HRA 10-12 Approve Amended & Restated Tax Increment Pledge Agreement for Redevelop Project 1& Tax Increment Dist 2-11•
•
November 1, 2010
HRA Report 2010-12
APPROVE AMENDED AND RESTATED TAX INCREMENT PLEDGE AGREEMENT
FOR REDEVELOPMENT PROJECT NO.1 AND
TAX INCREMENT DISTRICT 2-11
Proposed Action
Staff recommends approval of the following: move to adopt Resolution 470 authorizing execution of an
amended and restated tax increment pledge agreement with the City of Hopkins relating to the Ci 's G.O.
Refunding Bonds Series 2010B in the aggregate principal amount of $2,680,000.
Adoption of this resolution will authorize pledging tax increment proceeds from TIF District 2-11 to the
refunded bonds sold on October 19, 2010.
Overview
When bonds for TIF District 2-11 were originally sold in 2002, the HRA entered into a pledge agreement,
pledging tax increment proceeds from the district to the bonds sold to finance the project. The original
pledge agreement did not provide for continued pledging in the event of a bond refunding; therefore, when
the refunded bonds were sold on October 19, 2011, to pay off the 2002 bonds, the original pledge
agreement would be fulfilled. MN Statutes require that the HRA pledge tax increment proceeds to any
bond issue related to the project. Since the original pledge agreement will expire when the refunding pays
the original bond issue, we need to approve an agreement pledging tax increment proceeds from TIF
District 2-11 to the refunding bonds sold on October 19, 2010.
Primary Issue to Consider
Compliance with state statutes
Staff Recommendation
• Finance recommends approval of the agreement.
Supporting Information
• Tax Increment Pledge Agreement
• Resolution 470
•Christine Harkess, CPA, CGFM
Finance Director
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HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 470
RESOLUTION AUTHORIZING EXECUTION OF AN AMENDED
AND RESTATED TAX INCREMENT PLEDGE AGREEMENT
WITH THE CITY OF HOPKINS RELATING TO THE CITY'S
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010B,
IN THE AGGREGATE PRINCIPAL AMOUNT OF $2,680,000
WHEREAS, the Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota
(the "HRA") has established Redevelopment Project No. 1 (the "Project"), and approved a Redevelopment
Plan (the "Plan") for the Project; and
WHEREAS, the HRA and the City of Hopkins, Minnesota (the "City"), have established Tax
Increment Financing District No. 2-11 (the "TIF District") within the Project in accordance with Minnesota
Statutes, Sections 469.174 to 469.1799; and
WHEREAS, the HRA and the City have established the Tax Increment Financing District No. 2-11
(the "TIF District") within the Project in accordance with Minnesota Statutes, Sections 469.174 to 469.1799;
and
• WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and Minnesota
Statutes, Chapter 475, the City previously agreed to finance certain public redevelopment costs to be incurred
by the HRA or the City in the Project through the issuance of general obligation bonds of the City in the
principal amount of $2,490,000, designated the General Obligation Tax Increment Bonds, Series 2002A (the
"Refunded Bonds"); and
WHEREAS, pursuant to a resolution adopted by the City Council of the City on October 19, 2010,
the City has determined to redeem and prepay the Refunded Bonds; and
WHEREAS, the City has determined to issue its General Obligation Refunding Bonds, Series 2010B
(the "Refunding Bonds"), in the original aggregate principal amount of $2,680,000, and apply approximately
$1,585,000 in proceeds of the Refunding Bonds to redeem and prepay the Refunded Bonds and pay interest
on the Refunding Bonds pursuant to a Crossover Refunding Escrow Agreement, dated on or after
November 1, 2010, between the City and the escrow agent named therein; and
WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for the
principal and interest on the Bonds; and
WHEREAS, there has been presented to the HRA an Amended and Restated Tax Increment Pledge
Agreement between the HRA and the City (the "Pledge Agreement") providing for the pledge of tax
increments from the TIF District to payment of principal and interest on the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of the
HRA, as follows:
1. The Chair and Secretary of the HRA are hereby authorized to execute and deliver the Pledge
• Agreement substantially in the form on file with the City, providing for the pledge of tax increment derived
from property in the TIF District for the payment of the principal of, premium, if any, and interest,on, the
Refunding Bonds.
2. This resolution shall be effective as of the date hereof.
Adopted by the Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota
this 1 st day of November, 2010.
Chair
Attest:
Secretary
HP 110-81 (JAE)
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TAX INCREMENT PLEDGE AGREEMENT
by and between
CITY OF HOPKINS, MINNESOTA
and
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF HOPKINS, MINNESOTA
THIS AGREEMENT is made and entered into on or as of the 17th day of November, 2010, by
and between the City of Hopkins, Minnesota (the "City"), and the Housing and Redevelopment Authority
in and for the City of Hopkins, Minnesota (the "HRA").
WHEREAS, the HRA has established Redevelopment Project No. 1 (the "Project"), and
approved a Redevelopment Plan (the "Plan") for the Project; and
WHEREAS, the HRA and City have established the Tax Increment Financing District No. 2-11
(the "TIF District") within the Project in accordance with Minnesota Statutes, Sections 469.174 to
469.1799; and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City previously agreed to finance certain public redevelopment costs
to be incurred by the HRA or the City in the Project through the issuance of general obligation bonds of
the City in the principal amount of $2,490,000, designated the General Obligation Tax Increment Bonds,
Series 2002A (the "Refunded Bonds"); and
WHEREAS, pursuant to a resolution adopted by the City Council of the City on October 19,
2010, the City has determined to redeem and prepay the Refunded Bonds; and
WHEREAS, the City has determined to issue its General Obligation Refunding Bonds, Series
2010 (the "Refunding Bonds"), in the original aggregate principal amount of $2,680,000, and apply
approximately $1,585,000 in proceeds of the Refunding Bonds to redeem and prepay the Refunded Bonds
and pay interest on the Refunding Bonds pursuant to a Crossover Refunding Escrow Agreement, dated on
or after November 1, 2010, between the City and the escrow agent named therein; and
WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for the
principal and interest on the Refunding Bonds.
WHEREAS, pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, any agreement to
pledge tax increment revenues must be made by written agreement by and between the HRA and the City
and must be filed with the Taxpayer Services Division Manager of Hennepin County;
NOW, THEREFORE, the City and the HRA mutually agree to the following:
(1) The City will sell the Refunding Bonds and use the proceeds of the Refunding Bonds to
redeem and prepay the principal amount due on the Refunded Bonds after
• February 1, 2013 and pay interest on the Refunding Bond to and including February 1,
2013.
(2) The HRA hereby pledges to the payment of the principal of and interest on the Refunding
Bonds, and any bonds issued by the City to refund the Refunding Bonds, the tax
increments derived from property in the TIF District and received by the HRA, which
pledge is in an amount sufficient to pay 105% of such principal and interest due on the
Refunding Bonds from time to time (the "Pledged Tax Increment").
(3) Not less than three (3) business days prior to each debt service payment date for the
Refunding Bonds, there shall be transferred from the account for the TIF District to the
Debt Service Fund maintained by the City for the payment of the Refunding Bonds, an
amount of Pledged Tax Increment which when taken together with amounts already on
deposit in such Debt Service Fund, is equal to the principal of and interest on the
Refunding Bonds to become due on the subject payment date. Any Pledged Tax
Increment in excess of 105% of the principal and interest due with respect to the
Refunding Bonds on any payment date may be retained by the HRA in the tax increment
account for the TIF District and applied to any public redevelopment costs of the Project
in accordance with law.
(4) Without regard to anything in this Agreement to the contrary, Pledged Tax Increment
shall be available (at the HRA's option on a parity, superior or subordinate basis) to pay
principal of and interest on both the Refunding Bonds and any other obligations issued by
the City, HRA or any other public body to finance public redevelopment costs paid or
incurred by the HRA in the Project.
(5) An executed copy of this Agreement shall be filed with the Taxpayer Service Division
Manager of the County pursuant to the requirement contained in Minnesota Statutes,
Section 469.178, Subdivision 2.
H
•
IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly
executed on their behalf and their seals to be hereunto affixed and such signatures and seals to be attested,
as of the day and year first above written.
ATTEST:
City Manager
(SEAL)
ATTEST:
Secretary
(SEAL)
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CITY OF HOPKINS, MINNESOTA
Mayor
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
HOPKINS, MINNESOTA
Chair
STATE OF MINNESOTA TAXPAYER SERVICES DIVISION MANAGER'S
COUNTY OF HENNEPIN
CERTIFICATE
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby
certify that a Tax Increment Pledge Agreement by and between the City of Hopkins, Minnesota and the
Housing and Redevelopment Authority in and for the City of Hopkins dated as of November 17, 2010,
relating to the City's $2,680,000 General Obligation Refunding Bonds, Series 2010B, has been filed in my
office.
WITNESS my hand and official seal this — day of .2010.
Taxpayer Services Division Manager
(SEAL) Hennepin County, Minnesota
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Deputy
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