Adopt Resolution #18-171 Approving Consent to Assignment of Rights Under TIF Agreement

This case was added on August 6, 2018. Due to the addition of the case on the same day as the meeting, the City Council is not obligated to take action this evening. Staff is presenting this case as an option for action this evening in order to provide the opportunity to act without delaying the project until the end of the month. Options for action include, but are not necessarily limited to the following.

1. Take action this evening (8/6/18).
2. Hold a special meeting on 8/13/18.
3. Postpone action until the next regularly scheduled meeting (8/28/18).

Affinity at Ramsey, LLC, the developer of a 55+ senior apartment building has requested that the City consent to an assignment of rights under the approved TIF Agreement. The Primary Lender on the project has requested the rights of the TIF Agreement to be assigned to them as collateral on their loan. This is standard in transactions, and does not increase liability to the City.

The City previously approved a Tax Increment Financing Agreement to reimburse the Developer for the City's share of public infrastructure surrounding the development site. The Developer is constructing and paying up front for all required public infrastructure that will benefit the remaining undeveloped parcels surrounding the development site. The Developer is still paying their share of the public infrastructure (under the 60%/40% Split per City policy). This was a tool that was used that allowed the project to move forward in a shorter timeframe and still construct beginning in 2018. The structure of the agreement is Pay As You Go, so there is very limited liability to the City.

Notification is not required.

The original TIF Agreement was drafted by Ms. Mary Ippel of Briggs and Morgan, which is standard for Ramsey for these types of financial packages. Ms. Ippel has reviewed the request and the document, and is comfortable in taking action for approval this evening. Ms. Ippel states that this is a fairly standard consent, and the agreement is really between the Developer/Borrower and the Lender. There is no material change or increase in liability to the City. The City is not a direct party to the Assignment.

With this action, the City is simply consenting to an agreement between Borrower (Developer/Affinity at Ramsey) and Lender. The City is further protected by other existing agreements such as the Right of Re-Entry Agreement, Assessment Agreement, and Development Agreement (including a Financial Guarantee in the form of a Letter of Credit). Staff believes the City is well protected in this project.

Staff and Legal Counsel recommend approval of the Assignment, regardless of the date of action. Staff would support a delay in action if desired by the City Council. Given the simplicity of the Agreement/Consent, legal counsel does not believe it is necessary to hold up closing for this agreement.

Motion to adopt Resolution #18-171 approving Assignment of Rights Under TIF Agreement related to the Affinity at Ramsey project.