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HomeMy WebLinkAbout08-06 - ADMIN Resolution - Economic Development Authority - 2008/05/19ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 08-06 RESOLUTION RATIFYING AND CLARIFYING FUND LOAN RELATED TO PARK COMMONS AND EXCELSIOR BOULEVARD TIF DISTRICTS RECITALS A. The City of St. Louis Park ("City') and its Economic Development Authority ("Authority') have undertaken a program to promote the development and redevelopment of land which is underutilized within the City, and in this connection the Authority administers the Redevelopment Project No. 1 (the "Project Area") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.1081 (the "Act"). B. Pursuant to the Act, the Authority is authorized to undertake certain activities to prepare such real property for development and redevelopment by private enterprise. C. Within the Project the Authority and City have established the Excelsior Boulevard Tax Increment Financing District (the "Excelsior Boulevard TIF District") and the Park Commons Tax Increment Financing District (the "Park Commons TIF District"). D. In connection with redevelopment within the Park Commons TIF District, the City and Authority entered into an Amended and Restated Contract for Private Redevelopment with Meridian Properties Real Estate Development LLC (the "Redeveloper") dated as of July 23, 2001, as amended (the "Contract"). E. Under the Contract, the Authority agreed to finance certain public improvements within the TIP District, either by issuing general obligation tax increment bonds secured by tax increments from the Park Commons TIF District, or by using remaining proceeds of the City's General Obligation Tax Increment Bonds, Series 1997A (the "Series 1997A Bonds"). The Series 1997A Bonds were secured primarily by tax increments from the Excelsior Boulevard TIF District. F. In 2002, the Authority elected to finance the public improvements described in the Contract from proceeds of the Series 1997A Bonds, and in accordance with Section 7.3(c)(7) of the Contract, retained Available Tax Increment (as defined in the Contract) from the Park Commons TIF District to repay the Authority based on a payment schedule determined as if the City had issued new tax increment bonds. The effect of that provision was to create an interfund loan payable from the Park Commons TIF District to the Excelsior Boulevard TIF District, with interest rate at the rate of 4.53% (determined by the City's financial advisor in accordance with the Contract). G. Expenditure of the Series 1997A Bond proceeds diverted funds that were available for ongoing redevelopment activities in the Project Area. Accordingly, the Authority determined to replenish the funds in the Excelsior Boulevard TIF District by making a loan from the Authority's Development Fund to the account for the Excelsior Boulevard TIF District. By Resolution No. 07- 02 approved January 16, 2007 (the 2007 Interfund Loan Resolution) the Authority approved a transfer of funds in the amount of $2,945,497.40 (representing the unpaid balance of the original interfund loan described in the Contract) from the Development Fund to the Excelsior Boulevard TIF District fund, thereby making those funds immediately available for redevelopment activities until termination of the Excelsior Boulevard TIF District on August 1, 2009. EDA Resolution No. 08-06 -2- H. The Authority has now determined to clarify the intent of the original interfund loan described in the Contract and 2007 Interfund Loan Resolution. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the St. Louis Park Economic Development Authority as follows: 1. The Authority ratifies the original interfund loan described in the Contract, and clarifies that the interest rate on that loan, calculated as described in the Contract, is 4.53% and the payment schedule is attached hereto as Exhibit A. The interest rate is less than the maximum rate allowable under Minnesota Statutes, Section 469.178, subd. 7 in effect in 2002 (7%) which is the year when the loan was advanced. 2. The 2007 Interfund Loan Resolution effectively refinanced the original interfund by prepaying the balance due to the Excelsior Boulevard TIF District, and transferring the liability to the Development Fund. As a result, payments as described in Exhibit A are now payable from the Park Commons TIF District to the Development Fund. 3. The purpose of the transfer described in the 2007 Interfund Loan was to replace funds in the Excelsior Boulevard TIF District that are currently needed for redevelopment activities in the Project Area, and which funds would have been available if the Authority had financed its public improvement requirements under the Contract by issuing new tax increment bonds secured by tax increments from the Park Commons TIF District.. 4. The Board authorizes and directs staff and consultants to take all actions necessary to carry out the intent of this resolution. Approved by the Board of Commissioners of the St. Louis Park Economic Development ity this May 19, 2008. for Administration: Adopted by the Economic Development Authority May 19, 2008 it for President Attest / L_v AM1I�I