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2017-053 Approving Property Tax Abatement Related to Public Infrastructure Improvements in the City of Hopkinsfollows: CITY OF HOPHINS, MINNESOTA RESOLUTION NO. 2017-053 RESOLUTION APPROVING PROPERTY TAX ABATEMENT RELATED TO PUBLIC INFRASTRUCTURE IMPROVEMENTS IN THE CITY OF HOPKINS BE IT RESOLVED By the City Coancil of the City of Hopkins, Minnesota (the "Ciry"), as Section 1. Backeround. ].Ol. The City owns an ice hockey and multipurpose facility known as the Hopkins Pavilion, located at ll000 Excelsior Boulevard in the City (the "Facility"), and the Hopkins Youth Hockey Associatio�, a Minnesota nonprofit corporation (the "Association"), currently uses the ice arena within the Facility (thc "ice Arena") and ren[s space in the Ice Arena on an annual basis for its youth hockey activities. The City has determined to tinance the construction of certain improvements to the Facility (the "Improvements"). The Association has agreed to contribute $1,000,000 to finance Yhe Improvements and Indepe�dent School District No. 270 has also agreed to contribute $1,000,000 to finance the Improvements. 1.02. Anchor Bank, N.A., a national banking association (the `Bank"), has agreed to loan $950,000 to the Association (the "Loan") for the Association's contributio� to the Improvements. As a condition of providing the Loan, the Bank will require the City to guaranty up to $550,000 of the Loan, provided the guaranty would be utilized only upon a default under the loan documents by the Association. The terms of the guaranry are set forth in the Hopkins Pavilion Contribution Agreement (the "Contribution AgreemenY') to be entered into between the City, the Association, and the Bank. 1.03. The City has contemplated granting a property tax abatement in order to aid in financing the Improvements, including the guazanty of up to $550,000 of the Loan, as required by the Bank, all pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (tl�e "AcY'). 1.04. Pursuant to Section 469.1813, subdivision 1 of the Act, the City may grant an abatement of all or a portion of the taxes imposed by the City on a parcel of property to pay for all or part of the cost of acquisition or construction of public facilities and to provide access to such public facilities to residents of the City, whether or not located on or adjacent to the parcel for which the tax is abated. 1.05. The City has ideutified fourteen (14) parcels ]ocated in the Ciry, identified in EXHIBIT A hereto (the "Abatement Property"), which will be benefitted by the Improvements and from which the City proposes to abate a portion of the City's share of taxes to help finance the Improvements and to provide a guaranty of up to $550,000 of the Loan, subject to all the terms and conditions of this resolution (the "AbatemenY'). The Abatement Property is not located in a tax increment financing district. 1.06. The City intends to issue one or more series of its general obligation tas abatement obligations in the approximate aggregate principal amount of $3,580,000 (the "Abatement Bonds") to pay the costs of the Improvements and to guaranty the payment of up to $550,000 of the Loan pursuant to the Act. The Abatement Bonds are expected to be paid primarily through the collection of Abatement revenues. 502614v2 JAE HP110-98 1.07. On the date hereof, the Council conducted a duly noticed public hearing on the Abatement at which the views of all interested persons were heard. Section 2. Findines. 2.01. It is hereby found and detennined that the benefits to the City from the Abatcment will be at least equal to the costs to the City of the Abatement for the following reasons: (a) The Abatement will help finance improved public facilities in a way that wil] strengthen the local economy, preserve natural resources, and ensure a high quality of life for residents of the City. (b) The Abatement will provide access to improved recreational services to residents of the City. (c) The Improvements will help preserve and increase the value of the Abatement Property, thereby helping to generate additional City tax revenues over the long term after the expiration of the Abatement. 2.02. It is hereby found and determined that thc Abatement is in the public interest for the following reasons: (a) Thc Abatement will increase or preserve tax base by stimulating development and helping to maintain values in the area, as set forth above. (b) The Abatement will finance or provide public facilities, which wil] protect the general health and welfare of the community and contribute to the quality of life in the City by maintaining public infrastructure and facili[ies in proper working order. (c) The Abatement will provide access to betterquality recreational facilities to residents of the City. Section 3. Actions Ratified; Abatement Approved. 3.01. The Council hereby ratifies all actions of the City's staff and wnsultants in arranging for approval of this resolution in accordancc with the Act. 3.02. Subject to the provisions of the Act, the Abatement is hereby approved and adopted subject to the following terms and conditions: (a) The term "Abatemenf' means the City's share of the real property taxes generated from the land and improvements on the Abatement Property, in the amounts descnbed in this Section: (i) The aggregate Abatement paid by the City during the term of this resolution will not exceed the amount necessary to pay the principal of the Abatement Bonds, up to a maximum of $3,580,000. (ii) Notwithstanding anyChing to the contrary herein, the Abatement payable on any August ] and subsequent February 1, combined, will not exceed the amount produced 502614v2 JAE FIPI 10 �)R 2 by extending the City's total tax rate for the applicable year against the tar capacity of the Abatemcnt Property, as of January 2 in the prior year. (iii) In accordance with Section 4691813, subdivision 8 of the Act, in no year shall the Abatement, together with all other abatements approved by the Ciry under the Act and paid in that year, exceed the greater of ten percent (10%) of the Ciry's net tax capacity for that year or $200,000 (the "Abateinent Volume Cap"). The City may grant any other abatements permitted under the Act after the date of this resolution, provided that to the extent the total abatements in any year exceed the Abatement Cap, the allocation of Abatement Cap to such other abatements is subordinate to the Abatements under this resolution. (b) The Abatement will be for a tenn of fifreen (15) years, and the City will pay the Abatement in semiannual installments each August 1 and February l. With respect to Improvements to be financed with a portion of the proceeds of the Abatement Bonds, payment of the Abatement will commence August 1, 2019, and continue through February 1, 2034. With respect to the guaranty to be provided by the City for $550,000 of the Loan, payment of the Abatement will not commence until the Association has defaulted in its payment obligations under the Loan documents as provided in the Contribution Agreement and the City has been provided with proper notice thereof by the Bank. Each time the Association defaults in its repayment obligation, the City will be required to collect Abatement to pay the Loan. The City will pay the Abatement solely to &nance the cost of the Improvements (iocluding the guaranty of up to $550,000 of the Loan) through application of Abatement amounts toward debt service payments on the Abatement Bonds (including any bonds issued to refund the initial Abatement Bonds). (c) This resolution may be modified only with the prior written approval of the City, and any modification is subject to Section 469. ] 8] 3, subdivision 7 of the Act. Once the Bonds are issued, this resolution may not be modified. (d) In accordance with Section 469. ] 8] 5 of the Act, the City will add to its levy i❑ each year during the term of the Abatement the total estimated amount of current year Abatemen[ granted under this resolution. 3.03. The Mayor and City Manager are authorized and directed to execute and deliver any agreements, certificates or other documents that the City determines are necessary to implement this resolution. Adopted by the City Council of the City of Hopkins, Minnesota this 31s' day of July, 2017. , %1�71 y �t ������ � y � Molly mmings, Mayor ATTEST: �� , , Amy Domeier, City Clerk 502614v2 JAE HPI 10-9R Parcel Identification Numbers: 24-117-22-32-0138 25-117-22-22-0021 24-117-22-33-0011 24-117-22-31-0055 24-117-22-33-0003 EXHIBIT A ABATEMENT PROPERTY 24-ll 7-2234-0092 24-117-22-34-0093 24-117-22-34-0100 24-117-22-34-0104 24-117-22-34-0105 502fi I4v2 JAE HP I 10-9R A- I 24-117-22-34-0249 23-117-22-44-0021 24-117-22-31-0059 24-117-22-32-0097