10-08-2001 - Laserfiche WebLink

Home Browse Search

Item No: 8A Meeting Date: October 8, 2001 Type of Business: EDA-B WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Economic Development Authority From: James Ericson, Community Development Director Item Title/Subject: Discussion and Consideration of EDA Resolution 01- EDA-153, a Resolution providing for the Issuance and Sale of the EDA’s Taxable Tax Increment Bonds, Series 2001, and Approving Execution of Various Agreements Date of Report: October 4, 2001 Background: Over the course of this year and last, City staff has been working with Jim O’Meara of Briggs and Morgan to finalize the development assistance agreement for the Mermaid project. We have been close to being final for some time now, and then had to put on hold the approval pending the outcome of the legislature’s revisions to the TIF laws. Because of those changes, the foundation of the TIF agreement had to be revised. Now, after many months of revisions, the documents are in place and the agreement is ready to be approved by the Economic Development Authority. Jim O’Meara will be present at the meeting to address any of your questions pertaining to the attached Development Assistance Agreement, the Indenture of Trust, or the Private Placement Memorandum. For the Authority’s reference, the Private Placement Memorandum (PPM) has been prepared by the Mermaid’s financial consultant and will be used in conjunction with the sale of the bonds to a third party. It is included for the Authority’s information only and does not require the Authority’s execution. Discussion: Essentially what the Authority is approving with Resolution 01-EDA-153 is the issuance of the tax increment revenue bonds not to exceed $850,000 at an interest rate not to exceed 7.75%. The Council may recall that prior to the legislature imposed changes, the amount of the assistance had been discussed at levels that exceeded $2,000,000. The Bonds being approved for issuance are not general obligation bonds and do not put the City at any risk. The Bonds are repaid through the increment generated above and beyond the established tax capacity of the Mermaid project. If for some reason the increment is not sufficient to pay the Bonds, the Halls have provided their personal guarantee. The net proceeds of the Bonds shall provide funds to the Mermaid to cover certain eligible costs such as land acquisitions. The TIF plans were approved for modification in November of 2000 to allow for this development to move forward.