October 7, 2008
A regular meeting of the Hopkins Housing and Redevelopment Authority was held October 7, 2008, at Hopkins City Hall. Present were Chairman Eugene Maxwell and Commissioners Rick Brausen, Kristi Halverson, Bruce Rowan and Cheryl Youakim. Also present were Executive Director Rick Getschow, Assistant Executive Director Kersten Elverum, and City Attorney Jerry Steiner.
- Call To Order
The meeting was called to order at 7:18 pm.
- Open Agenda/Public Comments
- Consent Agenda
- Approve minutes of the September 2, 2008, regular meeting
- Approve disbursements through September 30, 2008
Commissioner Rowan moved, Commissioner Halverson seconded, to approve the consent agenda. The motion was approved unanimously.
- New Business
- ITEM 2008-12 First amendment to redevelopment agreement—Cargill
HRA Counsel Bob Deike, Sid Inman of Ehlers & Associates and Andy Pratt of Kennedy & Graven were present. Ms. Elverum explained that Cargill has started construction on Phase III (Building C) of Excelsior Crossings and has requested that the HRA issue and sell tax exempt tax increment revenue bonds to support the project.
The Hopkins HRA entered into a redevelopment agreement with Cargill for Phase III of Excelsior Crossings on March 15, 2007. That agreement outlined the terms under which the HRA would issue tax increment revenue bonds to support the project.
Since that date, the entire project has moved forward more quickly and on a larger scale than originally anticipated.
As a result, excess increment has been created that can be pledged toward the Phase III bonds, making for a more cost-effective bond structure. To accomplish this, the existing agreement requires minor modifications. The proposed amendment also addresses the following other administrative details and clarifications, which are of a “housekeeping” nature:
The amount of increment given to Cargill remains capped at $27.25 per square foot. The maximum amount of the bond issue is $8,500,000.
- The amendment acknowledges certain matters such as the size of Phase III, the amount of tax increment qualified costs that will be reimbursed with bond proceeds and that certain procedural steps required by the development agreement have been satisfied.
- The current agreement with Cargill states that Cargill would receive interest on the qualified costs incurred for Phase III from April 2008 until construction starts on Phase III, but that no interest would be paid on that amount. To avoid underwriting complications caused by that provision, the amendment states that the amount of the preconstruction interest can be added to the principal amount of the Phase III bonds.
- The amendment clarifies that tax increment pledged to Phase III includes, on a pro rata basis, the tax increment generated from the related platted out lots.
Commissioner Rowan moved, Commissioner Halverson seconded, to approve the First Amendment to the Redevelopment Agreement between the Hopkins HRA and Cargill, Inc. The motion was approved unanimously.
- ITEM 2008-13 Excelsior Crossings Bond Issue - Phase III
Ms. Elverum stated that, as mentioned earlier, Cargill has started construction on Phase III (Building C) of Excelsior Crossings and has requested that the HRA issue and sell tax exempt tax increment revenue bonds to support the project.
Proceeds from the bonds will be used to pay the eligible redevelopment costs to be funded with tax increment.
The proposed amount of the bonds is $8,500,000, and is likely to be less, possibly $7,700,000.
The bonds will be repaid from tax increment generated from Phase III construction within TIF District 2-11. There is no obligation for the HRA or the City to make up for a shortfall in tax increment used to pay the bonds.
Commissioner Youakim moved, Commissioner Brausen seconded, to adopt Resolution 457, authorizing the issuance of tax increment revenue bonds (Excelsior Crossings - Phase III) series 2008. The motion was approved unanimously.
Commissioner Brausen moved, Commissioner Youakim seconded, to adjourn the meeting. The motion was approved unanimously. The meeting adjourned at 7:32 p.m.