HomeMy WebLinkAbout2016-096 (Approving Settlement - Territorial Partners) RESOLUTION NO. 2016-096
CITY OF STILLWATER
WASHINGTON COUNTY, MINNESOTA
A RESOLUTION APPROVING SETTLEMENT
WHEREAS, a suit was brought against the City by Territorial Partners, LLC alleging
that the City did not properly calculate the tax increment generated by the five buildings within
the Terra Springs Development, and;
WHEREAS, the City denied the allegations and filed an Answer to the claim alleging
that the City had calculated the increment properly. The Answer was prepared and served by
James Tompson, from the law firm of Kennedy and Graven, who were assigned by the League of
Cities Insurance Trust to represent the City, and;
WHEREAS, , the parties agreed to a process of Mediation, and Thomas Radio of the law
firm of Felhaber Larson in Minneapolis acted as Mediation and after several sessions a
Settlement Agreement was reached, subject to the approval of the City Council, and;
WHEREAS, after reviewing the litigation with the City Attorney and the City
Administrator, it appears that the recommended settlement would be in the best interest of the
City;
NOW THEREFORE BE IT RESOLVED THAT:
1. The Binding Settlement Agreement attached to this Resolution as Exhibit A is approved.
Enacted by vote of the Stillwater City Council this 3rd day of May, 2016.
CITY OF STILLWATER
Te lowski, Mayor
ATTEST:
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Diane F. Ward, Clerk
Exhibit
BINDING MEDIATED SETTLEMENT AGREEMENT
In the Matter of: Territorial Springs,LLC v. City of Stillwater
On 4_ •,• 1 ci , 2016, with the assistance of the undersigned Mediator, we
agreed to a settlement of our dispute, and wish to here memorialize our understanding, as
follows:
1. We have been represented by the undersigned attorneys, and understand that the
Mediator has had no duty to protect our interests or to provide us with information about our
Iegal rights. We understand that signing this agreement could adversely affect our legal rights,
and that we should consult and have consulted with our counsel before signing this agreement
relative to any uncertainty about our rights.
2. We intend that this agreement once signed is binding and enforceable upon us.
While we understand that formal documents, stipulations and/or releases may be prepared to
facilitate or finalize our agreements contained here, we do not intend the enforcement of our
settlement to be dependent upon any such documentation. We will use our best efforts to concur
as to any formal documentation. And while we need not agree to the binding arbitration
provisions of this sentence, upon the advice of counsel, we voluntarily and knowingly agree that
should any dispute develop in any documentation of our settlement set out below, the Mediator
will act as a binding arbitrator to decide such dispute(s) and the terms of any necessary
documentation, which decision will be based on the Mediator's determination of what is
consistent with the intent and spirit of our negotiations, or his determination of what is fair and
equitable under the circumstances. We agree to be bound by any such arbitration that will be
enforceable as provided by the Minnesota Arbitration Act and by law.
3. The following are the essential terms of our settlement:
6e c 41-1-rt Gro( 551��1/ Pti et rkr/ EX. Ti.
4. Billing teinis for Mediation: Billed equally among counsel unless otherwise here
stated.
4
1061139.v1
Dated: i.14<71 / ? , 01-a
The Parties
Territorial Springs, LLC
BY C.o f-,y . ..I h .q '74- t ly\
Its 40i_,•
City of Stillwater
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J. Rae o, Me t iator
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Jo P. Boyle, Esq.
Key C. McGinty, Esq.
ti esl. mson, Esq.
5
1061139 v
Territorial Springs LLC v. City of Stillwater Settlement Terms
Court File No. 82-CV-15-5590
Subject to approval by the City Council,
1. The City will issue TI Revenue bonds using Dougherty's assumptions (Exhibit 1) with these
additional conditions:
a. The City must approve all terms of the bonds. Such approval will not be
unreasonably withheld.
b. The bonds must be fixed rate.
c. The terms must permit all Tax Increment to be released from the Indenture on each
payment date as long as the coverage on that date is at least 125%.
d. The bonds will be issued in a principal amount, and at interest rates, that produce at
least 1.20 coverage for the first three years and at least 1.5 coverage thereafter on the
City's GO bonds (measuring coverage based on the increment remaining after
payment of the revenue bonds).
2. Dougherty will be the underwriter.
3. US Bank, developer, and guarantors will completely release the City from the 2011 Terra
notes.
4. Same people who are on the guaranty for the Terra Notes will guarantee the City's GO bonds
through February 1, 2017 payment, up to a maximum amount of $50,000. Any surplus
Available Tax Increment will be utilized before the City demands payment on the guaranty.
5. Lawsuit will be dismissed with prejudice upon issuance of the TI Revenue bonds.
Exhibit A
. '
. '
Preliminary
$6,770,000
•
City of Stillwater, MN
Tax Increment Revenue Refunding Bonds, Series 2016
TIF District 71 (10)
Total Issue Sources And Uses
Dated 07/01/2016 I Delivered 07/01/2016
Lofts of Territorial Issue
Stillwater Springs Summary
Sources Of Funds
Par Amount of Bonds $1,580,000.00 $5,190,000.00 $6,770,000.00
Transfers from Prior Issue DSR Funds 198,258.38 198,258.38
Total Sources $1,778,258.38 $5,190,000.00 $6,968,258.38
Uses Of Funds
Total Underwriter's Discount (2.000%) 31,600.00 103,800.00 135,400.00
Financial Advisor 5,834 56 19,165.44 25,000.00
Bond Counsel 5,834.56 19,165.44 25,000.00
Underwriter's Counsel 4,667.65 15,332.35 20,000.00
Trustee Origination/1st Year 1,166.91 3,833.09 5,000.00
Deposit to Debt Service Reserve Fund(DSRF) 72,000.00 227,000.00 299,000.00
Deposit to Current Refunding Fund 4,800,000.00 4,800,000.00
Deposit to Current Refunding Fund 1,655,000.00 1,655,000.00
Rounding Amount 2,154 70 1,703.68 3,858.38
Total Uses $1,778,258.38 $5,190,000.00 $6,968,258.38
Exhibit 1
LottsTIF Rev:M:916 wiTS 1 Issuct Summary 4111'2016 1 1.5S PM
Dougherty & Company LLC
Dougherty Public Finance Page 1