HomeMy WebLinkAboutResolution - 2000-145 - Refunding of Parkway Apartments Housing Revenue Bonds - 09/05/2000 CITY OF EDEN PRAIRIE
HENNEPIN COUNTY,MINNESOTA
RESOLUTION NO.2000-145
A RESOLUTION OF THE CITY OF EDEN PRAIRIE,
MINNESOTA ADOPTING A PROGRAM UNDER
MENNESOTA STATUTES, CHAPTER 462C, AUTHORIZING
THE ISSUANCE OF UP TO $12,000,000 IN AGGREGATE
PRINCIPAL AMOUNT OF ITS MULTIFAMILY HOUSING
REVENUE REFUNDING BONDS (GNMA
COLLATERALIZED LOAN — PARKWAY APARTMENTS
PROJECT), SERIES 2000A AND UP TO $1,500,000 IN
AGGREGATE PRINCIPAL AMOUNT OF ITS TAXABLE
MULTIFAMILY HOUSING REVENUE REFUNDING
BONDS (GNMA COLLATERALIZED LOAN — PARKWAY
APARTMENTS PROJECT), SERIES 2000B, APPROVING
THE FORMS THEREOF, AND AUTHORIZING THE
EXECUTION OF VARIOUS DOCUMENTS RELATING
THERETO.
WHEREAS, the City of Eden Prairie, Minnesota (the "City") is duly organized as a
statutory city under tie Constitution and the laws of the State of Minnesota; and
WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes
Chapter 462C (the "Act"), the City is authorized to carry out programs for the financing of
multifamily housing for persons of low and moderate income and to authorize its housing
and redevelopment authority to act on its behalf; and
WHEREAS,the City Council(the"City Council") of the City has prepared the Housing
Plan for Local Housing for the City of Eden Prairie, Minnesota (the "Housing Plan"), which
Plan was adopted pursuant to the Act on February 2, 1982; and
WHEREAS, the City has previously issued its Multifamily Housing Revenue
Refunding Bonds (Welsh Parkway Apartments Limited Partnership Project-FHA Insured
Mortgage Loan), Series 1990-A, issued originally in the aggregate principal amount of
$13,795,000, and its Taxable Multifamily Housing Revenue Bonds (Welsh Parkway
Apartments Limited Partnership Project-FHA Insured Mortgage Loan), Series 1990-B,
issued originally in the aggregate principal amount of $1,055,000 (collectively, the "Prior
Bonds") to refinance the acquisition, construction and equipping of the Parkway Apartments, a
375-unit multifamily rental facility located at 13775, 13800, 13875 and 13900 Chestnut Drive
and 13945 Anderson Lakes Parkway in the City(the"Project"); and
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WHEREAS, HR Parkway LLC, a Minnesota limited liability company and the current
owner of the Project (the "Borrower") has proposed a program (the "Program") for the
issuance of bonds to refund the Prior Bonds; and
WHEREAS, the Act requires adoption of a housing finance program after a public
hearing held thereon for which notice was published in a newspaper of general circulation in
the City at least fifteen(15) days in advance of the hearing; and
WHEREAS, the City on September 5, 2000 did conduct a public hearing on the
Program, including the issuance of the City's revenue bonds to refund the Prior Bonds, after
notice of such hearing was published in a newspaper of general circulation in the City at least
fifteen(15) days in advance of the hearing, and at which hearing members of the public were
provided an opportunity to express their views with respect to the Program and the
refinancing of the Project with the proceeds of the City's revenue bonds; and
WHEREAS, the Program was submitted to the Metropolitan Council on or prior to the
date of publication of notice of the public hearing on such Program, and the Metropolitan
Council was afforded an opportunity to present comments at the public hearing, all as required
by the Act; and
WHEREAS, the City desires to facilitate the development of rental housing within the
community, encourage the preservation of affordable housing opportunities for residents of
the City, encourage the preservation of housing facilities designed for occupancy by persons
of low or moderate income within the boundaries of the City, and the maintenance of
affordable units in the Project would assist the City in achieving these objectives; and
WHEREAS, the Program will result in the continued provision of decent, safe and
sanitary rental housing opportunities to persons within the City; and
WHEREAS, this City Council has been advised than conventional, commercial
financing to pay the capital costs of the Program is available only on a limited basis and at
such high costs of borrowing that the economic feasibility of operating the Project would be
significantly reduced, but the City Council has been further advised that with the aid of
municipal financing and resulting low borrowing costs, the Project is economically more
feasible; and
WHEREAS, the staff of the City considers the proposed Program to be in furtherance
of the housing policies of the State of Minnesota as stated in the Act and of the City as stated
in the Housing Plan;
WHEREAS, the Project is to be refinanced and the Prior Bonds are to be refunded
from the proceeds of Multifamily Housing Revenue Refunding Bonds (GNMA
Collateralized Mortgage Loan—Parkway Apartments Project), Series 2000A in the aggregate
principal amount not to exceed$12,000,000 (the"Series A Bonds") and Taxable Multifamily
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Housing Revenue Refunding Bonds (GNMA Collateralized Mortgage Loan. — Parkway
Apartments Project), Series 2000B in the aggregate principal amount not to exceed
$1,500,000 (the "Series B Bonds", and together with the Series A Bonds, the "Bonds'), to be
issued by the City, and the revenues from the Project shall be pledged for the security of and
payment for the Bonds (except as may be otherwise set forth in the Indenture hereinafter
referred to); and
WHEREAS, the Bonds will be issued under a Financing Agreement, dated as of
October 1, 2000 (the "Financing Agreement"), between the City, the Borrower, U.S. Bank
Trust National Association, as trustee (the "Trustee"), and Prudential Huntoon, Paige
Associates Ltd., as lender (the "Lender"), and an Indenture of Trust, dated as of October 1,
2000 (the "Indenture"), between the City and the Trustee, and will be secured primarily by a
"fully-modified pass-through" mortgage-backed security guaranteed as to timely payment of
principal and interest by the Government National Mortgage Association ("GNMA'), of
which $12,875,000 in aggregate principal amount is owned by and registered in the name of
First Trust National Association (now known as U.S. Bank Trust National Association), as
trustee for the Prior Bonds (the "Prior Trustee"), issued previously by the Lender with
respect to the Prior Bonds (the "GNMA Security"), and which is backed by a mortgage loan
to the Borrower in the original principal amount of $15,200,000 (the "Mortgage Loan"),
which is insured by the Federal Housing Administration ("FHA") of the U.S. Department of
Housing and Urban Development; and
WHEREAS, said Bonds and the interest on said Bonds shall be payable solely from
the revenues pledged therefor and the Bonds shall not constitute a debt of the City within the
meaning of any constitutional or statutory limitation nor give rise to a pecuniary liability of
the City or a charge against its general credit or assets and shall not constitute a charge, lien,
or encumbrance, legal or equitable, upon any property of the City other than the City's
interest in said Project; and
WHEREAS, forms of the following documents (including the exhibits referred to
therein)have been submitted to the City:
a. The Indenture to be made and entered into among the City, the
Borrower and the Trustee providing for the issuance of the Bonds, prescribing the
form thereof, pledging the trust estate described therein for the security of the Bonds,
and setting forth proposed recitals, covenants and agreements by the parties with
respect thereto;
b. The Financing Agreement to be made and entered into among the City,
the Borrower, the Trustee and the Lender providing for the registration, transfer and
delivery of the GNMA Security, requiring the Borrower to make all payments due on
the Mortgage Loan, and setting forth proposed recitals, covenants and agreements by
the parties with respect thereto;
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C. The Bond Purchase Agreement, to be dated as of the date of execution
thereof(the "Bond Purchase Agreement"),by and among the City,the Borrower,U.S.
Bancorp Piper Jaffray Inc. and Miller & Schroeder Financial, Inc. (collectively, the
"Underwriter")providing for the purchase of the Bonds by the Underwriter;
d. A Second Amendment to Regulatory Agreement between the Borrower
and the City(the "Regulatory Agreement Amendment");
e. A Preliminary Official Statement (the "Preliminary Official
Statement").
The agreements and amendments described and referred to in paragraphs a through d
above shall hereinafter sometimes be referred to collectively as the "Agreements."
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF EDEN PRAIRIE:
Section 1. It is hereby found, determined and declared that:
a. The preservation of the quality of life in the City is dependent upon the
maintenance, provision, and preservation of an adequate housing stock which is
affordable to persons and families of low or moderate income, that accomplishing this
is a public purpose, and that many would-be providers of housing units in the City are
either unable to afford mortgage credit at present market rates of interest or are unable
to obtain mortgage credit because the mortgage credit market is severely restricted;
b The development and implementation of the Program, and the issuance
and sale of the Bonds by the City, and the execution and delivery of the Agreements
and the performance of all covenants and agreements of the City contained therein
and of all other acts and things required under the Constitution and the laws of the
State of Minnesota to make the Agreements and the Bonds valid and binding
obligations of the City in accordance with their terms, are authorized by the Act;
C. The implementation of the Program for the purposes and in the manner
contemplated by the Agreements conforms or will conform to all pertinent statutes,
regulations and ordinances of the State of Minnesota and the City;
d. It is desirable that the Bonds, in the principal amount not to exceed
$13,500,000, be issued by the City on the terms set forth in the Indenture and the
Bond Purchase Agreement;
e. The payments required or provided for by the Agreements are intended
to produce income and revenues sufficient to provide for the payment when due of
principal of and interest on all Bonds issued under the Indenture, and payments are
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required to be made for such expenses of, among other things, administration of the
Program, as will be necessary to protect the interests of the City and the Trustee;
f. Pursuant to the provisions of the Act, and as provided in the
Agreements,the Bonds shall be retired solely from the revenues of the Project;
g. No litigation is pending or,to the best knowledge of the members of the
City Council or any officers of the City, threatened against the City questioning the
organization or boundaries of the City or the right of any officer of the City to hold
his or her office, or in any manner questioning the right and power of the City to
execute and deliver the Bonds, or otherwise questioning the validity of the proposed
Agreements, or questioning the appropriation of revenues for the payment of the
Bonds or the right of the City to lend the proceeds of the Bonds the Borrower;
h. To the best of its knowledge, neither the execution and delivery of the
Agreements or the Bonds, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms, conditions or
provisions of the Bonds, this Agreement or the Indenture conflict with or result in a
material breach of any of the terms, conditions or provisions of any constitutional
provisions or statute of the State, or of any agreement, instrument,judgment, order or
decree to which the City is now a party or by which it is bound, or constitute a
material default under any of the foregoing;
i. The City will, in reliance upon information furnished by the Borrower,
duly execute and cooperate in the filing of, simultaneously with the issuance of the
Bonds, a report on Internal Revenue Service Form 8038; and
j. Except as otherwise provided or contemplated in the Indenture,the City
will not make any pledge or assignment of the Trust Estate, other than the pledge and
assignment thereof under the Indenture.
Section 2. The Program, attached hereto as Exhibit A.is hereby adopted.
Section 3. The Agreements in substantially the forms submitted to the City at this
meeting are hereby approved. Such of the Agreements as require the execution of the City
are hereby authorized and directed to be executed or accepted, as the case may be, and
delivered in the name and on behalf of the City by its Mayor and its City Manager, or any of
their assistants, upon execution thereof by the parties thereto as appropriate. The Bonds and
the Agreements shall be executed and delivered as provided therein. Copies of all the
documents necessary for the consummation of the transactions described herein and in the
Agreements shall be delivered, filed and recorded as provided herein and in the Agreements.
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Section 4. The Bonds and the Agreements shall be executed substantially in the
forms submitted,but with such additions or deletions as the Mayor and its City Manager may
approve, as evidenced by their execution thereof.
Section 5. In anticipation of the collection of revenues of the Project, there shall
be issued forthwith the Bonds, in two series, in the aggregate principal amount not to exceed
$13,500,000, which issuance is approved, substantially in the forms and upon the terms set
forth in the Indenture, the terms of which are for this purpose incorporated in this Resolution
and made a part hereof as if fully set forth herein. The Bonds shall be dated as of the date and
shall mature on the dates (subject to redemption on such earlier dates as provided in the
Indenture), bear interest and be payable at the rates, all determined as set forth in the
Indenture, provided that such rates shall result in an average coupon rate not greater than
7.00% per annum for the tax-exempt Series A Bonds, and not greater than 9.00%per annum
for the taxable Series B Bonds. The City may at its option issue additional bonds at a later
date to be used to pay or reimburse costs of the Project not paid from the proceeds of the
Bonds, in a principal amount not to exceed the amount set forth in the Program.
Section 6. All actions of the members, employees and staff of the City heretofore
taken in furtherance of the Program are hereby approved,ratified and confirmed.
Section 7. The sale of said Bonds to the Underwriter is hereby approved, and the
Bonds are hereby directed to be sold to the Underwriter, upon the terms and conditions set
forth in the Bond Purchase Agreement. The Mayor and the City Manager, or any of their
assistants, are hereby authorized and directed to prepare and execute by manual or facsimile
signature the Bonds as described in the Indenture and to deliver them to the Trustee (which is
herein designated as the authenticating agent under Minnesota Statutes, Section 475.55) for
authentication and delivery to the Underwriter, together with a certified copy of this
Resolution, and the other documents required by the Indenture.
Section 8. The Mayor, the City Manager and other officers of the City are
authorized and directed to prepare and furnish when the Bonds are issued, certified copies of
all proceedings and records of the City relating to the Bonds and such other affidavits and
certificates (including but not limited to those required by bond counsel) as may be required
to show the facts relating to the legality, tax exemption and marketability of the Bonds as
such facts appear from the books and records in said officers' custody and control or as
otherwise known to them; and all such certified copies, certificates and affidavits, including
any heretofore furnished, shall constitute representations of the City as to the truth of all
statements made by the City and contained therein. The Mayor, the City Manager and other
officers are further authorized to execute such additional documents as shall be determined
by the Mayor to be necessary and desirable to provide for the issuance of the Bonds.
Section 9. The City authorizes, consents to, and approves of the distribution of the
Preliminary Official Statement relating to the Bonds, substantially in the form on file with
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the City, and its use by the Underwriters in offering the Bonds for sale to the public. Such
Preliminary Official Statement is hereby in all respects approved, ratified, confirmed and
designated as a near-final official statement for purposes of Rule 150-12 of the Securities and
Exchange Commission. The City further authorizes, consents to, and approves of the use by
the Underwriter in connection with the sale of the Bonds of a final Official Statement,
substantially in the form of the Preliminary Official Statement described above. The
Preliminary Official Statement and the Official Statement are the sole materials consented to
by the City for use in connection with the offer and sale of the Bonds. The City has not been
requested to participate in the preparation of or to review said Official Statements and has not
done so, and the City has made no independent investigation of the facts and statements
provided herein; accordingly, the City assumes no responsibility with respect thereto,
including without limitation as to matters relating to the accuracy, fairness, completeness or
sufficiency of said Official Statements.
Section 10. All covenants, stipulations, obligations and agreements of the City
contained in this Resolution and the aforementioned documents and Agreements shall be
deemed to be the covenants, stipulations, obligations and agreements of the City to the full
extent authorized or permitted by law, and all such covenants, stipulations, obligations and
agreements shall be binding upon the City. Except as otherwise provided in this Resolution,
all rights,powers and privileges conferred and duties and liabilities imposed upon the City by
the provisions of this Resolution or of the aforementioned documents and Agreements shall
be exercised or performed by the City or by such members of the City, or such officers,
board, body or agency thereof as may be required or authorized by law to exercise such
powers and to perform such duties.
No covenant, stipulation, obligation or agreement herein contained or contained in the
aforementioned documents or Agreements shall be deemed to be a covenant, stipulation,
obligation or agreement of any member of the City, or any officer, agent or employee of the
City in that person's individual capacity, and neither the City Council nor any officer or
employee executing the Bonds shall be liable personally on the Bonds or be subject to any
personal liability or accountability by reason of the issuance thereof.
No provision, covenant or agreement contained in the aforementioned documents, the
Agreements, the Bonds or in any other document related to the Bonds, and no obligation
therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to
any pecuniary liability of the City or any charge upon its general credit or taxing powers. In
making the agreements, provisions, covenants and representations set forth in such
documents, the City has not obligated itself to pay or remit any funds or revenues, other than
funds and revenues derived from the Project or the proceeds of the Bonds which are to be
applied to the payment of the Bonds, as provided therein and in the Indenture. The Bonds
shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or
funds of the City except the revenue and proceeds pledged to the payment thereof, nor shall
the City be subject to any liability thereon. The holders of the Bonds shall never have the
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right to compel any exercise of the taxing power of the City to pay the outstanding principal
of the Bonds or the interest thereon, or to enforce payment thereof against any property of the
City. The Bonds shall recite in substance that the Bonds, including the interest thereon, are
payable solely from the revenues and proceeds pledged to the payment thereof. The Bonds
shall not constitute a debt of the City within the meaning of any constitutional or statutory
limitation.
Section 11. Except as herein otherwise expressly provided, nothing in this
Resolution or in the aforementioned documents or Agreements expressed or implied is
intended or shall be construed to confer upon any person or firm or corporation, other than
the City or any holder of the Bonds issued under the provisions of this Resolution, any right,
remedy or claim, legal or equitable, under and by reason of this Resolution or any provision
hereof, this Resolution, the aforementioned documents and Agreements and all of their
provisions being intended to be and being for the sole and exclusive benefit of the City and
any holder from time to time of the Bonds issued under the provisions of this Resolution.
Section 12. In case any one or more of the provisions of this Resolution, or of the
aforementioned documents or Agreements, or of the Bonds issued hereunder shall for any
reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other
provision of this Resolution, or of the aforementioned documents, or of the Bonds, but this
Resolution, the aforementioned documents, and the Bonds shall be construed and enforced as
if such illegal or invalid provision had not been contained therein.
Section 13. The Bonds, when executed and delivered, shall contain a recital that
they are issued pursuant to the Act, and such recital shall be conclusive evidence of the
validity of the Bonds and the regularity of the issuance thereof, and that all acts, conditions
and things required by the laws of the State of Minnesota relating to the adoption of this
Resolution, to the issuance of the Bonds and to the execution of the aforementioned
documents to happen, exist and be performed precedent to and in the enactment of this
Resolution, and precedent to issuance of the Bonds and precedent to the execution of the
aforementioned documents have happened, exist and have been performed as so required by
law.
Section 14. In the event any of the officers of the City authorized to execute
documents on behalf of the City under this Resolution shall have resigned or shall for any
reason be unable to do so, any member of the City, or officer of the City, is hereby directed
and authorized to do so on behalf of the City, with the same effect as if executed by the
officer authorized to do so in this Resolution.
Section 15. The Borrower has agreed to pay directly or through the City any and all
costs incurred by the City in connection with the Bonds and the Program whether or not the
Program is carried to completion or whether or not the Bonds or the Agreements are
executed.
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Section 16. Nothing in this Resolution or the documents and Agreements prepared
pursuant hereto shall authorize the expenditure of any municipal funds oft the Program other
than as specified and authorized by the City Council and other than the revenues derived from
the Project or otherwise granted to the City for this purpose.
Section 17. This Resolution shall take effect immediately.
Adopted by the City Council on September 5,2 0.
[SEAL] J an L. Harris, Mayor
Attest:
�1�29��—
Kat een Porta, City Clerk
M1:508924.01
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