HomeMy WebLinkAboutVIII-05 Providing Internal Loan to HEDRA – 400 Vermillion Street PurchaseCity Council Memorandum
To:Mayor and City Council
From:John Hinzman, Community Development Director
Date:September 15, 2025
Item:Resolution: Approval of Interfund Loan –Purchase of 400 Vermillion St
Council Action Requested:
Adopt the attached resolution documenting an interfund loan from the City Council for
the purchase of the former Wells Fargo Bank property at 400 Vermillion Street.
Background Information:
On November 4, 2024 the City Council approved a financing plan to allow HEDRA to
purchase 400 Vermillion Street as a part of the Block 28 Gateway Redevelopment
Project. The approved plan for the $700,000 purchase consisted of:
•$300,000 –HEDRA Fund Reserves
•$400,000 –City Debt Redemption fund internal loan to HEDRA
o HEDRA will reimburse the Debt Redemption Fund.
▪$95,000 –will be realized when the sale of a Lot to Rio Gran is
finalized
▪$305,000 –will be repaid through future HEDRA revenues
The resolution is consistent with the terms approved by the Council on November 4th.
HEDRA is scheduled to take a similar action on September 11th.
Financial Impact:
N\A
Advisory Commission Discussion:
N\A
Council Committee Discussion:
N\A
Attachments:
▪Resolution
▪City Council Memo –Approval of Financing Plan –November 4, 2024
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RESOLUTION NO. 2025-__
RESOLUTION APPROVING AN INTERNAL LOAN TO THE HASTINGS
ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY
(HEDRA) TO PURCHASE 400 VERMILLION STREET
BE IT RESOLVED by the City Council of the City of Hastings, Minnesota as follows:
Section 1.Background.
1.01.The Hastings Economic Development and Redevelopment Authority (HEDRA)
Board of Commissioners approved the purchase of 400 Vermillion Street (former Wells Fargo
property) (“Property”) for $700,000 on August 27, 2024.
1.02.The financing plan for the Property is $300,000 from HEDRA Fund Reserves and
a $400,000 internal loan from the City of Hastings’ City Debt Redemption Fund.
1.03.On November 4, 2024, the City Council approved the financing plan.
Section 2.Interfund Loan.
2.01.The City Council hereby authorizes the advance of legally available City funds in
the amount of $400,000 to the HEDRA to be used towards the purchase of the Property.
2.02 A fixed annual interest rate of 3% applies to the loan funds.
2.03.The HEDRA shall reimburse the City’s Debt Redemption Fund as follows:
•$95,000 –realized when the sale of a Lot to Rio Gran is finalized; and
•$305,000 –repaid through future HEDRA revenues.
Section 3.Effective Date. This resolution is effective upon approval.
Adopted by the City Council of the City of Hastings this 15th day of September, 2025.
__________________________________________
Mary Fasbender, Mayor
ATTEST:
Kelly Murtaugh, City Clerk
VIII-05
City Council Memorandum
To:Mayor Fasbender & City Council members
From:Chris Eitemiller, Finance Manager and John Hinzman, Community Development
Director
Date:November 4, 2024
Item: Approve Financing plan for HEDRA purchase of former Wells Fargo property
Council Action Requested:
Approve financing plan, which includes an internal loan of $400,000 at 3% annual interest to
purchase the former Wells Fargo property at 400 Vermillion Street.
Background Information:
Purchase of this property, at a price of $700,000, was approved by the HEDRA Board on August 27,
2024.
The financing plan for this purchase consists of:
•$300,000 –HEDRA Fund Reserves
•$400,000 –City Debt Redemption fund internal loan to HEDRA
o HEDRA will reimburse the Debt Redemption Fund.
▪$95,000 –will be realized when the sale of a Lot to Rio Gran is finalized
▪$305,000 –will be repaid through future HEDRA revenues
Staff seeks Council approval for this financing plan and internal loan. Once approval is granted,
HEDRA will move forward to finalize the purchase.
Financial Impact:
•$400,000 internal loan from the City’s Debt Redemption Fund to HEDRA. This will be repaid in
future years as HEDRA receives payments from various sources, such as property sales.
Committee Discussion:
Not Applicable
Attachments:
•None
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