Agenda - Council - 04/24/2012 - Laserfiche WebLink

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CC Regular Session Meeting Date: 04/24/2012 By: Diana Lund, Finance Information 7. 1. Title: Authorization of Resolution #12-04-XXX Accepting Proposal on Sale of $7,420,000 Taxable General Obligation Tax Increment Bonds, Series 2012B, Providing for Their Issuance, Pledging Tax Increments for the Security Thereof and Authoring Execution of Pledge Agreement. Background: On September 27, 2011 the HRA and City Council approved a Purchase Agreement and Development Agreement with Flaherty and Collins for the construction of a 230-unit market rate apartment project in the COR at Ramsey. The development and purchase agreements included project financing by the HRA in the amount of a $1.3 million dollar loan and a $6.85 million dollar note. The private financing of the project will be provided by PNC bank in the amount of $20.45 million. On February 28, 2012, the HRA approved the Subordination Agreement with PNC bank with regard to the HRA and PNC financing for the project. Additionally, at the September 27, 2011, meeting of the HRA, the public hearing for the sale of the bonds associated with the HRA's financing of the project was held. The authorization of the sale of the bonds was held at the regularly scheduled city council meeting of March 13, 2012. $7,420,000 of Taxable General Oligation Tax Increment Bonds will be sold the morning of April 24, 2012. Final sale information will be presented by Stacie Kvilvang of Ehlers, the HRA's financial advisor for the project, at the regularly scheduled city council meeting that same night. Thus, you will note that the attached resolution has several blanks that cannot be filled in until after the April 24 bond sale. As this is a tax increment bond, the city is pledging tax increment within Tax Increment District #14 for security of this issue. As the loan is Prior to the bond sale, the city had the bonds rated by Standards and Poor. Once again, S&P assigned an AA+ rating to these bonds. Funding Source: The Taxable General Obligation Tax Increment Bonds are to be paid from the revenue generated from the project and the tax increment revenue generated from the project, and if funding is still needed, from the tax increment of the VA & Allina. Ultimately, the bond is backed by the City's general obligation. Council Action: Motion to recommend adoption of Resolution #12-04-XXX Accepting Proposal on Sale of $7,420,000 Taxable General Obligation Tax Increment Bonds, Series 2012B, Providing for Their Issuance, Pledging Tax Increments for the Security Thereof and Authoring Execution of a Pledge Agreement. Attachments Bond Sale Report Resolution for $7,420,000 Tax Increment Bonds