HomeMy WebLinkAbout22-29 - ADMIN Resolution - Economic Development Authority - 2022/06/06EDA Resolution No. 22-29
Resolution authorizing an interfund loan for advance of certain
costs in connection with the Rise on 7 Tax Increment Financing
District
Whereas, the City of St. Louis Park, Minnesota (the "City") and the St. Louis Park
Economic Development Authority (the “Authority”) intend to establish the Rise on 7 Tax
Increment Financing District (the "TIF District"), a housing district, within Redevelopment
Project No. 1 (the "Project") in the City, and will adopt a Tax Increment Financing Plan (the "TIF
Plan") on the date hereof for the purpose of financing certain improvements within the Project,
pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF
Act”); and
Whereas, the Authority may incur certain costs related to the TIF District, which costs
may be financed on a temporary basis from available Authority funds. 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; and
Whereas, the Authority intends to enter into a Contract for Private Development (the
“Agreement”) with the City and CB SLP Housing Limited Partnership, a Minnesota limited
partnership (the “Developer”), pursuant to which the Developer will agree to develop
approximately 120 units of multifamily rental housing, approximately 74 underground parking
stalls, and approximately 6,600 square feet of space consisting of an early childcare center (the
“Minimum Improvements”); and
Whereas, to make the Minimum Improvements economically feasible, the Authority has
proposed to provide a deferred loan to the Developer in the principal amount of $1,800,000
(the “Deferred Loan”) for certain development costs, including constructing affordable housing,
demolition costs and costs of asbestos removal (the “Public Development Costs”) in accordance
with the terms of the Agreement; and
Whereas, the Authority has determined to pay for the Public Development Costs
through the Deferred Loan, which costs may be financed on a temporary basis from Authority
funds available for such purposes; and
Whereas, the Authority has determined to use tax increments from the TIF District to
pay for certain administrative costs identified in the TIF Plan in the principal amount of $50,000
(the "Administrative Costs"), which costs may be financed on a temporary basis from Authority
funds available for such purposes; and
Whereas, on the date hereof, the City Council of the City will consider a resolution
authorizing an interfund loan from the City’s Affordable Housing Trust Fund to the Authority to
provide funds for the Authority to make the Deferred Loan to the Developer and provide
temporary financing for the Public Development Costs; and
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EDA Resolution No. 22-29 2
Whereas, subject to approval by the City Council, the Authority will make the Deferred
Loan with funds from the City’s Affordable Housing Trust Fund; and
Whereas, the Authority intends to reimburse itself for the Administrative Costs and
intends to reimburse the City’s Affordable Housing Trust Fund from tax increments derived
from the TIF District in accordance with the terms of this resolution; and
Now, therefore, be it resolved by the Board of Commissioners of the St. Louis Park
Economic Development Authority as follows:
1. The Authority hereby authorizes the advance of up to $50,000 from any legally
authorized Authority fund or so much thereof as may be paid as Admi nistrative Costs (the
“Administrative Costs Portion Interfund Loan”) and the advance of up to $1,800,000 from the
City’s Affordable Housing Trust Fund to pay the Deferred Loan (the “AHTF Portion Interfund
Loan” and together with the Administrative Costs Portion Interfund Loan, the “Interfund
Loan”). The Authority shall reimburse itself for the Administrative Costs and reimburse the City
for the amount of the Deferred Loan together with interest at the rate stated below. Interest
accrues on the principal amount from the date of each advance. The maximum rate of interest
permitted to be charged is limited to the greater of the rates specified under Minnesota
Statutes, Section 270C.40 or Section 549.09 as of the date the loan or advance is authorized,
unless the written agreement states that the maximum interest rate will fluctuate as the
interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are from
time to time adjusted. The interest rate shall be 4% and will not fluctuate.
2. Principal and interest ("Payments") on the Interfund Loan shall be paid semi -
annually on each August 1 and February 1 (each a "Payment Date") to the City for the AHTF
Portion Interfund Loan or the Authority for the Administrative Costs Portion Interfund Loan,
respectively, 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 of the
Authority, through the date of last receipt of tax increment fro m the TIF District.
3. Payments on the Interfund Loan are payable solely from "Available Tax
Increment," which shall mean, on each Payment Date, tax increment available, or as otherwise
determined by the Executive Director of the Authority, generated in the preceding six (6)
months with respect to the property within the TIF District and remitted to the Authority by
Hennepin County, all in accordance with the TIF Act. Payments on this Interfund Loan may be
subordinated to any outstanding or future bonds or notes issued by the Authority and secured
in whole or in part with Available Tax Increment. This Interfund Loan shall be paid prior to any
pay-as-you-go notes or contracts secured in whole or in part with Available Tax Increment, and
any other outstanding or future interfund loans secured in whole or in part with Available Tax
Increment.
4. The principal sum and all accrued interest payable under this Interfund Loan are
prepayable in whole or in part at any time by the Authority without premium or penalty. No
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EDA Resolution No. 22-29 3
partial prepayment shall affect the amount or timing of any other regular payment otherwise
required to be made under this Interfund Loan.
5. This Interfund Loan is evidence of an internal borrowing by the Authority and the
City 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. This Interfund Loan and the interest hereon shall not be deemed to constitute a
general obligation of the State of Minnesota or any political subdivision thereof, including
without limitation the Authority or the City. Neither the State of Minnesota , the City, the
Authority, nor any political subdivision thereof shall be obligated to pay the principal of or
interest on this Interfund Loan or other costs incident hereto except out of Available Tax
Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota ,
the City, the Authority or any political subdivision thereof is pledged to the payment of the
principal of or interest on this Interfund Loan or other costs incident hereto. 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. Notwithstanding the
foregoing, the Authority shall apply payments received by the Developer or any affiliate
thereon on the Deferred Loan in accordance with the Agreement (the “Developer Payments”)
to the AHTF Portion Interfund Loan. Any Developer Payments reflecting payments of principal
on the Deferred Loan shall be applied against principal of the AHTF Portion Interfund Loan.
6. The Authority may amend the terms of this Interfund Loan at any time by
resolution of the Board, including a determination to forgive the outstanding principal amount
and accrued interest to the extent permissible under law.
7. 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, however, that the interest rate may not be increased above the
maximum specified in Section 469.178, subdivision 7 of the TIF Act.
Reviewed for Administration: Adopted by the Economic Development
Authority June 6, 2022
Karen Barton, executive director Margaret Rog, president
Attest:
Melissa Kennedy, secretary
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