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• MEMORANDUM <br /> TO: Mayor and Members of the City Council <br /> Michael Mornson, City Manager <br /> FROM: Jerry Gilligan <br /> DATE: April 18, 1996 <br /> RE: Chandler Place Refunding Bonds and TIF Loan Payoff <br /> At its April 23rd meeting the City Council will be requested to adopt a <br /> resolution approving the issuance of revenue bonds to refund revenue bonds <br /> issued by the City in 1985 to finance the construction of Chandler Place. The <br /> refunding bonds will be payable solely from payments made by the owner of <br /> Chandler place and the bonds will be insured by FHA. The City will not have any <br /> liability for the.payment of the bonds and all costs of the City will be paid by the <br /> owner of Chandler Place. <br /> • At this time the final terms of the bonds have-not been determined <br /> and the resolution approving the bonds sets forth a maximum principal amount <br /> and interest rates. It is anticipated that the closing on the bonds will occur sometime <br /> in May and that the 1985 Bonds will be redeemed on June 1st. <br /> The HRA has made a loan of $700,000 to the owner of Chandler Place <br /> from tax increment from the Chandler Place TIF District. The loan proceeds were <br /> used to fund the reserve fund for the 1985 bonds. The loan bears interest at 3% and <br /> terms of the loan provide.that interest was not paid on a current basis until 1996 and <br /> accrued interest not paid was added to the principal of the loan. Presently the <br /> principal balance of the loan exceeds $800,000. <br /> At the April 23rd meeting the HRA will be requested to adopt a <br /> resolution approving the satisfaction of the loan by the payment of $600,000 by the <br /> owner of Chandler Place and the payment by the HRA to the owner of St. Anthony <br /> Health Center of $100,000 from tax increment revenue from the Chandler Place TIF <br /> District upon completion of an expansion of the Health Center. The loan <br /> repayment to the HRA would be made at the closing of the refunding bonds. The <br /> $100,000 payment by the HRA would reimburse the owner of the Health Center for a <br /> portion of the costs of the expansion. The owner is not required to proceed with the <br /> expansion, and if the expansion does not occur no payment is made by the HRA. <br /> • As you were previously informed since the refunding bonds will be <br /> insured by FHA, Chandler Place will be eligible for treatment as Class 4c property for <br /> DORSEY & WHITNEY LLP <br />