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HomeMy WebLinkAboutResolution - 90-129 - Amendment to Loan Agreement - Parkway Apartments Housing Bond - 05/01/1990 e RESOLUTION NO. tl Ia g • RESOLUTION APPROVING AMENDMENT TO LOAN AGREE- MENT AND OTHER DOCUMENTS RELATED TO PROJECT FINANCED BY HOUSING DEVELOPMENT REVENUE NOTE (PARKWAY APARTMENTS LIMITED PARTNERSHIP PROJECT) SERIES 1985 AND GIVING PRELIMINARY APPROVAL TO ISSUANCE OF REFUNDING BONDS. WHEREAS, the City previously issued its Housing Development Revenue Note (Parkway Apartments Limited Partnership Project) Series 1985 in the original principal amount of $17,000,000 (the "Note") and loaned the proceeds thereof to Parkway Apartments Limited Partnership, a Minnesota limited partnership ("Original Borrower") pursuant to a Loan Agreement, dated October 8, 1985 (the "Loan Agreement") , to finance the acquisition and construction of a multifamily rental project (the "Project") to be owned by Original Borrower; and WHEREAS, to assure the exclusion of interest on the Note from federal income taxes, a Declaration of Restrictive Covenants, dated October 8, 1985, as amended, from the Original Borrower (the "Declaration") was filed of record against the Project and a certain Regulatory Agreement, dated October 8, 1985, was entered into related hereto (the "Regulatory Agreement") ; and WHEREAS, on March 29, 1990 Parkway Properties of Eden Prairie, • Inc. , a Minnesota corporation ("Parkway") , assumed all Original Borrower's duties and obligations under the Loan Agreement, Declaration, Regulatory Agreement and related documents, and, with the consent of the City, purchased the Project from the Original Borrower; and WHEREAS, by resolution adopted by this City Council on March 13, 1990, the City approved the future transfer of the Project to certain transferees upon the conditions set forth in such resolu- tion; and WHEREAS, by resolution adopted by this City Council on April 17, 1990, the transferees to whom the Project was authorized to be transferred was stated to include an entity affiliated with Welsh Companies, Inc. or a partnership, the general partner of which is an affiliate or subsidiary of Welsh Companies, Inc. ; and WHEREAS, it is proposed that Welsh Parkway Apartments Limited Partnership, a Minnesota limited partnership of which the general partner is an affiliate of Welsh Companies, Inc. (the "Partner- ship") purchase the Project from Parkway and assume Parkway's obligations under the Loan Agreement, Declaration and Regulatory Agreement; and WHEREAS, Piper, Jaffray & Hopwood Incorporated or its assigns (the "Holder") proposes to purchase the Note from the present • registered owner of the Note; and WHEREAS, to reflect the foregoing events, the Partnership and Holder have requested an amendment to the Declaration upon the terms set forth in an Amendment to Declaration of Restrictive Covenants, a form of which has been presented to the City Council (the "Declaration Amendment") and an amendment to the Regulatory Agreement upon the form set forth in a First Amendment to Regulatory Agreement, a form of which has been presented to the City Council (the "Regulatory Agreement Amendment") ; and WHEREAS, because of insufficient Project revenues, the Holder and Partnership propose a deferral, but not a forgiveness, of certain amounts payable pursuant to the Loan Agreement in accor- dance with a First Amendment to Loan Agreement, a form of which has been presented to the City Council (the "Loan Agreement Amend- ment") ; and WHEREAS, the City has received an opinion of Bond Counsel that transfer of the Project to the Partnership and execution and delivery of the Loan Agreement Amendment, Declaration Amendment and Regulatory Agreement Amendment will not adversely affect the exclusion of interest on the Note from gross income for federal income tax purposes; and WHEREAS, the Partnership proposes that the City issue its revenue bonds or notes in an amount not to exceed the outstanding principal amount of the Note (the "Refunding Bonds") for the purpose of refunding the Note in whole or in part; and WHEREAS, the City shall not be liable on the Refunding Bonds, and the Refunding Bonds shall not be a debt of the City within the meaning of any state constitutional provision or statutory limita- tion, and will not constitute or give rise to a charge against the general credit or taxing power of the City or a pecuniary liability of the City, nor shall the Bonds be payable out of any funds or properties other those than provided as security therefor; NOW THEREFORE BE IT RESOLVED, by the City Council of the City of Eden Prairie, as follows: 1. Each of the Loan Agreement Amendment, Declaration Amendment and Regulatory Agreement Amendment is hereby approved, and the Mayor and City Manager, or officials of the City duly acting in their stead, are hereby authorized to execute each, with such amendments or modifications thereof as are approved by legal counsel for the City and the persons executing such instrument, the execution of each being conclusive evidence of such approval. 2 r A 2. The City hereby gives preliminary approval to the issuance of the Refunding Bonds. Notwithstanding the foregoing, • however, the adoption of this resolution shall not be deemed to establish a legal obligation on the part of the City or its council to issue or cause the issuance of the Refunding Bonds, and the City and its Council retain the right not to issue such bonds or to issue the bonds in an amount less than referred to above, should the City or its Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the bonds or to issue the bonds in an amount less than set forth above. 3. The Partnership has agreed to pay directly or through the City any and all costs incurred by the City in connection with the Refunding Bonds whether or not the bonds are approved by the City. 4. All commitments of the City expressed herein are subject to the condition that the City and the Partnership shall have agreed to mutually acceptable terms and conditions of the Loan Agreement, the Refunding Bonds, and of the other instruments and proceedings relating to the Refunding Bonds and that the closing of the issuance and sale of the Refunding Bonds shall have occurred by no later than July 1, 1991. If the events set forth herein do not take place within the time set forth above, or any extension thereof, and the Refunding Bonds are not sold within such time, the preliminary approval herein of the Refunding Bonds shall expire and be of no further effect. • 5. The Mayor, City Manager and other officials of the City are hereby authorized to execute and deliver such other agreements, certificates or instruments, approved by legal counsel to the City, as may be reasonably necessary or desirable to implement the matters approved hereby, the execution of such agreements, certifi- cates or instruments being conclusive evidence of such approval. Adopted: May 2, 1990. Mayor ATTEST: Cler 3 •