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HomeMy WebLinkAbout08-12 - ADMIN Resolution - Economic Development Authority - 2008/10/06ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 08-12 AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH HIGHWAY 7 CORPORATE CENTER TAX INCREMENTFINANCING DISTRICT BE IT RESOLVED By the Board of Commissioners of the St. Louis Park Economic Development Authority (the "Authority") as follows: Section 1. Background. 1.01. The Authority has established the Highway 7 Corporate Center tax increment financing district (the "TIF District") within Redevelopment Project No. 1 (the "EDA Project") all pursuant to Minnesota Statutes, Sections 469.174 to 469.1799 (the "TIF Act") and Sections 469.001 to 469.047 (the "HRA Act"). 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority 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. 1.04. The Authority intends to advance funds from its Development Fund to pay relocation costs related to the TIP District as more fully described in Section 3.6 of the Contract for Private Redevelopment between the Authority, the City of St. Louis Park ("City"), and Highway 7 Business Center, LLC, as amended (the "Agreement"), and now proposes to designate such advances as an interfund loan in accordance with the terms of this resolution and the TIF Act. Section 2. Repayment of Interfund Loan. 2.01. The Authority will advance, from its Development Fund, moneys to pay relocation costs related to the TIF District, in the principal amount of $20,000. The Authority will reimburse itself for such advances together with interest at the rate of 1% per annum (the "Interfund Loan"). Interest accrues on the principal amount from the date of each advance. The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2008. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each February 1 and August 1 (each a "Payment Date"), commencing on February 1, 2028, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as 95% of the tax increment from the TIF District received by the City from Hennepin EDA Resolution No. 08-12 -2- County in the six-month period before any Payment Date and not otherwise pledged to other bonds, notes or obligations, including without limitation the TIF Notes described in the Agreement. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing Date will be compounded semiannually on February 1 and August 1 of each year and added to principal until the first Payment Date, unless otherwise specified by the City Manager. 2.04. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority 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 Authority 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 Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 2.07. The Authority 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. 3. Effective Date. This resolution is effective upon approval. Administration: Adopted by the Economic Development Authority k October 6, 2008 President Attest