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HomeMy WebLinkAboutResolution - 2004-118 - Authorize Issuance and Sale of $8,000,000 Multifamily Housing and Redevelopment Revenue Note of 2004 for Broadmoor Apartments Project - 08/03/2004 CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION 2004-118 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF THE $8,000,000 MULTIFAMILY HOUSING DEVELOPMENT REVENUE NOTE OF 2004 (BROADMOOR APARTMENTS,INC. PROJECT) RESOLVED by the City Council of the City of Eden Prairie,Minnesota: Section 1. Findings. The City Council has heretofore determined, and does hereby determine, as follows: 1.1. the City is authorized by Minnesota Statutes, Chapter 462C, as amended (the "Act"), to finance the acquisition of 227 residential condominium units and 73 attached garage units in the multifamily housing facility commonly known as Broadmoor Apartments located at 635 Prairie Center Drive in the City (the "Project") and to enter into a Loan Agreement with the Borrower (the "Loan Agreement") for the public purposes expressed in the Act; 1.2. in authorizing the financing of the Project the City's purpose is to further promote the public purposes and legislative objectives of the Act by retaining and assisting the multifamily housing facilities of the Borrower in the City; 1.3. it is desirable, feasible and consistent with the objects and purposes of the Act to issue the $8,000,000 Multifamily Housing Development Revenue Note of 2004 (Broadmoor Apartments, Inc. Project) in the form of a single fully registered Note (the "Note")to finance the Project; and 1.4. the Note and the interest accruing thereon do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation and do not constitute or give rise to a pecuniary liability or a charge against the general credit or taxing powers o f the City and neither the full faith and credit nor the taxing powers of the City is pledged for the payment of the Note or interest thereon. Section 2. The Note. 2.1. Authorized Amount and Form of Note. T he N ote i ssued p ursuant t o this Resolution shall be in substantially the form set forth on Exhibit A to the Loan Agreement, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions hereof; and the total principal amount of the Note that may be outstanding hereunder is expressly limited to $8,000,000 unless a duplicate Note is issued pursuant to Section 2.7. 2.2. The Note. The Note shall be dated as of the date of delivery, shall be payable at the times and in the manner, shall bear interest at the rate, shall be payable to K.S.C.S. Properties, Inc., a Minnesota corporation (the "Lender") and shall be subject to such other terms and conditions as are set forth therein. 2.3. Execution. The Note shall be executed on behalf of the City by the signatures of its Mayor and Manager and shall be sealed with the seal of the City. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if it had remained in office until delivery. In the event of the absence or disability of the Mayor or Manager such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the City Council execute and deliver the Note. 2.4. Delivery of Note. Before delivery of the Note there shall be filed with the Lender of the Note(except to the extent waived by the Lender)the following items: (a) an executed copy of each of the following documents: (1) the Loan Agreement; (2) the Pledge Agreement between the City and the Lender(the "Pledge Agreement"); (3) the Mortgage, Security Agreement and Fixture Financing Statement from the Borrower to the Lender (the "Mortgage"); and (4) the Regulatory Agreement between the Borrower and the Lender(the"Regulatory Agreement"). (b) an opinion of Counsel for the Borrower as prescribed by Bond Counsel; (c) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; and (d) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (c) above or that the Lender may reasonably require for the closing. 2.5. Disposition of Note Proceeds. Upon delivery of the Note, the purchase price paid will be used by the Lender to acquire the Project. 2.6. Registration of Transfer. The City will cause to be kept at the office of the Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Lender and shall be transferable upon the Note Register by the Lender in person or by an agent duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to 1663931v2 2 the Clerk, duly executed by the holder or its duly authorized agent. The following form of assignment shall be sufficient for such purpose. For value received hereby sells, assigns and transfers unto the within Note of the City of Eden Prairie, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer such Note on the books of such City with full power of substitution in the premises. The undersigned certifies that the transfer be made in accordance with the provisions of Section 2.9 of the Resolution relating to the above Note. Dated: Registered Owner Upon such transfer the Clerk shall note the date of registration and the name and address of t he n ew h older i n t he N ote R egister and i n the r egistration b lank appearing o n t he Note. 2.7. Mutilated, Lost or Destroyed Note. In case any Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substitution for and upon cancellation of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the holder's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8. Ownership of Note. The City may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. 2.9. Limitation on Note Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. 2.10. Issuance of New Note. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Lender, issue new notes, in minimum amounts of not less than $100,000 and in the aggregate outstanding principal amount equal to that of 1663981v2 3 the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. Section 3. General Covenants. 3.1. Payment of Principal and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and interest on the Note at the place, on the dates, solely from the source and in the manner provided herein and in the Note. The principal and interest are payable solely from and secured by revenues and proceeds derived from the Loan Agreement, the Pledge Agreement and the Mortgage (the "Security Documents"), which revenues and proceeds are hereby specifically pledged to the payment thereof in the manner and to the extent specified in the Note and the Security Documents; and nothing in the Note or in this Resolution shall be considered as assigning,pledging or otherwise encumbering any other funds or assets of the City. 3.2. Performance of and Authority for Covenants. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Resolution, in the Note and in all proceedings of the City Council pertaining thereto; that it is duly authorized under the Constitution and laws of the State of Minnesota including particularly and without limitation the Act, to issue the Note,pledge the revenues and assign the Loan Agreement in the manner and to the extent set forth in this Resolution, the Note, the Loan Agreement and the Pledge Agreement; that all action on its part for the issuance of the Note and for the execution and delivery thereof has been duly and effectively taken; and that the Note in the hands of the holders are and will be valid and enforceable special limited obligations of the City according to the terms thereof. 3.3. Enforcement and Performance of Covenants. The City agrees to enforce all covenants and obligations of the Borrower under the Loan Agreement, upon request of the holders of the Note and being indemnified to the satisfaction of the City for all expenses and claims arising therefrom, and to perform all covenants and other provisions pertaining to the City contained in the Note and the Loan Agreement and subject to Section 3.4. 3.4. Nature of Security. Notwithstanding anything contained in the Note, the Security Documents or any other document referred to in Section 2.4 to the contrary, no covenant, provision or agreement of the City herein, or in the Note or in any other document executed by the City (or any other party) in connection with the issuance, sale and delivery of the Note, or any obligation herein or therein imposed upon the City or respecting breach thereof, shall give rise to a pecuniary liability of the City or a charge against the City's general credit or taxing powers or shall obligate the City, its officers, employees or agents financially in any way except with respect to this Resolution and the application of revenues therefrom and the proceeds of the Note. The Note shall be and constitute only a special and limited revenue obligation of the City, payable solely from the revenues pledged to the payment thereof pursuant to this Resolution, and the Note does not now and shall never constitute an indebtedness, a general or moral obligation or 1663981v2 4 a 1 oan o f t he c redit o f t he i ssuer o r a l ine, c harge o r e ncumbrance, I egal o r e quitable, against the City's general credit or taxing powers or any of the City's property. No failure of the City to comply with any tern, condition, covenant or agreement therein shall subject the City, its officers, employees or agents to liability for any claim for damages, costs or other financial or pecuniary charges except to the extent that the same can be paid or recovered from this Resolution or revenues therefrom or proceeds of the Note. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City. In making the agreements,provisions and covenants set forth herein,the City has not obligated itself except with respect to this Resolution and the application of revenues hereunder as hereinabove provided. The Note constitutes a special obligation of the City, payable solely from the revenues pledged to the payment thereof pursuant to the Loan Agreement and this Resolution, and do not now and shall never constitute an indebtedness or a loan of the credit of the City, the State of Minnesota or any political subdivision thereof or a charge against general taxing powers within the meaning of any constitutional or statutory provision whatsoever. It is further understood and agreed by the Borrower and the Holders that the City, its officers, employees or agents shall incur no pecuniary liability hereunder and shall not be liable for any expenses related hereto, all of which the Borrower agrees to pay. If, notwithstanding the provisions of this Section, the City, its officers, employees or agents incurs any expense, or suffers any losses, claims or damages or incurs any liabilities, the Borrower will indemnify and hold harmless the City, its officers, employees or agents from the same and will reimburse the City, its officers, employees or a gents f or any legal or other expenses incurred by the City, its officers, e mployees o r a gents i n r elation t hereto, a nd t his c ovenant t o i ndemnify,h old harmless and reimburse the City, its officers, employees or agents shall survive delivery of and payment for the Note and expiration or termination of this Resolution. The liability of the City is further restricted as provided in the Act. Section 4. Miscellaneous. 4.1. Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 4.2. Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 1663981v2 5 4.3. Authorization to Execute Agreements. The forms of the proposed Loan Agreement and the Pledge Agreement are hereby approved in substantially the form heretofore presented to the City Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and City Manager are authorized to execute the Loan Agreement and the Pledge Agreement in the name of and on behalf of the City and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Mayor or City Manager such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the City Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF EDEN PRAHUE, MINNESOTA, THIS 3an DAY OF AUGUST 2004. Nanc T - uke , Ma ATTEST: Kathleen Porta, City Clerk (Seal) 1663981v2 6