Agenda - Council - 02/10/2015 - Laserfiche WebLink

Home

Our Mission: To work together to respasibtyr grow oYU community, and to provide quality, cost.effecdve, and efficient government services. CC Regular Session Meeting Date: 02/10/2015 By: Kurt Ulrich, Administrative Services Information 7. 3. Title: Adopt Resolution #15-02-044 Authorizing the Execution and Delivery of a First Amendment to Development Agreement (F & C Ramsey, LLC) Purpose/Background: As outlined in the attached report by development attorney Tom Bray, the attached resolution: authorizes the Mayor and City Administer to (1) execute a proposed First Amendment to Development Agreement in the form attached to the Resolution, (2) execute and deliver the TIF Note in the amount of $3,000,000.00, and (3) authorized the City to return to the Borrower the originals ofNote No. 1 and Note No. 2; and to execute such documents as may be necessary to release the Security Interest the City, as successor to the HRA, holds in the membership interest of Borrower as security for the repayment ofNote No. 1 and Note No. 2, all upon and only upon the Borrower's payment of all principal and interest due under both Note No. 1 and Note No. 2. When the Borrower repays Note No. 2, the City is obligated to issue the TIF Note described in the Development Agreement to the Developer. The TIF Note is in the amount of $3,000.000.00 This resolution is required as part of the refinancing process being undertaken by F&C and will mean that both the City's loans to the project will be paid. As stated above, it also means that the anticipated tax increment financing (TIF) note will now be issued by the City for the project. The TIF note is structured as a pay-as-you-go note, meaning it only gets paid to the property owner as the property owner pays property taxes. Consequently, the risk to the City that a loan will not be repaid is now eliminated, once these transactions have been completed. Observations/Alternatives: Please see the attached memo (Bray 02-05-2015) that outlines issues associated with the approval of this resolution. One item of note is that, with the payoff of Loan No. 2, the City will lose the ability to require the property owner to have a certain percentage of low to moderate income tenants. It was required originally because the bonds the City issued were classified as "Housing Bonds" which required that 50% of the Project be qualified as a Housing Development Project. If this restriction is still desired by the City as a matter of policy, it would need to be negotiated into the agreement. Since it is no longer required with the new financing, staff supports eliminating it as part of the agreement. Funding Source: Not applicable. Recommendation: