Loading...
HomeMy WebLinkAbout11-13-2006 EDA PacketAGENDA ECONOMIC DEVELOPMENT AUTHORITY MONDAY NOVEMBER 13, 2006 6:15 P.M. 0 /J0-1j 1. Call to Order and Roll Call 2. Consideration of Minutes of January 23, 2006 3. Resolution No. 06-02, First Amendment to Lease-Pprchase Agreement between Lino Lakes EDA and the City of Lino Lakes ,/,_ e 4.4 r " 1 4. Resolution No. 06-03, Approving Assignment and Release of Certain Obligations under the Contract for Private Development between the Lino Lakes Economic Development Authority, the City of Lino Lakes, and Hartford Development, Inc. 5. Adjourn Pg 2-3 Pg 3-12 Pg 13-23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 DRAFT CITY OF LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MINUTES DATE MEMBERS PRESENT MEMBERS ABSENT OTHERS PRESENT : January 23, 2006 : J. Bergeson, D. Carlson, J. O'Donnell, J. Reinert, : D. Stoltz : Mary Divine, Gordon Heitke, and Julie Bartell Meeting called to order by President Reinert at 6:03 p.m. CONSIDERATION OF MINUTES OF NOVEMBER 14, 2005 EDA Member Bergeson moved to approve the November 14, 2005 minutes, as presented. EDA Member Carlson seconded the motion. Motion passed unanimously. CONSIDERATION OF ANNUAL APPOINTMENTS Ms. Divine informed the Authority that it is required to make appointments each year at the first meeting of the year. She outlined the appointments that were required. EDA Member Carlson nominated EDA member O'Donnell for President. EDA member O'Donnell noted he was already President Pro Tem of the City Council and would prefer another member were appointed. Motion died for lack of a second. EDA President Reinert nominated EDA Member Stoltz. EDA Member Bergeson seconded the nomination. Motion passed unanimously. EDA Member O'Donnell nominated EDA Member Carlson for Vice -President. EDA Member Bergeson seconded the nomination. Motion passed unanimously. EDA Member Reinert nominated EDA Member O'Donnell for Treasurer. EDA Member Bergeson seconded the motion. Motion passed unanimously. EDA Member O'Donnell moved to approve the other appointments as outlined by Ms. Divine in the staff report. EDA Member Carlson seconded the motion. Motion passed unanimously. RESOLUTION NO. 06-01 AMENDING THE EDA BY-LAWS Ms. Divine outlined suggested amendments to the meeting requirements in the EDA by-laws. Those changes included; 1. Holding an annual meeting on the fourth Monday in January of each year so that it coincides with the same night as a City Council meeting. Annual appointments will be made at this annual meeting. 2. Hold meetings throughout the year as needed, as has been accepted practice. -2- EDA MINUTES November 14, 2005 DRAFT 49 EDA Member O'Donnell suggested deleting the word "Special" from Section 3.2 of the 50 amended by-laws. 51 52 EDA Member Carlson questioned whether the new City Council work sessions would conflict 53 with the annual meeting date. It was recommended by Mr. Heitke to move the annual meeting to 54 the first City Council meeting of the year. Ms. Divine noted that the City Council should select 55 its legal newspaper and depositories before the EDA makes those selections. Mr. Heitke 56 suggested holding the EDA meeting after the first City Council meeting of the year. 57 58 EDA Member Carlson moved to adopt the amended by-laws with the suggested changes 59 included. EDA Member O'Donnell seconded the motion. Motion carried unanimously. 60 61 ADJOURNMENT 62 63 There being no further business, EDA Member Carlson moved to adjourn. EDA Member 64 O'Donnell seconded the motion. Motion passed unanimously. 65 66 Meeting adjourned at 6:15 p.m. 67 AGENDA ITEM 3 STAFF ORIGINATOR Al Rolek MEETING DATE November 13, 2006 TOPIC Resolution 06-02, First Amendment to Lease -Purchase Agreement Between Lino Lakes EDA and the City of Lino Lakes VOTE REQUIRED Simple Majority The City's bond counsel has advised that we will need to amend the Lease -Purchase Agreement for the outstanding EDA bonds Series 1998A because the lease payments will be reduced to the amount needed to pay the small amount of bonds that will remain outstanding. The City Council has approved the amended agreement in its resolution awarding the sale of the G.O. CIP Refunding bonds 2006E. The EDA must also approve the amended agreement. Staff recommends the. approval of Resolution 06-02 amending the Lease -Purchase Agreement for the outstanding EDA bonds Series 1998A. 1. Approve Resolution 06-02. 2. Refer to Staff for further review. 3. Deny Resolution 06-02. Option 1 A-3 -4- LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 06-02 WHEREAS, the Lino Lakes Economic Development Authority ("Authority") issued its $5,350,000 Lino Lakes Economic Development Authority Lease Revenue Bonds, Series 1998A (City of Lino Lakes, Minnesota Lease Obligation), dated August 1, 1998 (the "Series 1998A Bonds"), the proceeds of which were used to finance the construction of a City administration building, police station and early childhood learning center (the "Facilities"); and WHEREAS, in connection with issuance of the Series 1998A Bonds, the Authority and City, of Lino Lakes ("City") entered into a Lease -Purchase Agreement dated August 1, 1998 (the "Lease"), under which the City leased the Facilities from the Authority; and WHEREAS, the lease payments made by the City to the Authority are pledged to payment of the Series 1998A Bonds; and WHEREAS, by resolution approved October 23, 2006 (the "Refunding Bond Resolution") the City has awarded sale of its $3,025,000 General Obligation Capital Improvement Plan Refunding Bonds, Series 2006E (the "Refunding Bonds") to refund a portion of the outstanding principal amount of the Series 1998A Bonds; and WHEREAS, in connection with the partial refunding of the Series 1998A Bonds, the Authority and City have determined to amend the Lease in order to adjust the lease payments made by the City to reflect principal and interest payments remaining on the Series 1998A Bonds after partial redemption thereof. NOW THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of Lino Lakes as follows: 1. The President and Executive Director are authorized to execute the First Amendment to Lease -Purchase Agreement between the City and Authority (the "First Amendment") in substantially the form on file with the City, subject to modifications approved by those officials, provided that execution of the document by those officials will be conclusive evidence of their approval. 2. Authority staff are authorized and directed to take any other actions necessary to carry out the intent of the First Amendment and otherwise facilitate partial redemption of the Series 1998A Bonds as described in the Refunding Bond Resolution. 299625v1 SJB LN140-96 -5- DATED: November 13, 2006 President ATTEST: Secretary 299625v1 SJB LNI40-96 FIRST AMENDMENT TO LEASE -PURCHASE AGREEMENT THIS FIRST AMENDMENT TO LEASE-P of November 1, 2006,URCHASE AGREEMENT dated as DEVELOPMENT AUTHORITY and between the LINO LAKES ECONOMIC subdivision of the State of Minnesota, as le body corporate and politic and political LINO LAKES, a home rule charter cityr (the "Authority"), and the CITY OF Minnesota (the "City"), and political subdivision of the State of as lessee; WITNESSETH: WHEREAS, the City and Authority entered into a Lease Purchase Agreement dated as of August 1, 1998 (the "Lease") property to the City used for a Citya "Lease"), under which the Authorityleased cerl childhood administration building, certain real learning center (the "Facilities"); and police station and early WHEREAS, in order to finance construction of the Facilities, the Authority its $5,350,000 Lino Lakes Economic Development Authority Lease Revenue Series 1998A (City of Lino Lakes, issued Bonds;" and Minnesota Lease Obligation), referred to as thee°Bor "Series WHEREAS, the Series 1998A Bonds were issued pursuant to a Trust between the Authority and U.S. Bank National Association (the "Trustee" Indenture 1998 (the "Indenture"), and were secured b an )dated August 1 Lease to the Trustee pursuant to Y assignment of the Authority's interest in the Authorityan Assignment and Security Agreement between the and the Trustee dated August 1, 1998; and WHEREAS, the City has proposed to issue its $3,025,000 General Ob Capital Improvement Plan Refunding Bonds, Series 2006E (the "Series 2006Eligation in order to prepay a portion of the lease a Bonds") portion of the outstanding principal P Yments due under the Lease and refund a amount of the Series 1998A Bonds; and WHEREAS, on December 1, 2006 (the "Redemption Date"), the Authority redeem $3,345,000 in aggregate will representing: $(a)g principal amount of the Series 1998A Bonds, the 2013 through 2019 maturities of the Series 1998A Bonds, and(b) of the Term Bonds ma a mandatory sinkingmaturing on February 1, 2011, such portion being equal to the fund installment due on February 1 2011 the mandatory sinking fund installment due on Febru ($290,000) and $55,000 of ary1,2010;and WHEREAS, after the Redemption Date, the outstanding principal amount Series 1998A Bonds will be $865,000, representing the 2007 and 2008 mat of the outstanding principal balance of the 2011 Term Bond (being the mandatory i� and the 3' g fund 299583v1 SJB LN140-96 -7- installment due on February 1, 2009 ($270,000) and $115,000 of the mandatory sinking fund installment due on February 1, 2010); and WHEREAS, in light of such partial refunding of the Series 1998A Bonds, the Authority and City have determined to amend the Lease as further provided herein; NOW, THEREFORE, in the joint and mutual exercise of their powers, and in consideration of the mutual covenants herein contained, the parties hereto recite and agree and follows: 1. As of the Redemption Date, the Authority acknowledges the City's partial prepayment of Lease Payments in the amount of $3,345,000 in accordance with Article VIII of the Lease, and waives any notice requirements set forth in Section 8.2 thereof in connection therewith. 2. The remaining Lease Payments hereto, which supersedes in all respects the Lease Payments 4.2 are set forth in Exhibit A original Lease. yments set forth in Exhibit B to the 3. The Authority and City acknowledge that, after partial redemption of the Series 1998A Bonds on the Redemption Date, the Reserve Requirement will be $86,500, representing 10% of the outstanding principal amount of all series of Outstanding. Series 1998A Bonds. 4. The Lease remains in full force and effect and is not modified except as expressly provided herein. 299583v1 SJB LNI40-96 2 -8- IN WITNESS WHEREOF, the AuthorityLease-Purchase Agreement to be executed in its name by its duly authorizeofficers; used this First Amendment tod the City has caused this First Amendment to Lease to be executed in name byit uly authorized officers, as of the date first above written. by its duly LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY By: Its: President By: Its: Executive Director STATE OF MINNESOTA ) COUNTY OF ANOKA ) SS. The foregoing instrument was acknowledged before me this 2006, byand day of President and Executive Director, respectively, of the Lino Lakes Economic Authority, a public body corporate and politic under the laws of ' the Development Authority. Minnesota, on behalf of the 299583v1 SJB LN140-96 3 -9- Notary Public STATE OF MINNESOTA COUNTY OF ANOKA The Mayor and corporation, CITY OF LINO LAKES, MINNESOTA By: Its: Mayor By: Its: City Administrator ) SS. foregoing instrument was acknowledged before me this , 2006, byand day of City Administrator, respectively, of the City of Lino Lakes, a muni, the ci al on behalf of the corporation. p 299583v1 SJB LN140-96 4 -10- Notary Public The undersigned, as Trustee under the Trust Indenture between the undersigned and the Lino Lakes Economic Development Authority ("Authority") dated as of August 1, 1998, hereby consents to the forgoing First Amendment to Lease -Purchase Agreement dated as of November 1, 2006. U.S. BANK NATIONAL ASSOCIATION as Trustee By Its STATE OF MINNESOTA ) COUNTY OF ) SS. The foregoing instrument was acknowledged , 2006, by the Bank National Association, a national banking association, 299583v 1 SJB LN 140-96 5 -11- before me this day of , of U.S. on behalf of the association. Notary Public EXHIBIT A Schedule of Lease Payments $865,000 City of Lino Lakes Economic Development Authority, Minnesota Lease Revenue Bonds (Bonds remaining after 2006 Refunding), Series 1998A Debt Service Schedule Date Principal Coupon Interest Total P+I 02/01 /2007 230,000.00 4.700% 10,483.75 240,483,75 08/01/2007 - 15,562.50 15,562.50 02/01/2008 250,000.00 4.750% 15,562.50 265,562.50 08101/2008 9,625.00 9,625.00 02/01/2009 270,000.00 5.000% 9,625.00 279.625.00 08/01/2009 - 2,875.00 2,875.00 02101/2010 115:000.00 5.000% 2,875.00 117,875.00 Total S865,000.00 S66.608.75 S931,608.75 299583v1 S]B LN140-96 A-1 - 1 2 - AGENDA ITEM 4 STAFF ORIGINATOR: Mary Alice Divine DATE: 11/13/06 TOPIC: Resolution No. 06-03, Approving the Assignment and Release of Certain Obligations under the Contract for Private Development with Hartford Development, Inc. Vote Required: Simple Majority BACKGROUND: The Economic Development Authority entered into a Contract for Private Development with the Hartford Group on December 20, 2004, (amended on September 13, 2005) setting forth the terms and conditions of redevelopment for Legacy at Woods Edge. The Contract acknowledges that Hartford Group plans to sell certain portions of the development property to subdevelopers, and requires that any proposed subdeveloper assume all the obligations of the developer for the portion of the property being transferred. The subdeveloper must agree to be subject to all the conditions and restrictions of the Contract, including the construction of minimum improvements on the site. This EDA action releases the Hartford Group from the conditions that will be assumed by the subdeveloper (Avalon Homes) for Phase 1 of the townhome site. This release will be delivered upon approval of the site development agreement with Avalon Homes, Inc. OPTIONS: 1. Approve Resolution No. 06-03 Approving the Assignment and Release of Certain Obligations for Avalon Homes under the contract with Hartford Group. 2. Do not approve Resolution No. 06-03 3. Return to staff for further consideration. RECOMMENDATION: Option 1 -13 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 06-03 RESOLUTION APPROVING ASSIGNMENT AND RELEASE OF CERTAIN OBLIGATIONS UNDER CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF LINO LAKES AND HARTFORD DEVELOPMENT, INC. BE IT RESOLVED By the Board of Commissioners ("Board") of the Lino Lakes Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority currently administers Development District No. 1 (the "Project)" pursuant to Minnesota Statutes, Sections 469.124 to 469.134 ("Development District Act"). 1.02. The Authority, the City of Lino Lakes ("City") and Hartford Development, Inc. (the "Developer") entered into a into a Contract for Private Development dated December 20, 2004, as amended by a First Amendment thereto dated September 13, 2005 (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Project, referred to generally as the Legacy at Woods Edge Project. 1.03. The Developer and Legacy Holdings-LL, LLC (the "Development Property Owner") have determined need to assign certain obligations under the Contract to Avalon Homes, Inc. (the "Successor Developer"). 1.04. The Authority has reviewed an Approval of Assignment and Release of Obligations under Contract for Private Development, Avalon Homes, Inc., between the Authority, the City, the Developer and the Successor Developer (the "Assignment"), and finds that the execution thereof is in the best interest of the City and its residents. Section 2. Authority Approval; Further Proceedings. 2.01. The Assignment as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Assignment and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. SJB-267750v1 LN 140-80 -14- Approved by the Board of Commissioners of the Lino Lakes Economic Development Authority this 13th of November, 2006. ATTEST: Secretary SJB-267750v1 LN 140-80 2 -15- President I. Recital. 1.1 APPROVAL OF ASSIGNMENT AND RELEASE OF OBLIGATIONS UNDER CONTRACT FOR PRIVATE DEVELOPMENT AVALON HOMES, INC. The Effective Date of this Agreement is , 2006. 1.2 The Parties to this Agreement are the LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of Minnesota (the "Authority"), the CITY OF LINO LAKES, a Minnesota municipal corporation (the "City") and HARTFORD DEVELOPMENT, INC., a Minnesota corporation (the "Master Developer") and AVALON HOMES, INC., a Minnesota corporation ("Successor Developer"). 1.3 The Authority, City and Master Developer are parties to a Contract for Private Development dated December 20, 2004, recorded December 29, 2004, as Document No. 1971748.006, in the Office of the Anoka County Recorder, as amended by a First Amendment thereto dated September 13, 2005 (the "Contract"). 1.4 Various real estate parcels are subject to the Contract and Successor Developer has entered into an agreement with Legacy Holdings-LL, LLC, an affiliate of Master Developer, to purchase certain of the parcels subject to the Contract for the purpose of developing townhomes (the "Townhome Development"). Such parcel is legally described as: Lots 1-22, Block 1 and Outlot B, Legacy Townhomes at Woods Edge, Anoka County, Minnesota (the "Subject Parcels") 1.5 In connection with the sale of the Subject Parcel, Master Developer has requested approval of an assignment of and a release from the terms and conditions of the Contract as to the Subject Parcel pursuant to Article VIII of the Contract. 1.6 Master Developer desires to assign, and Successor Developer desires to assume Master Developer's rights and obligations under the Contract with respect to the transferred Parcel. 1 - 16 - 1.7 City has approved the Subject Parcel for use consistent with the proposed Townhome Development. On that basis, City and Authority are willing to approve an assignment of the Contract to Successor Developer and release Master Developer from the terms and conditions of the Contract subject to the terms and conditions of this assignment. THEREFORE, IT IS AGREED AS FOLLOWS: II. Agreement. 2.1 Master Developer hereby assigns, and Successor Developer hereby expressly assumes all of the rights and obligations of Master Developer under the Contract with respect to construction of townhomes on the Subject Parcel with a minimum market value of $4,330,200 (the "Townhome Improvements"). 2.2 The parties hereto agree and understand that the Townhome Improvements constitute a portion of the Owner -Occupied Housing Component of the Minimum Improvements under the Contract. 2.3 The Authority and the City hereby consent to and approve the assignment in sections 2.1 and 2.2 above. 2.2 From and after the effective date set forth above, Master Developer is released from its obligations under the Contract as to the Subject Parcel and as to the portion of the Owner -Occupied Component represented by the Townhome Improvements, subject to the following: (a) Master Developer remains liable under the Contract as to all other parcels subject to the Contract that are not released hereby or previously released, and as to all other provisions of the Contract. (b) Successor Developer agrees and understands that the Subject Parcel is subject to the Assessment Agreement between the Authority and Developer dated July 11, 2006 ("Assessment Agreement"), setting a minimum market value for the Subject Parcel and the Townhome Improvements constructed thereon for the period described in the Assessment Agreement. (c) Satisfactory completion by Successor Developer of the Townhome Improvements will be considered satisfaction of Developer's obligations as to a portion of the market value of Owner -Occupied Component under Section 4.3 of the Contract, such portion being the minimum value of $4,330,200 or the actual value upon completion, whichever is greater. However, nothing in this agreement will relieve Developer of its obligation to construct the remainder of the Owner -Occupied Component in accordance with the Contract. 2 -17- This document drafted by: Hartford Group, Inc. (FAJ) 1300 Wells Fargo Plaza 7900 Xerxes Ave. S. Bloomington, MN 55431 (Remainder of Page Intentionally Left Blank) Dated: , 2006 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of Minnesota By Its President By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this day of , 2006 by and , the President and Executive Director of the Lino Lakes Economic Development Authority, on behalf of the Authority. [Separate Signature Page to Approval of Assignment and Release of Obligations Under Contract For Private Development] 4 - 1 9 - Dated: , 2006 CITY OF LINO LAKES, MINNESOTA, a municipal corporation under the laws of the State of Minnesota. STATE OF MINNESOTA ) ss COUNTY OF ANOKA By: Its: Mayor By: Its: City Clerk The foregoing instrument was acknowledged before me this day of 2006, by , the and , the of the City of Lino Lakes, Minnesota on behalf of said City. Notary Public [Separate Signature Page to Approval of Assignment and Release of Obligations Under Contract For Private Development] 1787796v2 7/7/05 5 - 2 0 - Dated: , 2006 STATE OF MINNESOTA COUNTY OF ANOKA The foregoing Hartford Development, ) ss HARTFORD DEVELOPMENT, INC., a Minnesota corporation By: Keith Gruebele Its: Chief Financial Manager instrument was acknowledged before me this day of 2006, by , the of Inc, a Minnesota Corporation on behalf of said Corporation. Notary Public [Separate Signature Page to Approval of Assignment and Release of Obligations Under Contract For Private Development] 6 -21- Dated: , 2006 AVALON HOMES, INC., a Minnesota corporation By: Its: STATE OF MINNESOTA ) ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of . 2006, by , the of Avalon Homes, Inc, a Minnesota corporation on behalf of said corporation. Notary Public [Separate Signature Page to Approval of Assignment and Release of Obligations Under Contract For Private Development] 7 -22- -23-