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HomeMy WebLinkAboutResolution - 95-155 - Refunding Bonds for Olympic Ridge Housing Project - 08/15/1995 3 RESOLUTION NO. 5 - 5 5 AUTHORIZING THE SALE AND ISSUANCE OF MULTIFAMILY HOUSING REVENUE REFUNDING BONDS, THE EXECUTION OF RELATED DOCUMENTS AND THE PERFORMANCE OF RELATED ACTIONS BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota (the "City"), as follows: Section 1. Authorization and Recitals. 1.01 General Authority. Pursuant to Minnesota Statutes, Chapters 462A and 462C (the "Act"), the City is authorized to issue revenue bonds to refund the City's Multifamily Housing Development Revenue Bonds (Olympic Ridge Project) (the"Prior Bonds")the proceeds from the sale of which financed the acquiring, constructing and equipping of a 143-unit multifamily rental housing facility located on Homeward Hills Road at the intersection of County Road No. 1 in the City(the"Project"),which constitutes a"multifamily housing development"within the meaning of the Act. The City has adopted a housing plan and,with respect to the Project, a program, adopted on November 19, 1985 as required by the Act. 1.02 Proposed Financing. The Project is presently owned by R_ Neslund Co., a Minnesota corporation(the"Prior Company"),which is the successor to the original owner of the Project. The Prior Company has requested the City to issue and sell its Multifamily Housing Revenue'Refunding Bonds, Series 1995A (GNMA Collateralized Mortgage Loan -- Olympic Ridge Project) in the approximate aggregate principal amount of $5,894,000 (the "Series A Bonds"), its Multifamily Housing Revenue Refunding Bonds, Series 1995B (Olympic Ridge Project) in the approximate aggregate principal amount of$520,000 (the "Series B Bonds"), and its Multifamily Housing Revenue Refunding Bond, Series 1995C (Olympic Ridge Project) in the approximate aggregate principal amount of$896,000 (the"Series C Bond" and collectively with the Series A Bonds and the Series B Bonds, the`Bonds"). The Series A Bonds and the Series B Bonds are proposed to be issued pursuant to a Trust Indenture (the "Series A and B Indenture") between the City and First Trust National Association (the "Trustee") and the Series C Bond is proposed to be issued pursuant to a Trust Indenture (the "Series C Indenture") between the City and the Trustee. Prior to the issuance of the Bonds,the Prior Company will transfer all of its interest in and to the Project to Olympic Ridge Limited Partnership, a Minnesota limited partnership (a partnership with the Prior Company as its general partner, referred to herein as the "Borrower"'). Sale proceeds of the Series A Bonds and the Series B Bonds are proposed to be loaned to the Borrower pursuant to a Loan Agreement and a Subordinate Loan Agreement, respectively (collectively referred to as the "Series A and B Loan Agreements"), in order to refund, together with other funds,the Prior Bonds. Sale proceeds of the Series C Bond are proposed to be loaned to Richard and Maebeth Neslund (each a shareholder (or related to a shareholder) of the Prior Company, referred to herein as the "Shareholders") pursuant to a Loan Agreement between the City and the Shareholders(the"Series C Loan Agreement")for the purpose of refunding the Prior Bonds. The Series A and B Loan Agreements will provide for payments from the Borrower sufficient to pay timely when due all principal of and interest on the Series A Bonds and the Series B Bonds, respectively. The Series C Loan Agreement will provide for payments from the Shareholders sufficient to pay timely when due all principal of and interest on the Series C Bond. Proceeds of the Bonds will be deposited with the Trustee under an Escrow Agreement between the Issuer,the Trustee and the Borrower(the"Escrow Agreement")to be applied for the refunding of the Prior Bonds on December 1, 1995. The Series A Bonds are proposed to be secured primarily by a fully-modified pass-through security, guaranteed by the Government National Mortgage Association. The Series B Bonds are proposed to be secured on a subordinate basis to the Series A Bonds by an assignment to the Trustee of all rights of the City in the Series B Loan Agreement(with certain exceptions) and by a second mortgage lien on and security interest in the Project granted pursuant to a Subordinated Multifamily Mortgage and Security Agreement from the Borrower to the Trustee (the "Series B Mortgage"). The Series C Bond is proposed to be secured by an assignment to the Trustee of all rights of the City in the Series C Loan Agreement(with certain exceptions). The Prior Company has entered a certain Regulatory Agreement and a certain Declaration of Restrictive Covenants with respect to renting a portion of the Project to qualifying low and moderate-income persons. In connection with the issuance of the Bonds, the Borrower proposes to amend each of the above documents pursuant to an Amendment to Regulatory Agreement between the City,the Trustee and the Borrower(the"Amendment to Regulatory Agreement") and a Second Amendment to Declaration of Restrictive Covenants between the City, the Trustee and the Borrower(the"Amendment to Declaration of Restrictive Covenants"). Miller& Schroeder Financial, Inc. (the "Underwriter") proposes to act as the underwriter to purchase all Bonds at the prices and upon the terms set forth in a Bond Purchase Agreement between the City, the Underwriter and one or more other parties (the "Bond Purchase Agreement"). The Series A Bonds will be offered pursuant to a Preliminary Official Statement (the "Series A POS") and are proposed to be sold pursuant to a final Official Statement, the Series B Bonds will be offered pursuant to a Preliminary Official Statement(the"Series B POS") and are proposed to be sold pursuant to a final Official Statement and the Series C Bonds will be offered pursuant to a Preliminary Private Placement Memorandum ("Series C Preliminary PPM") and are proposed to be sold pursuant to a final Private Placement Memorandum. The Series A POS, Series B POS and Series C Preliminary PPM are collectively referred to herein as the"Preliminary Offering Documents". 2 1.03 Documentation. Forms of the following have been prepared and submitted to this Council and are hereby directed to be filed: (a) the Series A and B Indenture; (b) the Series C Indenture; (c) the Series A and B Loan Agreements; (d) the Series C Loan Agreement, (e) a form of each of the Bonds; (f) the Amendment to Regulatory Agreement; (g) the Amendment to Declaration of Restrictive Covenants; (h)' the Escrow Agreement, (i) the Bond Placement Agreement; and 0) the Series C Mortgage. Section 2. Findings and Approval of Documents. Based on the foregoing, the City Council hereby determines that issuance of the Bonds furthers the purposes of the Act and approval of the Bonds and the transactions herein contemplated are in the public interest of the City. The forms of each document listed in Section 1.03 are hereby approved. Section 3. Offering Documents. The City Council has been presented with a form of each of the Preliminary Offering Documents and consents to the use of the Preliminary Offering Documents in substantially the forms presented. The City also approves the use of such documents in their final form as completed to reflect the terms of the Bonds herein approved. The City has not reviewed or participated in the preparation of the Preliminary Offering Documents, has made no independent investigation with respect to the information contained therein and assumes no responsibility for the accuracy or completeness of such information or such documents as finalized or amended. Section 4. The Bonds;Terms, Sale and Execution. 4.01 Authorization;Price. The City Council hereby authorizes the issuance of the Bonds bearing the interest rate or rates as negotiated between the Borrower and the Underwriter 3 (provided the aggregate principal amount and the rate or rates shall not exceed $5,900,000 and 9 % per annum on the Series A Bonds, $550,000 and 12 % per annum on the Series B Bonds, and $900,000 and 12%per annum on the Series C Bond)and the sale thereof to the Underwriter at the price and upon the terms contained in the Bond Purchase Agreement. Notwithstanding the foregoing,the sale of the Series B Bonds and Series C Bonds shall be made on a private placement basis. 4.02 Terms. All terms of the Bonds, including their interest rates, series, dates,maturity, place and medium of payment, principal amounts, registration privileges, redemption terms, manner of execution, form and other terms, covenants and conditions shall be as provided in the final Series A and B Indenture and the Series C Indenture (subject to the restrictions provided in this Resolution), as appropriate, which are hereby incorporated in their entirety herein and shall constitute a part of this Resolution. 4.03 Execution. The Mayor and City Manager are hereby authorized and directed to execute the Bonds and the other documents referred to above, to the extent the City is a party thereto and the signatures of such persons are called for, and to deliver them to the Trustee, together with the other documents, certificates, consents or instruments required of the City in the Series A and B Indenture or the Series C Indenture or as may be appropriate to effect the transactions herein contemplated, but only upon satisfaction of the conditions precedent to issuance of the Bonds set forth in the applicable Indenture and satisfaction (or waiver) of the conditions precedent to the Underwriter's obligation to purchase the Bonds as set forth in the Bond Purchase Agreement. Copies of all foregoing documents, certificates, consents or instruments shall be delivered,filed and recorded as provided therein. 4.04 Modifications, Absence of Officers. The approval hereby given to the execution and delivery of the various items referred to in Section 4.03, including the Bonds, includes an approval of such modifications thereto, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney, Lang, Pauly & Gregerson, Ltd., prior to the execution and delivery of the same. 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. In the absence or disability of any officer or employee of the City, any of the documents authorized by this Resolution to be executed by such person may be executed by any other person who is otherwise permitted by law to execute such documents on behalf of the City. Section 5. Authentication of Proceedings. The Mayor, City Manager and other officers of the City are authorized and directed to furnish to the Underwriter and Bond Counsel, certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality and marketability of the Bonds as such facts appear from the books and records in the officers' custody or control or as otherwise known to them; and all such certificates and affidavits, including any heretofore 4 furnished, shall constitute representations of the City as to the truth of all statements contained therein. Section 6. Limitations of the City's Obligations. The Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, and shall not be payable from nor charged upon any funds other than the revenues pledged to the payment thereof, and no holder of the Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Bonds or the premium, if any, or interest thereon, or to enforce payment thereof against any property of the City, other than those rights and interests of the City pledged therefor under the Indenture. The agreement of the City to perform the covenants and other provisions contained in this Resolution or the Bonds,the Series A and B Loan Agreement, the Series C Loan Agreement, the Series A and B Indenture, the Series C Indenture, the Bond Purchase Agreement or the Bond Placement Agreement shall be subject at all times to the availability of revenues famished by or on behalf of the Borrower sufficient to pay all costs of such performance or the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. Section 7. Effective Date. This Resolution shall become effective as of the date and time of its adoption. Adopted: August/ 1995. Approved: Mayor Attest: W67L City Clerk 5