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