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HRA Regular Session 5.3. Meeting Date: 04/24/2012 Submitted For: Kurt Ulrich By: Jo Thieling, Administrative Services Title: Adopt Resolution #HRA 12 -04 -XXX Authorizing Execution of a Pledge Agreement Background: In March, 2012, the City of Ramsey and the City's HRA entered into a Development Agreement with F &C Ramsey, LLC and F &C Ramsey Member, LLC in connection with the development of an approximately 230 unit, four story, market rate, rental apartment within Tax Increment District No. 14. The HRA will make a loan to F &C Ramsey and F &C Ramsey Member to finance eligible costs of the apartment project. The repayment of such loan is spelled out in the Development Agreement. It is anticipated the City Council will adopt the resolution presented to them this evening accepting proposal on the sale of a $7,420,000 Taxable General Obligation Tax Increment Bonds, Series 2012B, providing for their issuance, pledging tax increments for the security and authorizing execution of a tax increment pledge agreement. To provide additional security for the payment of the Bonds, it is necessary for the Ramsey Housing and Redevelopment Authority (HRA) to execute the Pledge Agreement. The HRA will make a loan ( "Loan No. 2 ") to the borrower (Flaherty and Collins) to finance eligible costs of the Project. The Borrower has agreed to repay Loan No. 2 and execute and deliver to the Authority Note No. 2 ( "Note No. 2 ") in accordance with the provisions of Article VIII of the Development Agreement. In addition David M. Flaherty will execute a Personal Guaranty (the "Personal Guaranty ") in favor of the Authority to provide security for the performance of the Borrower's obligations under Note No. 2. This HRA Resolution pledges all payments received by the Authority pursuant to Note No. 2 and the Personal Guaranty to the payment of the Bonds and interest thereon. Approval of this Pledge Agreement also grants approval of such additional details as may be necessary and appropriate and modifications, deletions, and additions as may be necessary and appropriate and approved by the City Attorney and by the HRA officials authorized to execute or accept, document changes prior to its execution, and HRA officials would be authorized to approve said changes on behalf of the HRA. Attached for the HRA review is the Pledge Agreement and the resolution authorizing execution of same. Recommendation: Staff is recommending the HRA adopt the resolution authorizing execution of a pledge agreement Funding Source: N/A Council Action: Moton to adopt Resolution #HRA -12 -04 -XXX Authorizing Execution of a Pledge Agreement. Resolution & Pledge Agreement Attachments Form Review Inbox Reviewed By Date