HomeMy WebLinkAboutResolution No. 04-07 EDA (Approved)
RESOLUTION NO. 04-07
LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY
AUTHORIZING INTERNAL LOAN IN CONNECTION WITH
TAX INCREMENT FINANCING DISTICT NO. 1-11
BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE LINO LAKES
ECONOMIC DEVELOPMENT AUTHORITY (the “Authority”) AS FOLLOWS:
Section 1. Background.
1.01. Pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the “TIF Act”) the
Authority and City of Lino Lakes (“City”) previously established tax increment financing district
no. 1-11 (the “TIF District”) within Development District No.1.
1.02. The Authority may incur certain costs related to the TIF District, which costs may be
financed on a temporary basis from available Authority or City funds.
1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority or City is
authorized to advance or loan money from any fund from which such advances may be legally
made in order to finance expenditures that are eligible to be paid with tax increments under the TIF
Act.
1.04. The Authority has approved a Contract for Private Development (the “Contract”)
between the Authority, the City and Legacy Development, Inc. (“Developer”) under which the
Authority will provide Legacy Holdings/Lino Lakes LL, LLC (the “Development Property Owner”)
proceeds from an interfund loan fund from the City to finance the cost of acquisition of certain land
within the TIF District.
1.05. City will make available to the Authority the proceeds from sale of the City Parcel, (as
defined in the Contract) in the amount of $1,700,000 (or such lesser amount required if the City
receives Met Council grant proceeds as described in Section 3.5(c) of the Contract) and the
Authority will advance such funds to the Development Property Owner under the terms and
conditions described in Section 3.5 of the Contract.
1.06. The Authority intends to reimburse the City for the funds so advanced as an interfund
loan in accordance with the terms of this resolution.
Section 2. Repayment of Interfund Loan.
2.01. The Authority will reimburse the City for funds advanced under Section 3.5 of the
Contract the in the principal amount of $1,700,000 (or such lesser amount advanced, in accordance
with Section 3.5(c) of the Contract) together with interest at the rate of 4% per annum (the
“Interfund Loan”). Interest accrues on the principal amount from the date of disbursement of funds
from the Escrow Agreement as described in Section 3.5 of the Contract (hereafter, the “Accrual
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Date”). The interest rate is no more than the greatest of the rate specified under Minnesota
Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2004. The interest
rate will, without further action by the Authority, be adjusted on January 1 of each year to reflect
the greater of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09 in
effect for that calendar year.
2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on the dates (each a “Payment Date”), and in the amounts specified in Exhibit A hereto, as
adjusted from time to time in accordance with this resolution.
2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment
as defined in the Contract, together with any amounts received by the Authority or City from any
future grant from the Metropolitan Council. Payments shall be applied first to accrued interest, and
then to unpaid principal. Interest accruing from the Accrual Date will be compounded semiannually
on February 1 and August 1 of each year and added to principal, unless otherwise specified by the
Executive Director. Without further action by the Authority, the payment schedule in Exhibit A
will be adjusted to reflect the actual Accrual Date, any changes from time to time in the interest rate
in accordance with Section 2.01, and reduction in principal described in Section 3.5(c) of the
Contract.
2.04. The principal sum and all accrued interest payable under this resolution is pre-
payable in whole or in part at any time by the Authority without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise required to be
made under Exhibit A, except as otherwise provided in Section 3.5(c) of the Contract.
2.05. This resolution is evidence of an interfund loan in accordance with Section 469.178,
subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax
Increment pledged to the payment hereof under this resolution. The Interfund Loan shall not be
deemed to constitute a general obligation of the State of Minnesota or any political subdivision
thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota,
nor any political subdivision thereof shall be obligated to pay the principal of or interest on the
Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority
shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest
thereon, which may remain unpaid after the final Payment Date.
2.06. Authority staff and officials are authorized and directed to execute any collateral
documents and take any other actions necessary to carry out the intent of this resolution.
2.07. The Authority may from time to time, with approval by the City, amend the terms of
this Resolution to the extent permitted by law, including without limitation amendment to the
payment schedule and the interest rate; provided that the interest rate may not be increased above
the maximum specified in Section 469.178. subd. 7 of the TIF Act.
Section 3. Effective Date. This resolution is effective upon execution in full of the
Contract.
Approved by the Board of Commissioners of the Lino Lakes Economic Development
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Authority this 20th day of December, 2004.
_____________________________
President
ATTEST:
Secretary
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EXHIBIT A
Interfund Loan Payment Schedule
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