HRA 09-13 Tax Exempt Revenue Bonds, Phase III Excelsior Crossings � GITY pF
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, NOPKINS ;
September 30, 2009 _ : HRA Report 2009-13 = ' �
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: TAX EXEMPT REVENUE BONDS, PHASE III '
EXCELSIOR CROSSINGS
Proposed Action '
Staff recommends adoption of the following motion: Move to approve resolution 466 `
authorizing the issuance of tax increment revenue boncis (Excelsior Grossings — Phase ' �
III) series 2009 :
With this motion the issuance will be finalized.
Overview
Last year the HRA approved the: sale of tax increment revenue bonds for the third
building of the Excelsior Crossings campus: The bond mark�t was beginning to be very..
uncertain and the issuance was not pursued. Bond markets have now stabilized and
the HRA is being asked once again to authorize the sale of revenue bonds for building �
three. The bonds are based on a partial completion of the third building. Proceeds from
: the bonds will be used to pay the eligible redevelopment-costs_to be funded with tax
increment. :
• The redevelo ment a reement befinreen the. HRA and Car ill s ecificall allows for the - �
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sale of the bonds and the transaction has been reviewed by the HRA's bond counsel :
and attorney. The proposed amount of:the bonds is $4,590,000.
The bonds will be repaid from tax increment generated frorn Phase Ili construction !� ,.:
` within TIF District 2-11. There is no obligation for the HRA or the City to rnake up for a.
shortfall in tax increment used to pay the bonds.
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Supporting :Information
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• Resolution 466 : ' , ' �
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Director Flanning' & evelopment
Financial lmpact: $ 0' Budgeted: Y/N Source:
Related Documents (CIP, ERP, etc.):�
• Notes
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• THE AOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF HOPKINS, NIINNESOTA
RESOLUTION NO. 466
RELATING TO THE TAX INCREMENT FINANCING OF PUBLIC
IlVIPROVEMENTS RELATED TO PHASE THREE OF THE EXCELSIOR
CROSSINGS DEVELOPMENT LOCATED IN TAX.INCREMENT FINANCING
DISTRICT NO. 2-11; AUTHORIZING THE ISSUANCE OF TAX INCREMENT
REVENUE BONDS (EXCELSIOR CROSSINGS PROJECT PHASE THREE),
SERIES 2009; AND PROVIDING THE FORM, TERMS, PLEDGE OF
REVENUES, AND FINDINGS, COVENANTS, AND DIRECTIONS RELATING
TO THE ISSUANCE OF SUCH OBLIGATIONS
RESOLVED BY THE BOARD OF COMMISSIONERS OF THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS, MINNESOTA:
SECTION 1. BACKGROUND
1.01. The Board of Commissioners (the "Board") of the Housing and Redevelopment
Authority in and for the City of Hopkins, Minnesota (the "HRA"), previously created Redevelopment
• Project No. 2(the "Redevelopment Project") within the City of Hopkins, Minnesota (the "City"),
pursuant to Minnesota Statutes, Section 469.001 to 469.047, as amended (the "HRA Act"). The HRA, by
Resolution No. 369, adopted by the Board on October 6, 1998, and the City, by Resolution No. 98-061,
adopted by the City Council of the City on October 6, 1998, have previously approved a tax increment
financing plan (the "TIF Plan") for Tax Increment Financing District No. 2-11 (the "TIF District")
located within the Redevelopment Project, by the authority granted by Minnesota Statutes, Sections
469.174 to 469.1799, as amended (the "Tax Increment Act"), for the purpose of financing certain
improvements within the TIF District. The TIF Plan for the TIF District was subseyuently modified and
amended by Resolution No. 392, adopted by the Board of the HRA on December 4, 2001, and by
Resolution No. 2001-46, adopted by the City Council of the City on December 4, 2001.
1.02. Resolution No. 445, adopted by the Board of the HRA on March 20, 2007 (the "Phase
One Bond Resolution"), provided for the issuance and sale of tax increment revenue bonds. Pursuant to
the terms of the Phase One Bond Resolution and the terms and conditions of an Indenture of Trust, dated
May 1, 2007 (the "Phase One Indenture"), between the HRA and U.S. Bank National� Association, as
trustee (the "Trustee'.'), the HRA issued its Tax Increment Revenue Bonds (Excelsior Crossings Project),
Series 2007 (the "Phase One Bonds"), in the principal amount of $9,005,000, dated as of May 10, 2007.
A portion of the Phase One Bonds was used to finance the acquisition of real property, demolition of
certain structures, site remediation, and construction of an approximately 261,000-square foot office
building (the "Phase One Improvements"), the first phase of a multi-phased, 27-acre office development
(the "Overall Development"), located at the intersection of U.S. Highway 169 and Excelsior Boulevard -
in the City (the "Property"). Another portion of the Phase One Bonds was intended to provide for a
portion of the financing of the construction of an approximately 268,000-square foot seven-story office
• building (the "Phase Two Improvements"), the second phase of the Overall Development, located at the
Property.
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I I 1.03. Resolution No. 452, adopted by the Board of the HRA on April l, 2008 (the "Phase Two :.�
Bond Resolution"), provided for the issuance and sale of tax increment revenue bonds. Pursuant to the �
terms of the Phase Two Bond Resolution and the terms and conditions of an Indenture of Trust, dated
I � A ril 1 2008 the "Phase Two Indenture" between the HRA and the Trustee the HRA issued its Tax
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Increment Revenue Bonds (Excelsior Crossings Project), Series 2008 (the "Phase Two Bonds"), in the
principal amount of $5,290,000, dated as of Apri124, 2008. A portion of the Phase Two Bonds was used
to finance the acquisition of real property, demolition of certain structures, site remediation, and the
construction of the Phase Two Improvements, the second phase of the Overall Development.
1.04. lt is now proposed that the HRA issue its Tax Increment Revenue Bonds (Excelsior
Crossings Project Phase Three), Series 2009 (the "Bonds") in a principal amount not to exceed
$5,500,000 to finance a portion of the costs of constructing an approximately 263,645 square foot office
building (the "Phase Three Improvements"). ,
1.05. In order to provide for the redevelopment of the Redevelopment Project and the TIF
! District and, specifically, to provide for the Phase Three Improvements, the HRA entered into a
j Redevelopment Agreement, dated March 15, 2007, between the HRA and Cargill, Incorporated, a
Delaware corporation (the "Redeveloper"), amended by the First Amendment to Redevelopment
� Agreement, dated September 28, 2009 (the "Redevelopment Agreement"). Pursuant to the
� Redevelopment Plan, the TIF Plan, and the Redevelopment Agreement, the Redeveloper will construct
� the Phase Three Improvements (as described in Paragraph 1.04 above).
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; 1.06. Pursuant to Laws of Minnesota 2003, Chapter 127, Article 10, Section 31 (the "Special
; Law"), the HRA Act, and the Tax Increment Act, the HRA is authorized to issue and sell its bonds for
i the purpose of financing public development costs in a redevelopment project and to pledge tax '� .
; increment revenues derived from a tax increment financing district established within the redevelopment
� project to the payment of the principal of and interest on such obligations.
i SECTION 2. ISSUANCE OF THE BONDS
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� 2.01. In order to finance public improvements related to the Project, the HRA is hereby
i authorized to issue the Bonds.
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2.02. In order to finance public improvements related to the Phase Three Improvements, the
Board hereby authorizes the issuance of the Bonds in a principal amount not to exceed $5,500,000. The
Bonds shall be issued on such date and upon the terms and conditions determined by the Executive
Director of the HRA (the `Bxecutive Director"). The Bonds may be designated such other name or
names as determined to be appropriate by the Executive Director. The Bonds shall be issued in one or
more series as the Executive Director may determine, and shall be assigned a separate series designation -
determined by the Executive Director for each series issued by the HRA. The Bonds are authorized to be
issued as obligations the interest on which is not includable in gross income for federal and State of
Minnesota income tax purposes. This authorization to issue the Bonds is effective without any additional
action of the Board and shall be undertaken by the Executive Director on such date or dates and upon the
terms and conditions deemed reasonable by the Executive Director. The Board hereby authorizes the
sale of the Bonds to Dougherty & Company LLC (the "Underwriter") upon the offer of the Underwriter
to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the HRA
and the Underwriter (the "Bond Purchase Agreement").
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2.03. There have been prepared in conjunction with the issuance of the Bonds, and are �
currently on file with the HRA, the following documents, collectively known as the "HRA Documents":
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• (i) an Indenture of Trust (the "Indenture"), between the HRA and the Trustee; and (ii) the Bond Purchase
Agreement. The HRA Documents are hereby approved in substantially the forms on file with the HRA
on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that
are approved by the Executive Director.
2.04. The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered,
and issued in such denominations, shall be subject to mandatory and optional redemptions and
prepayment prior to maturity, shall be executed, sealed, and authenticated in such manner, shall be in
such form, and shall have such other details and provisions as are prescribed in the Indenture. The form
of the Bonds included in the Indenture is approved in substantially the form in the Indenture, subject to
such changes not inconsistent with this resolution and applicable law, and subject to such changes that
are approved by the Executive Director. Without limiting the generality of the foregoing, the Executive
Director is authorized to approve the original aggregate principal amount of the Bonds to be issued under
the terms of this resolution (subject to the maximum aggregate principal amount for the Bonds authorized
by this resolution), to establish the terms of redemption, the principal amounts subject to redemption, and
the dates of redemption of the Bonds, and to approve other changes to the other terms of the Bonds which
are deemed by the Executive Director to be in the best interests of the HRA. The issuance and delivery
of the Bonds shall be conclusive evidence that the Executive Director has approved the terms and
provisions of the Bonds in accordance with the authority granted by this resolution. The proceeds
derived from the sale of the Bonds, and the earnings derived from the investment of such proceeds, shall
be held, transferred, expended, and invested in accordance with determinations of the Executive Director.
2.05. The Bonds shall be secured by Available Tax Increments (as defined in the Indenture)
and all other property, rights, interests, privileges, rentals, revenues and income pledged or assigned to
• the Trustee pursuant to the provisions of the Indenture which constitutes the Trust Estate (as defined in
the Indenture).
2.06. It is hereby found, determined and declared that the issuance and sale of the Bonds, the
execution and delivery by the HRA of the HRA Documents, and the performance of all covenants and
agreements of the HRA contained in the HRA Documents, and of all other acts required under the
Constitution and (aws of the State of Minnesota to make the Bonds the valid and binding special
obligations of the HRA enforceable in accordance with their respective terms, are authorized hy
applicable Minnesota law, including, without limitation, the Tax Increment Act and this Resolution.
2.07. Under the provisions of the Tax Increment Act, and as provided in the Indenture and
under the terms of the Bonds, the Bonds are riot to be payable from or chargeable against any funds other
than the revenues pledged to the payment thereof; neither the HRA nor the City shall be subject to any
liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever have
the right to compel any exercise by the HRA or the City of its taxing powers (other than as contemplated
by the pledge of tax increment revenues under the terms of the Indenture) to pay the principal of, '
premium, if any, and interest on the Bonds, or to enforce payment thereof against any property of the
HRA or the City other than the property expressly pledged thereto; the Bonds shall not constitute a
charge, lien or encumbrance, legal or equitable, upon any property of the HRA or the City other than the
revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a pledge of
the general or moral obligation of the HRA or the City, and that the Bonds, including interest thereon, are
payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a
debt of the HRA or the City within the meaning of any constitutional or statutory limitation of
• indebtedness.
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2.08. The HRA hereby designates the Bonds as "qualified tax-exempt obligations" within the
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meaning of Section 265(b)(3) of Internal Revenue Code of 1986, as amended (tk�e Code ). �
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2.09. Pursuant to the Indenture and subject to the restrictions on the amount of bond issuance
in the Redevelopment Agreement, additional bonds secured by Available Tax Increment may be issued
pursuant to a supplemental indenture for the purposes of refunding all or part of the Bonds or to complete
the acquisition, construction, or reconstruetion, or both, of the Phase Three Improvements.
SECTION 3. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES
3.01. The preparation of an official statement (the "Disclosure Document") in conjunction
with the offer and sale of the Bonds is hereby authorized. When approved by the Executive Director, the
Disclosure Document is authorized to be distributed in conjunction with the offer and sale of the Bonds.
The Executive Director, the Chairperson of the Board ("Chairperson"), the Secretary of the HRE1 (the
"Secretary," and together with the Chairperson, the "HRA Officials"), and the Trustee may execute and
i deliver an agreement or certificate providing for continuing disclosure with respect to the Bonds.
� 3.02. The HRA Officials are authorized to furnish to the purchasers of the Bonds, on the date
of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such officer, the
Disclosure Document does not, as of the date of closing, and did not, as the time of sale of the Bonds,
contain any untrue statement of a material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. Unless litigation shall have been
commenced and be pending questioning the Bonds, the proceedings for approval of the Bonds, tax
increment revenues generated or collected for payment of the Bonds, revenues pledged for payment of
the Bonds, or the organization of the H.RA, or incumbency of its officers, at the respective closings, the ""
HRA Officials shall also execute and deliver a suitable certificate as to absence of material litigation, a
certificate as to payment for and delivery of the Bonds, and the signed approving legal opinion of
Kennedy & Graven, Chartered, as to the validity and enforceability of the Bonds and the tax-exempt
status of interest on the Bonds.
3.03. The HRA Officials, the Executive Director, and other agents, officers, and employees of
the HRA are hereby authorized and directed, individually and collectively, to furnish to the attorneys
approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and
certifications as to facts as shown by the books and records of the HRA, and the right and authority of the
I HRA to issue the Bonds, and all such certified copies and certifications shall be deemed representations
� of fact on the part of the HRA. Such officers, employees, and agents of the HRA are hereby authorized
to execute and deliver, on behalf of the HRA, the Indenture, the Bond Purchase Agreement, all other
I certificates, instruments, and other written documents that may be requested by bond counsel, the
i Underwriter, the Trustee, or other persons or entities in conjunction with the issuance of the Bonds and
the expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the
preceding sentence, such of�cers and employees are specifically authorized to execute and deliver a
certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, a
receipt for the proceeds derived from the sale of the Bonds, an order to the Trustee, a general certificate
i of the HRA, and, with respect to the Bonds, an Information Return for Taac-Exempt Governmental
Obligations, IRS Form 8038-G (Rev. November 2000).
SECTION 4. MISCELLANEOUS
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4.01. All agreements, covenants, and obligations of the I�RA contained in this resolution and
in the above-referenced documents shall be deemed to be the agreements, covenants, and obligations of
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• the HRA to the full extent authorized or permitted by law, and all such agreements, covenants, and
obligations shall be binding on the HRA and enforceable in aceordance with their terms. No agreement,
covenant, or obligation contained in this resolution or in the above-referenced documents shall be
deemed to be an agreement, covenant, or obligation of any member of the Board, or of any officer,
employee, or agent of the HRA in that person's individual capacity. Neither the members of the Board
nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal
liability or accountability by reason of the issuance of the Bonds.
4.02. Nothing in this resolution or in the above-referenced documents is intended or shall be
construed to confer upon any person (other than as provided in the Indenture, the Bonds, and the other
agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable,
under and by reason of this resolution or any provision of this resolution.
4.03. If for any reason the HRA Officials, the Executive Director, or any other officers,
employees, or agents of the HRA authorized to execute certificates, instruments, or other written
documents on behalf of the HRA shall for any reason cease to be an officer, employee, or agent of the
HRA after the execution by such person of any certificate, instrument, or other written document, such
fact shall not affect the validity or enforceability of such certificate, instrument, or other written
document. If for any reason the HRA Officials, the Executive Director, or any other officers, employees,
or agents of the HRA authorized to execute certificates, instruments, or other written documents on
behalf of the HRA shall be unavailable to execute such certificates, instruments, or other written
documents for any reason, such certificates, instruments, or other written documents may be executed by
another officer of the HRA designated by the Board.
• 4.04. The HRA shall not take any action or authorize any action to be taken in connection with
the application or investment of the proceeds of the Bonds or any related activity which would cause the
Bonds to be deemed to be "private activity bonds;" within the meaning of Section 141 of the Code. The
HRA shall not take any action or authorize any action to be taken in connection with the application or
investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be
deemed to be "arbitrage bonds," within the meaning of Section 148 of the Code. Furthermore, the HRA
shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not
and does not become includable in gross income for federal income tax purposes.
4.05. The authority to approve, execute, and deliver future amendments to the documents
executed and delivered by the HRA in connection with the transactions contemplated hereby is delegated
to the Executive Director, subject to the following conditions: (a) such amendments do not require the
consent of the holders of the Bonds or, if required, such consent has been obtained; (b) such amendments
do not materially adversely affect the interests of the HRA as the issuer of the Bonds; (c) such
amendments do not contravene or violate any policy of the HRA; (d) such amendments are acceptable in
form and substance to the HRA Attorney, bond counsel or other counsel retained by the HRA to review
such amendments; (e) the HRA has received, if necessary, an opinion of bond counsel to the effect that
the amendments will not adversely affect the tax-exempt character or interest on the Bonds, if the Bonds
are then tax-exempt obligations; and (fl such amendments do not materially prejudice the interests of the
owners of the Bonds. The authorization hereby given shall be further construed as authorization for the
execution and delivery of such certificates and related items as may be required to demonstrate
compliance with the agreements being amended and the terms of this resolution. The execution of any
instrument by the HRA Officials or the Executive Director shall be conclusive evidence of the approval
• of such instruments in accordance with the terms hereo£
4.06. This Resolution shall take effect and be in force from and after its approval.
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i Adopted by the Board of Commissioners of the Housing and Redevelopment Authority in and for
I the City of Hopkins, Minnesota this 6th day of October, 2009.
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Chairperson
Attest: �
Secretary
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i HP 110-77 (JAE)
( 338749v11
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