. This resolution is evidence of an internal borrowing by the EDA in accordance with Section 469.178, subdivision 7 of the TIF Act, and is a special, limited obligation payable solely from TIF 4 Available Tax Increment or Net Sale Proceeds payable under the Purchase Price Note pledged to the payment hereof under this resolution. The TIF 3 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 City of Brooklyn Center, Minnesota (the "City"). Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the TIF 3 Interfund Loan or other costs incident hereto except out of TIF 4 Available Tax Increment. The EDA shall have no obligation to pay any principal amount of the TIF 3 Interfund Loan or accrued interest thereon from any other source, and such amounts may remain unpaid after the final Payment Date. 6. The EDA may at any time make a determination to forgive the outstanding principal amount and accrued interest on the TIF 3 Interfund Loan, in whole or in part, on any date from time to time, to the extent permissible under law. 7. The EDA 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. subd. 7 of the TIF Act. EDA RESOLUTION NO. 2016-22 November 14, 2016 Date ATTEST: Secretary President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner April Graves and upon vote being taken thereon, the following voted in favor thereof: Tim Willson, April Graves, Kris Lawrence -Anderson, Lin Myszkowski, Dan Ryan and the following voted against the same: whereupon said resolution was declared duly passed and adopted. EDA RESOLUTION NO. 2016-22 Exhibit A Estimated Repayment Schedule Loan Amount $ 1,500,000.00 Interest Rate 3.50% No. of Payments 6 Payments $281,502.31 12/31/2017 Beginning $281,502.31 229,002.31 52,500.00 Cumulative Cumulative Ending Date Balance Payment Principal Interest Principal Interest Balance 12/31/2017 1,500,000.00 $281,502.31 229,002.31 52,500.00 229,002.31 52,500.00 1,270,997.69 12/31/2018 1,270,997.69 $281,502.31 237,017.39 44,484.92 466,019.70 96,98492 1,033,980.30 12/31/2019 1,033,980.30 $281,502.31 245,313.00 36,189.31 711,332.70 133,174.23 788,667.30 12/31/2020 788,667.30 $281,502.31 253,898.95 27,603.36 965,231.65 160,777.59 534,768.35 12/31/2021 534,768.35 $281,502.31 262,785.42 18,716.89 1,228,017.07 179,494.48 271,982.93 12/31/2022 271,982.93 $281,502.33 271,982.93 9,519.40 1,500,000.00 189,013.88 (0.00)