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<br />Item No: 11.B.1 <br />Meeting Date: November 23, 2009 <br />Type of Business: Reports <br />City Administrator Review: _____ <br />City of Mounds View Staff Report <br />To: Honorable Mayor and City Council <br />From: Mark Beer, Finance Director <br />Item Title/Subject: EDA Resolution XXXX Calling for Redemption of Outstanding <br />Taxable Tax Increment Revenue Bonds, Series 2001, Dated <br />October 1, 2001 <br /> <br />Introduction: <br />The Taxable Tax Increment Revenue Bonds, Series 2001 were callable anytime after August 1, 2008. <br />With a potential sale pending on the hotel portion of the property, staff deferred recommending any <br />action on the bonds. <br /> <br />Background: <br />The Mounds View Economic Development Authority (EDA) and Mounds Vista, Inc. (Mermaid) entered <br />into a development agreement to redevelop the Mermaid property and add a hotel to the <br />redevelopment area at 2200 County Highway 10. The HRA issued $815,000 Taxable Tax Increment <br />Revenue Bonds on behalf of Mounds Vista, Inc. to be repaid with tax increment generated from the <br />two parcels that comprise the Mermaid property. The bonds have semi-annual principal and interest <br />payments and mature on February 1, 2013. <br /> <br />Discussion: <br />The outstanding balance to be called is $345,000. The bonds pay interest at 7.5% and the remaining <br />balance of interest that could be avoided is $46,950. Trustee fees that could be avoided if the bonds <br />are called would be $7,590. The opportunity cost of calling the bonds would be approximately <br />$16,800. The net benefit to calling the bonds would be approximately $37,740. There is $40,498 held <br />in trust by the bond trustee and $25,064 in the debt service fund to apply toward the call. The net <br />amount that would be paid out of TIF District 1 is approximately $279,438. The City has sufficient TIF <br />resources to facilitate this call and it will not affect the financing of the street projects. This is an <br />opportunity for the City to save approximately $37,740. <br /> <br />Recommendation: <br />Staff recommends the EDA adopt the attached resolution XXXX redeeming the outstanding Taxable <br />Tax Increment Revenue Bonds, Series 2001, dated October 1, 2001. <br /> <br /> <br />Respectfully submitted, <br /> <br /> <br />___________________________ <br />Mark Beer, Finance Director <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />