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HomeMy WebLinkAbout06-12 - ADMIN Resolution - Economic Development Authority - 2006/05/01ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 06-12 RESOLUTION AUTHORIZING INTERNAL LOAN FOR ADVANCE OF QUALIFIED HOUSING COSTS IN CONNECTION WITH PARK CENTER TAX INCREMENT FINANCING DISTRICT BE IT RESOLVED by the Board of Commissioners (`Board") of the St. Louis Park Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act'), the Authority previously established its Park Center Boulevard Housing Tax Increment Financing District (the "TIF District') within Redevelopment Project No. 1 in the City. 1.02. Pursuant to Section 469.1763, subd. 2(b) of the TIF Act, the Authority and City are authorized to use increment from the TIF District to pay the costs of a "housing project' as defined in the TIF Act, whether such costs are incurred within or outside the geographic area of the TIF District. 1.03. Because of ambiguities within Section 469.1763 of the TIF Act concerning the availability of tax increment for expenditures for housing projects outside the geographic area of a TIF district if such expenditures are paid after five years following certification of the district (the "Five-year Rule"), legislation is expected to be proposed at the Minnesota Legislature to clarify the Five-year Rule and to allow outside -district expenditures for housing projects after five years following certification. 1.04. The City has approved a $400,000 loan (the "Loan") to PPL Louisiana Court Limited Partnership to rehabilitate Louisiana Court, a housing project as defined in Section 469.174, subd. 11 of the TIF Act. 1.05. The City intends to fund $131,100 of the Loan from City or Authority development account funds, and further desires to reimburse itself for the costs of $131,100 of the Loan through an interfund loan (the "Interfund Loan") using tax increment from the TIF District, subject to the passage of legislation clarifying the Five-year Rule. Section 2. Interfund Loan Authorized. 2.01. The Board approves the Interfund Loan. 2.02. Upon passage of Five-year Rule clarifying legislation, the Executive Director is authorized and directed to allocate $131,100 in tax increment from the TIF District to repay the $131,100 in principal amount of the Interfund Loan, together with accrued interest as described in Section 2.04. Such repayment will be credited to the appropriate account used for immediate funding of the Loan. 2.03. If tax increment available from the TIF District is not immediately sufficient to repay the entire Interfund Loan, the balance of unpaid principal and accrued interest will be payable in installments each February 1 and August 1 (the "Payment Dates"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the Executive Director, until the balance has been paid in full. EDA Resolution No. 06-12 -2- 2.04. Interest will accrue on the principal amount of the Interfand Loan from the date of disbursement of the Loan (the "Accrual Date") to PPL, at the rate of 6.0%, which rate is no greater than the greatest of the rates specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2006. The interest rate will, without further action by the Authority, be adjusted on January 1 of each year to reflect the greater of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar year. 2.05. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TIF District received by the Authority from Hennepin County in the six-month period before any Payment Date and not otherwise pledged to other bonds, notes or obligations. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the Accrual 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 Executive Director. 2.06. 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. 2.07. 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. 2.08. 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. 2.09. The Authority may from time to time amend the terms of this Resolution to the extent permitted by law, provided that the interest rate may not be increased above the maximum specified in Section 469.178. subd. 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon approval. Approved by the Board of Commissioners of the St. Louis Park Economic Development ty this I" day of May, 2006. Administration: Adopted by the Economic Development �uthority May 1, 2006 t President Attest