18-68 - 10-16 - Amend Resolution 16-61 Interfund Loan TIF Winnetka Ave RESOLUTION NO. 18-68
RESOLUTION AMENDING 16-61 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 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, 2016 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"). On
October 16, 2018 this amount was reduced to $1,050,000.
(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.
Resolution No. 18-68 -2-
2. Approval of the Current Interfund Loan.
(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.
Adopted by the City Council of Golden Valley, Minnesota this 16th day of October, 2018.
She rd M. Rarris(Khayor
ATTEST:
he-
Kristine
A. Luedke, City Clerk