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8.1. HRSR 08-05-2019 Request for Action To Item Number Housing and Redevelopment Authority 8.1 Agenda Section Meeting Date Prepared by Work Session August 5, 2019 Amanda Othoudt, ED Director Item Description Reviewed by TIF Discussion Cal Portner, City Administrator Reviewed by Action Requested Information presented for discussion purposes. Background/Discussion At their April 3, 2017, meeting, the HRA moved forward with the steps necessary to create a redevelopment plan for the properties located at the intersection of Main Street, Gates Avenue NW and rd 3 Street connecting to Highway 169 which would align with the Mississippi Connections Plan. The HRA is proposing to reimburse itself for the costs advances including administrative costs incurred prior to the establishment of the TIF District, subject to the limitations of the TIF Act, and certain costs incurred in connection with a study of blighting conditions, engineering, land and building acquisition, demolition and site preparation costs. Gina Fiorini, of Kennedy & Graven will be in attendance to answer questions related to the potential establishment of a redevelopment TIF district. Financial Impact N/A Attachments  Interfund Loan Resolutions  Project Area Map The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ELK RIVER, MINNESOTA CITY OF ELK RIVER SHERBURNE COUNTY STATE OF MINNESOTA RESOLUTION NO. 17-05 AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH A TAX INCREMENT FINANCING DISTRICT BE IT RESOLVED By the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Elk River, Minnesota (the "HRA") as follows: Section 1. Background. 1.01. The HRA and the City of Elk River (the "City") are considering establishing a Tax Increment Financing District which is anticipated to include certain blighted and underused real property located near the intersection of Main St NW, Gates Ave NW, and 3'a St NW (the TIF District") pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the TIF Act"). 1.02. The HRA or the City may incur certain costs related to the TIF District which may be financed on a temporary basis from available HRA funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the HRA and the City are 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 HRA has determined that it or the City may pay for administrative costs associated with the establishment of the TIF District and certain other costs incurred in connection with the proposed development of the TIF District, including but not limited to a study of blighting conditions, engineering, land and building acquisition of properties along Main St NW, Gates Ave NW and 3'a St NW, demolition and site preparation costs (the "Costs Advances") on a temporary basis from the City's General Fund, the HRA's General Fund or any other fund from which such advances, from time to time, may be legally made (the "Fund") as an interfund loan pursuant to Minnesota Statutes, Section 469.178, Subd. 7. 1.05. The HRA hereby designates the Costs 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 HRA will reimburse itself or the City for the Costs Advances including without limitation (i) administrative costs incurred prior to the establishment of the TIF District, subject to the limitations of the TIF Act, and (ii) certain costs incurred in connection with a study 1 510729vl JSB EL18548 of blighting conditions, engineering, land and building acquisition, demolition and site preparation costs in an aggregate amount not to exceed the greater of $1,100,00 or the adopted and, if applicable, amended Tax Increment Financing Plan budget for the TIF District (the Interfund Loan"), together with interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Interfund Loan, or any part of it, is first made; provided, however, the City Finance Director is authorized to specify a lower rate. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid annually on February 1 (the "Payment Date"), commencing on the first Payment Date on which the City or the HRA has received Available Tax Increment (defined below), or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the TIF District (the "Maturity Date"). 2.03. Payments on the Interfund Loan will be made solely from the tax increment from the TIF District received by the HRA or the City from Sherburne County in the 6 -month period before any Payment Date, net of the amount paid under any agreement with a private developer or otherwise pledged to the payment of any obligation (the "Available Tax Increment'). Payments shall be applied first to accrued interest, and then to unpaid principal, unless otherwise specified by the City Finance Director. Interest accruing from the Loan Date will be compounded semiannually on February 1 and August 1 of each year and added to principal, unless otherwise specified by the City Finance Director. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes, or contracts secured in whole or in part with available tax increment, and are on a parity with any other outstanding or future interfund loans secured in whole or in part with available tax increment. 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 HRA without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the HRA or the City 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 HRA or 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. Neither the HRA nor the City shall have any obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the termination or expiration of the TIF District. 2.06. The HRA or the City, as applicable, may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan, in whole or in part, on any date from time to time, to the extent permissible under law. 2.07. The HRA 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 2 5107290 JSB EL185-48 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 adoption. Adopted this 1St day of December, 2017. Cww ATTEST: e etary 5107290 JSB ELI 8548 pity of Elk River pity Council Resolution 17- 85 A Resolution of the City Council of the City of Elk River Authorizing an Interfund Loan for Advance of Certain Costs in Connection With a Tax Increment Financing District NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: Section 1. Background 1.01. The City and the Housing and Redevelopment Authority in and for the City of Elk River, Minnesota (the "HRA") are considering establishing a Tax Increment Financing District which is anticipated to include certain blighted and underused real property located near the intersection of Main St NW and Gates Ave NW, and 3 s St NW the "TIF District") pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"). 1.02. The City or the HRA may incur certain costs related to the TIF District which may be financed on a temporary basis from available HRA funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the City and the HRA are 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 City has determined that it or the HRA may pay for administrative costs associated with the establishment of the TIF District and certain other costs incurred in connection with the proposed development of the TIF District, including but not limited to a study of blighting conditions, engineering, land and building acquisition of properties along Main St NW, Gates Ave NW and 3`s St NW, demolition and site preparation costs (the Costs Advances") on a temporary basis from the City's General Fund, the HRA's General Fund or any other fund from which such advances, from time to time, may be legally made the "Fund") as an interfund loan pursuant to Minnesota Statutes, Section 469.178, Subd. 7. 1.05. The City hereby designates the Costs Advances as an interfund loan in accordance with the terms of this resolution and the TIF Act. lo21R[I II MATURE Section 2. Regiment of Interfund Loan. 2.01. The City will reimburse itself or the HRA for the Costs Advances including without limitation (i) administrative costs incurred prior to the establishment of the TIF District, subject to the limitations of the TIF Act, and (ii) certain costs incurred in connection with a study of blighting conditions, engineering, land and building acquisition, demolition and site preparation costs in an aggregate amount not to exceed the greater of 1,100,000 or the adopted and, if applicable, amended Tax Increment Financing Plan budget for the TIF District (the "Interfund Loan"), together with interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Interfund Loan, or any part of it, is first made; provided, however, the City Finance Director is authorized to specify a lower rate. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid annually on February 1 (the "Payment Date"), commencing on the first Payment Date on which the City or the HRA has received Available Tax Increment (defined below), or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the TIF District (the "Maturity Date"). 2.03. Payments on the Intetfund Loan will be made solely from the tax increment from the TIF District received by the City or the HRA from Sherburne County in the 6 - month period before any Payment Date, net of the amount paid under any agreement with a private developer or otherwise pledged to the payment of any obligation (the "Available Tax Increment"). Payments shall be applied first to accrued interest, and then to unpaid principal, unless otherwise specified by the City Finance Director. Interest accruing from the Loan Date will be compounded semiannually on February 1 and August 1 of each year and added to principal, unless otherwise specified by the City Finance Director. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes, or contracts secured in whole or in part with available tax increment, and are on a parity with any other outstanding or future interfund loans secured in whole or in part with available tax increment. 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 City or the HRA without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the City or the HRA 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 City or the HRA. Neither the State of Minnesota, not 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. Neither the City nor the HRA shall have any obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the termination or expiration of the TIF District. rerEAE' it rIATURE 2.06. The City or the HRA, as applicable, may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan, in whole or in part, on any date from time to time, to the extent permissible under law. 2.07. The City 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 adoption. Passed and adopted this 18`x' day of December 2017. rpt j. T4t7' N' . ATTEST: d,. P Tina Allard, City Clerk POWE N II ® 9 iu m011 13 0.7 © Bolton & Menk, Inc - Web GIS 0 Legend Redevelopment Area A - Main Street/Gates/3rd Street NW This drawing is neither a legally recorded map nor a survey and is not intended to be used as one. This drawing is a compilation of records, information, and data located in various city, county, and state offices, and other sources affecting the area shown, and is to be used for reference purposes only. The City of Elk River is not responsible for any inaccuracies herein contained. Disclaimer: 11/22/2017 9:59 AM 91 Feet City Limits Urban Service Area Parcels (1-24-2017) Park Areas