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02-12-2018 EDA Packet
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02-12-2018 EDA Packet
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EDA
EDA Document Type
EDA Packet
Meeting Date
02/12/2018
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LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY <br />AGENDA ITEM 3B <br /> <br />STAFF ORIGINATOR: Michael Grochala, Community Development Director <br /> <br />MEETING DATE: February 12, 2018 <br /> <br />TOPIC: Consider Resolution No. 18-02, Approving Collateral Assignment <br />and Subordination of Development Agreement and Tax Increment <br />Note, AX Lino Lakes L.P. – TIF District 1-12 <br /> <br />VOTE REQUIRED: 3/5 <br /> <br />BACKGROUND <br />The Economic Development Authority (EDA) approved the Contract for Private Development <br />with United Properties and Distribution Alternatives in July of 2016. The action also included <br />authorization for the issuance of a Tax Increment Revenue Note. Construction of the 402,000 <br />square foot facility and associated public improvements has been completed. <br />In December of 2017, AX Lino Lakes, L.P., a Delaware limited partnership, acquired the <br />property, including all rights under the TIF Note and the Contract. Bank of America, N.A. (the <br />“Lender”), has agreed to provide a loan to the new owner in the amount of $16,110,000 to <br />finance a portion of the acquisition costs. As a condition, the Lender requires that the owner <br />assigns all rights under the Contract and TIF note to the Lender and that the EDA agrees to <br />subordinate its rights under the Contract to the rights of the Lender. <br /> <br />Pursuant to Section 7.3 of the Contract for Private Development, dated July 25, 2016, between <br />the EDA, the Developer, and Distribution Alternatives, Inc., the EDA agreed to subordinate its <br />rights under the Contract for Private Development as long as the subordination was subject to <br />reasonable terms and conditions. Section 8.2 of the Contract permits the assignment of the <br />Assignor’s rights and duties under the Contract subject to the EDA’s approval. <br /> <br />Julie Eddington, of Kennedy & Graven, the EDA’s development counsel, has reviewed the <br />request and has recommended approval. <br /> <br />RECOMMENDATION <br /> <br />Staff is recommending approval of Resolution No. 18-01. <br /> <br />ATTACHMENTS <br /> <br />1. Resolution No. 18-02 <br />2. Collateral Assignment and Subordination of Development Agreement and TIF Note
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