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<br />RESOLUTION 04-~ <br /> <br />RESOLUTION APPROVING THE TERMS OF INTERNAL LOAN IN <br />CONNECTION WITH DOWNTOWN PHASE I TAX INCREMENT <br />FINANCING DISTRICT NO. 22 (LAND) <br /> <br />BE IT RESOLVED by the City Council (the "Council") of the City of Elk River, <br />Minnesota (the "City"), as follows: <br /> <br />Section 1. <br /> <br />Background. <br /> <br />(a) The City has heretofore approved the establishment of Downtown Phase I Tax <br />Increment Financing District No. 22 (the "TIP District") within its Municipal Development <br />District No. 1 (the "Development District"), and has adopted a tax increment financing plan for <br />the purpose of financing certain improvements within the TIP District. <br /> <br />(b) The City has determined to pay for certain costs (the "Qualified Costs") identified <br />in the TIP Plan consisting of the costs of the Jackson Block Property for the Jackson Block <br />Development, both as defined in the Development Agreement, dated as of December 6, 2004, <br />between the City and MetroPlains Development, LLC (the "Development Agreement"), which <br />costs will be financed on a temporary basis from City funds available for such purposes. <br /> <br />(c) Under Minnesota Statutes, Section 469.178, Subd. 7, the City is authorized to <br />advance or loan money from the City's general fund or any other fund from which such advances <br />may be legally made, in order to finance the Qualified Costs. <br /> <br />(d) The City intends to reimburse itself for the Qualified Costs from tax increments <br />derived ITom the TIP District in accordance with the terms of this resolution (which terms are <br />referred to collectively as the "Interfund Loan"). <br /> <br />Section 2. <br /> <br />Terms ofInterfund Loan. <br /> <br />(a) The City shall repay to the City fund from which the Qualified Costs are initially <br />paid, the principal amount of approximately $500,000 together with interest at 4.00% per annum <br />ITom the later of December 6, 2004 or the date of the sale of the Land. <br /> <br />(b) Principal and interest ("Payments") shall be paid semi-annually on each February <br />I and August I commencing with the first February 1 or August I occurring after the date of <br />issuance of a certificate of completion for the shell of the Bluff Block Development (as defined <br />in the Development Agreement) to and including the earlier of (a) the date the principal and <br />accrued interest of the Interfund Loan is paid in full, or (b) the date of last receipt of tax <br />increment from the TIP District ("Payment Dates") which Payments will be made in the amount <br />and only to the extent of City Pledged Tax Increment as hereinafter defined. Payments shall be <br />applied first to accrued interest, and then to unpaid principal. <br /> <br />(c) Payments on this Interfund Loan are payable solely ITom "City Pledged Tax <br />Increment," which shall mean, on each Payment Date, 4% of the actual Available Tax Increment <br />(as defined in the Development Agreement) received by the City since the last Payment Date <br /> <br />S:\Resolutions\2004 Resolutions\Unapproved\EDA Dee 6\INTERFUND _LOAN_RESOLUTION _(LAND). DOC <br /> <br />Page 10f2 <br />