03-14-2012 Council Agenda - Laserfiche WebLink

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c-o, (�. (9117 or 11,01 >aiea r, 515 Little Canada Road, Lillie Canada, MN 55117-1600 (651) 766 -4029 / FAX: (651) 766 -4048 auww.ci.11 ale- canada. um. us MAYOR Bill nlesenci COUNCIL Rick Montour John Kels Michael McGraw Shelly Boss ADMINISTRA'POR Joel R. Ilansou MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Joel Hanson, City Administrator DATE: March 9, 2012 RE: Tax Increment Financing Note #R -1 Issued to St. Jude Medical, Inc. Pursuant to our Section 3.2 of our Development Agreement with St. Jude Medical, Inc., the City is required to issue a Tax Increment Financing Note in the amount of $530,237.23 for the funds advanced by St. Jude as part of the "Phase III Shortfall" provisions (copy of pertinent language attached - pgs 7 -8). The language in question required St. Jude to provide up to $650,000 of funding to address city expenditures related to those defined in Item C below: (e) Phase III Public Improvements, consisting of acquisition of the properties at 2404 Rice Street, 93 County Road 132 W and 2442 Rice Street, Lots A, 13, C, and D and the removal or demolition of the vertical improvements thereon, certain landscaping improvements and completing a 12 -inch water main loop along County Road B2; the costs thereof specifically include but are not limited to related relocation costs; and The City has billed St. Jude for the relevant costs at the end of last year and the invoice was paid on January 9, 2012. To fulfill our legal obligations, we need to issue the attach note and date it to be effective January 9, 2012. Some key highlights of this transaction are as follows: 1e The note accrues interest at 4% per annum. `o> The note is only payable from tax increments generated by the St. Jude property after meeting debt service obligations (and potentially any Guarantee Notes that could be issued subject to other provisions of our development agreement. If TIP funds are insufficient to retire the outstanding note at the termination of the Tit: District, then the note has no further consequence to the City. We may have a follow -up note to issue depending on the final costs associated with the 132 landscaping project. A copy of the invoice submitted to St. Jude with more of the transaction details is attached hereto -- pgs 9 -10. Subject to any continents or questions you may have, staff recommends issuance of the note as required by our Development Agreement with St. Jude Medical, Inc. 1