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HomeMy WebLinkAboutResolution No. 13-01 EDALINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 13-01 APPROVING EFFORTS TO SEEK SPECIAL LEGISLATION AUTHORIZING CONVEYANCE OF CERTAIN TAX -FORFEITED LAND TO THE LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY BE IT RESOLVED By the board of commissioners of the Lino Lakes Economic Development Authority (the "EDA") as follows: Section 1. Background. 1.01. In 2004, the City of Lino Lakes (the "City"), EDA and Hartford Development Inc. entered into a Contract for Private Development for the development of the Legacy at Woods Edge development, which was proposed to include commercial development, rental housing, and owner - occupied housing (the "Legacy at Woods Edge Development"). 1.02. In support of the Legacy at Woods Edge Development, the City issued its Taxable General Obligation Improvement Bonds, Series 2005A (the "Series 2005A Bonds") in the amount of $5,550,000, to finance the costs of various public improvements necessary for the development. Assessments against certain properties within the Legacy at Woods Edge Development were proposed to pay all of the principal of and interest on the Series 2005A Bonds. 1.03. In 2006, in furtherance of a cooperative program entered into under the Minnesota Statutes, Sections 471.15 to 471.191 (the "Recreation Act"), the City and the YMCA of Greater St. Paul ("YMCA") entered into an Amended and Restated Development Agreement (the "Development Agreement") relating to the construction and operation of an approximately 45,000 square foot recreational facility in the City (the "Facility") to be located on property within the Legacy at Woods Edge Development. Under the Development Agreement, the City agreed to contribute $2,350,000 toward construction of the Facility. The City subsequently issued its General Obligation Tax Abatement Bonds, Series 2006C (the "Series 2006C Bonds"), in the principal amount of $2,460,000, to finance the City's contribution for the costs of constructing the Facility. Abatements of certain properties within and adjacent to the Legacy at Woods Edge Development were proposed to pay the principal amount of and a portion of the interest on the Series 2006C Bonds. 1.04. In 2009, sixteen parcels of property within the Legacy at Woods Edge Development (not including the YMCA property) were foreclosed on by the Developer's lenders. Of the foreclosed property, five of the parcels are located within the City's Tax Increment Financing District No. 1-11 (the "TIF District") and ten of the parcels are subject to the abatement described in Section 1.03 above. Tax increments from the TIF District are pledged to the payment of the City's General Obligation Tax Increment Bonds, Series 2007A (the "Series 2007A Bonds") issued in the amount of $4,215,000, to finance improvements to the I-35W/Lake Drive Interchange. 1.05. In 2010, following the foreclosure of the sixteen parcels of property within the Legacy at Woods Edge Development, the lenders determined that the outstanding special assessments and delinquent taxes on the sixteen parcels exceeded the market value of the properties, and those properties were tax forfeited. 1.06. The City and EDA continue to market the property within the Legacy at Woods Edge Development to private developers in order to get the properties back into the hands of private owners and to complete the redevelopment process originally commenced in 2004. Returning these properties to private ownership will result in special assessments being paid and property taxes being collected. In turn, the special assessments, abatements, and tax increments derived from the properties can be used by the City to pay debt service on the Series 2005A Bonds, the Series 2006C Bonds, and the Series 2007A Bonds. 1.07. Minnesota Statutes, Section 282.01, Subd. la allows the EDA to purchase tax - forfeited properties for fair market value, and proceeds received by the County are applied first to pay county administrative costs and second to pay special assessments that were outstanding at the time of forfeiture. However, that process is time-consuming and cumbersome, and the amount the of county administrative costs is not determined until the end of each year, creating uncertainty in the amounts developers will be required to pay. 1.08. The City and EDA have therefore determined to seek special legislation in the 2013 legislative session that would direct conveyance of the tax -forfeited properties within the Legacy at Woods Edge Development to the EDA without monetary consideration. 1.09. The proposed special legislation would require that, when the EDA sells a parcel to private party, it must return to the County 10% of the gross proceeds from sale of the parcel. This would occur only if the EDA is able to sell for a price in excess of the special assessments that were in place at forfeiture. 1.10. The EDA is in the process of negotiating a letter of intent with owners of the existing assisted living facility within the Legacy at Woods Edge Development, and with Anoka County, regarding an adjacent tax -forfeited parcel (Outlot A) to be acquired by that entity for expansion of its facility; and that parcel will be excluded from the special legislation. 1.11. The EDA has determined that enactment of the special legislation described above is necessary to complete the ongoing redevelopment of the Legacy at Woods Edge Development. Section 2. Approval of Special Legislation. 2.01. The EDA board hereby approves efforts to obtain special legislation in the 2013 legislative session that would authorize the EDA to acquire all the tax -forfeited properties in the Legacy at Woods Edge Development (except Outlot A) for no consideration, as described above. 2.02. EDA officials, staff and consultants are hereby authorized and directed to take any and all other steps necessary or convenient in order to obtain approval of the special legislation 419362v1 SJB LN140-80 2 described in this resolution. Adopted by the board of commissioners of the Lino Lakes Economic Development Authority this 25h day of February, 2013. ATTEST: Mary Alice Di'! ine Secretary 419362v1 SJB LN140-80 3 Dave Roeser, President