HRA Resolution 2006-09HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
RESOLUTION NO. 2006 -09
AUTHORIZING INTERFUND LOAN FOR
ADVANCE OF CERTAIN COSTS
IN CONNECTION WITH TAX INCREMENT
FINANCING DISTRICT NO. 1 -37
BE IT RESOLVED By the Board Of Commissioners of the Housing and
Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority ") as
follows:
Section 1. Background.
1.01. The Authority has established tax increment financing district no. 1 -37
(the "TIF District ") within the Central Monticello Redevelopment Project No. 1 (the
"Redevelopment Project ") pursuant to Minnesota Statutes, Sections 469.174 to 469.179
(the "TIF Act ") and Sections 469.001 to 469.047 (the "HRA Act ").
1.02. The Authority may incur certain costs related to the TIF District, which
costs may be financed on a temporary basis from available Authority funds.
1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is
authorized to advance or loan money from any fund from which such advances may be
legally made in order to finance expenditures that are eligible to be paid with tax
increments under the TIF Act.
1.04. The Authority owns or will acquire certain property (the "Redevelopment
Property ") and has incurred or will incur certain costs to prepare such property for
redevelopment. The Authority has determined that the market price of the improved
Redevelopment Property is at least $245,181.82, or $2.65 per square foot.
1.05. The Authority proposes to enter into a Purchase and Redevelopment
Contract (the "Contract ") with SL Real Estate Holdings LLC (the "Redeveloper "), under
which the Authority will (among other things) convey the Redevelopment Property to the
Redeveloper for a purchase price of $101.433.82, subject to Redeveloper's obligation to
pay a portion of City trunk fees in the amount of $1,635.
1.06. By conveying the Redevelopment Property under the Contract, at Closing
the Authority will forgo receipt the full market price of the Redevelopment Property.
Such forbearance represents an advance of Authority funds in the amount of $142,113
(the write -down in purchase price net of Redeveloper's trunk fee payment).
1.07. The Authority intends to designate such advances as an interfund loan in
accordance with the terms of this resolution and the TIF Act.
Section 2. Repayment of Interfund Loan.
2.01. The Authority will reimburse itself for the land advance in the principal
amount of $142,113 together with interest at the rate of 6% per annum (the "Interfund
Loan "). Interest accrues on the principal amount from the date of Closing on conveyance
of the Redevelopment Property to the Redeveloper under the Development Agreement
(hereafter, the "Closing Date "). The interest rate is no more than the greatest of the rate
specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for
calendar year 2006. The interest rate will, without further action by the Authority, be
adjusted on January 1 of each year to reflect the greater of the rate specified under
Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar year.
2.02. Principal and interest ( "Payments ") on the Interfund Loan shall be paid
semi - annually on each August 1 and February 1 (each a "Payment Date "), commencing
on the first Payment Date on which the Authority has Available Tax Increment (defined
below), or on any other dates determined by the City Administrator, through the date of
last receipt of tax increment from the TIF District.
2.03. Payments on the Interfund Loan will be made solely from Available Tax
Increment, defined as tax increment from the TIF District received by the Authority from
Wright County in the six -month period before any Payment Date, less any amounts
determined by the Authority to be applied toward administrative expenses in accordance
with the TIF Act. Payments shall be applied first to accrued interest, and then to unpaid
principal. Interest accruing from the Closing Date will be compounded semiannually on
February 1 and August l of each year and added to principal until the first Payment Date,
unless otherwise specified by the City Administrator.
2.04. The principal sum and all accrued interest payable under this resolution is
pre - payable in whole or in part at any time by the Authority without premium or penalty.
2.05. This resolution is evidence of an internal borrowing by the Authority in
accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited
obligation payable solely from Available Tax Increment pledged to the payment hereof
under this resolution. The Interfund Loan shall not be deemed to constitute a general
obligation of the State of Minnesota or any political subdivision thereof, including,
without limitation, the Authority and the City. Neither the State of Minnesota, nor any
political subdivision thereof shall be obligated to pay the principal of or interest on the
Interfund Loan or other costs incident hereto except out of Available Tax Increment. The
Authority shall have no obligation to pay any principal amount of the Interfund Loan or
accrued interest thereon, which may remain unpaid after the final Payment Date.
2.06. The Authority may at any time make a determination to forgive the
outstanding principal amount and accrued interest on the Interfund Loan to the extent
permissible under law.
2.07. The Authority may from time to time amend the terms of this Resolution
to the extent permitted by law, including without limitation amendment to the payment
schedule and the interest rate; provided that the interest rate may not be increased above
the maximum specified in Section 469.178. subd. 7 of the TIF Act.
Section 3. Effective Date. This resolution is effective upon execution in full of
the Contract.
Adopted this 12th day of April, 2006
/r
Chair
ATTEST:
Executive Director