HomeMy WebLinkAboutEDA August 15, 2000
\ CITY of ANDOVER
'J
Economic Development Authority - Tuesday, August 15, 2000 agenda
Bookmark
Call to Order - 6:30 PM Name
Approval of Minutes minutes
Di~""~~ion It..m~
1. Public Hearing: Consider Sale of Lot 2, Block 1, Andover Commercial Park
2. Pledge for Bonds/TIF Dist. 1-1
Other Business
:~
Adjournment
,
'J
CITY OF ANDOVER
REQUEST FOR EDA ACTION
, / DATE: AUlnIst 15. 2000
AGENDA SECTION ORIGINATING DEPARTMENT
Approval of Minutes City Clerk )J/
0,0
ITEM NO.
Approval of Minutes
The Economic Development Authority is requested to approve the following minutes:
July 27, 2000 Regular EDA Meeting (Knight absent)
, )
, j
CITY OF ANDOVER
REQUEST FOR ECONOMIC DEVELOPMENT AUTHORITY ACTION
DATE: August 15. 2000
AGENDA SECTION ORIGINATING DEPARTMENT
Discussion Community Development
ITEM NO. 1 David L. Carlberg
Public Hearing: Lot Sale Community Development Director
Lot 2, Block 1, Andover Commercial Park
The Economic Development Authority (EDA) is requested to hold a public hearing to consider
the sale of Lot 2, Block 1, Andover Commercial Park. Attached is a purchase agreement
prepared by Bill Hawkins on the sale of the lot to Northwest Commercial LLC.
As the EDA is aware, Minnesota Statutes 469.105 requires a public hearing on all land sales. In
addition, the Statute also requires that the EDA find that the sale and conveyance are in the best
interests of the City and that the transaction furthers the general plan for economic development
for the City.
, I
r-'~ f4.r~
..~ -, . '-=I' t .
b'~a~liac Ii U
PIJRr.HASF A(:;RFFMFNT
THIS PURCHASE AGREEMENT (the "Agreement") is made and effective as of
, by and between the City of Andover, a municipal corporation,
("Sellers") and Northwest Commercial LLC, a limited liability company, ("Buyer").
RECITALS:
WHEREAS, the Buyer is desirous of purchasing property owned by the Seller
within Andover for the purpose of office/warehouse space; and
WHEREAS, the Seller has agreed to sell certain property that it owns within
Andover.
NOW, THEREFORE, in consideration of the amount of One ($1.00) Dollar paid
by Buyer to Seller, the receipt and sufficiency of which is hereby acknowledged, and
, in consideration of the foregoing Recitals, the mutual promises of the parties hereto
and the mutual benefits to be gained by the performance hereof, Seller and Buyer
agree as follows:
1. Sale. Subject to the terms, conditions, covenants and provisions of this
Agreement, Seller agrees to sell to Buyerl and Buyer agrees to purchase from Seller,
the real property located in Anoka County, Minnesota, legally described as:
Lot 2, Block 1, Andover Commercial Park, Anoka County, Minnesota.
2. Pllrr.h;:!!':p. Prir.p., In consideration of the transfer of the Property to
Buyer described in Paragraph 1, Buyer shall pay the sum of Eighty Six Thousand Two
Hundred Fifty and no/100 ($86,250.00) Dollars. Said amount shall be paid as
follows:
I
1
lOttAfY
(a) One Thousand and no/100 ($1,000.00) Dollars earnest money, which
shall be deposited and remain in the trust account of Registered
Abstractors, Anoka, Minnesota until closing;
(b) Eighty Five Thousand Two Hundred Fifty and no/100 ($85,250.00)
Dollars on or before the Date of Closing;
.
3. M::IrkP.t::lhl/'! Titl/'!. Subject to the full performance by Buyer, Seller
agrees to execute and deliver or cause to be delivered a Warranty Deed and any other
documents necessary to fulfill the terms of this Agreement. The Warranty Deed shall
convey marketable title to the Property, subject to the following exceptions:
(a) Laws, ordinances and State and Federal regulations;
(b) Restrictions relating to use or improvement of premises without effective
forfeiture provision; and
(c) Reservation of any minerals or mineral rights to the State of Minnesota.
4. R/'!::II F~tM/'! Tmm~ ::Inn Sr/'!r.iFlI A~~/'!~~m/'!nt~. Seller shall pay the real
estate taxes due in the year 1999 and prior years. The parties agree the real estate
taxes due and payable in the year 2000 shall be prorated at the date of closing.
Buyer shall be responsible for all real estate taxes due and payable in the year 2001
and thereafter. Seller shall pay at the time of closing all levied special assessments
against the parcels.
5. Ii1le.
(a) Cnmmitm/'!nt or Ah~trFlr.t. Seller shall, within a reasonable period of time
after approval of this Agreement, furnish Buyer with one of the
following, at Seller's sole discretion: (i) a Commitment for the issuance
of an AL T A owner's policy of title insurance issued by a title insurance
company licensed to do business in the State of Minnesota ("Title
Company") in the full amount of the Purchase Price (the "Commitment");
(ii) an Abstract of Title; or (iiil a Registered Property Abstract.
2
D IT)) f~ rF'-If
1 Ii ~ er--:.\
(b) FX;1min;1tion of Titlp.' Ohjp.r.tion' Sp.llp.r'!; Flp.r.tion. Buyer shall be allowed
twenty (20) days after receipt thereof for examination of said title and
the making of any objections thereto, said objections to be made in
writing or deemed to be waived. If any objections are so made, Seller
shall have ten (10) business days following receipt of Buyer's title
objections to either elect to: (i) proceed to make the title marketable or
(ii) terminate this Agreement. Seller shall notify Buyer of its election in
writing prior to the expiration of such ten-day period. In the event Seller
elects to terminate this Agreement, Buyer shall execute and deliver to
Seller a quit claim deed for the Property in favor of Seller in exchange for
return of its earnest money within ten (10) days after receiving the
termination notice, Thereafter, the parties shall have no further
obligations under this Purchase Agreement.
(c) Titlp. Not M;1rlP. M;1rkp.t;1hlp.. If said title is not marketable and is not
made so within one hundred twenty (120) days from the date of written
objections thereto as above provided, Buyer, at its option, may:
(i) Declare this Agreement null and void, in which event: (a) Seller
shall promptly thereafter refund to Buyer the Earnest Money; (b)
Buyer shall execute and deliver to Seller a quit claim deed for the
Property in favor of Seller within ten (10) days from the expiration
J of the one hundred twenty (120) day period; and lc) Buyer shall
have no further remedies or causes of action against Seller; or
(ii) Waive the objection to marketability of title and proceed to
closing.
(d) Titlp. M;1rlP. or FOImrl M;1rkp.t;1hlp.. If the title to the Property is found to
be marketable or is so made within said one hundred twenty (120) day
period, and Buyer shall default in any of the agreements and continue in
default for a period of ten (10) days, then and in that case the Seller
may, at their option, terminate this Agreement and on such termination
all the payments made upon this contract shall be retained by said Seller,
as liquidated damages, or enforce any of Seller's remedies as described
in this Agreement, time being of the essence hereof.
6. Dp.frllllt.
(a) nP.f;11 lit hy Spllpr. In the event that Seller should fail to consummate the
transactions contemplated herein for any reason, except for a default by
Buyer, Buyer may:
(i) Terminate this Agreement, in which event the earnest money shall
forthwith be returned to Buyer; or
3
I!)~Af1i
Iii) Enforce the specific performance of this Agreement and, in such
action, shall have the right to recover damages suffered by Buyer
by reason of the delay in the acquisition of the property provided
that such action is commenced within six (6) months of the date
of this Agreement; or
(iii) Bring suit for damages for breach of this Agreement.
No delay or omission in the exercise of any right or remedy accruing to
Buyer upon any breach by Seller under this Agreement shall impair such
right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by Buyer of any
condition or of any subsequent breach of the same or any other term,
covenant, or condition herein contained shall not be deemed to be a
waiver of any other condition or of any subsequent breach of the same
or any other term, covenant, or condition herein contained. All right,
powers, options or remedies afforded to Buyer either hereunder or by
law shall be cumulative and not alternative, and the exercise of one right,
power, option or remedy shall not bar other rights, powers, options or
remedies allowed herein or by law.
(b) nAf~lilt hy RIIYAr, In the event that Buyer should fail to consummate the
/ transactions contemplated herein for any reason, except for a default by
Seller, Seller may:
(i) Enforce the specific performance of this Agreement and, in such
action, shall have the right to recover damages suffered by Seller
by reason of the delay in the sale of the Property; or
Iii) Bring suit for damages for breach of this Agreement; or
liii} Cancel this Purchase Agreement and retain the earnest money.
No delay or omission in the exercise of any right or remedy accruing to
Seller upon any breach by Buyer under this Agreement shall impair such
right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by Seller of any
condition or of any subsequent breach of the same or any other term,
covenant, or condition herein contained shall not be deemed to be a
waiver of any other condition or of any subsequent breach of the same
or any other term, covenant, or condition herein contained. All rights,
powers, options or remedies afforded to Seller either hereunder or by law
shall be cumulative and not alternative, and the exercise of one right,
power, option or remedy shall not bar other rights, powers, options or
remedies allowed herein or by law.
4
DP A u:-
. Ii~ ......~ II
7. r.lo~ing. The closing on the sale of the conveyance of the Property from
Sellers to Buyer shall take place on or before September 15, 2000.
8. PI::lr.p. of r.lo~ing. The closing shall be held at the offices of Registered
Abstractors, Inc., 2115 Third Avenue North, Anoka, Minnesota.
IN WITNESS WHEREOF, the parties hereto have set their respective hands as of
the effective date first written above,
SELLER: CITY OF ANDOVER
By:
Its: Mayor
By:
Its: City Clerk
, BUYER: NORTHWEST COMMERCIAL LLC
By:
Its:
By:
Its:
5
CITY OF ANDOVER
REQUEST FOR ECONOMIC DEVELOPMENT AUTHORITY ACTION
DATE: AUlnIst 15.2000
AGENDA SECTION ORIGINATING DEPARTMENT
Finance
Discussion Jim Dickinson
ITEM NO. ~.
Pledge for Bonds / TIF Dist. 1-1
REQUEST:
The Andover Economic Development Authority is requested to pledge increment ofTIF District 1-1 for
the $2,445,000 Taxable G.O. Tax Increment Bonds, Series 2000A. A resolution prepared by the City's
financial advisor (Ehlers & Assoc.) will be presented at the meeting.
If you have any questions please do not hesitate in contacting me at 767-5110.
/
NO, 2871 - P. 2/10 -. , ,
AUG. 4,2000 7:28AM EHLERS & ASSOC,
Revised
BOND SALE REPORT
$2,445,000
Taxable G.O. Tax Increment Bonds, Series 2000A
City of Andover, Minnesota
, I
August 1, 2000
+) EHLERS
~ ASSOCIATtS PfC
I.tADERS IN pU8LIc 'INANCt ~
- ., 0" '"
651 697 8555 PAGE. 02
AUG 04 2000 07:34
NO. 2871 P. 3/10 --
AUG. 4. 2000 7:28AM EHLERS & ASSOC.
Bond Sale Report
;
OVERVIEW
This report describes the proposed plan for the City of Andover to issue $2,445,000 Taxable
G.O. Tax Increment Bonds, Series 2000A. This report has been prepared by Ehlers &
Associates, in consultation with City Staff and bond counsel. This report deals with:
. Pwpose and components of bond issue.
. Structure.
. Other considerations in issuing bonds.
. Market conditions.
. Issuing process.
PURPOSE
The $2,445,000 Taxable G.O. Tax Increment Bonds, Series 2000A (the "Bonds") are being
issued pursuant to Minnesota Statutes, Chapter 475 and Section 469.178. The Bonds are being
issued to fmance land acquisition and other public costs to facilitate development in the City's
Development District No. I.
Financing these projects requires a bond issue in the amount of $2,445,000 . The proposed
finance plan consists of the follOwing sources and uses of funds:
SOURCES USES
Par Amount of Bonds $2,445,000 Project Costs $2,385,000
Up-FrOn! Revenue 0 Costs of Issuance 19,000
Discount 41,000
Capilali~ed Interest 0
Total Sources $2,445,000 Total Uses $2,445.000
/
Page 1
651 697 8555 PAGE. 03
AUG 04 2000 07: 34
-- NO. 2871- P. 4/10 .- ..
AUG. 4. 2000 7:28AM EHLERS & ASSOC.
Bond Sale Report
STRUCTURE AND REPAYMENT
The Bonds are general obligations of the City of Andover and as such are secured by a pledgc of
the City's full faith, credit, and taxing powers. It is the intent of the City to pay the entire amount
of principal and interest from tax increment revenues collected from Tax Increment Financing
District No.1-I. Revenues from cxisting development and development under construction
should be sufficient to support this debt.
The Bonds will be sold September 5, 2000 and be dated September 1,2000. The fIrst interest
payment on the Bonds will be February 1,2001, and semiannually thereafter on August 1 and
February 1.
We recommend that the Bonds mature in semiannual installments of principal. The faster
amortization of the debt will reduce the interest expense over the life of the Bonds. Principal on
the Bonds will be due on February 1 and August 1 beginning February 1,2002 and ending
February 1,2010.
We recommend that Bonds maturing in the years 2007 through 2010 be subject to prepayment at
the discretion of the City on February 1.2006 and any date thereafter.
The preliminary projection of debt service and revenues for the Bonds appears in Attachment I.
OTHER CONSIDERATIONS
Taxable Bonds
Interest on the Bonds will not be exempt from taxation for State or Federal purposes. The Bonds
do not count against the calendar year's allocations for bank qualified bonds or exemption from
arbitrage rebate. The Bonds are not subject to other arbitrage regulations on the investment of
proceeds and monies in the debt service fund.
Global Book Entry
The Bonds will be global book entry. As "paper less" bonds, you will avoid the costs of bond
printing and annual registrar charges. Since the City is currently using V,S. Bank Trust as their
Paying Agent, we recommend designating U.S. Bank as Paying Agent for this issue. The Paying
Agent will invoice you for thc interest semi-armually and On an annual basis for the principal
coming due, You will be charged only for paying agent/transfer agent services provided by the
bank.
Rating
Standard & Poor's CoIp. will be asked to rate this issue. The City currently has an "A" rating on
its outstanding general obligation bonds. Although recent issues have been insured. S&P
confirmed the "A" rating with a stable outlook in 1999. City and Ehlers staff will conduct a
/ conference call with rating analysts prior to the sale.
Page 2
651 697 8555 PAGE. 04
AI 1['; Vld ?V\V\VI PI?:",<;
P. 5/10 -
AUG. 4. 2000 7:28AM EHLERS & ASSOC. NO. 2871
Bond Sale Report
/
According to the Mergent Bond Record, Moody's Investors Service shows an outstanding HA2"
rating On G.O. debt of Andover. Thc City has not requested a Moody's rating since 1996. We
will work with Staff to address any questions raised by Moody's (if any) during the sale process.
Continuing Disclosure
Regulations of the Securities and Exchange Commission on the continuing disclosure of
municipal securities apply to long"tcrm securities with an aggregate principal amount of
$1,000,000 or more. Since aggregate amount of this issue is over $1,000,000 and the City has
mOre than $10,000,000 in total municipal obligations outstanding, you will be obligated to
comply with Full Continuing Disclosure requirements as required by paragraph (b)(5) of Rule
15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange
Act of 1934. You will be required to provide certain financial information and operating data
relating to the City annually and to provide notices of the Occurrence of certain material events.
The specific nature of the Undertaking, as well as the information to be contained in the notices
of material events will he set forth in the Continuing Disclosure Certificate that you will enter
into at the time of closing for this issue.
MARKET CONDITIONS
The Bond Buyer's 20- Y ear G.O. Index (BBI) currently stands at 5.60%. Interest rates have
/ generally followed an upward trend over the past 12 months as the Federal Reserve raised rates.
In recent weeks, rates on municipal bonds have fallen (see chan on next page). A significant
change in the market is not expected prior to the sale.
Page 3
651 697 8555 PAGE. 05
AUG 04 2000 07:35
AUG. 4. 2000 7:29AM EHLERS & ASSOC. NO. 2871 .P. 6/10
Rand Sale Rtport
/
Bond Bu)tr's 20-Year G.O. Index
6.50% .... --- .-.- - " ...... .. . ..-. .--- ....- ..-- --
5.50%
5.00%
/ 4.S0~.
1999 2000
ISSUING PROCESS
Following is a tentative schedule for the steps in the issuing process.
August 1, 2000 City Council adopts resolution calling for the sale of the Bonds
Week of August 21 Submit draft Official Statement and rating materials to S&P
for credit rating
Week of August 21 Distribute Official Statement
Week of August 28 Receive credit rating
September 5, 2000 Bond sale
September 27, 2000 Bond closing (esTimated)
/
Page 4
651 697 8555 PAGE. 06
AUG 04 2000 07: 35
NO. 2871 - P. 7/10
AUG. 4. 2000 7:29AM EHLERS & ASSOC.
Bond Sale Report
ATTACHMENT 1
Preliminary Debt Service Analysis
SO% T....
Annual FI.... A"'31"~Jt AvaIlable Solanc.
~ fr1nmIJ !lalI ~ W za IeL l!MDllI &wuII !.DnlIIl ~
2/11200 I 79,119,79 79,119.79 79.119.79 20CO 364.000 455,000 375.550 375.580
81112001 50.000 7.500% 94.S43.15 144.943.75
lI1I2002 50.000 7.500% 93.058.75 143,068.75 288.012.50 ~001 156,800 195.000 (92.0131 283,865
8/112002 50.000 7500% 91.193.75 141.193.75
Z/1I2003 50.000 7.500% 59.293,75 139,293.75 280.487.50 2002 26&.400 333.000 02,513 336.350
8/112003 70.000 7.700% 87.393.75 157.393.75
2/112004 70,000 7.700% 54.698.15 154,698.75 312.092,50 2003 2aB.500 3& 1.000 48,908 385.258
51112004 140,000 7.700" 82.003,75 22M03.7S
lIlI2005 145,000 7.700% 7&.513.75 721.613.7~ 4~3,617.S0 2004 395.800 496.000 52.383 437.670
&'1/2005 160000 7.750% 71.031.25 231,031,25
Zll/2005 160,000 7.750% 64.831.25 224,831.25 455.862.50 2005 414.400 518.000 &2.138 499.508
&011200& 1&0,000 7. 750~. 55.631.25 218,631.25
21112007 165,000 7.750"- 52.431.25 217,431.2& 436.062.50 2005 353.200 479.000 42.938 542.745
9/112007 t75.000 7.800% 46.037.50 221.037.50
lIll200a Hs.OOO 7.800% 39.212.50 214.212,50 4.35,250.00 2007 406.400 508,000 72.750 615.495
&01(,/008 200.000 7.800% 32.387.50 232.357.!>O
21112009 200.000 7.800% 24.587.50 "4.587.50 456.975.00 2008 428,000 535.000 78.02. 693.520
8/1/2009 210.000 7.900% 16.787,50 226,757.50
'J1/2010 215.000 7.900% 8492.50 223,492.50 450.280.00 2009 402 . DO 503 000 52.720 746.240
TOTAL 2 445.000 1.19V59.79 3,637759.793.637.759.79 3.507.200 4.384 .000
Oateel' 9/1100
De!;very Date 9/1100
Bot\d Year Oollllrs 15.295.25
Averall"UIe 6,256 Ye.,.
, A,..eao Coupoll 7.79773%
Nollntel", Coo< (NICI 8.05946%
T... '_est Cost mO) 8.15700%
Page 5
E;51 E;97 8555 PAGE':. 07
AIr, ~a ?~~~ ~?:;s
NO. 2871- P. 8/10'" . .u -.
AUG. 4. 2000 7:29AM EHLERS & ASSOC.
Bond Sale R~port
ATTACHMENT 2
TERMS AND CONDITIONS OF ISSUE
$2,445,000 Taxable G.O. Tax Increment Bonds, Series 2000A
DATE: August 1,2000
ISSUER: City of Andover, Minnesota
BOND NAME: $2,445,000 Taxable G.O. Tax Increment Bonds, Series 2000A
BOND ATTORNEY: Briggs & Morgan (Mary Tppel)
PURPOSE: Finance land acquisition and other public costs to facilitate
development in the City's Development District No. 1.
Sale Date: September 5, 2000
Est. Closing Date: September 27,2000
Proposal Opening: 12:00 Noon, office of Ehlers & Associates, Inc.
Proposal Award: 7:00 p,m., City offices.
Type of Sale (MN only): Independent Financial Advisory Provision,
Bonds Dated: September 1, 2000
Maturity: Principal on the Bonds will be due on February 1 and
August 1 beginning February 1,2002 and ending
February 1,2010.
Term Bond Option: All dates are inclusive. Bids for the bonds may contain a
maturity schedule providing for any combination of
serial bonds and term bonds, subject to mandatory
redemption, so long as the amounts of principal matUring
Or subject to mandatory redemption in each year
conforms to the maturity schedule set forth above.
First Interest: February 1,2001. Interest will be computed on the basis
of a 3 60-day year of twelve 30-day months and wiJ I be
rounded pursuant to rules of the MSRB.
Page 6
F.e;1 F.g7 Re;e;e; PAr.I=.VlR
AUG 04 2000 07:35
NO. 2871 - P. 9/10 .
AUG. 4. 2000 7:29AM EHLERS & ASSOC.
Bond S"le Report
Call Feature: Bonds maturing in the years 2007 through 2010 will be
subject to redemption prior to final maturity on February
1, 2006 and on any date thereafter. Notice of such call
shall be given by mailing a notice thereof by registered Or
certified mail at least thirty (30) days prior to the date
fixed for redemption to the registered owner of each
bond to be redeemed at the address shown on the
registration books.
Minimum Proposal: $2,404,000
Good Faith: $48,900, payable to the Issuer (Cashiers or Certified
Good Faith Check Q! wire transfer of funds to Ehlers
Good Faith Escrow or financial surety bond.
Record Date: Close of business on the 15th day (whether or not a
business day) of the immediately preceding month.
CUSIP Numbers: The Issuer will assume no obligation for the assignment
or printing ofCUSIP numbers on the Bonds or for the
correctness of any numbers printed thereon, but will
permit such numbers to be printed at the expense of the
purchaser, jfthe purchascr waives any delay in delivery
occasioned thereby.
Paying Agent: To be named by the Issuer.
Book Entry: This offering will be issued as fully registered Bonds
and, when issued, will be registered in the name of Cede
& Co., as nominee of The Depository Trust Company,
New York, New York.
Financial Advisor: Ehlers & Associates, Inc. [Rusty Fifield)
Rating Requested: Moody's Investors Service,
Qualified Tax-Exempt Taxable.
Obligations:
Continuing Disclosure: Full
N:\M;nnsollllAndovo:,\2000 Bond.\PreSale Itepon 2000".wpd
Page 7
~C:;1 ~q7 "'c:;c:;c:; Pt:lr.f=.V1Q
01 lr:: fA.I'I "J~~~ ~'7 ~ "<c.