2.2.
| CC Work Session |
| Meeting Date: | 06/09/2026 |
| Primary Strategic Plan Initiative: | Promote economic growth and development. |
Information
Title:
Consider Support of Gap Assistance (Loan) and Assumption of Mortgage Agreement for ARAA Sports Facility Project
Purpose/Background:
The purpose of this case is to review a proposed revised Financing Structure to provide financial assistance (loan) to Anoka Ramsey Athletic Association (ARAA) for construction of a 100,000 square foot athletic facility.
ARAA Project History / Finance
In February 2023, the Anoka Ramsey Athletic Association (ARAA) received site plan and plat approval to construct a sports dome structure at 14600 Ferret St. NW. ARAA eventually withdrew their landuse application, and therefore, never constructed the dome. Since that time, Ramsey staff have continued to work with representatives from ARAA as they sought out a new solution for an indoor sports facility to serve their organization. ARAA has progressed through new plans to construct a facility at a different location within Ramsey. The City Council met with ARAA at the January 13, 2026 work session and reached a consensus to provide up to 2.3M in financial assistance, primarily in the form of a low interest loan.
The City subsequently met at a Council Work Session on March 10th and reviewed a revised financing proposal that included a 75%/25% Debt Structure without the need for a financial guaranty with a proposed City Loan of approximately $1.43M. 2 days after the March 10 CC Work Session formal bank approval was obtained but included a requirement for a 5M financial guaranty. This guaranty was a deal killer for parties involved. ARAA has worked with 3 other banks to obtain additional financing options and received 3 proposals. The option proposed for Council consideration is included as an attachment to this case. In short, the 75/25 shifted to a 70/30 LTV ratio and the City loan and loans by other was considered equity for ARAA. The proposed City participation under the proposed financing structure would be an HRA loan of approximately $1.877M, which is still below the initial consensus of the Council supporting up to $2.3M of total assistance In January 2026. Understanding project costs could fluctuate, at the Council has previously provided consensus supporting the proposed financing structure and to give staff flexibility to go up to 2M for an HRA loan.
The City has explored the use of its Ramsey HRA dollars levied in Ramsey by Anoka County in the form of a loan. In order to use the HRA funds the City must create a Redevelopment Plan for a designated area which allows the fund to be expended for eligible costs. Taft Law has put together a revised schedule showing what this process and timing would look like. The County process to access the HRA funds is separate and will be worked into the schedule. This process involves a simple resolution requesting the funds and an explanation of what the funds will be used for which was approved on May 26. Although ARAA does now have formal financing approval at this time, changes to the structure of financing have been made since the City Council last reviewed this item. The revised Term Sheet is attached for review.
Changes to the Financing Structure
CORTrust Bank has approved financing of the ARAA project contingent on the City of Ramsey Assuming the Mortgage in the event of a default by ARAA and an inability to cure that default. The City of Ramsey Assumption of Mortgage is not optional, it would be required as part of the proposed financing structure. By assuming the ARAA Mortgage the City would become the building owner. Included in the Bank Term Sheet is an Amortization Schedule showing the loan balance over the 6-year period of construction and permanent financing. Staff is asking the City Council to consider starting the City process to obtain the HRA funds and to start the creation of the Redevelopment Plan. ARAA has committed to deposit 10K in escrow to start this process. Once they receive formal bank approval, the City will also utilize HRA funds to fund the balance of legal work by TAFT. Staff is working with Taft Law on the boundaries of the Redevelopment Plan Area and hopes to include areas, in addition to the ARAA project area, such as the 167th Commercial and residential node. The reason to expand the project area is so that in the future, the payments received from ARAA can be reallocated to additional HRA eligible project expenses. A map of the area is attached.
ARAA Project History / Finance
In February 2023, the Anoka Ramsey Athletic Association (ARAA) received site plan and plat approval to construct a sports dome structure at 14600 Ferret St. NW. ARAA eventually withdrew their landuse application, and therefore, never constructed the dome. Since that time, Ramsey staff have continued to work with representatives from ARAA as they sought out a new solution for an indoor sports facility to serve their organization. ARAA has progressed through new plans to construct a facility at a different location within Ramsey. The City Council met with ARAA at the January 13, 2026 work session and reached a consensus to provide up to 2.3M in financial assistance, primarily in the form of a low interest loan.
The City subsequently met at a Council Work Session on March 10th and reviewed a revised financing proposal that included a 75%/25% Debt Structure without the need for a financial guaranty with a proposed City Loan of approximately $1.43M. 2 days after the March 10 CC Work Session formal bank approval was obtained but included a requirement for a 5M financial guaranty. This guaranty was a deal killer for parties involved. ARAA has worked with 3 other banks to obtain additional financing options and received 3 proposals. The option proposed for Council consideration is included as an attachment to this case. In short, the 75/25 shifted to a 70/30 LTV ratio and the City loan and loans by other was considered equity for ARAA. The proposed City participation under the proposed financing structure would be an HRA loan of approximately $1.877M, which is still below the initial consensus of the Council supporting up to $2.3M of total assistance In January 2026. Understanding project costs could fluctuate, at the Council has previously provided consensus supporting the proposed financing structure and to give staff flexibility to go up to 2M for an HRA loan.
The City has explored the use of its Ramsey HRA dollars levied in Ramsey by Anoka County in the form of a loan. In order to use the HRA funds the City must create a Redevelopment Plan for a designated area which allows the fund to be expended for eligible costs. Taft Law has put together a revised schedule showing what this process and timing would look like. The County process to access the HRA funds is separate and will be worked into the schedule. This process involves a simple resolution requesting the funds and an explanation of what the funds will be used for which was approved on May 26. Although ARAA does now have formal financing approval at this time, changes to the structure of financing have been made since the City Council last reviewed this item. The revised Term Sheet is attached for review.
Changes to the Financing Structure
CORTrust Bank has approved financing of the ARAA project contingent on the City of Ramsey Assuming the Mortgage in the event of a default by ARAA and an inability to cure that default. The City of Ramsey Assumption of Mortgage is not optional, it would be required as part of the proposed financing structure. By assuming the ARAA Mortgage the City would become the building owner. Included in the Bank Term Sheet is an Amortization Schedule showing the loan balance over the 6-year period of construction and permanent financing. Staff is asking the City Council to consider starting the City process to obtain the HRA funds and to start the creation of the Redevelopment Plan. ARAA has committed to deposit 10K in escrow to start this process. Once they receive formal bank approval, the City will also utilize HRA funds to fund the balance of legal work by TAFT. Staff is working with Taft Law on the boundaries of the Redevelopment Plan Area and hopes to include areas, in addition to the ARAA project area, such as the 167th Commercial and residential node. The reason to expand the project area is so that in the future, the payments received from ARAA can be reallocated to additional HRA eligible project expenses. A map of the area is attached.
Notification:
N/A at this time. However, the Redevelopment Plan/business subsidy process will require public hearings.
Time Frame/Observations/Alternatives:
Staff is looking for council consensus on whether or not to proceed with the proposed financing structure, adding the requirement of Assumption of Mortgage. All terms and conditions of the loan will ultimately need to be formally approved by City Council action at a later date. If consensus is reached on approval of the financing, staff is asking for direction to begin working with the bank to draft the Mortgage Assumption Agreement and City Loan documents for the City HRA Loan to be formally approved by the Council. Key Terms of the City HRA Loan and Mortgage Assumption are below:
City EDA HRA Loan
City EDA HRA Loan
- Amount – Up to 2M, Current 1.88M proposed
- Collateral – 100,000 SF Building and Real Estate
- Term – 5 year
- Amortization – 25 year
- Interest Rate – indexed to 10 year Treasury Note (currently 4.53%)
- Payments for loan (deferred one year)
- Paid in full, or refinanced when Balloon Payment is due for COR Trust Loan.
ARAA / COR Trust Assumption of CORTrust Mortgage
- ARAA, CORTrust and City of Ramsey/EDA to execute Assumption of Mortgage Agreement to City of Ramsey/EDA
- City of Ramsey/EDA to assume ARAA loan with CORTrust if ARAA Defaults on Loan and is unable to cure Default with CORTrust. (required NOT Optional)
- City of Ramsey/EDA has the ability to refinance any time after the assumption of a mortgage without penalty.
- In the event that ARAA defaults within the last 6 months of the Mortgage with CORTrust, Cor Trust will extend the mortgage for up to 6 months for the City to obtain permanent takeout financing for the balloon payment.
- ARAA/CORTrust to execute the transfer of real estate (including 100,000 SF Building) to City of Ramsey / EDA.
- City of Ramsey/EDA will obtain financing to refinance the balance of CORTrust Loan.
- No Obligation by City of Ramsey/EDA to lease back to ARAA.
- ARAA waives the right to transfer/sell to another entity other than the City of Ramsey/EDA while the Assumption Agreement is in place.
Funding Source:
10K Escrow Account by ARAA to start TAFT Law Redevelopment Area process. (received)
Balance of Legal work by City of Ramsey (HRA/EDA).
Staff has reviewed City financing options and has recommended an HRA Loan (up to 2M) from Ramsey HRA funds held by Anoka County.
Balance of Legal work by City of Ramsey (HRA/EDA).
Staff has reviewed City financing options and has recommended an HRA Loan (up to 2M) from Ramsey HRA funds held by Anoka County.
Recommendation:
Based on Discussion
Outcome/Action:
Council consensus on whether or not to proceed with the proposed financing structure adding the requirement of Assumption of Mortgage. All terms and conditions of the loan will ultimately need to be formally approved by City Council/EDA Action at a later date.
Attachments
- Site Location Map
- CONSENSUS - Revised Bank Term Sheet
- CONSENSUS - Revised Financing Structure
- Redevelopment Plan Schedule
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Brian Hagen | Brian Hagen | 06/04/2026 12:25 PM |
- Form Started By:
- Sean Sullivan
- Started On:
- 06/01/2026 02:19 PM
- Final Approval Date:
- 06/04/2026