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HomeMy WebLinkAbout11-14 - ADMIN Resolution - Economic Development Authority - 2011/11/07EDA RESOLUTION NO. I1-14 RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH THE HARDCOAT TAX INCREMENT FINANCING DISTRICT BE IT RESOLVED By the Board Of Commissioners of the St. Louis Park Economic Development Authority (the "Authority") as follows: Section 1. Background. 1.01. The Authority has established the Hardcoat Tax Increment Financing District (the "TIF District') within Redevelopment Project No. I (the "Redevelopment Project') pursuant to Minnesota Statutes, Sections 469.174 to 469.1799 (the "TIF Act') and Sections 469.001 to 469.047 (the "HRA Act'), as amended. 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority or City funds. 1.03. 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. 1.04. The Authority has previously established a Spending Plan (the "Spending Plan") pursuant to Laws 2010, Chapter 216, Section 32 (the "Job Creation Act'), pursuant to which the Authority may provide funds from certain designated preexisting tax increment financing districts including the Victoria Ponds, Park Center Housing, CSM, Mill City, and Elmwood tax increment financing districts (the "Prior TIF Districts") to assist private developers and increase the creation of jobs, and has approved its Construction Assistance Program ("CAP") as a framework for such private assistance. 1.05. The Authority entered into a Contract for Private Development dated as of December 20, 2010 (the "Agreement') with M & L Anodizing Properties, LLC (the "Developer"), under which the Authority agreed to (among other things) provide a forgivable CAP loan to the Developer to assist with a portion of the costs of acquisition of the Development Property, in the principal amount of the lesser of $420,000 or 33% of the Construction Costs incurred (as such terms are defined in the Agreement). 1.06. By structuring the loan to the Developer as a forgivable loan, the Authority may forgo repayment of the loan. Such loan forgiveness represents an advance of Authority funds in the maximum amount of $420,000. 1.07. The Authority also previously determined that it will advance the actual costs of consultants and attorneys retained by the Authority in connection with creation and administration of the TIF District and the negotiation and preparation of the Agreement and other incidental agreements and documents related to the development contemplated hereunder (the "Administrative Costs"), in an amount not to exceed $80,000. EDA Resolution No. 11-14 -2- 1.08. 2- 1.08. The Authority designated such advances as an interfund loan in accordance with the terms of the TIF Act and its resolution of December 20, 2010, pursuant to which it approved such interfund loan. 1.09. On the date hereof, the Authority has approved a First Amendment to Contract for Private Development between the Authority and Developer (the "First Amendment'), pursuant to which the Authority has agreed to increase the maximum principal amount of the CAP Loan to $500,000, which represents a potential increase of $80,000 in principal amount. 1.10. The Authority hereby designates the additional advance in Authority funds of $80,000 as an additional interfund loan, in accordance with the terms of the First Amendment and the TIF Act. Section 2. Repayment of Interfund Loan. 2.01. The Authority hereby authorizes the advance of up to $80,000 from the Spending Plan funds from the Prior TIF Districts to pay the Additional CAP Loan advances as described in the First Amendment, and will reimburse itself for such advances together with interest at the rate of 4.0% per annum (the "hiterfund Loan"). Interest shall accrue on the principal amount of each advance from the date of such advance. The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2011. The interest rate will not fluctuate. 2.02. Principal and interest ("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 City Manager, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as 100% of the tax increment from the TIF District received by the Authority from Hennepin County in the six-month period before any Payment Date. Payments shall be applied first to accrued interest, and then to unpaid principal. 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. 2.04. 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. 2.05. 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. 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. EDA Resolution No. 11-14 -3- 2.06. 3- 2.06. 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. 2.07. 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. Section 3. Effective Date. This resolution is effective upon execution in full of the First Revie ed or Administration: Adopted by the Economic Development Authority November 7, 20� 1 4- Exec"Virpc br President Attest Secretary