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To: Mike Mornson — City Manager From: Stacie Kvilvang Date: June 22, 2010 Subject: Fannie Mae Loan Repayment and Amended Interfund Loan — TIF District 3-5 (Apache Redevelopment) In 2008, the City and HRA approved an agreement with Fannie Mae to extend its loan repayment schedule due to the downturn in the condominium market, economy and inability of development to move forward in Silver Lake Village. The remaining principle balance on the loan at the time was $2,500,000. The term of the extension is to December 31, 2010 with payments to be made as follows (only principle amounts shown, interest is due quarterly as well): $75,000 at closing $175,000 on July 1, 2009 $200,000 on October 1, 2009 $200,000 on January 1, 2010 $200,000 on April 1, 2010 $200,000 on July 1, 2010 $200,000 on October 1, 2010 $1,250,000 by December 31, 2010 Since the closing on the extension, the HRA has been making the payments on the loan. Through negotiations with Apache Redevelopment LLC, the HRA is going to be making the remaining payments on the Fannie Mae loan as they become due and will be repaid from future TIF and land sale proceeds. Following are the sources of funding for payment to Fannie Mae of this loan (inclusive of interest): Fannie Mae Loan Repayment * Chandler TIF Poolin Dollars $ 400,500 * Apache Cub TIF Pooling Dollars $ 630,000 Water Filtration Fund $ 1,600,000 TOTAL $ 2,630,500 • These amounts are estimates at this time and final amount will be based upon legal pooling calculations and actual increment available If a City and/or HRA need to make expenditures related to a TIF district (for capital or administrative costs) prior to having adequate TIF funds available in the district, State Statute requires that the City and HRA approve a resolution authorizing an internal (interfund) loan to the respective TIF District and set the terms for reimbursement of the qualified TIF costs to be repaid with tax increments from the respective TIF District. On June 14, 2005, the HRA approved an interfund loan in an amount up to $200,000 for various administrative and capital expenditures in TIF District 3-5. On February 14, 2006, the HRA approved a 49 E H L E_RS LEADERS IN PUBLIC FINANCE 3060 Centre Pointe Drive Roseville, MN 55113-1105 Phone: 651-697-8506 Fax: 651-697-8555 s k v i l v a n g@ e h l e rs-i n c. c o ni 22