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47U US Bank Plea <br />200 South Six[h Street <br />Minneapolis MN 55402 <br />(612) 337-9300 telephone <br />(612)337-9310 fax <br />http://w ww, keno edy-graven. com <br />MEMORANDUM <br />TO: Tim Simon, Finance Director <br />FROM: Stephen Bubul <br />DATE: December 7, 201 l <br />RE: YMCA Merger <br />You asked me to explain the proposed consent by the Economic Development Authority <br />for the City of Elk River (the "Authority") to merger of the Young Men's Christian <br />Association of Metropolitan Minneapolis and the YMCA of Greater St. Paul. Those two <br />entities are planning to merge, creating a single entity called Young Men's Christian <br />Association of the Greater Twin Cities (`Y-GTC"). <br />As you know, the Authority helped finance construction of the YMCA facility in Elk <br />River (the "Project") by issuing certain general obligation bonds in 2007 and 2008 in an <br />aggregate principal amount of $12,000,000 (the "Bonds"), after those Bonds were <br />approved by the voters. The Authority leases the Project to the YMCA under a Lease <br />Agreement dated August 20, 2007 (the "Lease").l Under the Lease, the YMCA pays, as <br />"basic rent," an amount equal to one-third of the debt service on the Bonds. <br />Under the Lease, the YMCA is permitted to merge with another entity, with the <br />Authority's consent, so long as these conditions are met: <br />(1) the resulting entity assumes all the obligations of YMCA under the Lease; <br />(2) afrer that merger, the resulting party will not be engaged in any trade or <br />business other than the operation of the Project (as defined the Lease) as permitted under <br />the Lease; <br />~ For commissioners who may not know this, I represented the Authority in [he negotiation and drafting of <br />the Lease. <br />395661v1 SJB EL185-6 <br />