Loading...
04-24-17 EDA Agenda CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY APRIL 24, 2017 IMMEDIATELY FOLLOWING CITY COUNCIL MEETING AGENDA 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING A. Roll Call President Zerby Labadie Siakel Sundberg Johnson B. Review Agenda 2. APPROVAL OF MINUTES A. EDA minutes of July 14, 2016 meeting B. EDA minutes of March 20, 2017 meeting 3. NEW BUSINESS A. Refunding 2008 Lease Revenue Bond issue (Executive Director memorandum) B. Resolution 17 - 02 4. ADJOURN 2A CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, JULY 14, 2016 6:30 P.M. MINUTES 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING President Zerby called the meeting to order at 6:30 P.M. A. Roll Call Present. President Zerby; Boardmembers Labadie, Siakel, and Woodruff, Executive Director/Secretary Joynes; Assistant Treasurer DeJong; Assistant Executive Director Nielsen; Attorney Keane; and, City Clerk Panchyshyn Absent: Boardmember Sundberg B. Review Agenda Labadie moved, Siakel seconded, approving the agenda as presented. Motion passed 4/0. 2. APPROVAL OF MINUTES A. EDA Minutes of December 14, 2015 Woodruff moved, Labadie seconded;approving the EDA Meeting Minutes of December 14. 2015, as presented. Motion passed 4/0. 3. CONSENT AGENDA - - President Zerby reviewed the item on the consent agenda. Woodruff moved, Siakel seconded,Approving the Motion Contained on the Consent Agenda. A. Treasurer's Report Motion passed 4/0. 4. NEW BUSINESS A. Selection of Officers Executive Director Joynes explained the Shorewood Economic Development Authority (EDA) Bylaws stipulate the Board must select officers during its annual meeting (this meeting). The position of President must be the Mayor of Shorewood, the Executive Director/Secretary shall be the City Administrator, the Assistant Treasurer shall be the Director of Finance, and the Assistant Executive Director shall be the Director of Planning. The positions of Vice President and Treasurer need to be appointed. There is an option to appoint a President Pro-Tem also. CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 14,2016 Page 2 of 6 Boardmember Woodruff suggested keeping the other Shorewood EDA officer appointments the same as they are. Woodruff moved, Siakel seconded, approving the Economic Development Authority Officer appointments of: President—Scott Zerby Vice President—Richard Woodruff President Pro-Tem—Kristine Sundberg Treasurer—Debbie Siakel Executive Director/Secretary—Bill Joynes Assistant Treasurer—Bruce DeJong Assistant Executive Director—Brad Nielsen Motion passed 4/0. B. Tax Increment Financing—Oppidan Executive Director/Secretary Joynes explained the Shorewood, EDA Board has an obligation to bring forward to the Shorewood City Council recommendations on the Tax Increment Financing (TIF) Plan, the establishment of the TIF District and the redevelopment project for the Oppidan Investment Shorewood Senior Living project. The Redevelopment District Plan is the background required by law to establish the Tax Increment Area. The document includes things,like a description of the project, the conditions under which it is being proposed, a description of the but-for test, the reason for doing the project with TIF, an explanation of why its fits in the land use the City has established for it and so forth. The land use for the project had been recommended for approval by the Planning Commission and approved by Council. During the special Council meeting public hearing immediately following this meeting the specifics of the documents will be highlighted. TIF law,is,a legislatively enabled process where there is a joint partnership between a public and a private entity. It occurs when there is a proposed project that could not go forward under normal circumstances because of extraordinary costs. It could be because of things like soil conditions, assembly of a number of land parcels, and infrastructure needed to support the project. This evening the EDA Board is primarily recommending TIF to support the site preparation costs for the Oppidan project because of,for example, soil correction needs which are extraordinary. If the City does not do that the project would not go forward because the costs would be too substantial. In addition there are a number of site improvements the City wants in order to make the project more compatible with the neighborhood. Another big component of the project is the extension of Shorewood municipal water to the site; the added cost to do that is extraordinary. When Oppidan first proposed the project the City of Excelsior was going to extend its watermain to the site. Excelsior later changed its mind. That increased the cost for extending municipal water to the site by fourfold. The extension of Shorewood municipal water to the site improves the water system for the future. It would allow the City to provide water to an area in the City south of Highway 7. There will be a potential for possible hookups for over 90 properties that are currently served by private wells. The extension of CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 14,2016 Page 3 of 6 watermain on the north side of Highway 7 will pass by 47 properties that could at some point hook up to Shorewood municipal water. Of those 47 properties, 22 of the properties are currently served by Excelsior water and 25 properties are served by private wells. A way to look at this is the project and the additional taxes generated from it are allowing Shorewood to fund an extension of its water system and not charge residents to do that. He noted the EDA Board is being asked to adopt a resolution approving a Redevelopment Plan for Redevelopment Project No.2, a TIF Plan for TIF District No 2, and a Contract for Private Development between the Shorewood EDA and KTJ 285, LLC. The Contract for Private Development includes some things the City/EDA wants to ensure the project conforms to. They are assurances to the City/EDA. One is a caveat that states,lhe City/EDA wants to make sure that once the project is completed there is a minimum assessment value that is achieved throughout the life of the TIF District. The building must be built to guarantee that it has a minimum value of approximately $17 million; that value is what generates the taxes. By signing the,Contract the developer guarantees that the value of the development will never go below approximately " 17 million thereby guaranteeing the City's contribution. The developer also<agrces to never change the tax value, The Contract contains protections for the City/EDA should the developer decide to sell the facility while the agreement is in effect. If a decision is made to sell it, the Contract goes with the property. The City/EDA would have to approve a new purchaser of the property. The Contract establishes a pay-as-you-go type of district. The City/EDA does not intend to bond for the project with a pay-as-you-go approach. The City ends up paying the developer increments as the project is developed and as things get done. The financing will be paid off as the increment is received under a distribution formula that is in the TIF Plan. Over the course o years,a portion of the revenue gets split between the City and the devcloper,in terms of paying down the cost of the improvements. The developer needs to finance its project on its°own and get paid back over the course of time. The City will charge the developer 4 percent interest on the money the City loans them up front; that is very advantageous to the City. He noted it is a 25-year redevelopment program but it is not anticipated to take that long. Joynes noted the EDA Board will be transmitting the Redevelopment Plan, the TIF Plan and the Contract for Private Development to the Shorewodd City Council. Council does not have to discuss the Contract during its special meeting following this EDA meeting. Boardmember Woodruff stated a copy of Resolution no 16-052 was found at the dais this evening and it will be considered''by Council. In Section 1.03 it refers to the Redevelopment Plan and the TIF Plan. He asked what the documents area Executive Director/Secretary Joynes explained the Redevelopment Plan (I.e.; the Redevelopment Plan for Redevelopment Project No. 2) should be in the materials provided to Council. It talks about the parameters for establishing the districts. Woodruff stated he has the development agreement with some schedules attached to it noting some of the schedules are blank. He also has a memorandum (memo) from Springsted. He does not have anything else. Joynes stated the documents should have been in the meeting packet provided to Council on July 11. Woodruff noted the Contract for Private Development and the Springsted memo the documents included in the meeting packet. There was Council consensus that the meeting packet did not contain a copy of the Redevelopment Plan or the TIF Plan. CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 14,2016 Page 4 of 6 President Zerby stated on page 2 in the Springsted memo it states "Reimbursement to the developer for the above - listed costs is proposed to be based on 75% of the annual tax increment revenues with 5.5% interest." Earlier he heard Executive Director/Secretary Joynes state the interest rate would be 4 percent. Joynes explained that originally the interest rate was going to be 1 percent and now it is 4 percent. Mikaela Huot, Vice President/Consultant with Sprin sg ted, explained the way the financing is structured to work in the Springsted memo it shows 75 percent of the annual tax increment revenues would be reimbursed to the developer at 5.5 percent. The City would retain the other 25 percent of the annual revenues for what Executive Director/Secretary Joynes referred to as out of district expenditures (e.g.; administrative costs and repayment of its interfund loan and that would be a 4 percent. She noted the maximum interest allowable by law for internal financing is 4 percent. She explained the 5.5 percent to the developer is more in line with the financing interest they are getting on the TIF from a third party. Boardmember Woodruff stated the memo shows the interest rate for the City is,I percent. Ms. Huot stated at the top of page 4 in the memo it shows 1 percent. That has,been increased to 4 percent since that memo was written. Assistant Treasurer DeJong noted that increase's the accrual to the City to $656,224.75. At 1 percent it would have been 5128,366. Woodruff then stated on page 6 paragraph 3 in City Resolution 16=02 there is an inappropriate period in the word PROCEDURES. In response to a question from Woodruff, Attorney Keane stated the amount of per incident liability insurance the developer must maintain during construetion has been increased to $2 million. Woodruff stated he thought that is a statutory limit at the State level; Keane clarified the $2 million per incident amount is what was recommended by someone at the League of Minnesota Cities Insurance Trust. Woodruff stated Section 5.01.b.iii states "... Developer maybe self-insured with respect to all or any part of its liability for any and all of the insurance required herein." He asked how the City knows that the developer has the resources to do that and do it over a 25 year period. He stated he does not recollect the City ever allowing a developer to be self-insured for certain types of things. Keane stated representatives for the developer will be at the Council meeting and they can be asked if having coverage with a properly rated insurance company is going to be an issue for the developer. Woodruff stated not having insurance with an insurance company,would be a concern for him. Keane stated that can be presented to the developer. Woodruff then stated in Section,5,01.c top of page 3 it states "Upon request, the Developer will deposit annually with the Authority a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect ..." He suggested that should not be optional. The developer should have to do that every year. Keane noted that has been changed in the updated draft Contract. President Zerby asked if Council has been provided with the updated draft. Attorney Keane stated Assistant Treasurer DeJong was asked to make copies and that can be verified when DeJong returns to the meeting. Boardmember Woodruff stated Schedule A in the Contract is blank and he assumes that is a legal description. Attorney Keane confirmed that. Woodruff then stated Schedule D Form of Minimum Assessment Agreement is blank. Keane noted staff has that to distribute. Woodruff noted Council has not provided with that. President Zerby stated that in Schedule B on page B-2 item 8 in the Contract for Private Development included in the meeting packet it states "... this Note is transferable upon the books of the Authority kept CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 14,2016 Page 5 of 6 for that purpose at the principal office of the by the Authority or the City, ...". He asked where the principal office is. Boardmember Woodruff asked who the fiduciary would be that holds the Tax Increment Revenue Note Series 2016. Attorney Keane asked Ms. Huot if that that has been selected. Attorney Keane noted the updated draft reads "...principal office of the City, by the Authority, ..." Zerby then stated on page B-3 it sates "IN WITNESS WHEREOF, the Board of Commissioners of the Economic Development Authority in and for the City of Shorewood, Minnesota, has caused this Note to be executed with the manual signatures of its ..." and he asked what should be filled in. Executive Director/Secretary Joynes stated the blank should be filled in with President. Boardmember Woodruff stated because Council does not have time to read the documents provided to Council during this meeting and he asked if the documents contain anything Council has not seen before that needs to be talked about. Ms. Huot stated that only thing that has changed on the TIF Plan is the date on the cover sheet. None of the material in the TIF Plan or Redevelopment Plan has changed. Woodruff clarified the TIF Plan and the Redevelopment Plan provided to Council for previous meetings are the same with the exception of changing some dates. Ms. Huot confirmed that. Woodruff asked if Council needs to take the time to read the Minimum Assessment Agreement. Attorney Keane summarized what the Agreement means. He explained it means the developer agrees that the minimum actual taxable value for assessment purposes shall not be less than $17,160,000 over the life of the Tax Increment District and the term of the Note. The City has reason to believe that the value will be substantially greater than that but it cannot be less than that. The $17,160,000 is the minimum amount required to service the schedule of debt repayment under the plan. Assistant Treasurer DeJong explained the figure is calculated based on the conservative estimate from the Hennepin County Assessor's Office of $165,000 per unit for 105 unites. He stated the Minimum Assessment Agreement guarantees,all costs will be repaid with interest during the life of the Agreement. Boardmember Woodruff'stated he is satisfied with what Council has been provided with the exception of the question about selt-insuring. Zerby moved, Woodruff seconded, adopting.RESOLUTION NO. 16-001, "A Resolution Approving a Redevelopment flan for Redevelopment Project No. 2, a Tax Increment Financing Plan for Tax Increment Financing District No. 2 and a Contract for Private Development between the Economic Development Authority of the City of Shorewood and KTJ 285, LLC. Motion passed 4/0. 5. ADJOURN Woodruff moved,'Siakel seconded, Adjourning the Shorewood Economic Development Authority Meeting of July 14, 2414, at 7:32 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Scott Zerby, President ATTEST: William S. Joynes, Executive Director CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 14,2016 Page 6 of 6 2B CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, MARCH 20, 2017 7:00 P.M. MINUTES 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING President Zerby called the meeting to order at 7:00 P.M. A. Roll Call Present. President Zerby; Boardmembers Johnson, Labadie, Siakel; And Sundberg; Executive Director/Secretary Lerud; and, Attorney Keane B. Review Agenda Executive Director Lerud asked that Item 1.13 Selection of Officers be added to the agenda. Siakel moved, Sundberg seconded, approving the agenda as amended. Motion passed 510. C. Selection of Officers Executive Director Lerud explained the Shorewood Economic Development Authority (EDA) Bylaws require an annual selection of officers. The Bylaws stipulate that to position of President must be the Mayor of Shorewood, the Executive Director/Secretary shall be the City Administrator, the Assistant Treasurer shall be the Director of Finance, and the Assistant Executive Director shall be the Director of Planning. The positions of Vice President, Treasurer and President Pro-tem need to be appointed. He noted that former City Administrator Joynes is still listed as the Executive Director/Secretary and former Councilmember Woodruff is listed as Vice President:He thought it prudent to update the officers being the EDA is going to call for a refunding of bonds. Boardmember Siakel asked,Boardmembers,Johnson and Labadie if they would like to be appointed to a position: Boardmember Johnson based on direction from his employer he must stay away from anything involving borrowing money. Boardmember Labadie stated if someone wants to appoint her to a position she would be okay with that. Siakel moved, Sundberg seconded, approving the Economic Development Authority Officer appointments of: President—Scott Zerby Vice President—Jennifer Labadie President Pro-Tem—Kristine Sundberg Treasurer—Debbie Siakel Executive Director/Secretary—Greg Lerud Assistant Treasurer—Finance Director Assistant Executive Director—Planning Director Motion passed 4/0/1 with Boardmember Johnson abstaining. CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING March 20,2017 Page 2 of 2 2. REFUNDING OPPORTUNITY FOR PUBLIC PORJECT LEASE REVENUE BONDS SERIES 2008A Administrator Lerud explained that the Lease Revenue Bonds Series 2008A bonds issued by the EDA for the remodeling of City Hall in 2008 are callable. He contacted Mr. David Drown, with David Drown Associates, to have him estimate what the savings would be if the bonds were refunded. The current interest rate on the bonds averages 4.6 percent. Mr. Drown estimates they could be refunded at rates of close to 2 percent. When refunding bonds, there must be a minimum of 3 percent in savings.*The estimated savings on the proposed refunding would be between 6 and 7 percent. The first step in the refunding process is to adopt a trigger resolution. Staff will work with David Drown and Associates to prepare an official statement. Bond council would also get involved. Either a private placement or public sale would be done. A private placement would be more efficient. The amount to be refunded is $920,000. There would be an accrued interest in the amount of$17,463.54. There would be an underwriter fee of$9,750 and $27,750 in various costs of issuance. The new debt issue would be $975,000:The length(or term.)of the issue will not change. There are 11 years remaining on the current bonds. The estimated net savings,(net of expenses) would be $98,650 over the life of the bonds. Lerud noted that staff recommends Council adopt the resolution.that would'start the process. Boardmember Sundberg asked if there would be any downside to doing this. Administrator Lerud stated he is not aware of any. Attorney Keane stated it is vety routine to do what is being proposed. . Sundberg moved, Siakel seconded, Adopting RESOLUTION NO. 2017-01, "A Resolution Approving the Issuance of up to $975,000 of Lease Revenue Bonds, Series 2017A if Certain Targets are Met. "Motion passed 510; 3. ADJOURN Siakel moved, Sundberg seconded, Adjourning the Shorewood Economic Development Authority Meeting of March 20,2017, at 7:08 P.M.Motion passed 510. RESPECTFULLY SUBMITTED, Christine'Freeman, Recorder; Scott Zerby, President ATTEST: Greg Lerud, Executive Director 3A MEMORANDUM FROM: Greg Lerud, Executive Director, Shorewood EDA TO: EDA Board members RE: Refunding the Public Project Lease Revenue Bond, Series 2008A At the March 20 meeting of the EDA, the board passed a bond refunding trigger Resolution and authorized David Drown to negotiate a private sale or conduct a public sale for the refunding bonds. He negotiated a private placement and the cash flow analysis is attached. The proposal was reviewed by the city's Bond Counsel,Justin Reppe. I must recognize Mr. Reppe's skill and thoroughness in this process. His review of the proposal and insistence in several key changes in the city's favor will save the city additional thousands going forward. The Resolution the EDA is considering is different than the one in the city council packet. In the interest of saving paper, I did not include either the First Amendment to the Ground Lease or First Amendment to the Lease Purchase Agreement with this packet, as they are identical to the ones included in the council packet. I just want you to know that the EDA will also have to approve those two documents. Mr. Drown will do the initial presentation during the council meeting, but he will be present for the EDA meeting if there are additional questions. If EDA approves the proposal Mr. Drown and the bond counsel to complete the sale,which should occur by the end of May. w w L y 3 0 y R N N N N N N N 0 (wR j U O M m w a s a w 0 0 0 0 0 0 a) O (O O O 2 O U U .� p O C . . . . . . . . . . . . .° -0 0 o r- O N N E O O N N 7 ? 0 : (V N w R w Z W U w L Q m O In V U y M V In N O (O (O O) C Y w p p U w U) R = W E 00 R E R O N` m Q ° E ° y co C� O a m L Z LN O a U 00 X U Q a 00 p i i i i i i i i i i i i In H (O X LL� U z C � w A >. - w Q R E w y O L_ w O > Q O w w C C y O J py ' O O z w w Z R M n N O N N N O N O O'It w N N O M O M (O O n 0 (O M a) V 00 00 0 O) V 00 V V M N In M (O M (O V N V N O) °-' An o w d o = y w w w OL w w w ° 1)w = ° a ° 1 m 0 0 0 o o M c n m p w p C C 0 N N N N N N p 0 Q Q y y 0 N 0 0 0 0 0 0 Q Q U ._Co o N N N N N N N R , L R E cm 'm N R R E O a . � W o 0 0 o N m° o m o a m U m W W o U d a z z Q U a m m a a a H U m m O O O O O O O O M w w 1n O w w w O w O O 00 O N N O N O N N w R O 0 O w O w w M O V N 0 O 00 E 0 O O a a O) O) O) R t M N w M w M w N 0 O r- r N O) O O) O) 0 0 0 0 0 0 0 0 0 0 0 0 O 00 _N r- LO U) u) a N Cl) N (O w (O O O O O O O N M N N N O N N N O N O O o0 O O O O In O w O m O m (O O V In N (O M _ O In O O N ' N V o0 O C C O) r- V 00 V 00 00 (O M .w. V M N O o0 (O M : O) I- 'It N V C N N N (O a r O w NI w 1 0 0 0 0 0 0 0 0 0 0 0 U) m O O O O O O O O O O O O L U N N N N N N N N N N N N Y CO O N > C O ° a m = m O O O O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q o w o - oo 00 00 00 00 0o rn rn ro 0 c °) 7 w a) o a W u y R CL c C c U a N a O jL w N ca-Fz Lo O U O yO Q N N L r r 00 O) O N M V n (O r 00 3 7 C C C p y 7 N N N N N N N N N m R c O o p 1 0 0 0 0 0 0 0 0 0 0 0 0 O O O w 0 E � U U LL N N N N N N N N N N N N t d E .w. U O R a Y Q -p - O - a) U N a . . CD Q li Q u m w o m m o U 0 o ° .o LO 0 o O O m a w a iL m m m m m o w -p w U v J 7 a` Q U a CO O m U w d m U O y y Q C O 0 a R N o > V V O In (O N M M M r M M r- 00-•y 0) M M O (O M O O r N N M M y I- 01 (3i (O Nt M 00 N In r 00 R N 00 In 01 00 I- (O to V (O 0) I- to It >. C C Q Q N y C C R y LO Cl) Cl) 1n 1n O 1n 1n O O 0 1n O > m aI 1n 04 r w CO N w a) O 00 1 R R O s N N (O (O (O In M O (O � O 00 f� � ~ R 00 (O O a 00 1z (O In 00 O 1z O 0 y O O O O O O O O O O O O O y N N N N N N N N N N N N O p O N N N N N N N N N N N N N O Cl) O U) U 1n 1n 1n 1n 1n 1n 1n 1n 1n 1n 1n 1n O o 01 01 01 01 01 01 01 01 01 01 01 01 It Qc c c c c c c c c c c c rn R In m� a c Oo Oo O 1n O O 1n 1 O O (o 01 (O Cl) 00 r 00 01 (O co 01 ' In Nt 00 d) 01 r- to N 00 _ N 00 y T N I- to 01 00 I- (O to V r 0) I- O c a y 01 R A A Cl) In N N O N N N O N O O 00 O 01 O m (O O V In 0 (O M O O Q Nt 00 O O O 01 r V _ 00 V O ~ It Cl) N In Cl) (O Cl) (O V N V N 0) Q U) 01 01 01 01 01 01 01 01 01 01 01 01 N n M 00 00 Cl) Cl) 00 00 In to Cl) Cl) Cl) Cl) Cl) Cl) to to 00 00 O O In to o0 N O It It 0 O In to It C C M M In to r r N N V r M M ' V d) d) 0 0 0 0 0 0 0 0 d) d) 00 00 r r to to V V CIL CIL .0. V 0 0 01 01 00 00 (O (O to to V V Cl) Cl) N N V c 0 c n ° o 0 0 0 0 0 0 0 0 0 0 0 I O O O O O O O O O O O O :6 N N N N N N N N N N N N N O O O O O O O O O O O O O K Q O O O O O O O O O O O O O N O O O O O O O O O O O O O O O O In to O O to to to O O to z 00 r r r r 00 00 00 00 00 01 01 (O a` rn m K m y R N 0) I- r r o0 00 d) d) O O N N M M V V In to (O (O r r 00 00 J O R O O O O O O O N N O N O N N N N N N O N O N O N O N O N O N O N O N O N O E p N N N N N N N O N O N O O O O N N N N N N N N N N O d (O N (O N (O N (O N (O N (O N (O N (O N (O N (O N (O N (O N m N r r r r r r r r r r r r 3 w z 00 0 &0 O O M_ M M In O O N N N O O O w O N O N O O O 01 I- V O In r N V In N (O V O V O V O O 0 C 0 d) M 00 O O 00 Nt O M M In d) O V In O1 O O O M V N M N M V M O O r- N d O O O Q O 01 O O m O O O m N O 1 N 1n N N N (O (O (O 0) 0) a) 01 Q r (O (O (O (O (O (O co M O O to to 00 00 M_ M_ co co In to O O O O o0 04 Q In to 01 01 CO CO N N O O N N CO CO I- I- I- I- (O (O 00 00 V 0 ' d) d) (O (O N N O O In to d) d) N N to to (O (O (O (O to to N N d) C5 O O d) d) 00 00 r r to to M M N N O O o0 o0 (O (O V V N N 00 L N _ M O a o o 0 0 0 0 0 0 0 0 0 0 0 m O O In to O O O O O O O O Q N N Cl) Cl) In to (O (O r r 00 00 O �_ z Z m O � N Q O O O O O O O O O O O O O O O O O O O O O O O O O O W O N Q O O O to O O to to O to O to to O 0 U N W c0 (0 (0 r r r r 00 00 d) d) d) N _ y O O N N M M V V In to (O (O r r o0 00 y N N N N N N N N N N O N v o R O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o Q L LL E p N N N N N N N N N N N N N N N N N N N N N N N N N C CO O C d (O N (O N (O N (O N (O N (O N (O N (O N (O N (O N (O N (O N O c 0 o Q o o w E O 1n p >, N y � y Q O Q m a (D R r 'O U a` Q c) cn UO) a. m0 O o RESOLUTION NO. 17—02 RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF THE AUTHORITY'S PUBLIC PROJECT LEASE REVENUE REFUNDING BONDS, SERIES 2017A (THE "BONDS") TO THE PURCHASER THEREOF; DETERMINING THE FORM AND DETAILS OF SUCH BONDS; AUTHORIZING THE EXECUTION, DELIVERY AND REGISTRATION OF SUCH BONDS; PROVIDING FOR THE PAYMENT OF AND THE SECURITY FOR SUCH BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED TO LEASE AND THE BONDS; AND AUTHORIZING AND RATIFYING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH BE IT RESOLVED By the Board of Commissioners ("Board") of the Shorewood Economic Development Authority (the "Authority") as follows: ARTICLE I AUTHORIZATION AND SALE Section 1.01. Authorization and Purpose. The City of Shorewood, Minnesota (the "City") is authorized by Minnesota Statutes, Section 465.71, as amended to acquire such items of real and personal property as are needed to carry out its governmental and proprietary functions, and to acquire such real and personal property by entering into lease-purchase agreements. The City previously determined that it was necessary for it to acquire pursuant to a Lease-Purchase Agreement, dated as of August 1, 2008 (the "Original Lease"), between the City and the Authority, the Authority's interest in certain real property described in the Original Lease (the "Site"), together with certain buildings, structures and improvements to be constructed thereon, and certain equipment to be contained therein (the "Facilities"). The development of the Site and the Facilities is consistent with and furthers the economic development functions of the Authority, and the Authority acquired a leasehold interest in the Site pursuant to a Ground Lease, dated as of August 1, 2008 (the "Original Ground Lease"), between the City and the Authority, and agreed to acquire title to the Facilities and lease and sell the Site and the Facilities to the City, pursuant to the Original Lease. To provide funds for the construction of the Facilities, the Authority previously issued its $1,310,000 Shorewood Economic Development Authority Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation) (the "Series 2008A Bonds"). Minnesota Statutes, Section 469.091 to 469.1081, as amended (the "Act"), authorizes the Authority to issue revenue refunding bonds to refund the Series 2008A Bonds. This Board, hereby determines to sell and issue in an amount not to exceed $950,000 in aggregate principal amount of its Public Project Lease Revenue Refunding Bonds, Series 2017A (City of Shorewood, Minnesota Lease Obligation) (as more fully described herein, the "Bonds" or the "Refunding Bonds") for the purpose of current refunding and defeasing all of the outstanding 4849-5863-0726.2 Series 2008A Bonds maturing on December 1 in the years 2018, 2020, 2022, 2024, 2026 and 2038 (the "Refunded Bonds"),providing funds to pay the principal of, the interest on, and/or the redemption price of such Refunded Bonds through and including June 1, 2017 (the "Redemption Date"). In connection with the issuance and sale of the Bonds, the Authority and the City will enter into (i) a First Amendment to Ground Lease, amending the Original Ground Lease (the "First Amendment to Ground Lease") and (ii) a First Amendment to Lease-Purchase Agreement, amending the Original Lease (the "First Amendment to Lease"). Section 1.02. Sale and Interest Rate. The Board, having been advised by David Drown Associates, its independent municipal advisor (the "Municipal Advisor"), previously authorized its Municipal Advisor to solicit proposals and negotiate on behalf of the Authority for the sale of the Refunding Bonds on a competitive basis. Based on the recommendation of its Municipal Advisor, the Authority entered into an engagement with Robert W. Baird & Co. Incorporated (the "Placement Agent"), to serve as placement agent for the Bonds. The Board has received and considered all proposals presented to it and hereby determines that the most favorable of such proposals is ascertained to be that of Branch Banking and Trust Company (the "Purchaser") to purchase the Bonds at a price of 100% in the principal amount of$950,000 on the date of delivery of the Bonds (the "Closing Date"). The Bonds shall bear interest as follows: Year of Interest Maturity Rate 2028 2.70% The proposal of the Purchaser to purchase the Bonds and make a loan to the Authority in the amount of$950,000 is hereby found to be a reasonable offer and is hereby accepted and the sale of the Bonds is hereby awarded to the Purchaser. As a condition to the sale of the Bonds to the Purchaser, the Purchaser agrees to deliver an executed investor letter, in the form on file with the Authority. Section 1.03. Debt Service Savings. The Board hereby finds and determines that the issuance of the Refunding Bonds upon the terms set forth in this Resolution will result in substantial debt service savings to the Authority. The present value of the dollar amount of savings total not less than $80,000 calculated on the bond yield. Section 1.04. Compliance with Law. All acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed precedent to the issuance of the Bonds having been done, having happened and having been performed in regular and due form, time and manner as required by law, the Board herby finds and determines that it is necessary for this Board to provide for the issuance, sale and deliver of the Bonds, to establish the form and terms of the Bonds and to provide for the payment and the security thereof. Section 1.05. Placement Agent. The Placement Agent shall be paid a fee of$8,500 for its services as placement agent in connection with placement and issuance of the Bonds. 4849-5863-0726.2 2 ARTICLE II AUTHORIZATION; BOND TERMS; REGISTRATION; EXECUTION AND DELIVERY Section 2.01. Authorization and Designation. In accordance with the Constitution and laws of the State of Minnesota and the Act, the Board hereby authorizes the issuance of the Bonds in the aggregate principal amount of $950,000 to provide for the refunding and redemption of the Refunded Bonds and to pay costs of issuing the Bonds. Such Bonds shall be designated as "Public Project Lease Revenue Refunding Bonds, Series 2017A". Section 2.02. Maturities, Interest Rates and Denominations. The Bonds shall be originally dated their date of original issue and delivery (anticipated to be June 1, 2017), shall be issued and sold in denominations of $5,000 or any integral multiple thereof within a single maturity, shall mature on December 1 in the years and amounts set forth below and shall bear interest at the rates per annum set forth below opposite such years and amounts from their date of original issue or from the most recent Interest Payment Date to which interest has been paid or duly provided for until paid or duly called for redemption (if any), as follows: Maturity Date (December 1) Principal Amount Interest Rate 2028 $950,000 2.700% The Bonds shall be issuable only in fully registered form and shall be numbered R-1 upward. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. The interest thereon and, upon surrender of the Bond, the principal amount thereof, shall be paid by check or draft issued by the Authority. Section 2.03. Dates and Interest Payments. Upon initial delivery of the Bonds pursuant to Section 2.07 hereof and upon any subsequent transfer or exchange pursuant to Section 2.06 hereof, the date of authentication shall be noted on each Bond so delivered, exchanged or transferred. The interest on the Bonds shall be payable on June 1 and December 1 (each, an "Interest Payment Date"), commencing December 1, 2017, to the owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day the ("Record Date"). If any payments of interest due on the Bonds on an Interest Payment Date are not timely made, such interest shall cease to be payable to the registered owners as of the Record Date for such Interest Payment Date and shall be payable to the registered owners of the Bonds as of a special date of record for payment of such defaulted interest as shall be designated by the Registrar whenever monies for the purpose of paying such defaulted interest becomes available. If the date for payment of the principal of or the interest on the Bonds shall be a Saturday, Sunday, legal holiday, the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, and payment on such day shall have the same force and effect as if made on the nominal payment date. 4849-5863-0726.2 3 Section 2.04. Redemption. (a) Optional Redemption. The Authority may elect to prepay the Bonds on December 1, 2022, and on any Interest Payment Date thereafter, so long as the Lease is in effect, in whole. The Bonds shall be redeemed at a price of par plus accrued interest to the date of redemption. (b) Mandatory Redemption. The Bonds maturing on December 1, 2028, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Amount 2017 $65,000 2018 70,000 2019 70,000 2020 75,000 2021 75,000 2022 80,000 2023 80,000 2024 85,000 2025 85,000 2026 85,000 2027 90,000 2028 * 90,000 *Final Maturity The holders of the Bonds are not required to present their Bonds in order to receive mandatory sinking fund payments as described above. (c) Notice of Redemption. Notice of redemption of Bonds stating their designation, date, maturity, principal amounts and the redemption date shall be given by the Authority by mailing such notice by first class mail, postage prepaid, not less than 30 days prior to the date fixed for redemption (or such shorter period as may be acceptable to the then registered owner of the Bonds) to the registered owners at their most recent addresses appearing upon the books of the Registrar. Failure to give notice to any particular registered owner or any defect in the notice given to such owner shall not affect the validity of the proceedings calling the Bonds or the redemption of any Bonds for which proper notice has been given. Notice of redemption need not be given to the owner of any Bonds, whether registered or not, who has waived notice of redemption. Notice of redemption having been given as provided above or notice of redemption having been waived by the owners of Bonds called for redemption to whom such notice has not been given as provided above, the Bonds so called for redemption shall become due and payable on the designated redemption date. If on or before the said redemption date funds sufficient to pay the Bonds so called for redemption at the applicable redemption price and accrued interest to said date have been deposited or caused to have been deposited by the Authority with the Registrar for the purposes of such payment and notice of redemption thereof has been given or waived as hereinbefore provided, then from and after the date fixed for redemption interest on such Bonds so called shall cease to accrue and become payable. If such funds shall not have 4849-5863-0726.2 4 been so deposited with the Registrar as aforesaid no later than the date fixed for redemption, such call for redemption shall be revoked and the Bonds so called for redemption shall continue to be outstanding the same as though they had not been so called; such Bonds shall continue to bear interest until paid at such rate as they would have borne had they not been called for redemption and shall continue to be protected by this Resolution and entitled to the benefits and security hereof Section 2.05. Appointment of Initial Registrar. The Authority hereby appoints the Assistant Executive Director of the Authority as the initial bond registrar, transfer agent and paying agent (the "Registrar"). The Registrar shall have only such duties and obligations as are expressly specified by this Resolution and no other duties or obligations shall be implied to the Registrar, except as may be set forth in a written agreement between the Authority and a successor Registrar. Section 2.06. Registration. The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Re ig ster. The Registrar shall keep a bond register in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after any Record Date and until the immediately succeeding Interest Payment Date. Notwithstanding the foregoing, the Bonds may only be transferred in Authorized Denominations to (i) Qualified Institutional Buyer, as defined in Rule 144A promulgated under the Securities Act of 1933, as amended (the "1933 Act"), or (ii) to a Person that is an institutional accredited investor, as defined in Rule 501(A)(1), (2), (3) or (7) of Regulation D promulgated under the 1933 Act, and that has executed and delivered to the Authority, the City and the then current owner an Investor Letter in the form of Exhibit C hereto ("Investor Letter"). (c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered owner for exchange the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of as directed by the Authority. 4849-5863-0726.2 5 (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. For every transfer or exchange of Bonds, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment. (i) Authenticating Agent. The Registrar is hereby designated authenticating agent for the Bonds. 0) Valid Obligations. All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the Authority, evidencing the same debt, and entitled to the same benefits under this Resolution as the Bonds surrendered upon such transfer or exchange. Section 2.07. Execution; Authentication and Delivery. The Bonds shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by 4849-5863-0726.2 6 the manual or facsimile signatures of each of the President and the Executive Director, provided that all signatures may be printed, engraved, or lithographed facsimiles of the originals. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Bond has been duly executed by the manual signature of the Registrar. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so executed and authenticated, they shall be delivered by the Registrar to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed. ARTICLE III FORM OF BONDS The Bonds shall be issued in substantially the form of bond attached as Exhibit A hereto. ARTICLE IV REDEMPTION OF REFUNDED BONDS; USE OF PROCEEDS (a) Redemption of Refunded Bonds (i) The Board hereby authorizes (A) the defeasance of the Refunded Bonds, (B) the payment of the interest on the Refunded Bonds due on each interest payment date prior to the Redemption Date, (C) the payment on the Redemption Date of the principal amount of the Refunded Bonds due on such date, together with all accrued interest on such principal to such date, and (D) the payment on the Redemption Date of the outstanding principal amount of the Refunded Bonds, together with all accrued interest on such principal to such date, all in accordance with redemption provisions set forth in Resolution No. 08-003, adopted on July 28, 2008, which awarded and authorized the issuance of the Series 2008A Bonds (the "Series 2008A Bond Resolution") and the terms and conditions of Notice of Defeasance and the Notice of Redemption attached as Exhibit B hereto, after which date interest on such Refunded Bonds shall cease. The form of Notice of Defeasance or Notice of Redemption may contain such additional information or different provisions concerning the redemption as may be requested by the Northland Trust Services, Inc., as registrar or paying agent for the Refunded Bonds ("2008A Bond Registrar"). (ii) Upon the issuance of the Bonds, the 2008A Bond Registrar is hereby instructed to (A) file notice of the defeasance of the Refunded Bonds with the Municipal Securities Rule Making Board (the "MSRB") through its EMMA portal, (B) mail Notice of Redemption of the Refunded Bonds to each registered owner thereof not less than thirty (30) days prior to the Redemption Date (or such shorter period as may be acceptable to the then registered owner of the Refunded Bonds), all in accordance with 4849-5863-0726.2 7 the Series 2008A Bond Resolution and (C) file such notice of redemption with the MSRB through its EMMA portal. (iii) The Board covenants and agrees to take all steps necessary and appropriate to provide for the calling and redemption of the Refunded Bonds on the Redemption Date. (b) Use of Proceeds. (i) Upon payment for the Bonds by the Purchaser, proceeds of the Bonds, together with funds of the Authority held for the payment of the Refunded Bonds, if any, and other Authority moneys, if necessary, shall be transferred to the 2008A Bond Registrar for purposes of redeeming the Refunded Bonds on the Redemption Date. (ii) Proceeds of the Bonds may be disbursed by the Authority to pay the costs of issuing the Bonds. The Authority or the City may also pay such costs from other legally available moneys. ARTICLE V PAYMENT; SECURITY; PLEDGES AND COVENANTS Section 5.01. Debt Service Fund. There is hereby established a Public Project Lease Revenue Refunding Bonds, Series 2017A Debt Service Fund (the "Debt Service Fund") which shall be created and maintained on the official books of the City as a separate debt payment fund. All Lease Payments payable by the City under the Lease are hereby pledged to the Debt Service Fund. So long as there is no Event of Default under the Lease and the City has not terminated the Lease due to nonappropriation, the Debt Service Fund shall be held and administered by the City until the Bonds, and all interest thereon, are fully paid. Section 5.02. Lease Payments. The Authority covenants to apply all Lease Payments received by the Authority from the City pursuant to the Lease to the payment of the principal of and interest on the Bonds. The Bonds shall not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority or the City and shall not grant to the owners of the Bonds any right to have the Authority or the City levy any taxes or appropriate any funds for the payment of the principal thereof or interest thereon. The Bonds are not a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. The Bonds shall not constitute an indebtedness of the Authority or the City within the meaning of any state constitutional provision or statutory limitation. The Bonds and interest thereon are payable solely from Lease Payments to be paid by the City pursuant to the Lease, or other moneys held by the Registrar in a fund or account appropriated to the payment of the Bonds. The obligation of the City to make Lease Payments pursuant to the Lease is subject to annual appropriation by the City Council of the City. In the event the City Council determines not to appropriate moneys for the payment of Lease Payments due in a fiscal year, the Lease 4849-5863-0726.2 8 will terminate at the end of the then-current fiscal year, and the City will have no further obligation to make Lease Payments pursuant to the Lease. In case an Event of Default as defined in the Lease occurs, or in the event of non- appropriation by the City Council of the City, the Authority may declare the principal of all Bonds outstanding to be due and payable prior to the stated maturity thereof, and upon such declaration, the principal of all Bonds outstanding shall become due and payable. After such declaration, all moneys received by the Authority and applicable to the Bonds pursuant to the Lease shall be applied to the equal and proportional payment of all Bonds outstanding and claims for interest thereon, without priority of any Bond over another Bond, or of principal over interest or interest over principal. Section 5.03. Reporting. The Authority will annually provide, or cause the City to provide, to the Purchaser the City's audited financial statements within 270 days of the end of the City's fiscal year. ARTICLE VI CERTIFICATION OF PROCEEDINGS Section 6.01. Bond Transcript. The officers of the Authority are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the Authority relating to the Bonds and to the financial condition and affairs of the Authority, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, may be deemed representations of the Authority as to the facts stated therein. Section 6.02. Approval of Documents. The First Amendment to Lease and the First Amendment to Ground Lease are hereby approved. The President and the Executive Director or any other officer of the Board or the Authority (each, including the person authorized to sign on his or her behalf, an "Authorized Officer"), or each individually, is hereby authorized, empowered and directed to execute and deliver the First Amendment to Lease and the First Amendment to Ground Lease on behalf of the Authority, substantially in the forms on file, but with all such changes therein as shall be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof, a Federal Tax Certificate, pursuant to which the Authority will make certain representations and covenants related to the exclusion of the interest portions of the Lease Payments from gross income for purposes of federal income taxation, and all other necessary documents in connection with undertaking the lease-purchase financing as permitted by the Act or in connection with the Bonds (collectively, the "Bond Documents"), for and on behalf of the Authority, including any necessary counterparts, in form and substance acceptable to such Authorized Officer, but subject to the terms and conditions set forth herein. The Authorized Officers, or each individually, is hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of such documents 4849-5863-0726.2 9 as executed. Copies of all of the Bond Documents shall be delivered, filed and recorded as provided therein. ARTICLE VII DEFEASANCE The Authority may discharge its obligations with respect to any Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit. The Authority may also discharge its obligations with respect to the Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Registrar on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided herein. The Authority may also at any time discharge its obligations with respect to the Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing interest payable at such time and at such rates and maturing or callable at the holder's option on such dates as shall be required to pay all principal and interest to become due thereon to maturity or earlier designated redemption date. If any deposit is made more than ninety days before the maturity date or specified redemption date of the Bonds to be discharged, the Authority shall have received a written opinion of Bond Counsel to the effect that such deposit does not adversely affect the exemption of interest on any Bonds from federal income taxation and a written report of an accountant or investment banking firm verifying that the deposit is sufficient to pay when due all of the principal and interest on the Bonds to be discharged on and before their maturity dates or earlier designated redemption date. When all of the Bonds have been discharged as provided in this Article, all pledges, covenants and other rights granted by this Resolution to the registered owners of the Bonds shall cease. ARTICLE VIII TAX COVENANTS Section 8.01. Tax-Exempt Obligations. The Authority covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. Section 8.02. No Rebate Required. (a) The Authority will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements 4849-5863-0726.2 10 relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2017) exceed the small-issuer rebate exception amount of$5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the Authority finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the Authority (and all subordinate entities of the Authority) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. Section 8.03. Not Private Activity Bonds. The Authority further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. Section 8.04. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the Authority designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the Authority) during calendar year 2017 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2017 have been designated for purposes of Section 265(b)(3) of the Code. Section 8.05. Procedural Requirements. The Authority will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. ARTICLE IX AUTHORIZATION OF OFFICERS Without in any way limiting the power, authority, or discretion elsewhere herein granted or delegated, the Board hereby (a) authorizes and directs each officer, employee and agent of the Authority to carry out, or cause to be carried out, and to perform such obligations of the Authority and such other actions as they, or any one of them shall consider necessary, advisable, 4849-5863-0726.2 11 desirable, or appropriate in connection with this Resolution and the issuance, sale, and delivery of the Bonds, including, without limitation and whenever applicable, the execution and delivery thereof and of all other related documents, instruments, certificates, and opinions; and (b) delegates to each such officer, employee and agent the right, power, and authority to exercise her or his own independent judgment and absolute discretion in determining and finalizing the terms, provisions, form and contents of each of the foregoing. The execution and delivery by any such officer, employee or agent of the Authority of any such documents, instruments, certifications, and opinions, or the doing by them of any act in connection with any of the matters which are the subject of this Resolution, shall constitute conclusive evidence of both the Authority's and their approval of all changes, modifications, amendments, revisions, and alterations made therein, and shall conclusively establish their absolute, unconditional, and irrevocable authority with respect thereto from the Authority and the authorization, approval, and ratification by the Authority of the documents, instruments, certifications, and opinions so executed and the action so taken. Adopted this 24th day of April, 2017 by the Board of the Commissioners of the Shorewood Economic Development Authority. SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY By: Its Executive Director By: Its President 4849-5863-0726.2 12 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF SHOREWOOD ) I, the undersigned, being the duly qualified and Executive Director of the Shorewood Economic Development Authority, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the Authority held on April 24, 2017 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of$950,000 Public Project Lease Revenue Refunding Bonds, Series 2017A (City of Shorewood, Minnesota Lease Obligation) of the Authority. WITNESS my hand officially as such Executive Director and the corporate seal of the Authority this day of , 2017 Executive Director 4849-5863-0726.2 EXHIBIT A (FORM OF BOND) THIS BOND MAY ONLY BE TRANSFERRED IN AUTHORIZED DENOMINATIONS TO (I) A PERSON THAT IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (II) AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE ACT, AND THAT HAS EXECUTED AND DELIVERED TO THE AUTHORITY, CITY AND THE CURRENT HOLDER AN INVESTOR LETTER IN THE FORM AS SET FORTH IN THE RESOLUTION. UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF SHOREWOOD SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY PUBLIC PROJECT LEASE REVENUE REFUNDING BOND, SERIES 2017A R- $ INTEREST MATURITY DATE OF RATE DATE ORIGINAL ISSUE % December 1, 20 May , 2017 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The Shorewood Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota (the "Authority") promises to pay, but solely from sources hereinafter described, to the Registered Owner specified above, or registered assigns, the Principal Amount specified above on the maturity date specified above, and to pay interest thereon from the date of original issue specified above, or from the most recent interest payment date to which interest has been paid or duly provided for, at the annual rate specified above, payable on June 1 and December 1 in each year, commencing December 1, 2017, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof at the office of the Assistant Executive Director of the Authority described below, the principal hereof, are payable in lawful money of the United States of America by check or draft drawn on Assistant Executive Director of the Authority, as A-1 4849-5863-0726.2 bond registrar, transfer agent and paying agent, or its successor designated under the resolution described herein (the "Registrar"). This Bond is issued pursuant to Minnesota Statutes, Sections 469.091 to 469.1081, as amended (the "Act"), and in conformity with the provisions, restrictions and limitations thereof This Bond does not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority or the City of Shorewood, Minnesota (the "City") and does not grant to the Registered Owner of this Bond any right to have the Authority or the City levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. This Bond does not constitute an indebtedness of the Authority or the City within the meaning of any state constitutional provision or statutory limitation. This Bond and interest hereon are payable solely from Lease Payments to be paid by the City pursuant to a Lease-Purchase Agreement, dated as of August 1, 2008, as amended by the First Amendment to Lease-Purchase Agreement dated as of May 1, 2017 (as amended, the "Lease"), between the Authority and the City, or other moneys held by the Registrar in a fund or account appropriated to the payment of the Bonds of this series under the Bond Resolution adopted by the Authority on April 24, 2017 (the "Resolution"). The Authority's Board of Commissioners have designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE IS SUBJECT TO ANNUAL APPROPRIATION BY THE CITY COUNCIL OF THE CITY. IN THE EVENT THE CITY COUNCIL DETERMINES NOT TO APPROPRIATE MONEYS FOR THE PAYMENT OF LEASE PAYMENTS DUE IN A FISCAL YEAR, THE LEASE WILL TERMINATE AT THE END OF THE THEN-CURRENT FISCAL YEAR, AND THE CITY WILL HAVE NO FURTHER OBLIGATION TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE. This Bond is one of a duly authorized series of special, limited obligation Bonds in an aggregate principal amount of $950,000, in denominations of $1,000 or integral multiples thereof not exceeding the principal amount maturing in any year, and numbered from R-1 upwards, and of like tenor and effect except as to serial number, denomination, interest rate, maturity and right of prior redemption, all of which have been authorized by law to be issued and have been issued or are to be issued by the Authority pursuant to the Resolution, to provide financing for refunding and defeasance of the Authority's outstanding Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligations). The Bonds are equally and ratably secured by the Resolution and the Lease. Pursuant to a Ground Lease, dated as of August 1, 2008, as amended by the First Amendment to Ground Lease dated as of May 1, 2017 (as amended, the "Ground Lease") between the City and the Authority, the City has leased the Site described in the Lease to the Authority. Reference is A-2 4849-5863-0726.2 hereby made to the Ground Lease, the Lease, the Resolution, and any amendments or supplements thereto for a description and limitation of the property, revenues and funds pledged and appropriated to the payment of the Bonds, the nature and extent of the security thereby created, the rights of the Registered Owners of the Bonds, the rights, duties and immunities of the Registrar, and the rights, immunities and obligations of the Authority and the City thereunder. Certified copies of the Resolution and executed counterparts of the Ground Lease and the Lease are on file at the office of the Authority. The Bonds are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Amount 2017 $65,000 2018 70,000 2019 70,000 2020 75,000 2021 75,000 2022 80,000 2023 80,000 2024 85,000 2025 85,000 2026 85,000 2027 90,000 2028 * 90,000 *Final Maturity The holders of the Bonds are not required to present their Bonds in order to receive mandatory sinking fund payments as described above. The Authority may elect to prepay the Bonds on December 1, 2022, and on any Interest Payment Date thereafter, so long as the Lease is in effect, in whole. The Bonds shall be redeemed at a price of par plus accrued interest to the date of redemption. Notice of redemption of this Bond shall be given to the Registered Owner hereof by first class mail, postage prepaid, not less than thirty (30) days prior to the date fixed for redemption (or such shorter period as may be acceptable to the then registered owner of the Bonds), all as more particularly set forth in the Resolution; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceeding for the redemption of any Bond with respect to which no such failure has occurred. Notice of redemption having been given as provided in the Resolution, or notice of redemption having been waived, and funds for the payment thereof having been deposited with the Registrar, this Bond shall cease to bear interest from and after the date fixed for redemption. As provided in the Resolution and subject to certain transfer restrictions set forth therein and on the face of this Bond, this Bond is transferable, only upon the registration records A-3 4849-5863-0726.2 maintained by the Registrar by the Registered Owner hereof in person or by the Registered Owner's duly authorized attorney, upon surrender of this Bond for transfer at the office of the Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Registrar duly executed by, the Registered Owner hereof or the Owner's duly authorized attorney, and, upon payment of any tax, fee or other governmental charge required to be paid with respect to such transfer, one or more Bonds of the same maturity, aggregate principal amount and interest rate will be issued to the designated transferee or transferees. In case an Event of Default as defined in the Resolution or the Lease occurs, or in the event of non-appropriation under the Lease by the City Council of the City, the principal of this Bond and all other Bonds outstanding may be declared or may become due and payable prior to the stated maturity hereof in the manner and with the effect and subject to the conditions provided in the Resolution, but no Registered Owner of any Bond shall have any right to enforce the provisions of the Resolution, the Lease or the Ground Lease except as provided in the Resolution. With the consent of the Authority and the Registrar, and to the extent permitted by and as provided in the Resolution, the terms and provisions of the Resolution, the Lease and the Ground Lease, or of any instrument supplemental thereto, may be modified or altered by the assent or authority of the Registered Owners of a majority in aggregate principal amount of the Bonds then Outstanding thereunder. This Bond shall not be valid or become obligatory for any purpose until it shall have been authenticated by the execution of the certificate hereon endorsed by the Registrar under the Resolution. (The remainder of this page is intentionally left blank) A-4 4849-5863-0726.2 IN WITNESS WHEREOF, the Shorewood Economic Development Authority has caused this Bond to be executed in its name by the facsimile or manual signatures of its duly authorized officers, all as of the Date of Original Issue specified above. SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY President Executive Director (Form of Bond Registrar's Certificate) This is one of the Bonds described in the within mentioned Resolution. Date: , 2017 Assistant Executive Director of Shorewood Economic Development Authority A-5 4849-5863-0726.2 CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the attached Bond may be made only by the registered owner or the registered owner's legal representative last noted below. Signature of Date of Registration Registered Owner Bond Registrar A-6 4849-5863-0726.2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated NOTICE: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240 Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) Please insert Social Security or other Tax Identification Number of Transferee. A-7 4849-5863-0726.2 EXHIBIT B-1 NOTICE OF DEFEASANCE $1,310,000 Shorewood Economic Development Authority Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligations) Dated August 21, 2008 NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Shorewood Economic Development Authority (the "Authority") that provision has been made for the payment, discharge and defeasance of the following bonds of the above-described issue: Maturity Amount CUSIP # Rate 2018 $120,000 82522P AF8 4.200% 2020 135,000 82522P AG6 4.350% 2022 145,000 82522P AH4 4.500% 2024 155,000 82522P AJO 4.600% 2026 175,000 82522P AK7 4.700% 2028 190,000 82522P AL5 4.800% all in accordance with the requirements of the resolution of the Authority that authorized the issuance of said bonds, by depositing sufficient moneys or investments which, together with the interest to be earned on such obligations, will be sufficient for the payment of the principal of said bonds and interest thereon to the date of maturity or redemption, with Northland Trust Services, Inc. (the "Registrar"), as registrar and paying agent for said bonds. Consequently, all of such bonds are deemed to be paid and discharged within the meaning of said resolution and all other rights granted thereby have ceased and terminated. Dated: , 2017. BY ORDER OF THE BOARD OF COMMISSIONERS OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY /s/ President B-1 4849-5863-0726.2 EXHIBIT B-2 NOTICE OF REDEMPTION $1,310,000 Shorewood Economic Development Authority Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligations) NOTICE IS HEREBY GIVEN THAT the Board of Commissioners of the Shorewood Economic Development Authority (the "Authority") has called for redemption and prepayment on June 1, 2017 (the "Redemption Date"), the outstanding maturities of the above-referenced bonds (the "Bonds") maturing on December 1 in the following years and having the respective interest rates and CUSIP numbers listed below: Maturity Amount CUSIP # Rate 2018 $120,000 82522P AF8 4.200% 2020 135,000 82522P AG6 4.350% 2022 145,000 82522P AH4 4.500% 2024 155,000 82522P AJO 4.600% 2026 175,000 82522P AK7 4.700% 2028 190,000 82522P AL5 4.800% The Bonds will be redeemed at a price of 100% of their principal amount plus accrued interest to the Redemption Date. Holders of the Bonds should present them for payment to Northland Trust Services, Inc., in Minneapolis, Minnesota, as registrar and paying agent (the "Paying Agent") with respect to the Bonds, on or before said date, when they will cease to bear interest, in the following manner: By Mail, Overnight Mail, or Courier Service: In Person, By Hand: Northland Trust Services, Inc. Northland Trust Services, Inc. 45 7`h Street, Suite 2000 45 7`h Street, Suite 2000 Minneapolis, MN 55402 Minneapolis, MN 55402 Important Notice to Bondholders: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W-9 Form, which may be obtained at a bank or other financial institution. The Paying Agent shall not be responsible for the selection of or use of the CUSIP number, nor is any representation made as to its correctness indicated in this Notice of Redemption. It is included solely for the convenience of the Holders. B-2 4849-5863-0726.2 Additional information may be obtained from the undersigned or from David Drown Associates, 5029 Uptown Ave. South, Minneapolis, Minnesota (612-920-3320), financial advisor to the Authority. Dated: BY ORDER OF THE BOARD OF COMMISSIONERS OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY /s/ President B-3 4849-5863-0726.2 EXHIBIT C FORM OF INVESTOR LETTER [Date] Shorewood Economic Development Authority Shorewood, Minnesota City of Shorewood, Minnesota Shorewood, Minnesota Shorewood Economic Development Authority, Minnesota Public Project Lease Revenue Refunding Bonds Series 2017A Ladies and Gentlemen: In connection with the purchase of the above-referenced obligation (the "Bond") issued by the Shorewood Economic Development Authority, Minnesota(the "Issuer") and by (the "Purchaser"), the Purchaser hereby certifies as follows: 1. The Purchaser has performed its own due diligence and financial analysis with regard to the Bond and the ability of the City of Shorewood, Minnesota(the "City") to make the payments described in the resolution of the Board of Commissioners of the Issuer, adopted on April 24, 2017 (the "Resolution"), and a Lease-Purchase Agreement, dated as of August 1, 2008, as amended by the First Amendment to Lease-Purchase Agreement, dated as of May 1, 2017, between the Issuer, as lessor, and the City, as lessee (collectively, the "Lease") associated with the Bond. The Purchaser acknowledges that no official statement, prospectus or offering circular containing information with respect to the Issuer or the City has been or will be prepared and that it has made its own inquiry and analysis with respect to the City and the Lease and the other material factors affecting the lease payments by the City under the Lease. 2. The Purchaser acknowledges that none of the Issuer, the City, or their governing bodies, their members or any of their officers, employees or agents have any responsibility to us for the accuracy or completeness of information regarding the Issuer or the City obtained by us from any source, the provisions for payment thereof, or the sufficiency of any security therefor. We acknowledge that we have assumed responsibility for obtaining such information and making such review as we have deemed necessary or desirable in connection with our decision regarding the loan to the Issuer evidenced by the Bond. 3. We have been offered copies of or access to all documents relating to the Bond and all records, reports, financial statements and other information concerning the Issuer and the City and pertinent to the source of payment for the Bond which we, as a reasonable investor, have requested and to which we, as a reasonable investor, would attach significance in making an investment decision. 4. The Purchaser understands that an investment in the Bond involves a certain degree of investment risk. The Purchaser has sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the purchase of the Bond. C-1 4849-5863-0726.2 5. The Purchaser understands and acknowledges that pursuant to the requirements of the Resolution, the Bond may be offered and sold or transferred only to an Institutional Accredited Investor (as defined below) or a Qualified Institutional Buyer (as defined below). The Purchaser is either (a) an "accredited investor," as defined in Rule 501(A)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended (an "Institutional Accredited Investor") or (b) a"qualified institutional buyer," as defined in Rule 144A promulgated under the Securities Act of 1933, as amended (a "Qualified Institutional Buyer"). 6. We understand that the Bond has not been registered with any federal or state securities agency or commission. 7. We acknowledge that the Bond is a special, limited obligation of the Issuer and that the payments of the City under the terms of the Lease will be dependent upon actual revenues of the City and the City's right to non-appropriation in any fiscal year. The foregoing representations shall survive the execution and delivery to us of the Bond and the instruments and documents contemplated thereby. 1 By: Name: Title: C-2 4849-5863-0726.2