Loading...
HomeMy WebLinkAbout01-088 CITY OF LAKEVILLE RESOLUTION Date June 18, 2001 Resolution No. 01-88 Motion By Mulvihill Seconded By xieb RESOLUTION APPROVING THE ISSUANCE OF A TAX INCREMENT REVENUE NOTE AND EXECUTION OF A RELATED TAX INCREMENT PLEDGE AGREEMENT BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the "City"), as follows: Section 1. Recitals; Past Actions. 1.01. Project Area and TIF District .The Housing and Redevelopment Authority of the City of Lakeville, Minnesota (the "HRA") has heretofore created Redevelopment Project No. 1 (the "Project Area") within the City and the HRA and the City have approved a Redevelopment Project Plan (the "Redevelopment Plan") with respect thereto. Further, the HRA has heretofore created Tax Increment Financing District No. 3 (the "TIF District") within the Project. Area and the HRA and the City have approved a Tax Increment Financing Plan (the "TIF Plan") relating • to the TIF District. 1.02. Prior Resolution. By Resolution No. 98-26, duly adopted February 17, 1998 (the "Prior Resolution"), the City approved (i) the Redevelopment Agreement dated as of February 17, 1998 (the "Redevelopment Agreement"), entered into between the City, Lakeville Five, Inc. ("Lakeville Five") and Aurora Investments, LLC ("Aurora"), pursuant to which Aurora agreed to undertake a development within the Project Area (the "Aurora Development") more fully described in the Redevelopment Agreement and pursuant to which the City, on behalf of the HRA, agreed to assist Aurora with the cost of acquiring certain land in the Project Area by the issuance of a tax increment revenue note to Lakeville Five, the prior owner and seller of the land, and (ii) an amendment to the TIF Plan ("TIF Plan Modification#3") which (a) amended the Section of the then-existing TIF Plan entitled "Development Program" and (b) amended the budget contained in Appendix F of the then-existing TIF Plan. Said approvals are- hereby ratified and confirmed. 1.03. Prior Authorization of Note. The Prior Resolution contemplated that the City would issue the tax increment revenue note in 1998 and authorized the issuance of said note in the form and with the terms provided in the Prior Resolution. Due to delays. in completing certain On-Site Public Improvements as provided in the Redevelopment Agreement, the tax increment revenue note was not in fact issued in 1998 as contemplated. The parties to the Redevelopment Agreement have now agreed that construction of the On-Site Public Improvements has been satisfactorily completed and the City now proposes to issue and deliver the tax increment revenue note to Lakeville Five as contemplated by Section 3.2(c) of the Redevelopment Agreement. Section 2. Terms of Note, Execution and Delivery. 2.01. Terms ofthe Note. As contemplated by the Redevelopment Agreement and as authorized by the JiRA, the City, acting pursuant to Minnesota Statutes, Section 469.178, shah issue its Tax Increment Revenue Note (Aurora Investments Project), with a dated date of February 1, 2000 (the "Note"), in the principal amount of $1,897,000, to Lakeville Five to provide a portion of the financing for the purchase of the land by Aurora from Lakeville Five. The terms of the Note shall be as set forth in the form of the Note attached hereto as Exhibit A . ...2.02. Date of Note. Pursuant to the Redevelopment Agreement, it was agreed by the parties thereto that the principal .balance of the Note would commence to accrue interest from February 1, 2000, but the .City was not required to deliver the Note to the custody of Lakeville Five until the provisions of the Redevelopment Agreement, including, particularly Section 3.2 thereof,. had been met. Consequently, the Note shall have a Dated Date of February 1, 2000, and shall be delivered to Lakeville Five as of July 1, 2U01. 2.03. Execution.. The Note shall be executed on behalf of the City by the signatures of the Mayor and City Clerk. 2:04. Registration of Transfer. The City will .cause to be kept at the office of the City Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the • City shallprovde for the registrationortransfer of ownership of the Note.. TheNote shall be transferable upon the books of the City by the registered owner thereof in person or by its attorney duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the registered owner- thereof or its duly authorized attorney, together with (i) an executed investment letter from the new registered owner in form satisfactory to: the City, (ii) if requested by the City, an opinion of counsel addressed to the City .and in form satisfactory to the. City that such transfer complies with all applicable federal and State of Minnesota securities Laws and (iii) if requested by the City, an indemnity agreement inform and substance satisfactory to the City executed by the registered owner., Upon such transfer the City. Clerk shall note the date of registration and the Warne and address of he new registered owner on the books of the City and in the registration blank appearing on .the Note., The City may deem and treat the person in whose name the Note is last registered upon the books of the City with such registration .noted on the Note as the absolute owner thereof, whether or not overdue, for the purpose ofreceiving payment of or on :account. of the principal or interest and for all other purposes, and all such payments so made to the registered. owner or upon its order shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum. or sums so paid, and the City shall not be affected by any notice to,the contrary. 2.05. Delivery: The Note shall be delivered to the Lakeville Five as the purchaser thereof and as evidence of the obligation of the City to fund a portion of the purchase price of the land on behalf of Aurora. • 2 2.06. Certain Provisions of the Prior Resolution Superseded. The provisions of this Resolution relating to the form and terms of the Note, and relating its delivery, shall supersede any conflicting provisions of the Prior Resolution, all of said conflicting. provisions of the Prior Resolution being rendered null and void upon adoption of this Resolution. Section 3. Security Provisions. 3.01. Bond. Fund. The principal of and interest on the Note shall be payable. from the Tax Increment Revenue Note (Aurora Investments Project) Bond Fund (the "Bond Fund") to be ..established by the City Finance Director on the books and records of the City.` The City hereby irrevocably appropriates to the Bond Fund the tax increments fromthe TIF District to be received by the. City pursuant to the Tax Increment Pledge Agreement {thee"Pledge Agreement") to be entered into between the City and the HRA, a draft of which has been presented to this Council. The. Pledge Agreement is hereby approved substantially in the form presented and the Mayor and City Clerk are authorized to execute the Pledge Agreement. on behalf of the City with such variations, omissions and insertions as the Mayor and City Clerk shall approve, which .approval. shall be conclusively .presumed by the execution and. delivery of the Pledge Agreement by the Mayor and City Clerk. So long as the Note is outstanding, .the City will not, without the prior written. consent of the registered owner, issue any additional obligations payable from the tax increment provided pursuant to the Pledge Agreement and will not take any action which results in a reduction in he amount of such tax increments except o the extent required by law. 3.02... No Representations or Warranties of Cif. The City makes no representation or warranty as to the sufficiency or availability. of the tax.increments from the TIF`District to pay the. principal of or interest on the Note when due. Section 4. Tax-Certifications, CountX Auditor Registration, Certification of Proceedings. 4.01. Tax Covenant.. The City covenants and agrees with the registered owner of the Note that it will not take, or permit to be taken by any of its ofI•icers, employees or agents, any action which would cause the interest payable on the Nate to become subject to taxation under the Internal Revenue Code of.1986, as amended {the Cade) and applicable Treasury Regulations (the Regulations), and covenants to take any and all actions within its powers to ensure that the interest on the Note will not become includible in gross income of the recipient under the Code .and the Regulations. While all or a portion of the land f nanced with the proceeds of the Note may be used in the trade or business of non-governmental persons, the City covenants that (i) neither Lakeville Five nor Aurora has provided or will provide any private security or private payments pursuant to the Redevelopment Agreement as security for the Note (and the Redevelopment Agreement does not contain any "impermissible agreement" as referenced below) and (ii) neitherahe City nor the HRA has any other development contract or agreement with any other non-governmental. persan pursuant to which said person has provided or will provide any private security or private payments as securityfor theNote (including any development contract or agreement with any non-governmental person relating to property within the TIF District which contains an "impermissible agreement" relating to imposition of personal tax liability, provision of credit support, agreement with respect to minimum property values or agreement not to-challenge or contest tax assessments). The City, on behalf of itself and the HRA, agrees: that neither it nor the HRA will enter into any' lease, use agreement, 3 i management agreement, development contract or other agreement or contract in the future with any non-governmental. person which would cause the Note to meet the private security or payment test of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code: 4,02. Arbitrage Certification. The Mayor and City: Clerk, being the officers of the City. charged with. the responsibility for issuing the Note pursuant to this resolution, are authorized and directed to execute and deliver as part of the closing transcript a certificate in accordance with the provisions of Section 148 of the Code, and Section 1.148-2(b) of the Regulations, stating the facts, estimates and circurnstances in existence on the date of issue and delivery of the Note which make it reasonable to expect that the proceeds. of the Note will not be used in a manner that would cause the Note to be arbitrage bond within the meaning of the Code and Regulations.. 4..03. Arbitrage Rebate. The City acknowledges that the Note may be subject to the rebate requirements of Section 148(f) of the Code. The City covenants .and agrees to retain. such records, make such determinations, file such reportsand documents and pay suchamounts at such times as are required under said. Section 148(f) and applicable Regulations to preserve the exclusion ofinterest on the Note from gross income for federal income tax purposes, unless the Note qualifies for an exception from the rebate requirement pursuant to one of the spending exceptions set forth in Section 1.148-7 of the Regulations and no "gross proceeds" of the Note {other than amounts constituting a "bona fide-debt service fund")-arise during or after the expenditure of the original proceeds thereof.' • 4.04. Qualified Tax-Exempt Obli ations. The City Council hereby designates the Note as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code relating to the: disallowance of interest expense for financialinstitutions and herebyfinds that the reasonably anticipated amount of qualified tax-exempt oblgations(withintbe meaning of Section 265(b)(3) of the Code) which will be :issued by the City and .all subordinate entities during calendar. year 2401 does not exceed $10,000,000. 4.05. Reimbursement. The City certifies,that the proceeds of the Note will not. be used by the. City to reimburse itself for any expenditure with respect to the land which the City paid or will have paid more than 60 days prior to the issuance of the Note. 4.06. Countti Treasurer-Auditor Registration. The City Clerk is hereby authorized and directed to file a certified copy of this resolution with the County Treasurer-Auditor of Dakota County, together with such other information as the County Treasurer-Auditor shall require, and to obtain from the County .Treasurer-Auditor a certificate that the Note has been. entered on the .County Auditor's bond register as required by law. 4.07. Certification of Proceedin,~s. The officers of the City and the County Treasurer- Auditor of Dakota County are hereby authorized and directed to prepare and furnish to the Purchasers and to Dorsey & Whitney LLP, Bond Counsel, certified copies of all. proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise .known to them, and .all such • 4 certified copies, certificates and affidavits, including any heretofore furnished,: shall be deemed representations of the City as to the facts recited therein. APPROVED AND ADOPTED by the City Council of the City of Lakeville, Minnesota, this 18th day of June, 2Q01. CITY OF VII.,LE By: Robert D. J son, Mayor TTES harlene Frie es, City jerk 5 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF LAKEVILLE TAX INCREMENT REVENUE NOTE (AURORA INVESTMENTS PROJECT) No~ R-1 $1,897,000 Interest Rate Final Maturity Dated Date of Note 8.00% February 1, 2014 February 1, 2000 .REGISTERED OWNER: LAKEVILLE FIVE, INC. PRINCIPAL AMOUNT: ONE MILLION EIGHT HUNDRED NINETY SEVEN THOUSAND DOLLARS FOR VALUE RECEIVED, THE CITY OF LAKEVILLE, Dakota County, Minnesota (thee"City"), acknowledges itself to be specially indebted and hereby promises to pay to the registered owner named above, or registered assigns (the "Registered Owner"), the principal amount specified above; in the manner set forth herein and on the dates shown on Exhibit A attached hereto, with interest thereon at the annual rate of eight percent (8.00%) per annum (computed on the basis of a 360-day year consisting of twelve 30-day months), computed commencing as of the Dated Date of this Note set forth above, payable in the manner set forth herein and on the dates set forth on said Exhibit A. The interest hereon and the principal hereof are payable in lawful money of the United States of America, by check or draft of the City. The final installment of the principal of and interest on this Note payable at maturity or upon redemption of the entire principal amount hereof is payable upon surrender hereof at the office of .the City Finance Director, in Lakeville, Minnesota. This Note is issued pursuant to a Redevelopment Agreement, dated February 17, 1998 between the City, Lakeville Five, Inc. and Aurora Investments, LLC (the "Redevelopment- Agreernent") and resolutions adopted by the City Council on February 17,1998 and June 18, 2001 (collectively, the "Resolution") to pay certain public redevelopment costs of Redevelopment Project No. 1 (the. "Project") heretofore established by the Housing and Redevelopment Authority of the City (the "HRA"). Pursuant to the Redevelopment. Agreement, the City agreed that interest on the principal balance would begin to accrue as of the Dated Date of this Note, but the City would not be required to deliver the Note to the Registered Owner and _ _ _ commence payments hereunder until certain conditions set forth in Section 3.2(c) of the Redevelopment Agreement had been fulfilled to the satisfaction of the City. Said conditions having been met to the satisfaction of the City, this Note is executed and delivered to the Registered Owner on the date set forth below in satisfaction of the City's obligations under the Redevelopment Agreement. This Note is issued pursuant to and in full conformity with the provisions of the Constitution and laws of the State of Minnesota thereunto enabling,-including Minnesota Statutes, Sections 469.001 through 469.047, Sections 469.174 through. 469..179 and Chapter 475, as amended. This Note is .payable solely from certain tax increments (the "District Tax Increment") to be derived from Redevelopment Tax Increment Financing District No. 3 (the "District"} within the Project, which have been pledged. to the payment of this Note by the Resolution. The District Tax Increment received will be deposited in the account established. pursuant to the provisions of Minnesota Statutes, Section 469.177, subdivision 5 (the "Account"). Payment from said Account shall be made in the following order and for the following purposes: 1. Payment shall be made to the City, on each February 1 and August 1, in the amount of $10,904.50 to be used by the City to help pay interest on the City's. General Obligation Improvement Bonds, Series 1995A, heretofore issued by the City for the benefit of the Project. Payments in said amount have previously been made from the. Account on February 1 and August 1 in each of the years 1998,.. 1999 and 2000, and on February 1, 2001, and will continue, commencingon • August 1, 200E 2. Subsequent to the Date of Delivery hereof, payment shall be made from. said Account to the appropriate payee, upon receipt of an invoice or other documentation reasonably acceptable to the City, for administrative expenses due but unpaid relating to the District, including, withoutlimtation, legal fees, legal notice and publication fees, and tax increment fees due the County and State. 3. On August 1, 2001, payment shall be made from said Account to the City in the amount of $88,859, and on February 1, 2002 the amount of $30,000 which is-the amount required to reimburse the City in full, after taking into account previous payments, for certain costs of public improvements heretofore. undertaken by the City within the Project. 4. Commencing on August 1, 2001 and continuing on each February 1 and August 1 thereafter until the earlier of (i) February 1, 2014 or (ii} the date upon which the .principal balance of this Note has been fully discharged, payments shall be made from said Account to the Registered Owner on said dates, after the foregoing disbursements have been made, of all remaining District Tax Increment to be applied toward payment of the principal of and interest on this Note then due. In theevent that amounts so disbursed to the City are not sufficient to pay the principal of and interest on this Note When due, the failure of the City to pay such, principal and interest shall not constitute a default hereunder. 2 This Note and the interest hereon shall not be deemed to constitute a general obligation of the HRA, the City or the State of Minnesota or any political subdivision thereof. Neither the HRA, the City, the State of Minnesota nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Notes except from District Tax Increment pledged therefor, and. neither the full faith and credit nor the taxing power of the HRA, the City, the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto, THE CITY MAKES NO REPRESENTATION OR WARRANTY AS TO THE SUFFICIENCY OR AVAILABILITY OF THE DISTRICT TAX INCREMENT TO PAY THE PRINCIPAL OF OR INTEREST ON THIS NOTE WHEN DUE. NO ASSURANCE CAN BE GIVEN THAT SUCH PRINCIPAL OR INTEREST WILL BE PAID IN ACCORDANCE WITH THE TERMS OF THIS NOTE. Payments made on this Note shall be applied first to interest accrued and owing on the Note and then to reduction of the outstanding principal balance. In the event the payment made on any payment date is not sufficient to pay the interest accrued in full, the deficiency shall continue as an obligation of the City until the accrued but unpaid interest shall have been fully paid but no interest shall be payable on overdue installments of interest. The City shall not be obligated to make any payments hereunder, whether principal or interest, subsequent to February 1, 2014, and any amounts remaining unpaid as of said date (other than by reason of failure of the City to comply with the terms of this Note) shall be considered forgiven and shall cease to be owing. Subsequent to each February 1 and August l payment, the City. Finance Director will update Exhibit A hereto through said payment date and will provide a copy of the revised Exhibit A to the Registered Owner hereof and said revised Exhibit A shall thereafter constitute a part of this Note: ,The principal amount of this Note may not. be prepaid by the City, either in whole or in part, from sources other than the. District Tax Increment without the prior written consent of the Registered Owner. As provided in the Resolution, the City will cause to be kept at the. office of the City Finance Director a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration or transfer of ownership of this Note. This Note is transferable upon the books of the City at the office of the City Finance Director by the .Registered Owner hereof in person or by its attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Finance Director, duly executed by the Registered Owner or its duly authorized attorney, together with. (i) an executed investment letter from the new Registered Owner in form satisfactory to the City, (ii) if requested by the City, an opinion of counsel addressed to the City and in form satisfactory to the City that such transfer complies with all applicable federal and State of Minnesota securities laws, and (iii) if requested by the City, an .indemnity agreement in form and substance satisfactory to the City executed by the Registered Owner. Upon such transfer the City Finance Director will note the date of registration and the name and. address of the new Registered Owner upon the books of the City and in the registration blank appearing below. Alternatively, the City 3 will at the request and expense of the Registered Owner issue new notes in an aggregate principal amount equal to the unpaid principal balance of this Note, and of like tenor, except as to number and principal amount, and registered in the name of the Registered Owner or such transferee as may be designated by the Registered Owner. The City may deem and treat the person in whose name this Note is last registered upon the books of the City with such registration noted on this Note as the absolute owner hereof for the purpose of receiving payment of or on account of the principal balance, redemption price or interest, whether or not overdue, and for all other purposes, and all such payments so made to the Registered Owner or upon its order shall be valid and effectual to satisfy and discharge the liability upon this .Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the issuance of this Note in order to make it a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed in regular and due form as so required. IN WITNESS WHEREOF, the City of Lakeville, Dakota Caunty, Minnesota, by its City Council, has caused this Note to be executed by the signatures of its Mayor and City Clerk and has: caused this Note to be delivered on the date set forth below. Date of Delivery: July 1, 2001. _ Mayor a City Cler RECEIPT OF ORIGINAL REGISTERED OWNER Lakeville Five, Inc., as the original registered owner of this Note, hereby acknowledges receipt of the Note and agrees to the terms and provisions hereof as set forth. above and in Exhibit A attached hereto. LAKEVILLE FIVE, INC. B ~ Y It 4 Y PROVISIONS AS TO REGISTRATION The ownership of the unpaid principal balance of this Note and the interest accruing thereon is registered on the books of the City in the name of the registered owner named on the first page hereof or as last noted below. Date of Name and Address of Signature of Registration Registered Owner City Finance Director • 5 Exhibit A Pa ments Accrued Interest Deferred Accrued Remaining Interest ~ Principal Unpaid Date Deferred .Interest Principal Total Balance Earned Balance 02/01/00. 1,897,000.00 08/01/00 1,897,000.00 75,880.00. 75,880.00 02/01 /01 1,897,000.00 ..75,880.00 151,760.00 08/01/01 1,897,000.00 .75,880.00 227,640.00 02/01 /02 08/01 /02 02/01 /03 08/01 /03 02/01 /04 08/01 /04 02/01 /05 08/01 /05 02/01/06 08/01 /06 ` 02/01/07 08/01/07 02/01 /08 - 08/01 /08 02101!09 08/01 /09 02/01 /10 08/01 /10- 02/01 /11 08/01 /11 02/01 /12' 08/01 /12 02/01/13 08/01 /13 02/01/14 _ _ Total - _ _ a ~ ~ f TAX INCREMENT PLEDGE AGREEMENT. This Tax Increment Pledge Agreement (the "Agreement") dated as of June 18, 2001, is by and between the City of Lakeville, Minnesota (the "City"), and the Housing and. Redevelopment .Authority of the City of Lakeville, Minnesota (the "Authority"), and provides as follows: WHEREAS, the City Council has, on or before the date hereof, adopted a resolution authorizing the issuance of the City's $1,897,000 Tax Increment Revenue Note (Aurora Investments Project) (the "Note"); and WHEREAS, the Note is being issued to finance land acquisition costs within the Authority's Redevelopment ProjectNo~ 1 (the "Project") and is to be payable'from tax increments realized by the Authority from Tax Increment Financing District No. 3 (the. "District") within he Project. NOW, THEREFORE,. to provide funds to be applied by the City to the payment of the principal and interest on the Note, the City and the Authority hereby agree as follows: 1. In order to provide tax: increments to be applied by the City to the payment of principal of and interest on the Note, the Authority hereby pledges and shall make available to the City,. as of each February 1 and August 1, commencing on August 1, 2001, for deposit in the Tax Increment Revenue Note (Aurora Investments Project) Bond Fund to be created on the i books of the City for the payment of the Note, all Available Tax Increments (as hereinafter defined). As used in this Agreement, "Available Tax Increments" means all tax increments allocable to the Authority from the District, after deducting therefrom certain amounts payable to the City for other purposes as specified in the Note. The City shall apply all Available Tax Increments made available by the Authority to the payment ofthe Note in accordance with the terms thereof. 2. An executed copy of this Agreement shall be filed with the County Auditor-Treasurer of Dakota County. 3. This Agreement shall become effective upon the actual issuance and delivery of the Note. IN WITNESS WHEREOF, the City and the Authority have caused this Agreement to be .duly approved and executed as of the day and year first above written. f CITY OF I,~IKEVILLE, n~IN~fESOTA . J' By ,~"'~l` f~ Its Mayor f And Its City Clerk HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF LAKEVILLE, MINNESOTA B ~ Y Its Cha n And ' Its Exe utive Director • •