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16-61 - 10-18 - Interfund Loan Winnetka Avenue & Medicine Lake Resolution 16-61 October 18, 2016 Member Clausen introduced the following resolution and moved its adoption: RESOLUTION APPROVING AN INTERFUND LOAN IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT (REDEVELOPMENT), WINNETKA AVENUE & MEDICINE LAKE ROAD BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota (the "City"), as follows: 1. Recitals. (a) The Housing and Redevelopment Authority of the City of Golden Valley (the "HRA") and the City adopted the Golden Hills Redevelopment Plan for the Winnetka and Medicine Lake Road Project Area (the "Plan"), together with the Tax Increment Financing Plan (the "TIF Plan") for Tax Increment Financing District (Redevelopment), Winnetka Avenue North & Medicine Lake Road No. 1 (the "District"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.174 to 469.1794, all inclusive, as amended (the "Act"). (b) In accordance with the TIF Plan, the HRA has agreed to undertake a project with Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company (the "Developer"), consisting of a five-story apartment building with approximately 187 apartments and approximately 55 townhomes, plus parking, landscaping, utilities and certain other improvements (the "Development"), all pursuant to a Private Development Agreement (the "Development Agreement") entered into with the Developer on April 29, 2016. (c) In support of the Development, the City is issuing its General Obligation Storm Sewer Revenue Bonds (the "Bonds") to finance storm water flood containment and storage improvements within the District. (d) In connection with the Development, the City authorized by written resolution dated December 15, 2015 an interfund loan of$1,000,000 to the HRA from the City's Storm Utility Fund, and the HRA approved the interfund loan by written resolution dated April 12, 2016 (the "Prior Interfund Loan"). Pursuant to Section 3.7 of the Development Agreement, the HRA paid Developer $1,000,000 to accommodate the installation of a large underground storm water storage basin beneath the Development. (e) The HRA has approved on October 13 an additional interfund loan from the City to the HRA in the amount of $1,500,000 to pay qualified costs of private activity improvements relating to the Development (the "Current Interfund Loan"). (f) The Bonds will be a general obligation of the City, secured by its full faith and credit and taxing power. The City will also pledge net revenues of the storm sewer utility to the payment of principal and interest on the Bonds. The City expects to use tax increment revenues derived from the Development to first, repay the interfund loans and second, pay debt service on the Bonds. 2. Approval of the Current Interfund Loan. Resolution No. 16-61 -2- October 18, 2016 (a) The City hereby authorizes the loan of up to $1,500,000 to the HRA from its Storm Utility Fund or other funds available or so much thereof as may be paid as qualified costs. The City shall be reimbursed such amount, together with interest at the rate stated below. Interest accrues on the principal amount from the date of each loan. 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 is made, 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. (b) Principal and interest ("Payments") on the outstanding Current Interfund Loan balance shall be paid semi-annually in two (2) equal installments per year, each installment to be paid within ten (10) business days of receipt by the City of property tax revenues from Hennepin County (the "Payment Dates"), commencing on the first Payment Date on which the City has Available Tax Increment (defined below), or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the HRA pursuant to the TIF Plan. (c) Payments on this Current Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations, if any, have been paid for the preceding six (6) months with respect to the Development Property and remitted by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1794, as amended. Payments on this Current 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. (d) The principal sum and all accrued interest payable under this Current Interfund Loan are pre-payable in whole or in part at any time by the HRA 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 Current Interfund Loan. (e) This Current Interfund Loan is evidence of a loan in accordance with Minnesota Statutes, Section 469.178, subdivision 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. She and M. Harris, Mayor ATTEST: Kristine A. Luedke, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Snope and upon a vote being taken thereon, the following voted in favor thereof: Snope, Clausen, Harris, Fonnest and Schmidgall and the following voted against the same: none whereupon said resolution was declared duly passed and adopted, signed by the Mayor and his signature attested by the City Clerk.