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HomeMy WebLinkAbout10-09 - ADMIN Resolution - Economic Development Authority - 2010/06/07EDA RESOLUTION NO. 10-09 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF A TAX EXEMPT TAX INCREMENT REVENUE REFUNDING NOTE (HOIGAARD VILLAGE PROJECT), SERIES 2010A, IN THE PRINCIPAL MAXIUM AMOUNT OF $4,300,000. BE IT RESOLVED BY the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority, St. Louis Park, Minnesota (the "Authority") as follows: Section 1. Authorization; Award of Sale. 1.01. Background. Pursuant to that certain Contract for Private Redevelopment between the Authority and Union Land II LLC and assigns (the "Redeveloper"), dated as of March 6, 2006, as amended (the "Agreement"), the Authority issued and sold two Initial Notes, consisting of its $1,663,000 Amended Taxable Tax Increment Revenue Note (Hoigaard Village Project), Series 2006A, dated May 1, 2010, and its $2,540,000 Taxable Tax Increment Revenue Note (Hoigaard Village Project), Series 2007A, dated April 26, 2007 (together, the "Refunded Notes"), for the purpose of financing certain public redevelopment costs of Redevelopment Project No. 1 in the City of St. Louis Park (the "City"), secured by a parity pledge of Available "fax Increment (all capitalized terms herein have the meaning assigned in the Agreement unless the context clearly requires otherwise). 1.02. Issuance of Series 2010A Note. The Agreement provides for the issuance of Refunding Notes to refinance the outstanding principal amount of any Initial Note, secured by a pledge of Available Tax Increment, upon satisfaction of certain conditions described in the Agreement. The Authority hereby finds and determines that (a) it is in the best interests of the Authority that it issue and sell its Tax Increment Revenue Refunding Note (Hoigaard Village Project), Series 2010A in the aggregate principal amount of $ (the "Series 2010A Note") for the purpose of refinancing the outstanding principal amount of the Refunded Notes, and (b) that the conditions described in the Agreement for issuance of Refunding Notes have been met. 1.03. Issuance, Sale, and Terms of the Series 2010A Note. The Series 2010A Note is issued pursuant to the Agreement. The Authority hereby authorizes issuance of the Series 2010A Note in accordance with terms set forth in this Resolution to (the "Purchaser"), at a price of par. The Series 2010A Note shall be dated as of the date of delivery thereof and shall bear interest at the rate of 5.0% per annum to maturity. The Series 2010A Note shall be payable in semi-annual installments of principal and interest in the amounts, at the rates and on the dates (the "Payment Dates"), and shall bear such other terms, all as provided in the form of the Series 2010A Note set forth in Section 2 hereof. Section 2. Form of Series 2010A Note. The Series 2010A Note shall be in substantially the following form, with the blanks to be properly filled in as of the date of issue: EDA Resolution No. 10-09 -2- No. R-1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT REVENUE NOTE (HOIGAARD VILLAGE PROJECT), SERIES 2010 Date of Original Interest Rate Maturity Date Issue 5.0% February 1, 2023 June —, 2010 C s The St. Louis Park Economic Development Authority (the "Authority"), for value received, certifies that it is indebted and hereby promises to pay to or registered assigns (the "Owner"), but solely from the sources and according to the terms described herein, the principal sum of $ , and to pay interest thereon at the interest rate set forth above, as and to the extent set forth herein. This Note is issued pursuant to the Resolution (defined hereafter) and that certain Contract for Private Redevelopment between the Authority and Union Land II, LLC ("Redeveloper") dated as of March 6, 2006, as amended by a First Amendment thereto dated as of July 10, 2006, a Second Amendment thereto dated as of March 5, 2007, a Third Amendment thereto dated as of April 28, 2008, and a Fourth Amendment thereto dated as of August 17, 2009 (collectively, the "Agreement"). Capitalized terms herein have the meaning assigned in the Agreement unless the context clearly requires otherwise. 1. IPUments. Principal and interest ("Payments") shall be paid on August 1, 2010 and each February 1 and August 1 thereafter to and including February 1, 2023 ("Payment Dates") solely from and to the extent of the sources set forth in Section 3 hereof. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner as set forth in the Authorization and Registration provisions of this Note, or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. EDA Resolution No. 10-09 -3- 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. Payments on this Note are payable on each Payment Date solely from and in the amount of the Available Tax Increment. The term "Available Tax Increment" means, on each Payment Date, 95% of the Tax Increment attributable to those portions of the Redevelopment Property described in the Agreement as Stage 1 and Stage 4 as described in Exhibit A attached hereto (the "Stage 1 and 4 Property") and received by the Authority from the County pursuant to the Tax Increment Act in the six month period before each Payment Date. The term Tax Increment does not include any amounts retained by or payable to the State auditor under Section 469.177, subd. 11 of the Tax Increment Act, or any amounts described in Section 469.174, subd. 25, clauses (2) through (4) of the Tax Increment Act. The Owner acknowledges that the TIF District includes properties other than the Stage 1 and 4 Property, and that the County remits Tax Increments to the Authority on the basis of the captured tax capacity of the entire TIF District. Consequently, the Authority will need to determine the amount of Available Tax Increment received from the entire TIF District that is properly allocable to the Stage 1 and 4 Property. The Owner acknowledges and agrees that the Available Tax Increment allocable to the Stage 1 and 4 Property, if the Redeveloper has paid the property taxes on the Stage 1 and 4 Property in accordance with law, will be calculated by the Authority by determining the captured tax capacity of the Stage 1 and 4 Property and the percentage that such captured tax capacity of the Stage 1 and 4 Property bears to the total captured tax capacity of the TIF District excluding parcels on which taxes are delinquent (the "Redeveloper's Percentage"). The Available Tax Increment allocated by the Authority to the Stage 1 and 4 Property will be equal to the total Available Tax Increment received by the Authority from the TIF District multiplied by the Redeveloper's Percentage. The Owner acknowledges that the amount of Available Tax Increment that is determined by the Authority to be properly allocable to the Stage I and 4 Property could be less than the property taxes paid by the Redeveloper on the captured tax capacity of the Stage I and 4 Property as a result of decreases in valuation of other properties in the TIF District to a valuation that is less than that upon which the original tax capacity was based. Failure by the Authority to pay all accrued interest on this Note on any Payment Date is defined as and declared to be and to constitute an Event of Default under this Note; provided that the Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than the Available Tax Increment and the failure of the Authority to pay all or any portion of principal on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays interest hereon to the extent of the Available Tax Increment. 4. Redemption of Note. This Note shall be subject to redemption on any date, at a price of par plus accrued interest to the date of prepayment and redemption. EDA Resolution No. 10-09 -4- 5. Default; Termination. At the Authority's option, this Note shall terminate and the Authority's obligation to make any payments under this Note shall be discharged upon the occurrence of certain Events of Default by the Redeveloper, as described in Section 9.2(b) and (c) of the Agreement and relating to non-payment or delinquent payment of taxes, or willful reduction of taxes, after expiration of the one-year cure period set forth in Section 9.2(c) of the Agreement. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $ issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on June 7, 2010, for the purpose of providing money to refund the outstanding principal amount of certain tax increment revenue notes of the Authority, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1799, as amended. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note 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. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note 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 or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. This Note has been designated by the Authority as a "qualified tax-exempt obligation" for purposes of Section 265(b) (3) of the federal Internal Revenue Code of 1986, as amended. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons to one (1) Registered Owner. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Registrar kept for that purpose at the principal office of the Authority, by the Registered Owner hereof in person or by such Registered Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Registered Owner. Upon such transfer or exchange and the payment by the Registered Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall be transferred or assigned only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser of an investment letter substantially in the form described in the Resolution. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. EDA Resolution No. 10-09 -5- IN WITNESS WHEREOF, the Board of Commissioners of the St. Louis Park Economic Development Authority has caused this Note to be executed with the manual or facsimile signatures of its President and Executive Director, all as of the Date of Original Issue specified above. Executive Director President AUTHENTICATION AND REGISTRATION PROVISIONS This is the Note described in the within mentioned Resolution. The ownership of the unpaid balance of the within Note is registered in the bond register of the Registrar, in the name of the person last listed below. Date of Registration Registered Owner Signature of Finance Director 2010 EDA Resolution No. 10-09 -6- Exhibit A Stage 1 and 4 Property Lot 2, Block 1, Hoigaard Village Addition And Lot 2, Block 1, Hoigaard Village 2' Addition EDA Resolution No. 10-09 -7- Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Series 2010A Note shall be issued as a typewritten note numbered R-1 in the amount of $ . The Series 2010A Note shall be issuable only in fully registered form. Principal of and interest on the Series 2010A Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. The Series 2010A Note shall be dated as of its date of original issue. Principal of and interest on the Series 2010A Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Controller to perform the functions of registrar, transfer agent and paying agent (the 'Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Reggister. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Series 2010A Note and the registration of transfers and exchanges of the Series 2010A Note. (b) Transfer of Note. Upon surrender for transfer of the Series 2010A Note duly endorsed by the Owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the Owner thereof or by an attorney duly authorized by the Owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Series 2010A Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Series 2010A Note shall be transferred only to an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission and only upon execution and delivery by the purchaser to the Registrar of an investment letter substantially in the form of Schedule A hereto. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Series 2010A Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Series 2010A Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Series 2010A Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Series 2010A Note is at any time registered in the bond register as the absolute owner of the Series 2010A Note, whether the Series 2010A Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Series 2010A Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Series 2010A Note to the extent of the sum or sums so paid. EDA Resolution No. 10-09 -8- (0 Taxes, Fees and Charges. For every transfer or exchange of the Series 2010A Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case the Series 2010A Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Series 2010A Note of like amount, maturity date and tenor in exchange and substitution for and upon cancellation of such mutilated Series 2010A Note or in lieu of and in substitution for such Series 2010A Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Series 2010A Note is lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Series 2010A Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Series 2010A Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation, shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Series 2010A Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Series 2010A Note prior to payment. (h) Redemption. In the event the Series 2010A Note is called for redemption, notice thereof shall be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of the Series 2010A Note at the address shown on the registration books kept by the Registrar, at least 30 days before the date of redemption of the Series 2010A Note. Failure to give notice by mail to any registered owner, or any defect therein, shall not affect the validity of the proceedings for the redemption of the Series 2010A Note. The Series 2010A Note shall cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 3.04. Preparation and Delivery. The Series 2010A Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Series 2010A Note shall cease to be such officer before the delivery of the Series 2010A Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, the Series 2010A Note shall not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Series 2010A Note has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Series 2010A Note certificates need not be signed by the same representative. The executed certificate of authentication on each Series 2010A Note shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Series 2010A Note has been so executed and authenticated, it shall be delivered by the Executive Director to the Owner upon payment of the purchase price therefor, and the Owner shall not be obligated to see to the application of the purchase price. Upon delivery, any preconditions to the delivery of the Series 2010A Note shall be deemed satisfied or waived by the Authority. EDA Resolution No. 10-09 -9- Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Series 2010A Note all Available Tax Increment as defined in the Series 2010A Note. Available Tax Increment shall be deposited in the Debt Service Fund in accordance with Section 4.02 hereof and applied to payment of the principal of, interest on and redemption price of the Series 2010A Note in accordance with the terms of the form of Series 2010A Note set forth in Section 2 of this Resolution. 4.02. Debt Service Fund. The Series 2010A Note is payable from the Tax Increment Revenue Refunding Note (Hoigaard Village Project) Series 2010A Debt Service Fund (the "Debt Service Fund") hereby created, to be used for no purpose other than the payment of the principal of and interest on the Series 2010A Note, except to the extent provided otherwise herein. The Authority appropriates and irrevocably pledges to the Debt Service Fund: (a) Available Tax Increment pledged pursuant to Section 4.01 of this Resolution; and (b) all investment earnings on funds held in the Debt Service Fund. The Debt Service Fund and all moneys deposited therein pursuant to this Resolution are hereby pledged to the payment of principal of and interest on the Series 2010A Note. 4.03. Refunding; Findings; Redemption of Refunded Notes. It is hereby found and determined that based upon information presently available from the Authority's financial advisers, the issuance of the Series 2010A Note is consistent with covenants made with the holders of the Refunded Notes and is necessary and desirable for the reduction of debt service costs to the Authority. It is additionally found and determined that the Proceeds will be sufficient to prepay all of the principal of and interest on the Refunded Notes. The Refunded Notes will be redeemed and prepaid on July 1, 2010 in accordance with their terms. Any funds remaining in the debt service funds for the Refunded Notes after redemption shall be transferred to the Debt Service Fund for the Series 2010A Note. 4.04. Additional Obligations. The Authority may not issue any additional obligations secured in whole or in part by Available Tax Increment as defined in the Series 2010A Note unless such obligations are subordinate to the Series 2010A Note. 4.05. Investment of Funds. All amounts held in the Debt Service Fund will be invested in accordance with the provisions of Minnesota Statutes, Chapter 118A, governing the investment of funds of governmental entities. Section 5. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Registered Owner of the Series 2010A Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Series 2010A Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. EDA Resolution No. 10-09 -10- Section 6. Tax Covenant. 6.01. The Authority covenants and agrees with the holders from time to time of the Series 2010A Note that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Series 2010A Note to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 6.02. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Series 2010A Note under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Series 2010A Note. 6.03. The City further covenants not to use the proceeds of the Series 2010A Note or to cause or permit them or any of them to be used, in such a manner as to cause the Series 2010A Note to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. In order to qualify the Series 2010A Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Series 2010A Note is not a "private activity bond" as defined in Section 141 of the Code; (b) the Authority hereby designates the Series 2010A Note as a "qualified tax- exempt obligation" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City, including the Authority) during calendar year 2010 will not exceed $30,000,000; and (d) not more than $30,000,000 of obligations issued by the City during calendar year 2010 have been designated for purposes of Section 265(b)(3) of the Code. Section 7. Continuing Disclosure. The continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") do not apply to the Series 2010A Note, because the offering is exempt from such requirements under Section 15c2-12(d)(1)(i). Consequently, the Authority will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Series 2010A Note. Section 8. Effective Date. This Resolution shall take effect and be in force from and after its approval and publication. EDA Resolution No. 10-09 11 - Section 9. Execution of Closing Certificates and Other Necessary Documents. The President and the Executive Director are hereby authorized and directed to furnish to the purchaser of the Series 2010A Note at the closing such certificates as are required as a condition of sale. In addition, the President and the Executive Director are hereby authorized and directed to execute such other documents as may be necessary, depending on the terms of the Series 2010A Note. Attest P" s Secretary Adopted by the Economic Development Authority June 7, 2010 � o President