09/24/2012 Council Packet - Laserfiche WebLink

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Kennedy raven CHARTERED 470 US Bank Plaza 200 South Sixth Street Minneapolis MN 55402 (612) 337 -9300 telephone (612) 337 -9310 fax http://www.kennedy-graven.com MEMORANDUM TO: Mary Alice Divine Al Rolek FROM: Stephen Bubul DATE: September 21, 2012 RE: Tax - Forfeited Property /Legacy at Woods Edge You asked me to comment on the proposal made by Anoka County regarding the tax - forfeited Legacy at Woods Edge property (which I will refer to as the "Property "). As I understand the facts, County staff has offered to advance the City's second -half total property tax settlement (which would normally be distributed in November), and the City may then use those funds to purchase the Property at the fair market value price determined by the County (which I understand is approximately $4,600,000). As provided by State law, the County would deduct from that amount certain administrative costs of the County, and the balance is returned to the City for application towards the outstanding special assessments against the Property. The County advises that this proposal would allow the City to take title to property, but receive the purchase price back, which results in only a minimal cost to the City (i.e., the County administrative costs). While this proposal appears attractive at first glance, I don't believe it would accomplish the intended purpose. When the net purchase price is returned to the City to pay the outstanding special assessments, those dollars must be deposited in the debt service fund the City's outstanding $5,500,000 Taxable General Obligation Improvement Bonds, Series 2005A (the "Series 2005A Bonds "). In the resolution awarding sale of the Series 2005A Bonds, the City irrevocably pledged all special assessments levied against the Property to payment of the Bonds, and the City would breach its covenant with bondholders if those funds were diverted to some other purpose.