HomeMy WebLinkAbout6.a. HRA Construction Loan Requesta �
CITY OF ROSEMOUNT
HOUSING REDEVELOPMENT AUTHORITY
AGENDA
FEBRUARY 16, 1988
**********ANNUAL************
7:00 P.M. Special H.R.A. Meeting ******ORGANIZATIONAL********
**********MEETING***********
1. Call to Order
2. Chairman's Review of 1987
3. ELECTION OF 1988 CHAIRMAN & SECRETARY
a. Election of Chairman for 1988
b. Election of Secretary for 1988
C. Discuss Stipend Payments for Members
d. Adopt Resolution for Compensation of Members
e.
4. REVIEW SOUTH ROBERT SgUARE PROJECT
a. Review Information on Short Term Loan Request
b. Update on Bid tabs for South Robert Square Project
C.
d.
8. ADJOURNMENT
February 11, 1988
TO: Mayor and City Council
HRA Board
FROM: Don F. Darling, Ex Dir
Subject: Construction Funding South Robert Square Project
2875 -145TH ST. W.
ROSEMOUNT, MINNESOTA 55068
612--423-4411
Attachedplease' find my memo 'dated January 29, 1988 that outlined to
the HRA Board, information leading to a request that the City Council
consider participating in the Downtown Project once again by providing
short term funding for construction of the current project now under
bid.
We must report that at present we have not opened bids for this project
even though that was scheduled for 2:00 p.m., Tuesday, February 9th.
Due to a Postal Service problem one of the Bidders reportedly did not
receive one of the Addendum to the Plans and Specs. This then prompted
yours truly and Milt Bruflodt to agree to extend the bid opening date
to 2:OO p.m., Thursday, February 18th. This will then delay the award
to sometime in March of 1988. The delay in awarding bids will give
some assurance that all 'is well with the project and we are in no way
causing a problem for the HRA in doing this project at this time.
Based on the above estimates provided by the Architect we are looking
at a need to finance One Million dollars in short term construction
funding for this project. The HRA would at this time request
consideration by the City Council, to embrace the concept of the City
Reserves being utilized to fund the short term construction funding
needed for the South Robert Square Project and cause this item to be
placed back on a future City Council Agenda for final consideration
when final construction costs are known.
This is a short term arrangement with a maximum term of 12 months.
There will be several draws required as the full amount will not be
needed at the start of the project. This would then allow the City
Finance Section the opportunity to stage return of the investments
without penalty.
The HRA Board approved a "concept" of interest payment on the
construction funding of 1% to 1.5% over the Current Jumbo CD rates.
This offering to you for your consideration during the discussion on
this request.
January 29, 1988
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TO: HRA Board
FROM: Don F. Darling, Ex Dir
Subject: Construction funding South Robert Square
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2675 -145TH ST W.
ROSEMOUNT. MINNESOTA 55068
612-423-4411
We are scheduled to report to you at the February 2, 1988 Regular HRA
meeting that we are going forward with the South Robert Square Project.
With this in mind we wish to discuss with you the need for Construction
Financing for this project. We have written confirmation from Miller &
Schroeder that we have both the construction loan and the long term
definitive loan for the project but it is being suggested that the HRA
in an effort to leverage the fundsavailable and save monies during
this process consider asking the City Council to participate with the
HRA by utilizing City Reserve Funds as construction funding for this
project. This would create considerable savings in HRA funds and would
still generate interest earnings for the City Reserve Funds being
utilized in this process. We are projecting considerable savings
should this process be ,favorable to both Council and the HRA Board.
These projections of estimated needs and savings will be avaiiable at
the February 2, 1988 meeting or sooner for your information and review.
Our concern when discussing this at the Staff level was whether is
would be allowed by Law and would Miller & Schroeder insist on having
the Construction Funding interest earnings as well as the Definitive
Bonds. We have directed Attorney Knutson to investigate both issues.
He has reported that after having contacted Miller & Schroeder about
their involvement in this phase of the funding, they expressed a
willingness to go along with whatever the City decides is in its best
interest. Also, he advised that a Short Term Construction Loan by the
City in favor of the HRA is certainly permissible under Minnesota
Statute.
With this information in hand I would request that you authorize Staff
to approach the City Council with this same information at the February
16, 1988 Regular meeting of the Council and from there, should they
approve, the necessary papers and contracts be drawn up to facilitate
finalizing the transactions needed regarding the short term loans.
Further, Staff would recommend that an interest rate 1 to 2 points
above the Jumbo CD Rate on the date of the loan be established as the
rate to be offered by the HRA for the construction fund loan.