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HomeMy WebLinkAbout2020-01 EDARCommissioner Ryan introduced the following resolution and moved its adoption: EDA RESOLUTION NO.2020-01 AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH A TAX INCREMENT FINANCING DISTRICT WHEREAS, the Economic Development Authority of the City of Brooklyn Center, Minnesota ("EDA") is considering establishing a Tax Increment Financing District which is anticipated to include certain real property located at or near 6100 Shingle Creels Parkway (the "Property") in the City of Brooklyn Center, Minnesota (the "City") or expanding Tax Increment Financing District No. 7 (Redevelopment District) to include the Property (alternatively as established or expanded, the "TIF District") all pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"); WHEREAS, the EDA may incur certain costs related to the TIF District which may be financed on a temporary basis from available City funds; 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 it may 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, including but not limited to acquisition of land and buildings in the TIF District (including the Property listed above), demolition and site preparation costs and costs of public infrastructure (the "Cost Advances") on a temporary basis from the City's general fund or any other fund, as determined by the City Finance Director, 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, Subd. 7; WHEREAS, the EDA hereby designates the Cost Advances as an interfund loan in accordance with the terms of this resolution and the TIF Act NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development Authority of the City of Brooklyn Center, Minnesota ("Board") as follows: The EDA will reimburse itself for the Cost Advances incurred on or after a date not more than 60 days prior to the date hereof (i.e. November 14, 2019) including without limitation (i) administrative costs incurred prior to the establishment of the TIF District, subject to the limitations of the TIF Act, in an aggregate amount not to exceed the greater of $100,000 and (ii) certain costs incurred in connection with land and building acquisition, demolition and site preparation, and public infrastructure in an aggregate amount not to exceed $5,000,000 (collectively, the "Interfund Loan"), together with interest at the rate of 5% per annum (which is the greater of the rates specified under Sections 270C.40 or 549.09 in accordance with Minnesota Statutes, Section 469.178, Subdivision 7); provided, however, the City Finance Director is authorized to specify a lower rate. 1 631332v1BR291-386 2. Principal and interest ("Payments") on the Interfund Loan shall be paid semiannually on February 1 and August 1 (each a "Payment Date"), commencing on the first Payment Date on which the EDA has received Available Tax Increment (defined below), or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the TIF District (the "Maturity Date"). 3. Payments on the Interfund Loan will be made solely from the tax increment from the TIF District received by the City from Hennepin County in the 6-month period before any Payment Date, net of the amount paid under any agreement with a private developer or otherwise pledged to the payment of any obligation (the "Available Tax Increment"). Payments shall be applied first to accrued interest, and then to unpaid principal, unless otherwise specified by the City Finance Director. 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 City Finance Director. Payments on this 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 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 limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The 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. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The EDA shall not have any obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the termination or expiration of the TIF District. 6. The EDA may at any time make a determination to forgive the outstanding principal amount and accrued interest on the 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, 8. This resolution is effective upon adoption. January 13, 2020 Date President 2 631332v1BR291-386 ATTEST: ecr tary�� �- The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Graves and upon vote being taken thereon, the following voted in favor thereof. Butler, Elliott, Graves, Lawrence -Anderson, Ryan and the following voted against the same: None. whereupon said resolution was declared duly passed and adopted. 3 631332v1BR291-386