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HomeMy WebLinkAbout25-07 - ADMIN Resolution - Economic Development Authority - 2025/02/18 EDA Resolution No. 25-07 Authorizing an interfund loan for advance of certain costs in connection with Terasă 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 Terasă 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”) 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 has determined to use tax increments from the TIF district to pay for certain administrative costs identified in the TIF plan (the “qualified costs”), which costs may be financed on a temporary basis from authority funds available for such purposes; and Whereas, under section 469.178, subdivision 7 of the TIF act, the authority is authorized to advance or loan money from the authority’s general fund or any other fund from which such advances may be legally authorized, in order to finance the qualified costs; and Whereas, the authority intends to reimburse itself for the qualified costs from tax increments derived from the TIF district in accordance with the terms of this resolution (the “interfund loan”), 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 qualified costs. The authority shall reimburse itself for such advances 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 8.0% and will not fluctuate. 2. Principal and interest (the “payments”) on the interfund loan shall be paid semi- annually on each August 1 and February 1 (each a “payment date”), 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 from the TIF district. 3. Payments on this interfund loan are payable solely from “available tax increment,” which shall mean, on each payment date, tax increment available after other obligations have been paid, or as determined by the executive director of the authority, Docusign Envelope ID: CCBD3EDE-DC63-4C18-8B5F-DDE79F96FB66 generated in the preceding six (6) months with respect to the property within the TIF district and remitted to the city by Hennepin County, Minnesota, all in accordance with the TIF act. payments on this interfund loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with available tax increment, and are on parity with 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 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 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 (the “state”) or any political subdivision thereof, including without limitation the authority or the city. Neither the state 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 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. 6. The authority may amend the terms of this interfund loan at any time by resolution of the Board of Commissioners of the authority, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Reviewed for administration: Adopted by the Economic Development Authority February 18, 2025: Karen Barton, executive director Sue Budd, president Attest: Melissa Kennedy, secretary Docusign Envelope ID: CCBD3EDE-DC63-4C18-8B5F-DDE79F96FB66