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HomeMy WebLinkAbout1990/03/22 - ADMIN - Minutes - Economic Development Authority - RegularMINUTES ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA March 22, 1990 MICROFILMED The meeting was called to order at 5:00 p.m. by President Keith Meland. The following Commissioners were present: Bruce Battaglia, Allen Friedman, Lyle Hanks, Larry Mitchell, Jane Tschida and Keith Meland. Also present were the Executive,[irector and City Attorney (Mr. Steilen), and Community Development Director Mr. Hagen). President Meland said the Authority convened to continue discussion from Monday, March 12 on the consideration of sale of tax increment financing revenue bonds. He said the City Attorney had advised that any action by the Authority should be reserved for this item only. The Executive Director gave a brief presentation on this item. He explained the bond issue would increase the capital immediately available to the EDA for carrying out projects from $12 million to $16 million. His most recent information indicated that the issue had dropped to under $4 million. Commissioner Hanks asked if they were not told at the March 12 meeting that the $4.1 issue would be sold by Tuesday, March 13. Dan Hartman said bond counsel had found a purchaser but they have since been informed the deal would not go through then. Councilmember Tschida asked for clarification. President Meland said he believed Mr. Hartman had indications from members of the Authority that they felt at $3.3 m illi on , there w as probably not enough money there to do some of the things that the Authority indicated i t wanted to do; for example, dealing with Apple Valley Red-E-Mix, possible purchase of the property under consideration by the Larsen Partners, etc. Mr. Hartman said they wanted to be sure not to make commitments in the City's name that could not be met. He said they had a party who remained very interested in the issue. It was moved by Commissioner Hanks that the Authority not sell bonds. The motion died for lack of a second. Commissioner Mitchell asked Mr. Steilen is he could give an overview of the implications of bonding or not bonding, the possibility of legislation, the implications of the April l date. Mr. Steilen presented the overview. In essence, the Authority expanded where the money generated from tax increments can be spent The life of the districts has not been extended. Tax increment expenditures were not increased. The boundaries of where the money can be spent were expanded, i.e. in Oak Park Village the boundaries of the source of the monies is the same as it always was in terms of its boundaries and its life and the TIF generated from it, but now the Authority can spend it outside of the Oak Park Village district. Expenditure can be anywhere within the enlarged boundaries. The Authority has given itself flexibility as to where the money can be spent. Economic Development Authority minutes March 22, 1990 tax increments The significance of the April l date is that/ for TIF districts established before 1979 (Oak Park Village and Excelsior Blvd.) cannot be collected after 2001 unless it is to amortize bonds issued before April 1, 1990. Bonds issued before April 1, 1990 that would be amortized subsequent to 2001, then tax increments can be collected until the year 2009. In answer to a question regarding expenditure of tax increments, Mr. Hagen said increments can only be collected to the degree that debt payments are owed. A discussion followed as to the recent and ongoing actions of the State Legislature. Dan Hartman, Miller & Schroeder, discussed the issue of parking the bonds as a tool to increase the issue from $3.34 million to $6 million. He reviewed the historical process involved in developing a bond issue. Given the Governor's concerns re tax rates for industrial/commercial development, M & S and staff used very conservative levels to make sure that whatever was issued that went to year 2009 was revenue that for sure would be there. ,[[, +\}g effort they whittled the revenue capabilities down toa$3.3l/'i's&Sl'e that was previously presented. All insurance carriers passed on this issue when approached for a number of reasons including the general tax situation in Minnesota. Councilmember Friedman felt the Authority was dealing with unknown figures: no knowledge of what it is going to cost vis a vis legal feels, no knowledge of what the Legislature is going to do. In re parking the bonds, legal fees, escrowing costs, etc. are not definitive. Mr. Hartman said he did not intend to discuss this in depth tonight and would require a day or so to get documents together. It was moved by Commissioner Battaglia, seconded by Commissioner Mitchell to direct staff and bond counsel to go forward with the $6 million issue using the escrow process. Councilmember Mitchell supported the motion. He was concerned that the Authority was back-tracking and felt this approach was needed, that redevelop- ment was needed . He f e lt all av a i l able opp or t u n it i e s for t he C it y needed to be maximized in the market place and that the flexibility offered by the parking of bonds would maximize the benefits in the marketplace. Councilmember Tschida asked if the Authority had to act before April 1. The City Attorney said yes if the Authority wanted to take advantage of the extension of the time to collect tax increment from year 2001 to 2009. In regard to the number of required votes, the President said he and the City Attorney had extensively research this issue and it would appear that the City Council is endorsing the action of the EDA and that a simple majority, not 6 votes is required from the EDA. The Council can interpret the Charter on its own behalf because the Charter deals with the question of full faith and credit. Since it's done under the EDA, the full faith and credit of the City is not the issue. ) Economic Development Authority minutes March 22, 1990 I CROFILMED r- J The City Attorney said that passage by the EDA only required four votes. So the only question is whether the City Council passage required six votes or not. When you read the Charter, the interpretation question that arises is whether the Charter provision that requires six votes only applies to bonds issued by the City. The question is does that same Charter provision apply to bonds issued by the EDA. The City Attorney's opinion is that the Charter requires six votes regardless of who issues it; however, he believes it is reasonable to interpret it not to require it if it is EDA-issued bonds, but the Council would have to vote to interpret its Charter as only requiring four votes. Councilmember Battaglia moved to call the question. The motion passed 4-1-1 (Commissioner Friedman opposed; Commissioner Hanks abstained). It was moved by Commissionerr Mitchell, seconded by Commissioner Battaglia, to set a special meeting for Tuesday, March 27, 1990 at 5:00 p.m. The motion passed 5-1 (Commissioner Hanks abstained). . . It was moved by Commissioner Battaglia, seconded by Commissioner Tschida, to adjourn the meeting. The motion passed 6-0. ' ) = 8 p Executive Director I ?