ADMINISTRATION - Joe Huss, Finance Director
Title
AUTHORIZING THE EXECUTION OF A CONSENT TO MORTGAGE RELATING TO THE FOGERTY ARENA “THE ICE HOUSE” PROJECT
Background
The EDA and the City have previously approved the issuance of conduit debt for Fogerty Arena to finance improvements at the arena as well as refinance existing debt. In addition to and independent of this debt, Fogerty also proposes to obtain a taxable loan from Village Bank (the issuer of the conduit note) to refinance existing taxable debt. The taxable loan will be secured by the same property as that of the previously issued conduit debt. While neither the City nor the EDA is a party to the new debt, as the owner of the property, its issuance is subject to the City’s consent.
The new debt does not subordinate the previous conduit debt to a standing below the new issuance and thus provides no additional risk to the City or the EDA.
Recommendation
Adopt the following resolution providing consent to Fogerty Arena.
Body
BE IT RESOLVED By the City Council (the “Council”) of the City of Blaine, Anoka and Ramsey Counties, Minnesota (the “City”) as follows:
Section 1. The Blaine Economic Development Authority (the “EDA”) has received from Fogerty Arena, “The Ice House”, a Minnesota nonprofit corporation (the “Borrower”), a proposal that the EDA issue its Recreational Facility Revenue Refunding Note (Fogerty Arena “The Ice House” Project), Series 2020 in a principal amount not to exceed $4,000,000 (the “Note”), pursuant to Minnesota Statutes, Chapter 469.152 to 469.1655 (the “Act”) to (i) assist in financing improvements to the Borrower’s facilities located at 9250 Lincoln Street NE in the City (the “Facilities”), including without limitation, replacement or renovation of the compressor system for the ice arena; and (ii) refund the outstanding balance of the City’s Recreational Facility Revenue Note, Series 2012 (Fogerty Arena, “The Ice House” Project); (iii) pay a portion of the interest on the note, if necessary; and (iv) pay a portion of the costs of issuing the note, if necessary (collectively the “Project”). The Facilities will be owned and operated by the Borrower on land owned by and leased from the City.
Section 2. By a resolution adopted on March 16, 2020, the City Council approved a Leasehold Mortgage, Security Agreement and Fixture Financing Statement to be executed by the Borrower in favor of Village Bank (the “Lender”) to secure the payment of amounts due under the Note.
Section 3. In addition, the Borrower proposes to obtain a taxable loan from the Lender in the amount of up to $175,000 to finance certain expenses related to the Facilities, including without limitation certain costs of issuance related to the Note and refinancing certain existing taxable indebtedness of the Borrower (the “Taxable Loan”). The Borrower further proposes to secure the taxable loan by granting to the Lender a mortgage and security interest in the property described therein pursuant to a second Leasehold Mortgage, Security Agreement and Fixture Financing Statement (the “Taxable Loan Mortgage”) to be executed by the Borrower in favor of the Lender, subject to receiving the consent of the City as owner of the land on which the Project is located. A draft of the Taxable Loan Mortgage has been submitted to the City Council.
Section 4. The form of the proposed Taxable Loan Mortgage is hereby approved in substantially the form presented to the City Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and City Manager of the City are authorized to execute the consent to the Taxable Loan Mortgage in the name of and on behalf of the City and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Mayor or the City Manager such officers of the City as, in the opinion of the City Attorney, may act on their behalf, shall without further act or authorization of the City Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof.
PASSED by the City Council of the City of Blaine this 20th day of April, 2020.