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HomeMy WebLinkAbout2016-09-13 PACKET 04.03a. COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY CITY OF COTTAGE GROVE WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. _________ RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTE (COTTAGE GROVE LEASED HOUSING ASSOCIATES I SENIOR HOUSING PROJECT); AND APPROVING CONSTRUCTION PLANS WITH RESPECT TO THE PROJECT BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Cottage Grove Economic Development Authority (the “Authority”) as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. The Authority has heretofore approved the establishment of Tax Increment Financing District No. 1-17 (Dominium), a housing tax increment district (the “TIF District”), within Development District No. 1 in the City of Cottage Grove, Minnesota (the “City”), and has adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District (the “Project”). Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the community that it issue and sell its Taxable Tax Increment Revenue Note (Cottage Grove Leased Housing Associates I Senior Housing Project) (the “Note”), in the maximum aggregate principal amount of $1,695,000, for the purpose of financing certain public costs of the Project. 1.02. Issuance, Sale, and Terms of the Note. On June 14, 2016, the Board of Commissioners of the Authority approved the Contract for Private Development (the “Agreement”) between the Authority, the City, and Cottage Grove Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the “Owner”). Pursuant to the Agreement, the Note shall be sold to the Owner; provided, however, that the conditions precedent to the issuance of the Note set forth in Section 3.3 of the Agreement have been satisfied. The Note shall be dated as of the date of delivery and shall bear interest at the rate set forth therein. The Authority shall receive in exchange for the sale of the Note the payment by the Owner of the payment of the Qualifying Costs as defined in the Agreement. The Note will be delivered in accordance with the terms of Sections 3.2 and 3.3 of the Agreement. Section 2. Form of Note. The Note shall be in substantially the form set forth in EXHIBIT A attached hereto, with the blanks to be properly filled in and the principal amount adjusted as of the date of issue. 449279v1 JAE NR370-10 Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates. Principal of the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the Executive Director of the Authority to perform the functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner’s order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in 2 449279v1 JAE NR370-10 exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of such Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof upon satisfaction of the conditions set forth in Section 3.3 of the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal on the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in EXHIBIT A attached hereto. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof remains unpaid, the Authority shall maintain a separate and special “Bond Fund” to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority’s account for the TIF District upon the payment of all principal and interest to be paid with respect to the Note. Section 5. Approval of Construction Plans. In accordance with Sections 3.3(d) and 4.2(a) of the Agreement, the Owner has submitted the Construction Plans (as defined in the Agreement) to the Authority. The Authority hereby approves the Construction Plans. This Section 5 of the resolution shall be construed as written approval of the Construction Plans pursuant to the Agreement. Section 6. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, 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 certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 7. Effective Date. This resolution shall be effective upon full execution of the Agreement. 3 449279v1 JAE NR370-10 Approved by the Board of Commissioners of the Cottage Grove Economic Development th Authority this 13 day of September, 2016. President Attest: Executive Director 4 449279v1 JAE NR370-10 EXHIBIT A FORM OF TIF NOTE UNITED STATE OF AMERICA STATE OF MINNESOTA WASHINGTON COUNTY No. R-1 $1,695,000 COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE NOTE (COTTAGE GROVE LEASED HOUSING ASSOCIATES I SENIOR HOUSING PROJECT) Date Rate of Original Issue 4.6% __________ The Cottage Grove Economic Development Authority (the “EDA”), for value received, certifies that it is indebted and hereby promises to pay to Cottage Grove Leased Housing Associates I, LLLP, or registered assigns (the “Owner”), the principal sum of $1,695,000 and to pay interest thereon at the rate of 4.6% per annum, as and to the extent set forth herein. This Note is issued pursuant to the Contract for Private Development between the EDA and the Owner dated _______________, 2016 (the “Agreement”). Capitalized terms not otherwise defined herein have the meanings provided in the Agreement. 1. Payments. Principal and interest (“Payments”) will be paid on August 1, 2019, and each February 1 and August 1 thereafter to and including February 1, 2034 (“Payment Dates”), in the amounts and from the sources set forth in Section 3 herein. Payments will be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or any other address as the Owner may designate upon 30 days written notice to the EDA. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein will accrue on the unpaid principal, commencing on the date of original issue. Interest will be simple, non-compounding interest and will be computed on the basis of a year of 360 days and twelve 30-day months and charged for actual days principal is unpaid. To the extent that Available Tax Increment is insufficient to pay principal and interest on any Payment Date, unpaid interest will not be added to principal. 3. Available Tax Increment. Payments on this Note are payable on each Payment Date in the amount of and solely payable from “Available Tax Increment,” which will mean, on each Payment Date, 90 percent of the Tax Increment attributable to the Development Property (defined in the Agreement) and paid to the EDA by Washington County in the six months preceding the Payment Date. A-1 486042v1 JAE CT165-53 Available Tax Increment will not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default by the Owner under the Agreement. The EDA will have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment, and the failure of the EDA to pay the entire amount of principal or interest on this Note on any Payment Date will not constitute a default hereunder as long as the EDA pays principal and interest hereon to the extent of Available Tax Increment. If on any Payment Date there is insufficient Available Tax Increment to pay accrued and unpaid interest on this Note on such date, the amount of such deficiency shall be deferred and paid, without interest thereon, on the next Payment Date on which the EDA has Available Tax Increment in excess of the amount necessary to pay the accrued and unpaid interest on this Note on such subsequent Payment Date. The EDA will have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 2034. 4. Optional Prepayment. The principal sum and all accrued interest payable under this Note is pre-payable in whole or in part at any time by the EDA without premium or penalty. No partial prepayment will affect the amount or timing of any other regular payment otherwise required to be made under this Note. 5. Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the EDA may, notwithstanding any notice and cure provisions in the Agreement, withhold from Payments hereunder all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, within 30 days after the Event of Default is cured. If on any date there has occurred and is continuing, after notice and opportunity to cure have been provided in accordance with the Agreement, any Event of Default under the Agreement, the EDA may exercise its remedies under the Agreement, including but not limited to terminating this Note. Reference is hereby made to all of the provisions of the Agreement, including without limitation Article VIII thereof for a fuller statement of the rights and obligations of the EDA to pay the principal of this Note, and said provisions are hereby incorporated into this Note as though set out in full herein. 6. Nature of Obligation. This Note is a single note in the total principal amount of $1,695,000 issued to aid in financing certain Qualifying Costs of a Development District undertaken by the EDA pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.179, as amended. This Note is a limited obligation of the EDA which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon will not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the EDA. Neither the State of Minnesota, nor any political subdivision thereof will be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of 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. 7. Estimated Tax Increment Payments. Any estimates of Tax Increment or Available Tax Increment prepared by the EDA or its financial advisors in connection with the TIF District or the Agreement are for the benefit of the EDA, and are not intended as representations on which the Developer may rely. A-2 486042v1 JAE CT165-53 THE EDA MAKES NO REPRESENTATION OR WARRANTY THAT THE AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THIS NOTE. 8. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. Subject to certain limitations set forth herein, this Note is transferable upon the books of the EDA kept for that purpose at the principal office of the Executive Director of the EDA as Registrar, by the Owner hereof in person or by the Owner’s attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the EDA, duly executed by the Owner. Upon the transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the EDA with respect to the transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note will not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the EDA has been provided with an investment letter in a form substantially similar to the investment letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to the EDA, that the transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED 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 in order to make this Note a valid and binding limited obligation of the EDA according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. ************************** IN WITNESS WHEREOF, the board of commissioners of the Cottage Grove Economic Development Authority has caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY Myron Bailey, President Charlene R. Stevens, Executive Director A-3 486042v1 JAE CT165-53 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the Executive Director of the EDA, in the name of the person last listed below. Date of Registration Registered Owner Signature of EDA Executive Director Cottage Grove Leased Housing Associates I, LLLP 2905 Northwest Boulevard Suite 150 Plymouth, MN 55442 Federal ID #_____________ A-4 486042v1 JAE CT165-53