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HomeMy WebLinkAbout09-10 - ADMIN Resolution - Economic Development Authority - 2009/07/27ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 09-10 RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH DEFEASANCE OF SERIES 2004A BONDS BE IT RESOLVED By the Board Of Commissioners of the St. Louis Park Economic Development Authority ("EDA") as follows: Section 1. Background 1.01. The City has duly established the following project areas and tax increment districts: (i) Excelsior Boulevard Redevelopment Project (the "Excelsior Boulevard District"); (ii) Oak Park Village Redevelopment Project (the "Oak Park District"; and (iii) the Highway 7 Development District (the "Highway 7 District") pursuant to Minnesota Statutes, Sections 469.001 through 469.047, 472A, and Sections 469.174 to 469.179 and predecessor statutes (Act). The Excelsior Boulevard District and Oak Park District are referred to together as the "Pre -79 Districts'; the Highway 7 Development District is referred to as the "Highway 7 District'; and all three districts are referred to together as the "Districts." 1.02. Pursuant to Minnesota Statutes, Sections 469.090 to 469.1081, the City transferred control and operation of the Districts to EDA. 1.03. By Resolution No. 90-4 of the EDA and Resolution No. 90-29 of the City, the geographical areas of the project areas associated with the Districts were expanded and joined (such expanded coterminous area is referred to herein as the "Project Area"). 1.04. In order to refund certain bonds issued to finance certain costs of the Project Area, the City issued its $7,490,000 General Obligation Tax Increment Refunding Bonds, Series 2004A of the City, dated April 7, 2004 (the "Series 2004A Bonds"). 1.05. In connection with issuance of the Series 2004A Bonds, the City and Authority entered into that certain Tax Increment Pledge Agreement dated as of April 7, 2004 (the "Pledge Agreement"), under which the EDA pledged Available Tax Increment (as defined therein) to payment of debt service on the Series 2004A Bonds. 106. The City and EDA have determined to defease the Series 2004A Bonds maturing in years 2010 through 2016, and in connection with such partial defeasance have determined to enter into a Supplement to Pledge Agreement (the "Pledge Agreement Supplement"). The Pledge Agreement Supplement (among other things) authorizes the deposit of Available Tax Increments and other EDA revenues in an escrow account for partial defeasance of the Series 2004A Bonds. EDA Resolution No. 09-10 -2- 1.07. EDA anticipates that Available Tax Increments from the Districts will be insufficient to fully fund the escrow account in order defease the specified maturities of the Series 2004A Bonds, and that other EDA revenues will be needed to make such deposit. 1.08. Under Section 469.178, Subdivision 7 of the Act, 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 Act. 1.09. The EDA has determined that, in furtherance of its economic development and redevelopment goals, it is reasonable and necessary to advance funds from any sources legally available to the EDA to fund the escrow agreement required to partially defease the Series 2004A Bonds as described in the Pledge Agreement Supplement, and apply certain tax increments to repay such advance as further described in this Resolution (referred to as the "Interfund Loan") Section 2. Approval of Interfund Loan. 2.01. The Interfund Loan is repayable according to the following terms: a. The principal amount of the Interfund Loan is the aggregate amount of advance of EDA funds described in the Pledge Agreement Supplement. The maximum aggregate principal amount of the Interfund Loan is $1,000,000. b. Interest will accrued on the principal amount of the advance from the date of deposit in the defeasance escrow, at the rate of 5% per annum (which is the greatest of the rate specified under Minnesota Statutes, Section 270C.40 and Section 549.09, both in effect for calendar year 2009). C. Payments on the Interfund Loan will be made from tax increment derived from: (i) the Highway 7 District, on parity with the pledge of such tax increment to the remaining maturities of the Series 2004A Bonds that are not defeased by the defeasance escrow, and on parity with any other obligations of the City or EDA to which such revenues are pledged; and from (ii) any other tax increment financing district within the Project Area from which tax increments may be legally transferred for such purposes. The Finance Director may determine the district that is the source of payment and the amount applied from each such source. d. Payments on the Interfund Loan shall be made on each February 1 and August 1, commencing February 1, 2010 and continuing until the Interfund Loan is repaid, or the Finance Director determines that no further tax increments from districts within the Project Area are available to make payments under this Resolution (the "Termination Date"). EDA Resolution No. 09-10 -3- 2.0.2 The principal and accrued interest on the Interfund Loan are pre -payable in whole or in part at any time by EDA without premium or penalty. 2.03. This resolution is evidence of an interfund loan by EDA in accordance with Section 469.178, subdivision 7 of the Act and an advance under Section 469.176, subd.lc(a)(5) of the Act, and is a limited obligation payable solely from the 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, EDA and 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 the tax increment pledged. The EDA shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the Termination Date. 2.04. EDA may from time to time amend the terms of this resolution to the extent permitted by law. Section 3. Effective Date. This resolution is effective upon approval. Adopted by the Economic Development Authority Tuly 27.2009 Attest Secretary 01'