HomeMy WebLinkAbout05/13/1992 N_......agt„
CITY OF SHAKOPEE - ‘c,-,:,.....„4 ,N, ----
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INCORPORATED 1870 `"
129 EAST FIRST AVENUE, SHAKOPEE, MINNESOTA 55379-1376 (612)445.3650 AlAKO
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May 8, 1992
Members of the Shakopee
Housing and Redevelopment Authority
129 East First Avenue
Shakopee, MN 55379
Gloria Vierling, Vice Chair of the HRA, has notified me, Judith S.
Cox, City Clerk of the City of Shakopee, that a special session of
the HRA will be held at 8: 30 a.m. on Wednesday, May 13 , 1992, for
the purpose of considering actions on the following matters:
1) Approving an agreement addressing the financial security
arrangement in exchange for amending the assessment agreement
for Canterbury Downs.
2) Taking appropriate action relative to calling for early
redemption on the outstanding balance of the $4, 200, 000
Special Obligations Tax Increment Revenue Bonds (Canterbury
Downs Project) .
3) Amending the assessment agreement for Canterbury Downs.
4) Any other business which may come before the HRA.
Respectfully,
(Att{ � /26
Jad'th S. Cox
i Clerk
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The Heart Of Progress Valley
AN EQUAL OPPORTUNITY EMPLOYER
MEMO TO: Shakopee Housing and Redevelopment Authority
FROM: Barry A. Stock, Assistant City Administrator
RE: Canterbury Downs Reduction in Assessed Valuation -
Special Meeting
DATE: May 8 , 1992
INTRODUCTION:
On May 5, 1992 a majority of the Shakopee HRA approved directing
staff to proceed in amending the assessment agreement with
Canterbury Downs to reduce the estimated market value of the
racetrack to generate $1. 5 million in taxes payable in 1992 . The
HRA also made it clear that the School District should be made
whole through this entire process and that Canterbury Downs would
supply the necessary financial security to protect the City in the
event of default through pay 1995 taxes.
BACKGROUND:
On Thursday, May 7 , 1992 staff met with the City' s Bond Counsel,
Financial Advisor and representatives from Canterbury Downs to
determine the exact process necessary to facilitate the action
taken by the HRA on May 5, 1992 . Since the current assessment
agreement with Canterbury Downs specifies that the developer shall
not seek a reduction of the market value below that which was
established in the assessment agreement, the City' s bond counsel
felt that it would be best to first amend the existing assessment
agreement prior to Canterbury Downs filing a tax petition to reduce
taxes. In regard to the tax petition process, it should be noted
that during this entire process, Canterbury Downs has been seeking
a reduction in their taxes payable for 1992 through the duration of
the original assessment agreement (payable 1994) . All of the
financial illustrations supplied by Springstead are consistent with
this point. Canterbury is offering to guarantee taxes for pay 1995
for the backstretch which is in TIF District #1. This is an
additional one year guarantee.
On Wednesday, May 13 , 1992 the HRA will be asked to consider taking
the following actions:
1. Approve a resolution defeasing the $4 , 200, 000 Special
Obligation Tax Increment Revenue Bonds, Series 1985
(Racetrack) .
2 . Approve a resolution amending the assessment agreement and
establishing a tax payment and security agreement.
Canterbury Downs has agreed to provide financial security to the
City to cover the amount of taxes payable through pay 1995 . The
exact legal instrument will not be ready by the HRA meeting on May
13 , 1992 . However, the City' s bond counsel will be preparing the
necessary language to be included in the assessment agreement which
will provide that Canterbury Downs must submit said financial
security to the City prior to a specified date. In the event of
default on the part of Canterbury Downs the original assessment
agreement and its terms and conditions will be reactivated.
TAX ABATEMENT PROCESS
The City' s Bond Counsel and Canterbury Downs' Attorneys agree that
there are two approaches for Canterbury Downs to consider in
effectuating a tax abatement.
1. Written application requesting said reduction to the County
Board.
2 . Written application to the Commissioner of Revenue.
At this time, Canterbury Downs is considering making their appeal
to the Commissioner of Revenue as opposed to the County Board. In
either case, the request for abatement must be filed on or before
May 16, 1992 . Hence the need for the meeting on May 13 , 1992 .
SUMMARY:
Staff understands that this is a complex and rather confusing
issue. Action by the HRA on May 13 , 1992 is crucial for Canterbury
Downs in order for them to file their abatement petition. Please
call me or Gregg Voxland if you have any questions regarding the
dynamics of Canterbury Downs ' request and subsequent HRA actions
that are necessary. Both the City' s Financial Advisor and Bond
Counsel will be present at the meeting on May 13th.
TENTATIVE AGENDA
HOUSING & REDEVELOPMENT AUTHORITY
SPECIAL SESSION SHAKOPEE, MINNESOTA MAY 13 , 1992
Chairman Robert Sweeney presiding
1] Roll Call at 8: 30 A.M.
2] Approval of the Special Call by the Vice-Chair
3 ] Res. No. 92-1 - Authorizing Defeasance of Tax Increment
Revenue Bonds, Series 1985
4] Res. No. 92-2 - Amending Canterbury Downs Assessment Agreement
5] Other Business
6] Adjourn
Dennis R. Kraft
Executive Director
Resolution No.
Resolution Authorizing Defeasance And
Payment and Redemption of Tax Increment
Revenue Bonds, Series 1985
Be It Resolved by the Board of Commissioners of the Housing And
Redevelopment Authority In And For The City of Shakopee, Minnesota
(the "Authority") , as follows :
Section 1 . Recitals .
1 .01 . The Authority now has outstanding its Tax
Increment Revenue Bonds dated March 1, 1985 (the "Bonds") , which
mature on August 1 in the years and in the amounts, and bear
interest at the rates, set forth below:
Interest
Year Amount Rate
1992 $585, 000 10 .00%
1993 640, 000 10 .25%
1994 710, 000 10 .25%
The bonds maturing in the years 1993 and 1994 are subject to
redemption and prepayment on August 1, 1992 at a price of 101% of
par plus accrued interest .
1 .02 . The Authority now has on hand tax increment
revenues sufficient to immediately defease and pay when due the
Bonds maturing on August 1, 1992, and to immediately defease, and
redeem and prepay on August 1, 1992 the Bonds maturing on August 1,
1993 and 1994 .
1 .03 . It is in the best interest of the City, Scott
County and Independent School District No. 720, that the Bonds be
immediately defeased, and paid and redeemed in full on August 1,
1992 .
Section 2 . Payment and Redemption Authorized.
2 .01 . The Executive Director is authorized and directed
to direct First Trust, National Association, as Trustee under the
Indenture of Trust between it and the Authority dated March 1,
1985 (the "Indenture") , pursuant to which the Bonds were issued,
to call for redemption and prepayment on August 1, 1992, the Bonds
maturing on August 1, 1993 and 1994; and upon receipt from the
Authority of the necessary moneys, to immediately defease all of
the Bonds .
2 .02 . The Executive Director is authorized and directed
to immediately pay to the Trustee from tax increment revenues
derived from the City' s Tax Increment Financing District No. 4,
the amount required to immediately defease such Bonds and to pay
and redeem such Bonds on August 1, 1992, in accordance with the
Indenture .
•
Resolution No.
Resolution Authorizing Execution And
Delivery Of Amendment To Assessment
Agreement and Tax Payment And Security
Agreement
Be It Resolved by the Board of Commissioners of The Housing and
Redevelopment Authority In And For The City of Shakopee, Minnesota
(the "Authority") , as follows"
Section 1 . Recitals .
1 .01 . New Canterbury Downs, a Minnesota partnership
which owns the Canterbury Downs Racetrack, and Ladbroke Racing
Canterbury , Inc. , a Delaware corporation which leases and
operates the racetrack ("LRC") , (the "Companies") have requested
that the Authority enter into an amendment of the Assessment
Agreement dated October 29, 1984 between the Authority and
Minnesota Racetrack, Inc. , the previous owner of the racetrack,
(the "Assessment Agreement") , establishing a minimum Assessor's
Market Value for the property comprising Canterbury Downs
Racetrack (the "Racetrack Property") , whereby the minimum
Assessor' s Market Value for that portion of the Racetrack Property
located in the City' s Tax Increment District No. 1 ("TIF District
No. 1") be lowered from $19, 049, 000 to $14, 600, 000, and whereby
the minimum Assessor' s Market Value for that portion of the
Racetrack Property located in the City' s Tax Increment Financing
District No. 4 ("TIF District No . 4") be lowered from
$24, 196, 000 to $9, 800, 000, for all assessment dates from January 2,
1991 to January 2, 1994, inclusive .
1 .02 . The Authority now has outstanding $1, 915, 000 Tax
Increment Revenue Refunding Bonds, Series 1984, but such bonds are
payable solely from tax increment revenues derived and to be
derived from certain property in TIF District No. 1 other than the
Racetrack Property.
1 .03 . The Authority has, by its Resolution No.
adopted on this date, authorized the immediate defeasance and
payment and redemption on August 1, 1992, of all outstanding bonds
of its Tax Increment Revenue Bonds dated March 1, 1985, which are
payable solely from tax increments derived and to be derived from
the Racetrack Property in TIF Districts No. 1 and 4 . Upon
completion of such action the Authority will have no outstanding
revenue bond to which tax increments derived and to be derived
from its Tax Increment Financing District No. 4 are pledged.
1 .04 . Tax increments derived and to be derived from the
Racetrack Property have been pledged by the Authority, to the
extent necessary, to pay the principal of and interest on certain
general obligation tax increment bonds of the City. However,
neither the Authority nor the City has made any covenants with the
holders of such outstanding general obligation tax increment bonds
that would prevent the Authority from entering into the requested
amendment to the Assessment Agreement, and an analysis of the debt
service requirements on such bonds and the tax increments received
and reasonably expected to be received for their payment, assuming
the Authority enters into the requested amendment to the
Assessment Agreement, indicates that such tax increments will be
available at the times and in amounts sufficient to pay such debt
service when due.
1 .05 . The Authority therefore has authority, and it is
necessary and in the best interests of the City, Scott County, and
Independent School District No. 720 (the "School District") , to
enter into the requested amendment to the Assessment Agreement;
provided the Company enters into a second agreement providing for:
(1) the payment to the City in each of the years 1992 through
1995, of ad valorem taxes, together with other moneys, in an
amount equal to $1, 500, 000 plus such additional amount as,
together with the School District ' s share of each year' s tax
increment, the School District would have received from tax
increments derived from the Racetrack Property had the amendment
to the Assessment Agreement not been entered into; and (2)
security for the payment of such amounts .
Section 2 . Approval of Agreements .
2 .01 . There has been presented to this Board proposed
forms of: (1) an Amendment To Assessment Agreement and Assessor's
Certification dated May 14, 1992 by and among the Authority and
the Companies (the "Amendment") , and (2) a Tax Payment Assurance
and Security Agreement dated May 14, 1992 (the "Payment
Agreement") ; by and between the Authority and LRC.
2 .02 . The forms of the Amendment and Payment Agreement
are approved, and the Chairman and Executive Director are
authorized and directed to execute and deliver them on behalf of
the Authority.
2 .03 . The Executive Director is authorized and directed
to request the Scott County Assessor to execute the Assessor' s
Certification attached to the Amendment .
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