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City Council Regular Meeting Minutes 02 <br /> June 8, 2004 <br /> Page 2 <br /> 1 VI. GENERAL POLICY BUSINESS OF THE COUNCIL. <br /> 2 A. Consider Resolution 04-046—Approving a policy on Tax Exempt Financing <br /> 3 Ms. Stacie Kvilvang, Ehlers &Associates, Inc. stated Dominium had requested that the City and <br /> 4 the City's Housing and Redevelopment Authority(HRA) assist them in obtaining private activity <br /> 5 revenue bonds from the State of Minnesota for the purposes of developing 260 units of rental <br /> 6 housing in the Northwest Quadrant Redevelopment Area. The City and the HRA have assisted <br /> 7 both rental housing developments and industrial developments with obtaining these bond funds <br /> 8 from the State in the past. However,the City and HRA have never had a formal policy on what <br /> 9 type and how much of a fee they would charge for assisting developers in pursuing these types of <br /> 10 bonds. <br /> 11 <br /> 12 Ms. Kvilvang stated after discussions with the City Attorney and City Manager, it is <br /> 13 recommended that the City and HRA adopt a formal policy charging the following: <br /> 14 <br /> 15 1. A one time issuance fee of one(1)percent of the principal amount of the bonds; and <br /> 16 2. The Applicant must pay all expenses of the City and HRA related to the issuance of such <br /> 17 revenue bonds, whether or not the revenue bonds are issued. <br /> 18 <br /> 19 Motion by Councilmember Faust, seconded by Councilmember Thuesen,to adopt Resolution <br /> 20 04-046—Approving Policy for Issuance of Revenue Bonds. <br /> 21 <br /> 22 Discussion: <br /> 23 <br /> 24 Councilmember Faust noted this was a policy that helped finance the revenue bonds and stated <br /> 25 the revenue came back to the general fund. <br /> 26 <br /> 27 Councilmember Stille noted this did not create a risk to the City; the City was only a conduit. <br /> 28 <br /> 29 Motion carried unanimously. <br /> 30 <br /> 31 B. Consider Resolution 04-047—Approving Fannie Mae Financing for Silver Lake Village <br /> 32 Ms. Stacie Kvilvang, Ehlers & Associates, Inc., stated on December 19, 2003, the City Council <br /> 33 and Housing and Redevelopment Authority(HRA) executed a Development Agreement with <br /> 34 Apache Redevelopment, LLC for the redevelopment of the above referenced area. According to <br /> 35 Section 12.11 of the Development Agreement, the City and/or HRA would be securing an <br /> 36 interim loan in the amount of$3,350,000 from Fannie Mae, to assist in acquiring three(3) <br /> 37 commercial properties where the for-sale housing would be developed. The City and HRA <br /> 38 conditioned the commitment to obtain these funds upon the following: <br /> 39 <br /> 40 1. The Cityy had received the Commercial Go Ahead Letter <br /> 41 2. The City had received the For Sale Housing Go Ahead Letter <br /> 42 3. The housing developer had documentation that they had obtained 20 percent of presales <br /> 43 of the units in the first building in Phase IA(13 units); <br /> 44 4. The Developer is not in default of the Development Agreement <br /> 45 <br /> 46 The loan, as originally discussed with the City Council and HRA, as going to be paid back <br /> 47 through land sale proceeds and a General Obligation TIF bond issued by the City/HRA when the <br />