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• • • CITY COUNCIL AGENDA ITEM 2A STAFF ORIGINATOR: Al Rolek MEETING DATE: May 11, 2015 TOPIC: Consider Resolution 15-51 Authorizing the Execution and Delivery of a Ground Lease, Lease -Purchase Agreement and Related Documents VOTE REQUIRED: 3/5 INTRODUCTION The City Council has approved Resolution 15-32 setting parameters for the issuance of Lease Revenue Bonds, Series 2015A, by the Lino Lakes Economic Development Authority (EDA) for financing for a new fire station facility. The City must now consider entering into a ground lease and a lease -purchase agreement with the EDA to go forward with this financing. Attached to this report are drafts of Resolution 15-51, the Ground Lease agreement and the Lease -Purchase agreement. BACKGROUND The City Council has entered into a contract to construct a fire station facility at Birch Street and Centerville Road. The project will be financed with lease -revenue bonds issued through the Lino Lakes Economic Development Authority (EDA). The City currently owns the property on which the facility is to be built. In order for the EDA to finance the project, the City must provide a ground lease to the EDA for the land on which the building will reside. The lease will commence upon the signing of the agreement, tentatively June 1, 2015, and will terminate according to the terms written in Article III of the agreement. The rent on the lease of the property will consist of good consideration and the payment of $1.00. The City Council will also enter into a lease -purchase agreement with the EDA. The lease will be in effect through February 1, 2036, at which time the financing for the facility will be retired. At that time the facility will become the property of the City. The City will annually appropriate funds to pay its lease obligation to the EDA, equal to the annual debt service payments, according to Exhibit B of the agreement, including all fees, charges and agent and counsel fees as they come due. The City agrees to maintain the property during the term of the lease and keep it in good repair. The City also agrees to provide liability and property insurance on the property and to indemnify the EDA during the lease term. All other terms and conditions of the lease -purchase agreement will also apply. Julie Eddington of the firm of Kennedy and Graven, Ltd., is the City's bond counsel. Ms. Eddington will be in attendance at tonight's meeting to address any questions or concerns you may have relative to these agreements. RECOMMENDATION Staff recommends approval of Resolution 15-51.