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HomeMy WebLinkAboutEDA March 1, 2004 / '\ 0 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US CITY OF ANDOVER ECONOMIC DEVELOPMENT AUTHORITY MEETING March 1,2004 - 6:30 p.m. CONFERENCE ROOM A AGENDA 1. Call to Order 2. Approve Minutes - February 3, 2004 3. Authorize Termination of Lease & Ground Lease, Execution of An Escrow Agreement & Calling Prior Bonds (Public Works Building) - Finance 0 4. Other Business 5. Adjourn / \ \J "- '. / 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US TO: Economic Department Authority CC: John Emr, Exocutivo D;rectOrv FROM: Vicki Volk, City Clerk SUBJECT: Approval of Minutes DATE: March 1, 2004 INTRODUCTION The following minutes were provided by City Staff for approval by the EDA: February 3, 2004 Regular Meeting (Schultz, Larsen absent) '-J DISCUSSION Attached is a copy of the minutes for your approval. ACTION REOUlRED The EDA is requested to approve the minutes of February 3,2004. Respectfully submitted, iLL- ()$ Vicki V olk City Clerk . ) , ~ND6VE~ "-/ 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US . ECONOMIC DEVELOPMENT AUTHORITY MEETING - FEBRUARY 3, 2004 MINUTES The Economic Development Authority Meeting of the City of Andover was called to order by President Mike Gamache at 6:03 p.m., Tuesday, February 3, 2004 at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Commissioners Present: Don Jacobson, Ken Ortte1, Mike Kight, Julie Trude, Robert Nowak Commissioners Absent: Fred Larsen III, Edward Schultz Also Present: John Erar, Executive Director Dave Berkowitz, City Engineer Will Neumeister, Community Development Director Jim Dickinson, Finance Director Bill Hawkins, City Attorney (arrived at 6:23 pm) \ , '--) AGENDA APPROVAL Mr. Erar requested that if time permits, there is some information regarding Anoka County's proposed legislation that he would like to discuss. APPROVAL OF MINUTES December 3, 2003 Page 3, third paragraph under Approval of the Amended and Restated DCCRs should read "City Attorney Hawkins stated there was concern from Commissioner Trude regarding being able to dissolve the Agreements and the members have been subiect to rather... .." Motion by Jacobson, seconded by Knight to approve the minutes of December 2,2003 as amended. Motion carried unanimously. REVIEW/APPROVE ANDOVER STATION NORTH RFP Mr. Neumeister explained that other than revising the RFP from Mixed Use Development '. ) to Master Plan Development the document changed very little. The list of developers who would receive the RFP has been provided. The deadline for submittal is April 7, 2004. " ) EDA Meeting February 7, 2004 - Minutes Page 2 Commissioner Jacobson stated that the way the RFP is written a developer would have to buy the entire site. He questioned if that is what the EDA wants or would the EDA look at other people who would just want to do the housing or retail portion. Commissoner Knight thought that the EDA had decided to make the RFP broad enough so they could look at several developers for the site. Commissioner Trude felt that the document should be simpler. She also noted that the most significant piece of information is the engineering study done by S.E.H. and that is not a part of the RFP. Commissioner Nowak suggested that Item 10, Proposed Purchase Price, should read, "Present a proposed purchase price for the entire development proposal and/or a parcel within the development...." and add a zoning map. Several commissioners felt that the last part of the proposal, "Proposal Review, Evaluation Process and Final Developer Agreement" should be shortened. Mr. Erar felt \ that as a courtesy to the bidders, they should know what our process is. \.~ Mr. Neumeister was directed to revise the RFP and either email or fax it to the Commissioners. DISCUSS CREATION OF TIF DISTRICT FOR HUGHS INDUSTRIAL PARK Mr. Neumeister explained that creation of a TIF district would be based on meeting the statutoI)' criteria for a redevelopment district Commissioner Jacobson asked if there is any other vehicle that could be used if a TIF district is not an option. Mr. Dickinson stated the possibilities are loan and grant processes or rezonmg. (Mr. Hawkins arrived at this time - 6:23 pm) Mr. Neumeister stated that most of the buildings have a mortar type appearance and it would be challenging to prove that they are dilapidated or substandard. We could set higher zoning standards. If you set up a TIF district too soon, water and sewer could become available. There is capacity in the pipe to run utilities to Hughs. Mr. Hawkins reviewed the criteria from State Law for establishing a TIF district noting ) that 70% of the district has to have buildings that are 50% dilapidated. , EDA Meeting " ) February 3, 2004 - Minutes Page 3 Rick Lindquist explained that he would like to put a bl~ck building on 162nd and Round Lake Boulevard and make improvements to the building at 16191 Round Lake Boulevard. Mr. Dickinson felt that a pay as you go program would be the safest route to take. In this program the increment would indicate what he would get Commissioner Trude suggested that the CDBG program could be another option. Commissioner Jacobson asked Mr. Lindquist if he is ready to proceed even without the TIF district Mr. Lindquist noted that he is counting on the TIF. The EDA discussed creation of a TIF district using only three lots and questioned what the maximum increment would be. Motion by Trude, seconded by Orttel that staff evaluate further the "pay as you go" option for the build out of the three lots and come back with that information and to look at the list of potential qualifying expenses. Motion carried unanimously. \, OTHER BUSINESS \._~ , Mr. Erar noted that there is a revised bill the County is considering to allow them to engage in economic development and transit oriented activities. County officials will be at the Council's February 17th meeting to discuss this information. Support is growing from some cities such as Columbia Heights, Anoka and Coon Rapids. They are talking about creating a multi-jurisdictional committee that would recommend projects to the County Board. Motion by Orttel, seconded by Jacobson to adjourn. Motion carried nnanimously. Meeting adjourned at 7:00 p.m. Respectfully submitted, J.:.L. ()~ Vicki V olk City Clerk '- J , I 'J 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US TO: Economic Development Authority (EDA) President and Commissioners CC: John Erar, EDA Executive Directorf FROM: Jim Dickinson, EDA Treasurer SUBJECT: Authorize Termination of Lease & Ground Lease, Execution of An Escrow Agreement & Calling Prior Bonds (Public Works Building) DATE: March 1, 2004 INTRODUCTION At the February 17, 2004 Andover City Council meeting, Mark Ruff, the City's Financial Advisor from Ehlers & Associates presented the results of the City's sale of a $3,890,000 G.o. Capital Improvement Bonds, Series 2004A. DISCUSSION The City Council awarded the sale ofthe following bond to close on March 16,2004: '\ $3,890,000 G.O. Capital Improvement Bonds, Series 2004A '- ./ , These bonds are issued to finance $1,600,000 in project costs for a new fire station (plus costs of issuance and capitalized interest) and to advance refund the outstanding maturities of the EDA's $2,350,000 Public Project Revenue Bonds, Series 1997 (public works facility) as a general obligation bond. The EDA Bonds are callable on December 1,2004 and the refunding will yield a savings to the City of$227,590. To complete the refunding the EDA is requested to authorize the termination of lease and ground lease, execution of an escrow agreement and calling prior bond. A detailed resolution prepared by bond counsel, Briggs & Morgan, is attached to fulfill that request. BUDGET IMPACT The refunding will yield a savings oflong-term debt service to the City of $227,590 ACTION REQUIRED The City Council is requested to approve the attached resolution, "A RESOLUTION AUTHORIZING TERMINATION OF LEASE AND GROUND LEASE, EXECUTION OF AN ESCROW AGREEMENT . A D CALLING FOR PRIOR BONDS". , ) ~esolution Authorizing the Termination of Lease and Ground Lease, Execution of an , Escrow Agreement and Calling Prior Bonds , ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ANDOVER , / ANOKA COUNTY, MINNESOTA A RESOLUTION AUTHORIZING TERMINATION OF LEASE AND GROUND LEASE, EXECUTION OF AN ESCROW AGREEMENT AND CALLING PRIOR BONDS WHEREAS, the City of Andover proposes to issue its $3,895,000 General Obligation Capital Improvement Bonds, Series 2004A (the "Bonds") in part to finance the acquisition of an approximately 30,000 square foot public works building (the "Public Works Building") from the Economic Development Authority of the City of Andover (the "Authority") ; and WHEREAS, the proposed purchase price for the Public Works Building is an amount equal to the outstanding principal of and accrued interest on the Authority's Public Project Revenue Bonds of 1997 (City of Andover Lease Purchase Project) (the "Prior Bonds"), dated September 1, 1997. NOW, THEREFORE, BE IT RESOLVED, 1. The Prior Bonds which mature on and after December 1,2005, shall be redeemed and prepaid on December 1,2004, in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached as Exhibit A to the Escrow Agreement dated as of March \ 16, 2004 (the "Escrow Agreement") by and between the City, the Authority and U.S. Bank , ) National Association, in St. Paul, Minnesota, Escrow Agent, which terms and conditions are --,' hereby approved and incorporated herein by reference; 2. The Authority hereby approves the execution by the President and Secretary on behalf of the Authority of the Escrow Agreement in substantially the form submitted to the Board of Commissioners; and 3. As provided in Section 10.4 of the Lease with Option to Purchase Agreement between the City and the Authority, dated as of September 1, 1997 (the "Lease"), the Authority hereby determines and declares that upon the issuance of the Bonds and the funding of the Escrow Deposit as provided in the Escrow Agreement, the Lease and the Ground Lease between the City and the Authority, dated as of September 1, 1997 shall be terminated and the Authority shall have no further right, title and/or interest in and to the Public Works Building. , ) 1617634vl ADOPTED this _ day of ,2004. , J President ATTEST: Secretary Motion by: Seconded by: Voted in favor: Voted against: / , , / 1617634vl , ESCROW AGREEMENT . I PUBLIC PROJECT REVENUE BONDS OF 1997 (CITY OF ANDOVER LEASE PURCHASE PROJECT) OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ANDOVER THIS ESCROW AGREEMENT made as of March 16, 2004, by and between U.S. Bank National Association, in St. Paul, Minnesota (the "Escrow Agent"), the Economic Development Authority of the City of Andover (the "EDA") and the City of Andover, Anoka County, Minnesota (the "City"), WITNESSETH THAT: A. WHEREAS, pursuant to a resolution adopted on August 5, 1997, the EDA has heretofore authorized its Public Project Revenue Bonds of 1997 (City of Andover Lease Purchase Project), of which the 2005 and later maturities are being refunded (the "Refunded Bonds"). The Refunded Bonds maturing on December 1, 2004, may be paid at maturity on such date, and the Refunded Bonds maturing on or after December 1,2005, in the aggregate amount of$1,865,000 may be redeemed and prepaid on December 1, 2004, in the years and amounts on such date as follows: Year Amount Year Amount \ 2004 $80,000 2011 $165,000 , / 2005 90,000 2012 180,000 2006 100,000 2013 195,000 2007 110,000 2014 220,000 2008 120,000 2015 240,000 2009 135,000 2016 260,000 2010 150,000 B. WHEREAS, to provide for the advance refunding of the Refunded Bonds in accordance with Minnesota Statutes, Section 475.67, the City has, pursuant to a resolution adopted on February 17, 2004 (the "Refunding Resolution"), authorized the issuance of its $3,895,000 General Obligation Capital Improvement Bonds, Series 2004A, dated March 16, 2004, as the date of original issue (the "Refunding Bonds") and the EDA has called for redemption and prepayment of the Refunded Bonds maturing on or after December 1, 2005 pursuant to the advance refunding accomplished by the issuance of the Refunding Bonds; and C. WHEREAS, under the terms of the Refunding Resolution $ of Refunding Bonds proceeds and certain other sums appropriated to the Escrow Account identified below (the "Escrow Account") shall be held and invested in accordance with the terms and conditions of this Escrow Agreement as follows: '. ) 1617299v1 Refunding Bonds Proceeds $ , .J Other Available City Funds $ Total $ , $ of the foregoing sum shall simultaneously be invested in securities (the "Initial Escrowed Obligations") as described in the report of , dated March 16, 2004, attached hereto as Exhibit D (the "Accountant's Report"), which Initial Escrowed Obligations, together with the balance of cash in the amount of $ , shall be used to advance refund the Refunded Bonds; the Initial Escrowed Obligations (or evidence of the investment therein and constructive receipt thereof) and cash are herein called the "Escrow Deposit", provided that the term "Escrow Deposit" may include due bills reflecting Escrowed Obligations not received by the delivery of and payment for the Refunding Bonds (the "Bond Closing") so long as such due bills are secured by the deposit of comparable securities identified as "Substitute Securities" in the Accountant's Report, or by a cashier's check in an amount equal to either the principal and interest due on the Escrowed Obligations so due or any deficiency in principal or interest due on the Substitute Securities (the Initial Escrowed Obligations, said Substitute Securities and any other investments made hereunder, are referred to collectively as the "Escrowed Obligations"); and D. WHEREAS, the Escrow Agent is, and hereby represents that it is, a corporation organized under the laws of the United States, and its deposits are insured by the Federal Deposit , ) Insurance Corporation, and its capital and surplus is not less than $500,000: NOW, THEREFORE, in consideration of the premises and of the respective agreements on the part of the Escrow Agent, the EDA and the City herein contained, the parties hereto hereby agree as follows: 1. Deoosits. The City agrees upon delivery of and payment for the Refunding Bonds at the Bond Closing to forthwith irrevocably deposit with the Escrow Agent the Escrow Deposit, as an appropriation of the Escrowed Obligations and all payments of principal and interest thereon, in trust with the Escrow Agent for the security of the holders and owners of the Refunded Bonds. The City further agrees upon the Bond Closing to deposit with the Escrow Agent the moneys designated above; and the City authorizes the Escrow Agent (and the Escrow Agent agrees) to disburse said moneys to pay Issuance Expenses. 2. Acknowledgment of Deposit. Receipt of (i) the Escrow Deposit; (ii) $ of Refunding Bonds proceeds; (iii) and $ of available City funds, shall be acknowledged on behalf of the Escrow Agent at the Bond Closing by execution of an Acknowledgment in the form attached hereto as Exhibit B by a duly authorized officer of the Escrow Agent. 3. Compensation: Waiver of Lien. The Escrow Agent hereby acknowledges receipt of the sum of$ as and for its full compensation for services to be performed by it as , agent under this Agreement. There will be no future billings for services rendered by the Escrow ) Agent. The Escrow Agent expressly waives any lien upon or claim against the moneys and ,~ / investments in the Escrow Account. 1617299vl 2 , 4. Collection and Remittance: Payment of Interest. Principal and Premium. if any. , ) on Refunded Bonds: Substitute Securities. The Escrow Agent will collect all remittances of interest on the Escrowed Obligations in the Escrow Account as and when such interest becomes due and payable. The Escrow Agent will cause such Escrowed Obligations to be presented for payment and converted into cash on their respective maturity or due dates in accordance with the schedule of cash payments included in the Accountant's Report, and will remit from the Escrow Account to the paying agent for the Refunded Bonds, the funds required from time to time for the payment when due, on each interest and principal payment date for the interest, principal and premium, ifany, on the Refunded Bonds. If the delivery of any Escrowed Obligations is secured at the Bond Closing by Substitute Securities and/or a cashier's check as hereinabove provided and delivery of the Initial Escrowed Obligations is not made within thirty (30) days after the Bond Closing, the Escrow Agent shall in accordance with the terms of such security arrangement substitute the Substitute Securities and/or cashier's check for the Initial Escrowed Obligations to assure that such schedule of cash payments can be complied with. 5. Sufficiency of Escrow Deposit; Further Deposits. In reliance upon the Accountant's Report, the City represents that the Escrow Deposit, if the principal of and interest on the Initial Escrowed Obligations are paid in accordance with their terms, is sufficient to produce cash in such amounts to enable the Escrow Agent to make full and timely payments as provided in paragraph 4 above. If at any time it shall appear to the Escrow Agent that the money in the Escrow Account allocable for such use hereunder will not be sufficient to make any payment due to the holders of any of the Refunded Bonds, the Escrow Agent shall immediately , notify the City. The City thereupon shall immediately deposit in the Escrow Account from funds \. ) on hand and legally available such additional funds as may be required to meet fully the amount to become due and payable and, if necessary, levy for such purpose an ad valorem property tax on all real property in the City subject to taxation without limitation as to rate or amount. Included in the Accountant's Report is a statement that such cash and Escrowed Obligations are sufficient to comply with the requirements set forth in paragraph 4 above. 6. No Repeal of Refunding Resolution. The EDA will not repeal, revoke or amend the Refunding Resolution calling the Refunded Bonds for payment on December 1,2004, or for redemption on their redemption date of December 1, 2004, in accordance with the Notice of Call for Redemption attached hereto as Exhibit A. 7. Notice of Redemption. The Escrow Agent shall cause the Notice of Call for Redemption attached hereto as Exhibit A to be given to the paying agent for the Refunded Bonds (if other than the Escrow Agent), by first class mail (postage prepaid) not more than sixty (60) and not less than forty-five (45) days before said redemption date and therefor to the registered owner of each Refunded Bond at the address shown on the registration books kept by the registrar for the Refunded Bonds; failure to give notice by mail to any registered owner, or any defect therein, will not affect the validity of any proceedings for the redemption of the Refunded Bonds. 8. Title to Moneys: Trust: Remission of Remaining Moneys. It is recognized that title to the Escrowed Obligations and money held in the Escrow Account from time to time shall \ remain vested in the City but subject always to the prior charge and lien thereon of this Escrow I , j Agreement and the use thereof required to be made by the provisions of this Escrow Agreement. 1617299vl 3 \, The Escrow Agent shall hold all such money and obligations in a special trust fund and account '-) (herein the "Escrow Account") separate and wholly segregated from all other funds and securities of the Escrow Agent or deposited with the Escrow Agent, and shall never commingle such money or securities with other money or securities, provided that nothing herein contained shall be construed as requiring the Escrow Agent to keep the identical moneys, or any part thereof, received for the Escrow Account, on hand, but moneys of an equal amount, except to the extent such are investments permitted under this Escrow Agreement, shall always be maintained on hand as funds held by the Escrow Agent as trustee, belonging to the City, and a special account thereof evidencing such fact shall at all times be maintained on the books of the Escrow Agent, together with such investments. In the event of the Escrow Agent's failure to account for any money or obligations held by it in the Escrow Account, such money and obligations shall be and remain the property of the City, and if for any reason such money or obligations cannot be identified, all other assets of the Escrow Agent shall be impressed with a trust for the amount thereof and the City shall be entitled to a preferred claim upon such assets. All moneys remaining in the Escrow Account after payment therefrom of all sums required to be paid under this Agreement shall be promptly remitted to the City. 9. Sale and/or Reinvestment. The Escrow Agent may sell and/or reinvest all or a part of the Escrowed Obligations, or the proceeds thereof in direct, non-callable United States obligations or obligations unconditionally guaranteed by the United States government, or any governmental bond which bears the highest or next highest rating of Moody's Investor's Services, Standard and Poor's Corporation, or a similarly nationally recognized rating agency, if and only \, if(a) such sales and/or reinvestment is approved by the City and otherwise permitted by the laws ,~ of Minnesota; (b) an opinion of a certified public accounting firm is first obtained to the effect that such sale and/or reinvestment will not prevent the Escrow Agent from making all of the payments to the paying agent for the Refunded Bonds as required in paragraph 5 above; and (c) an opinion of nationally recognized bond counselor tax counsel recognized as having an expertise in the area of tax-exempt bonds is first obtained to the effect that such sale and/or reinvestment will not cause the interest on the Refunded Bonds to become includable in the gross income of the owners thereof for federal income tax purposes. Any excess funds created in the Escrow Account as a result of such sale and/or reinvestment (i.e., funds not required to pay when due principal of and interest on, the Refunded Bonds, as shown on the certified public accountants' opinion required in subsection 9(b)) shall be withdrawn from the Escrow Account and paid by the Escrow Agent to the City, free of any lien of this Escrow Agreement, within 10 business days of receipt of the City's written request to withdraw such excess funds. 10. Trust: Safekeeping. All Escrowed Obligations, moneys and investment income deposited with or received by the Escrow Agent pursuant to this Escrow Agreement shall be subject to the trust created by this Escrow Agreement, and the Escrow Agent shall be liable for the preservation and safekeeping thereof; provided, however, that it shall not be responsible for any depreciation in value of any of the Escrowed Obligations or for the reinvestment of the same except as herein provided. \. 11. Duties. Obligations and Liabilities. The duties and obligations of the Escrow ) Agent shall be as prescribed by the provisions of this Escrow Agreement, and the Escrow Agent 1617299vl 4 / \ shall not be liable hereunder except for failure to perform. its duties and obligations as " ) specifically set forth herein or to act in good faith in the performance thereof, and no implied duties or obligations shall be incurred by the Escrow Agent other than those specified herein. The Escrow Agent may consult with counsel of its choice, and except as provided in paragraphs 9 hereof, the opinion of such counsel shall be full and complete authorization and protection with respect to any action taken or not taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel. 12. Resignation: Successor. The Escrow Agent may at any time resign and be discharged of its obligations hereunder by giving to the Clerk of the City written notice of such resignation and by refunding to the City a pro rata portion of the escrow fee set forth in paragraph 3 hereof, not less than sixty (60) days before the date when the same is to take effect, and by publication of a copy of such notice in any available daily or weekly newspaper or periodical, which circulates throughout the State of Minnesota and furnishes financial news as part of its service, not less than thirty (30) days prior to such date. Such resignation shall take effect upon the appointment and qualification of a successor agent. In the event of receipt of notice of such resignation, a successor shall promptly be appointed by the City, and the Clerk of the City shall immediately give written notice thereof to the predecessor agent and publish the same in a Minnesota newspaper as described above. If in a proper case no appointment of a successor agent is made within forty-five (45) days after the receipt by the City of notice of such resignation, the Escrow Agent or the Holders of a majority in aggregate principal amount of the Refunded Bonds, by an instrument or concurrent instruments in writing signed by such Holders, \ or by their attorney in fact duly authorized, may appoint a successor Escrow Agent. Any \. J successor agent appointed hereunder shall execute, acknowledge and deliver to its predecessor agent and to the Clerk of the City a written acceptance of such appointment, and shall thereupon without any further act, deed or conveyance become fully vested with all moneys, properties, duties and obligations of its predecessor, but the predecessor shall nevertheless pay over, transfer, assign and deliver all moneys, securities or other property held by it to the successor agent, shall execute, acknowledge and deliver such instruments of conveyance and do such other things as may reasonably be required to vest and confirm more fully and certainly in the successor agent all right, title and interest in and to the property held by it hereunder. Any bank into which the Escrow Agent may be merged or with which it may be consolidated or any bank resulting from any merger or consolidation to which it shall be a party or any bank to which it may sell or transfer all or substantially all of its corporate trust business shall, if the City approves, be the successor agent without the execution of any document or the performance of any further act. 13. Successors and Assigns: Beneficiaries. This Escrow Agreement shall be irrevocable and binding upon and shall inure to the benefit of the City, the EDA and the Escrow Agent and their respective successors and assigns. In addition, this Escrow Agreement shall constitute a third party beneficiary contract for the benefit of the holders at any time of the Refunded Bonds. Said third party beneficiaries shall be entitled to enforce performance and observance by the City, the EDA and the Escrow Agent of the respective agreements and covenants herein contained as fully and completely as if said third party beneficiaries were \ parties hereto. , \.) 1617299vl 5 , 14. Supplemental Agreements. For anyone or more of the following purposes, the ) City, the EDA and Escrow Agent may enter into any supplemental agreements to this Escrow Agreement as shall not adversely affect the rights of the holder or holders of the Refunded Bonds and as shall not be inconsistent with the terms and provisions of this Escrow Agreement, without the consent of or notice to the holder or holders of the Refunded Bonds: (a) To cure any ambiguity or formal defect or omission in this Escrow Agreement; (b) To grant to, or confer upon, the Escrow Agent for the benefit of the holder or holders of the Refunded Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holder or holders; and (c) To provide additional funds, securities or properties under this Escrow Agreement. 15. Consent Otherwise to Amendments. Except as expressly provided in paragraph 14 above, this Escrow Agreement may not be repealed, revoked, altered or amended without the unanimous written consent of the City, the EDA and the holder or holders of the Refunded Bonds, and the written consent of the Escrow Agent. 16. Headings. Headings in this Escrow Agreement are for convenience of reference only and are not a part hereof, and shall not limit or defme the meaning of any provision hereof. " I ) 1617299v1 6 IN WITNESS WHEREOF, the City, the EDA and Escrow Agent have caused this , ; Escrow Agreement to be executed in their respective names, and have caused this Escrow Agreement to be dated as of the date above fIrst written. CITY OF ANDOVER, MINNESOTA By Its Mayor And By Its Clerk \ \~ / I I 617299vl S-l , ECONOMIC DEVELOPMENT AUTHORITY OF , ) THE CITY OF ANDOVER By Its President And By Its Secretary '\ '. ) " , ) I 617299v1 S-2 \ EXHIBIT A .~ NOTICE OF CALL FOR REDEMPTION PUBLIC PROJECT REVENUE BONDS OF 1997 (CITY OF ANDOVER LEASE PURCHASE PROJECT) OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ANDOVER ANOKA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the Board of Commissioners of the Economic Development Authority of the City of Andover, Anoka County, Minnesota, there have been called for redemption and prepayment on December 1,2004, those outstanding bonds of the Authority designated as Public Project Revenue Bonds of 1997 (City of Andover Lease Purchase Project), dated September 1, 1997, maturing on December 1 of the years 2005 through 2016, and totaling $1,865,000 in principal amount. The bonds are being called at their accreted value to December 1, 2004, on which date all interest on the bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment, at U. S. Bank National Association in St. Paul, Minnesota, on or before '\ December 1,2004. " ) Dated: February _, 2004. BY ORDER OF THE BOARD OF COMMISSIONERS Isl Clerk ADD ANY ADDITIONAL INFORMATION , \ / 1617299v1 A-I EXHIBIT B J ACKNOWLEDGMENT I, being duly authorized to execute this acknowledgment on behalf of U.S. Bank National Association (the "Bank"), as Escrow Agent, do hereby acknowledge that the City of Andover, Minnesota (the "City"), has this date irrevocably deposited with the Bank in trust for the security of the holders and owners of the Public Project Revenue Bonds of 1997 (City of Andover Lease Purchase Project) of the Economic Development Authority of the City of Andover (the "EDA"), dated September 1, 1997 as the date of original issue, that certain Escrow Deposit required to be deposited with the Bank at the Bond Closing in accordance with the Escrow Agreement, dated March 16,2004, by and between the Bank, the EDA and the City. Dated March 16,2004. , U.S. BANK NATIONAL ASSOCIATION \. / By Its I I 61 7299v 1 B-1 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US TO: EDA Board Members FROM: John Erar, City Administrator SUBJECT: Supplemental Agenda Items for March 1,2004 EDA Meeting DATE: March 1, 2004 The EDA Board is requested to review the supplemental material for the following Agenda Items: Accept Additional Item Item # 3a. Consider Windfall Lien Indemnification Request/Target Greatland Project (Supplemental) - Administration J ar ity Administrator (3-:. \ \ '-. 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US TO: EDA President and Board FROM: John Erar, EDA Executive Director SUBJECT: Consider Windfall Lien Indemnification Request/Target Greatland Project DATE: March 1,2004 INTRODUCTION Staff discussions late last week with Target and Ryan Company representatives have resulted in a developer request for indemnification from the Andover EDA. This indemnification is specific to federal environmental legislation covering EP A efforts to obtain a windfall lien on past brown field site remediation costs. DISCUSSION As this federal legislation has been interpreted to potentially allow the EP A to pursue environmental clean-up recovery costs from the original purchaser of a piece of contaminated property that is remediated and then sold at a profit. This issue is complicated by the belief of Target Corporation attorneys that the EP A could pursue litigation in the form of a lien on the property purchased by Target in an attempt to recover past environmental remediation costs. In contrast, staff and the City Attorney's office believe that the federal legislation on windfall liens does not affect the ultimate end user, but only the original buyer of the contaminated property before and after the environmental cleanup took effect. In this particular case, Target will not realize any type of "windfall" profit on the site as they are paying what amounts to market value on the land from United Properties, the broker on the land deal. With respect to the EDA, the EDA is already legally indemnified from any type of litigation, as the EP A has previously agreed not to sue the EDA once the site was remediated and prepared for redevelopment. This issue has become overly complicated given varying legal perspectives and the desire for protection from long-term environmental liability. ACTION REOUIRED With respect to this action, staff is requesting the Board to authorize the EDA Executive Director and legal counsel to prepare language that meets the concerns of Target and Ryan Company to the extent possible with particularity to this specific environmental issue associated with a windfall lien. Terms of general indemnification would remain as is.