HomeMy WebLinkAbout6.o. Resolution approving the issuance of the TIF Note for Project Osprey
EXECUTIVE SUMMARY
City Council Meeting: February 21, 2023
AGENDA ITEM: Resolution approving the issuance of the TIF
Note for Project Osprey
AGENDA SECTION:
Consent
PREPARED BY: Eric Van Oss, Economic Development
Coordinator AGENDA NO. 6.o.
ATTACHMENTS: Authorizing Resolution, Development Contract APPROVED BY: LJM
RECOMMENDED ACTION: Motion to approve the issuance of a Tax Increment Revenue
Note, series 2023A in an aggregate principal amount not to exceed $670,996.32 in support
of Project Osprey.
BACKGROUND
As part of Osprey project, the city required a Contract for Private Redevelopment which established some
of the terms of the Tax Increment Financing (TIF) assistance and performance measures. Under the terms
of the contract Seefried PSO, LLC was to acquire the necessary parcels and construct the minimum
improvements which are defined by the Contract; 415,00 square foot warehouse. As part of the project,
the City required Boulder Avenue to be extended to South Robert Trail. Construction of the Road
Improvements are the responsibility of the Developer. The Developer indicated that the financial burden
of constructing the Road Improvements, in addition to other costs associated with constructing the
Minimum Improvements, made the Project financially infeasible. Given this the City agreed to construct
the Road Improvements, while the Developer, at its own expense will constructed the portion of the Road
Improvements necessary to cause Boulder Avenue to serve the development from the north. The cost of
the Road Improvements assumed by the City is a benefit to the Developer and is an element of the
business subsidy granted by the City to the Developer.
The Contract was approved by the Port Authority on October 5, 2021 and established that the City will
issue the Note to the Developer in a principal amount not to exceed $670,996.32 and will issue a pay as
you go TIF note for the principal amount after receipt of a Certificate of Occupancy for
the project.
The City will be taking 10% of the TIF generated for administrative fees associated with operating and
managing the TIF District. Staff and the consultant, Ehlers Inc., have confirmed that all the conditions
have been met, and the developer provided documentation of just over $5,125,000 in eligible expenses.
RECOMMENDATION
Staff recommends the City Council approve the issuance of a Tax Increment Revenue Note, series 2023A
in an aggregate principal amount not to exceed $670,996.32 in support of Project Osprey.
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CITY OF ROSEMOUNT
RESOLUTION 2023-XX
RESOLUTION APPROVING THE ISSUANCE OF, AND PROVIDING THE FORM, TERMS,
COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT
REVENUE NOTE, SERIES 2023A IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO
EXCEED $670,996.32
BE IT RESOLVED BY the City of Rosemount, Minnesota (the “City”), as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The City has heretofore approved the establishment of the Osprey
Tax Increment Financing District (the “TIF District”) within Development District No. 1 (the
“Development District”), and has adopted a tax increment financing plan for the purpose of financing
certain improvements within the Development District.
Pursuant to Minnesota Statutes, Section 469.178, the City is authorized to issue and sell its
bonds for the purpose of financing a portion of the public development costs of the Development
District. The bonds are payable from all or any portion of revenues derived from the TIF District
and pledged to the payment of the bonds. The City hereby finds and determines that it is in the best
interests of the City that it issue and sell its taxable Tax Increment Revenue Note, Series 2023A (the
“Note”), in the aggregate principal amount of $670,996.32, for the purpose of financing certain public
costs of the Development District.
1.02. Agreement Approved; Issuance, Sale and Terms of the Note. The City has previously
approved the Contract for Private Development (the “Agreement”) between the City and Seefried
PSO Rosemount, LLC, a Delaware limited liability company (the “Developer”), and authorized the
Mayor and City Administrator to execute the Agreement. Pursuant to the Agreement, the Note will
be issued to the Developer. The Note will be dated as of the date of delivery and will bear interest at
the rate of 4.0 percent per annum to the earlier of maturity or prepayment. In exchange for the City’s
issuance of the Note to the Developer, the Developer will pay certain costs related to the Minimum
Improvements (the Qualifying Costs, as defined in the Agreement). The Note will be delivered in the
principal amount of $670,996.32 for reimbursement of the Developer’s costs in accordance with the
terms of Article V of the Agreement.
Section 2. Form of the Note. The Note will be in substantially the following form, with
the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the
date of issue:
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RS220-419-850001.v1
UNITED STATE OF AMERICA
STATE OF MINNESOTA
DAKOTA COUNTY
CITY OF ROSEMOUNT
No. R-1 $670,996.32
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 2023A
Date
Rate of Original Issue
4.0% __________
The City of Rosemount, Minnesota (the “City”), for value received, certifies that it is indebted
and hereby promises to pay to Seefried PSO Rosemount, LLC, a Delaware limited liability company, or
registered assigns (the “Developer”), the principal sum of $670,996.32 and to pay interest thereon at the
rate of 4 percent per annum, as and to the extent set forth herein.
1. Payments. Principal and interest (“Payments”) will be paid on August 1, 2023, and
each February 1 and August 1 thereafter until the earlier of payment in full or February 1, 2032
(“Payment Dates”), in the amounts and from the sources set forth in Section 3 herein. Payments will
be applied first to accrued interest, and then to unpaid principal.
Payments are payable by mail to the address of the Developer or any other address as the
Developer may designate upon 30 days written notice to the City. Payments on this Note are payable
in any coin or currency of the United States of America which, on the Payment Date, is legal tender
for the payment of public and private debts.
2. Interest. Simple, non-compounding interest at the rate stated herein will accrue on
the unpaid principal, commencing on the date of original issue. Interest will be computed on the basis
of a year of 360 days and charged for actual days principal is unpaid.
3. Available Tax Increment. Payments on this Note are payable on each Payment Date
in the amount of and solely payable from “Available Tax Increment,” which will mean, on each
Payment Date, that percentage of the Tax Increment attributable to the Redevelopment Property and
Minimum Improvements (as defined in the Agreement) owing to Developer as set forth in the
Agreement, and paid to the City by Dakota County in the six months preceding the Payment Date, all
as the terms are defined in the Contract for Private Development between the City and Developer
which was recorded in the Office of the County Recorder, Dakota County, Minnesota on January 20,
2023 as doc. no. 3573929 (the “Agreement”). Available Tax Increment will not include any Tax
Increment if, as of any Payment Date, there is an uncured Event of Default by the Developer under
the Agreement.
The City will have no obligation to pay principal of and interest on this Note on each Payment
Date from any source other than Available Tax Increment, and the failure of the City to pay the entire
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amount of principal or interest on this Note on any Payment Date will not constitute a default
hereunder as long as the City pays principal and interest hereon to the extent of Available Tax
Increment. The City will have no obligation to pay unpaid balance of principal or accrued interest
that may remain after the final Payment on February 1, 2032.
4. Optional Prepayment. The principal sum and all accrued interest payable under this
Note is pre-payable in whole or in part at any time by the City without premium or penalty. No partial
prepayment will affect the amount or timing of any other regular payment otherwise required to be
made under this Note.
5. Suspension of Payment for Default. At the City’s option, the City’s obligation to make
any payments under this Note will be suspended upon the occurrence of an Event of Default on the
part of the Developer as defined in Section 10.1 of the Agreement, but only if the Event of Default
has not been cured in accordance with Section 10.2 of the Agreement.
6. Nature of Obligation. This Note is a single note in the total principal amount of
$670,996.32 issued to aid in financing certain public costs of a Development District undertaken by
the City and is issued pursuant to an authorizing resolution (the “Resolution”) duly adopted by the
City on February 21, 2023, pursuant to and in full conformity with the Constitution and laws of the
State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179, as amended. This
Note is a limited obligation of the City which is payable solely from Available Tax Increment pledged
to the payment hereof under the Resolution. This Note and the interest hereon will not be deemed
to constitute a general obligation of the State of Minnesota or any political subdivision thereof,
including, without limitation, the City. Neither the State of Minnesota, nor any political subdivision
thereof will be obligated to pay the principal of or interest on this Note or other costs incident hereto
except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of
the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal
of or interest on this Note or other costs incident hereto.
7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by the
City or its financial advisors in connection with the TIF District or the Agreement are for the benefit
of the City, and are not intended as representations on which the Developer may rely.
THE CITY MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND
INTEREST ON THIS NOTE.
8. Registration and Transfer. As provided in the Resolution, and subject to certain
limitations set forth herein, this Note is issuable only as a fully registered note without coupons. This
Note is transferable upon the books of the City kept for that purpose at the principal office of the
City Administrator of the City as Registrar, by the Developer hereof in person or by the Developer’s
attorney duly authorized in writing, upon surrender of this Note together with a written instrument
of transfer satisfactory to the City, duly executed by the Developer. Upon the transfer or exchange
and the payment by the Developer of any tax, fee, or governmental charge required to be paid by the
City with respect to the transfer or exchange, there will be issued in the name of the transferee a new
Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the
same dates.
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This Note may be transferred, assigned or pledged without the approval of the City; provided
that this Note will not be transferred to any person other than an affiliate, or other related entity, of
the Developer unless the City has been provided with an investment letter in a form substantially
similar to the investment letter submitted by the Developer or a certificate of the transferor, in a form
satisfactory to the City, that the transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws. (“Investment Letter”). Notwithstanding
anything to the contrary in this Note, in no event will a lender providing funds to the Developer and
taking an assignment of the Note as security for such funds be required to sign an Investment Letter
at either the time of execution of an assignment or transfer of the Notes a result of the assignment.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note valid and binding limited obligation of the City according to its
terms, have been done, do exist, have happened, and have been performed in due form, time and
manner as so required.
IN WITNESS WHEREOF, the city council of the City of Rosemount, has caused this Note
to be executed with the manual signatures of its Mayor and City Administrator, all as of the Date of
Original Issue specified above.
CITY OF ROSEMOUNT
Jeffery D. Weisensel, Mayor Logan Martin, City Administrator
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REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of
the City Administrator of the City, in the name of the person last listed below.
Date of Registration Registered Owner Signature of City Administrator
Seefried PSO Rosemount, LLC, a
Delaware limited liability company
8745 W. Higgins Road
Suite 220
Chicago, IL 60631
Attn: Brian Novak
Federal Tax ID #87-1713672
[End of Form of the Note]
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note will be issued as a single typewritten note
numbered R-1.
The Note will be issuable only in fully registered form. Principal of and interest on the Note
will be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note will be payable
by mail to the owner of record thereof as of the close of business on the fifteenth day of the month
preceding the Payment Date, whether or not the day is a business day.
3.03. Registration. The City hereby appoints the City Administrator to perform the
functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of registration and
the rights and duties of the City and the Registrar with respect thereto will be as follows:
(a) Register. The Registrar will keep at his office a bond register in which the Registrar
will provide for the registration of ownership of the Note and the registration of transfers and
exchanges of the Note.
(b) Transfer of the Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name
of the designated transferee or transferees, a new Note of a like aggregate principal amount and
maturity, as requested by the transferor. Notwithstanding the foregoing, the Note will not be
transferred to any person other than an affiliate, or other related entity, of the Developer unless the
City has been provided with an investment letter in a form substantially similar to the Investment
Letter submitted by the Developer or a certificate of the transferor, in a form satisfactory to the City,
that the transfer is exempt from registration and prospectus delivery requirements of federal and
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applicable state securities laws. The Registrar may close the books for registration of any transfer after
the fifteenth day of the month preceding each Payment Date and until the Payment Date.
(c) Cancellation. The Note surrendered upon any transfer will be promptly cancelled by
the Registrar and thereafter disposed of as directed by the City.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for
transfer, the Registrar may refuse to transfer the same until he is satisfied that the endorsement on the
Note or separate instrument of transfer is legally authorized. The Registrar will incur no liability for
his refusal, in good faith, to make transfers which he, in his judgment, deems improper or
unauthorized.
(e) Persons Deemed Owners. The City and the Registrar may treat the person in whose
name the Note is at any time registered in the bond register as the absolute owner of the Note, whether
the Note is overdue or not, for the purpose of receiving payment of, or on account of, the principal
of and interest on the Note and for all other purposes, and all the payments so made to any registered
owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability of the
City upon the Note to the extent of the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or
other governmental charge required to be paid with respect to the transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case the Note becomes mutilated or is
lost, stolen, or destroyed, the Registrar will deliver a new Note of like amount, maturity dates and
tenor in exchange and substitution for and upon cancellation of the mutilated Note or in lieu of and
in substitution for the Note lost, stolen, or destroyed, upon the payment of the reasonable expenses
and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or
destroyed, upon filing with the Registrar of evidence satisfactory to it that the Note was lost, stolen,
or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate
bond or indemnity in form, substance, and amount satisfactory to it, in which both the City and the
Registrar will be named as obligees. The Note so surrendered to the Registrar will be cancelled by
him and evidence of the cancellation will be given to the City. If the mutilated, lost, stolen, or
destroyed Note has already matured or been called for redemption in accordance with its terms, it will
not be necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note will be prepared under the direction of the
Manager and will be executed on behalf of the City by the signatures of its Mayor and City
Administrator. In case any officer whose signature appears on the Note ceases to be the officer before
the delivery of the Note, the signature will nevertheless be valid and sufficient for all purposes, the
same as if the officer had remained in office until delivery. When the Note has been so executed, it
will be delivered by the City to the Developer following the delivery of the necessary items delineated
in Section 5.3 of the Agreement.
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Section 4. Security Provisions.
4.01. Pledge. The City hereby pledges to the payment of the principal of and interest on the
Note all Available Tax Increment as defined in the Note. Available Tax Increment will be applied to
payment of the principal of and interest on the Note in accordance with the terms of the form of the
Note set forth in Section 2 of this resolution.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof
or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the
City will maintain a separate and special “Bond Fund” to be used for no purpose other than the
payment of the principal of and interest on the Note. The City irrevocably agrees to appropriate to
the Bond Fund in each year Available Tax Increment. Any Available Tax Increment remaining in the
Bond Fund will be transferred to the City’s account for the TIF District upon the payment of all
principal and interest to be paid with respect to the Note.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the City are hereby authorized and directed
to prepare and furnish to the Developer of the Note certified copies of all proceedings and records of
the City, and the other affidavits, certificates, and information as may be required to show the facts
relating to the legality and marketability of the Notes the same appear from the books and records
under their custody and control or as otherwise known to them, and all the certified copies, certificates,
and affidavits, including any heretofore furnished, will be deemed representations of the City as to the
facts recited therein.
Section 6. Effective Date. This resolution will be effective upon execution by the Mayor and
City Administrator following authorization by the city council of the City.
Adopted by the City Council of the City of Rosemount, this 21st day of February, 2023.
Jeffery D. Weisensel, Mayor
Logan Martin, City Administrator