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HomeMy WebLinkAbout2016-09-13 PACKET 04.03b. COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY CITY OF COTTAGE GROVE WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. _________ RESOLUTION APPROVING AGREEMENTS RELATING TO TAX INCREMENT FINANCING DISTRICT NO. 1-17 (DOMINIUM) AND THE LEGENDS OF COTTAGE GROVE DEVELOPMENT IN THE CITY OF COTTAGE GROVE BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Cottage Grove Economic Development Authority (the “Authority”) as follows: Section 1. Recitals. 1.01. On June 14, 2016, the Board approved a Contract for Private Development (the “Contract”) between the Authority, the City of Cottage Grove, Minnesota (the “City”), and Cottage Grove Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the “Developer”), relating to the development of a 184-unit multifamily housing development to be located in the City (the “Project”), eighty percent (80%) of the units of which are to be restricted to at least one person age 55 or older. The Contract also contemplates the execution of a Declaration of Restrictive Covenants (the “Declaration”) by the Developer and consented to by the Authority and an Assessment Agreement (the “Assessment Agreement”) between the Developer and the Authority. 1.02. The Project is located in Tax Increment Financing District No. 1-17 (Dominium), a housing tax increment financing district (the “TIF District”), located within Development District No. 1 in the City. 1.03. To make the Project economically feasible, the Authority agreed to reimburse qualifying costs of the Developer under the Contract in the amount of $1,695,000 and will issue to the Developer the Authority’s Taxable Tax Increment Revenue Note (Cottage Grove Leased Housing Associates I Senior Housing Project) (the “TIF Note”), in the principal amount of up to $1,695,000. The TIF Note will be payable from available tax increment collected from the TIF District (“Available Tax Increment”). 1.04. To provide financing for the acquisition, construction, and equipping of the Project, the City agreed to issue its multifamily housing revenue obligations, in one or more series, as taxable or tax-exempt obligations (the “Notes”), in the maximum principal amount of $25,000,000. The Notes will be issued pursuant to a Funding Loan Agreement (the “Funding Loan Agreement”), between the City, BMO Harris Bank, N.A., a national banking association, or another financial institution selected by the Developer (the “Funding Lender”), and U.S. Bank National Association, a national banking association, or another financial institution selected by the Developer (the “Fiscal Agent”). The proceeds derived from the sale of the Notes (the “Funding Loan”) will be loaned by the City to the Developer (the “Project Loan”) pursuant to the terms of a Project Loan Agreement (the “Project Loan Agreement”), between the City, the Fiscal Agent, and the Developer. The principal of and interest on the Project Loan will be paid from loan repayments to be made by the Developer under the terms of the Project Loan Agreement, and as security for the repayment of principal of and interest on the Project Loan, the Developer will execute and deliver to the City a mortgage agreement (the “Mortgage”) to be assigned by the City to the Fiscal Agent pursuant to an assignment of mortgage (the “Mortgage Assignment”). Additionally, the Developer 485920v1 JAE CT160-166 will issue one or more project notes (the “Project Notes”) to the City to be endorsed by the City to the Fiscal Agent as security for the Funding Loan. 1.05. The following documents (collectively, the “Development Documents”) have been presented before this Board: (i) a Subordination Agreement (Governmental Entity), proposed to be entered into between the City, the Authority, and the Fiscal Agent, subordinating certain of the City’s and Authority’s rights in the Contract to the rights of the Fiscal Agent under the Mortgage; (ii) a Collateral Assignment and Subordination of Development Agreement, proposed to be entered into by the Developer in favor of the Funding Lender and consented to by the City and the Authority, assigning the Developer’s interest and rights under the Contract to the Funding Lender and subordinating the Contract, the Declaration, and the Assessment Agreement to liens, terms, covenants, and conditions of the documents executed in conjunction with the issuance of the Notes; and (iii) a Collateral Assignment of Tax Increment Financing Note and Available Tax Increment, proposed to be entered into by the Developer in favor of the Fiscal Agent and consented to by the City and the Authority, assigning the Developer’s interest in the TIF Note and the Available Tax Increment to the Fiscal Agent. 1.06. The Board has reviewed the Development Agreements and finds that the execution thereof by the Authority and performance of the Authority’s obligations thereunder are in the best interest of the City and its residents. Section 2. Board Action. 2.01. The Development Agreements are approved in substantially the forms on file in City Hall, subject to modifications that do not alter the substance of the transaction and are approved by the President and Executive Director of the Authority; provided that execution of the documents will be conclusive evidence of their approval. 2.02. The President and Executive Director are authorized and directed to execute the Development Agreements and any other documents or certificates necessary to carry out the transactions described therein. Approved by the Board of Commissioners of the Cottage Grove Economic Development th Authority this 13 day of September, 2016. President Attest: Executive Director 2 485920v1 JAE CT160-166