Agenda - Council - 02/12/2019 - Laserfiche WebLink

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CC Regular Session 4. 8. Meeting Date: 02/12/2019 By: Sean Sullivan, Community Development Information Title Adopt Resolution # 19-047 Approving the Assignment and Assumption of Tax Increment Financing (TIF) Agreement and Pledge of TIF Note to BLIP II LLC Purpose/Background: The City of Ramsey entered into a Tax Increment Financing Agreement dated July 1, 2017 with PSD, LLC related to the construction of a 56,000 square foot industrial building in Bunker Lake Business Park. Currently, the building is occupied by two manufacturing companies. PSD, LLC is requesting assignment of its interest in the TIF Agreement to BLIP II, LLC. BLIP II, LLC appears to be associated with PSD, LLC for purposes of this project, and can be viewed more as an internal transfer. Bremer Bank, the bank for BLIP II, LLC is requiring the TIF Note with a principal in the amount of $218,000 to be pledged to Bremer Bank as security for its loan to BLIP II, LLC. Assignment and assumption of TIF Agreements and TIF Notes is common practice in the industry and the City has not identified any reason to withold the assignment and transfer. Notification: N/A Observations/Alternatives: The City TIF Attorney has worked with Staff and drafted the attached form of the resolution and the Assignment and Assumption Agreement and recommends adoption and execution by City Officials. The original request for assistance was reviewed by the Ehlers, the City's financial advisor. The Developer's return on investment were within industry standards with the inclusion of the assitance package, meaning the project would likely not have happened without the assistance and the requested amount was reasonable. Additionally, the amount of tax increment generated from the project over the life of the TIF District far exceeds the assistance amount. That excess increment can be used for eligible activites such as site improvements and administration of the district. Funding Source: N/A Recommendation: Staff recommends adoption of Resolution # 19-047 Approving the Assignment and Assumption of Tax Increment Financing (TIF) Agreement and Pledge of TIF Note for BLIP II LLC. Action: Motion to adopt Resolution # 19-047 Approving the Assignment and Assumption of Tax Increment Financing (TIF) Agreement and Pledge of TIF Note for BLIP II LLC.