Agenda - Council Work Session - 08/10/2026

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2. 2. CC Work Session Meeting Date: 08/10/2026 Primary Strategic Plan Initiative: Promote economic growth and development. Information Title: Consider Support of Gap Assistance (Loan) for ARAA Sports Facility Project Purpose/Background: The purpose of this case is to review a proposed revised Financing Structure to provide financial assistance (loan) to Anoka Ramsey Athletic Association (ARAA) for construction of a 100,000 square foot athletic facility. ARAA Project History / Finance in February 2023, the Anoka Ramsey Athletic Association (ARAA) received site plan and plat approval to construct a sports dome structure at 14600 Ferret St. NW. ARAA eventually withdrew their landuse application, and therefore, never constructed the dome. Since that time, Ramsey staff have continued to work with representatives from ARAA as they sought out a new solution for an indoor sports facility to serve their organization. ARAA has progressed through new plans to construct a facility at a different location within Ramsey. The City Council met with ARAA at the January 13, 2026 work session and reached a consensus to provide up to 2.3M in financial assistance, primarily in the form of a low interest loan. The City subsequently met at a Council Work Session on March loth and reviewed a revised financing proposal that included a 75%/25% Debt Structure without the need for a financial guaranty with a proposed City Loan of approximately $1.43M. 2 days after the March 10 CC Work Session formal bank approval was obtained but included a requirement for a 5M financial guaranty. This guaranty was a deal killer for parties involved. ARAA has worked with 3 other banks to obtain additional financing options and received 3 proposals. The option proposed for Council consideration is included as an attachment to this case. In short, the 75/25 shifted to a 70/30 LTV ratio and the City loan and loans by other was considered equity for ARAA. The proposed City participation under the proposed financing structure would be an HRA loan of approximately $1.877M, which is still below the initial consensus of the Council supporting up to $2.3M of total assistance In January 2026. Understanding project costs could fluctuate, at the Council has previously provided consensus supporting the proposed financing structure and to give staff flexibility to go up to 2M for an HRA loan. The City has explored the use of its Ramsey HRA dollars levied in Ramsey by Anoka County in the form of a loan. In order to use the HRA funds the City must create a Redevelopment Plan for a designated area which allows the fund to be expended for eligible costs. Taft Law has put together a revised schedule showing what this process and timing would look like. The County process to access the HRA funds is separate and will be worked into the schedule. This process involves a simple resolution requesting the funds and an explanation of what the funds will be used for which was approved on May 26. On June 9, 2026, City Council by consensus at a work session supported the City entering into an Assumption Agreement on ARAA's loan. This agreement would be enforced should ARAA become unable to meet their debt obligations, and the City would assume the remainder of the debt obligation. Following the consensus, staff worked with our bond counsel, but learned that State law prohibits such agreements. Changes to the Financing Structure CORTrust Bank has revised their approved financing of the ARAA project contingent on a private third party assuming the Mortgage in the event of a default by ARAA and an inability to cure that default. The third party Assumption of Mortgage is not optional, it would be required as part of the proposed financing structure. By assuming the ARAA Mortgage the third party would become the building owner. Staff has met with ARAA and the third party to review currently approved zoning regulations as they relate to other allowed uses for the site. The third party is satisfied with these uses and feels ownership of the site acceptable to them should the Assumption Agreement take effect. This change to the financing removes future financial obligations on the City to purchase the property. A component to the financing plan is the HRA Loan. To satisfy the third party entering into the Assumption Agreement, they have requested City Council consider a waiver of the HRA Loan should they be required to assume debt obligation. Time Frame/Observations/Alternatives: