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HomeMy WebLinkAboutResolution - 89-41 - Final Approval of Housing Revenue Bonds for Elim Shores for $4,100,000 Multiple Family Housing for Senior Housing - 02/01/1989 RESOLUTION NO . RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE, MINNESOTA, APPROVING THE ISSUANCE AND SALE OF THE CITY' S $4 , 100, 000 MULTIFAMILY HOUSING REVENUE BONDS ( EL IM SHORES PROJECT) SERIES 1989 AND AUTHORIZING THE APPROVAL AND EXECUTION OF RELATED DOCUMENTS AND THE APPROVAL OF RELATED MATTERS WHEREAS , pursuant to and in accordance with the provisions of Minnesota Statutes, Chapter 462C and Chapter 469 (collectively the "Act" ) , and a Resolution of the City Council of the City of Eden Prairie ( the "City" ) adopted on October 18 , 1988 by appropriate action duly taken by the City , and in furtherance of the purposes of the Act , the City has previously declared its intention to provide financing for the acquisition and construction of a 64 unit housing facility for elderly persons (the "Project" ) (as defined in more detail in the Loan Agreement ) ; and WHEREAS, the City is willing to issue its $4, 100 , 000, Multifamily Housing Revenue Bonds ( Slim Shores Project ) , Series 1989 ( the "Series 1989 Bonds" ) pursuant to an Indenture of Trust dated as of March 1 , 1989 between the City and Marquette Bank Minneapolis , National Association, as Trustee (the " Indenture" ) , and to apply the proceeds of the Series 1989 Bonds to finance a portion of the costs of this Project ; and WHEREAS, the issuance and sale of the Series 1989 Bonds and deposit of the proceeds thereof in the Funds and Accounts as provided in the Indenture shall constitute a loan of $4 , 100 , 000 to the Company as provided in the Loan Agreement dated as of March 1 , 1989 between the City and Elim Shores , Inc . , a Minnesota nonprofit corporation ( the "Company" ) ( the "Loan Agreement" ) ; and WHEREAS, such loan together with moneys contributed by the Company will be applied to pay for costs of constructing and equipping the Project pursuant to a Disbursing Agreement ( as defined in the Loan Agreement ) ; and WHEREAS, to secure payments under the Loan Agreement and the performance of other obligations of the Company, the Company will execute and deliver a Combination Mortgage, Security Agreement and Fixture Financing Statement dated as of March 1, 1989 ( the "Mortgage" ) to the Trustee to secure the Series 1989 Bonds ; and WHEREAS, to enhance the marketability of the Bonds , E1im Homes , Inc. , a Minnesota nonprofit corporation ( the "Guarantor" ) has agreed to guaranty payment of the Bonds pursuant to a Guaranty Agreement dated as of March 1 , 1989 between the Guarantor and the Trustee ( the "Guaranty" ) ; WHEREAS, Dougherty , Dawkins , Strand & Yost Incorporated ( the "Underwriter" ) has indicated to the City its desire to purchase the Series 1989 Bonds upon the terms and conditions set forth in a Bond Purchase Agreement described below; WHEREAS, pursuant to Minnesota Statutes , Chapter 469 , the Housing and Redevelopment Authority in and for the City of Eden Prairie ( the "HRA" ) and the City have established a Housing District and have approved a tax increment financing plan ( the "Tax Increment Financing Plan" ) which provides that the Company shall set aside and make available to certain low and moderate income elderly persons at least seventy-five percent ( 750 ) of the units in the Project pursuant to the terms and conditions of the Tax Increment Financing Plan; and WHEREAS , the Tax Increment Financing Plan further provides for an interest reduction program pursuant to which a portion of the tax increments received by the HRA from the Housing District shall be applied to reduce interest cost on the Bonds ; and WHEREAS, to implement the Tax Increment Financing Plan it is proposed that the City, HRA and Company enter into an Interest Rate Reduction Assessment Agreement and a Development Agreement , each dated as of March 1 , 1989 (herein, the "Development Agreements" ) ; and NOW, THEREFORE, BE IT RESOLVED by the Council. as ( follows : Section 1 . The City hereby finds and determines that : ( a) By virtue of the Act , the City has been vested with all powers necessary and convenient to carry out and effectuate the purposes and provisions of. the Act and to exercise all powers granted to it under the Act . ( b) The Project constitutes a "multifamily housing development" as such term is now defined in and as authorized by Minnesota Statutes , Section 462C . 02 , Subd . 5 . ( c) The acquisition , construction and operation of the Project will further the purposes stated in the Act . (d ) It is desirable and in the public interest for the City to issue and sell the Series 1989 Bonds upon the terms and conditions set forth in the Indenture , for the purpose of financing the loan pursuant to the Loan Agreement . 2 ( e ) To enhance the marketability of the ;Series 1989 Bonds, Elim Homes , Inc . , a Minnesota nonprofit corporation will guaranty the payment of the principal and purchase price of , and premium, if any , and interest on the Series 1989 Bonds and the obligations of the Company under the Loan Agreement , all as provided in the Guaranty. ( f ) The issuance of the Series 1989 Bonds is authorized by the Act and it is necessary and desirable that the Series 1989 Bonds in an amount not to exceed $4 , 100 , 000 be issued by the City upon the terms set forth in the Indenture, under the provisions of which Indenture the payments thereunder will be pledged to the Trustee as security for the payment of principal and interest on the Series 1989 Bonds . ( g ) The payments required by the Loan Agreement are fixed and required to be revised from time to time as necessary, so as to produce income and revenues sufficient to provide for prompt payment of principal and purchase price of and interest on all Series 1989 Bonds issued under the Indenture when due , and the Loan Agreement also provides that the Company is required to pay all expenses of the operation and maintenance of the project including , but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project and payable during the term of the Loan Agreement . ( h) Under the provisions of the Act , and as provided in the Loan Agreement and Indenture, the Series 1989 Bonds are not to be payable from nor charged upon any funds other than the revenues pledged to the payment thereof; the City is not subject to any liability thereon (except with respect to such revenues ) ; no holders of the Series 1989 Bonds shall ever have the right to compel any exercise of the taxing powers of the City to pay any of the Series 1989 Bonds or the interest thereon (except and as expressly provided in the Development Agreements ) , nor to enforce paynent thereof against any property of the City ; the Series 1989 Bonds shall not constitute a charge, lien or encumbrance , legal or equitable upon any property of the City ( except with respect to such revenues ) ; each Series 1989 Bond issued under the Indenture shall recite that the Series 1989 Bonds , ..ncluding interest thereon, are payable solely from the revenue pledged to the payment thereof ; and no Series 1989 �- Bond shall constitute a debt of the City within the 3 meaning of any constitutional or statutory limita- tion . ( i ) Under Section 103 (a ) and Section 149 ( e ) of the Internal Revenue Code of 1985 , as amended , and the applicable regulations of the Department of the Treasury promulgated thereunder ( the "Code" ) , the interest on an issue of qualified 501( c) ( 3 ) bonds issued by a political subdivision of a state for certain facilities is not includible in gross income for Federal income tax purposes , subject to the limitations and requirements of the Code , including the filing by such political subdivision of a statement providing information required by the Code on IRS Form No. 8038 ( the " Information Statement" ) . Section 2 . In consequence of the foregoing, the City hereby determines ( i ) to issue and sell the Series 1989 Bonds to the Underwriter in accordance with the terms and conditions as set forth in the Bond Purchase Agreement ( the "Bond Purchase Agreement" ) to be dated on or about March 1, 1989 by and among the City, the Underwriter and the Company, such Series 1989 Bonds to be sold and delivered in the manner. , at a purchase price of not less than 98% of the Far amount thereof , plus accrued interest thereon , and on the terms and conditions set forth in the Bond Purchase Agreement (which terms and conditions may include provision for serial and term Bonds resulting in substantially level debt service payments over a term of approximately thirty years , a weighted average interest rate on the Bonds not to exceed nine and one-half percent ( 9 . 5% ) , and total underwriter ' s compensation of approximately three and three-quarters percent ( 3 . 75% ) of the par amount of the Bonds ) ; ( ii ) to apply all of the Series 1989 Bond proceeds to finance the Project ; ( iii ) to execute and deliver the Loan Agreement , the Disbursing Agreement , the Development Agreement , the Assessment Agreement and the Indenture; ( iv) to secure the Bonds by pledging and assigning to the Trustee certain of the City ' s rights and remedies under the Loan Agreement and certain moneys due and to become due thereunder , pursuant to the Indenture; ( v) to execute an Arbitrage Certificate in connection with the issuance of the Series 1989 Bonds ; ( vi ) to file the Information Statement in connection with the issuance of the Series 1989 Bonds and ( vii ) to take such other actions as are necessary or appropriate to consummate the transactions contemplated by the documents and instruments approved hereby . 4 Section 3 . The form and substance of the Series 1989 Bonds ( in substantially the forms contained in the form. of Indenture presented to this meeting) are hereby approved . Section 4 . The form and substance of the following documents ( in substantially the forms presented to this meeting of the Council) are hereby approved : the Bond Purchase Agreement , the Indenture, the Loan Agreement , the Mortgage , the Development Agreements , the Disbursing Agreement and the Guaranty . Section 5 . The City hereby consents to the distribution and use of the Official Statement , to be dated on or about the date of this Resolution ( substantially in the form of the draft o'E the Preliminary Official Statement dated February 15 , 1989 as on file with the City , with such changes , revisions or supplements contemplated by the Bond Purchase Agreement ) , as contemplated by the Bond Purchase Agreement , in substantially the form submitted to this meeting of the Council . Notwithstanding the foregoing, however , the City assumes no responsibility for the contents or use of such Official Statement . Section 6 . The Mayor and the Manager of the City are hereby authorized , on behalf of the City, to execute and deliver the Bond Purchase Agreement , the Series 1989 Bonds , the Indenture, the Loan Agreement and the Development Agreements ( collectively, the "Financing Documents " ) , and the Clerk of the City is hereby authorized to affix the seal of the City and to attest the same, all in substantially the forms thereof presented to this meeting with such changes, variations , omissions and insertions , including final interest rates, underwriter ' s discount and changes in dates of documents to conform with the date of delivery of the Series 1989 Bonds , as the Mayor and the Manager shall approve ( such execution, delivery, affixation of the seal and attestation thereof with respect to the Series 1989 Bonds, however , notwithstanding the foregoing , to occur as provided in the Indenture) . The execution and delivery of such Financing Documents by the Mayor and the Manager shall constitute conclusive evidence of such approval . Copies of the documents shall be delivered , filed and recorded as provided therein. 5 Section 7 . The Mayor and the Manager are hereby authorized and directed for and in the name and on behalf of the City to do all acts and things contemplated, required or provided for by the provisions of the Financing Documents , and to execute and deliver all such additional certificates , instruments and documents , including the Arbitrage Certificate and the Information Statement , and to do all such further acts and things as may be necessary or , in the opinion of the Mayor and the Manager , desirable and proper to effect the purposes of the foregoing resolution and to cause compliance by the City with all of the terms , covenants and provisions of the Financing Documents , including, without limitation, such certificates, acts and things as may be required by Bond Counsel and approved by the City Attorney, to show the facts relating to the legality and marketability of the Series 1989 Bonds . Section 8. This Resolution shall take effect immediately , and the Bonds are hereby ordered to be issued in accordance with this Resolution . Approved and adopted this day of February, 1989 . i t ayor Attest : Clerk / i f i 6