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HomeMy WebLinkAboutResolution - 96-42 - Elim Shores Housing Refunding Bonds - 03/12/1996 Resolution No. 96-42 Resolution providing for the issuance and sale of Elderly Housing Refunding Revenue Bonds (Ehm Shores, Inc. Project), Series 1996, and authorizing the execution of certain documents in connection therewith. WHEREAS, pursuant to Minnesota Statutes, Chapter 462C, as amended (hereinafter referred to as the "Act"), the City of Eden Prairie, Minnesota (the "City") has heretofore issued its Multifamily Housing Revenue Bonds (Ehm Shores Project), Series 1989, originally dated as of April 1, 1989 (the 'Prior Bonds"), of which $3,955,000 principal amount remains outstanding, and loaned the proceeds of the Prior Bonds to Elim Shores, Inc., a Minnesota nonprofit corporation (the "Corporation") to be used for the purpose of paying the costs of acquisition, construction and furnishing of a 64 unit senior housing facility in the City (the 'Project"); and WHEREAS, at the request of the Corporation and pursuant to the Act, the City now proposes to issue its Elderly Housing Refunding Revenue Bonds (Elim Shores, Inc. Project), Series 1996, in the principal amount of $3,300,000 (the "Series 1996 Bonds"), and loan the proceeds to the Corporation to be used, along with certain additional funds to be contributed by the Corporation, to refund and retire the Prior Bonds on or about May 1, 1996; and WHEREAS, the City has conducted a public hearing on the date hereof on the issuance of the Series 1996 Bonds as required by Section 147(f) of the Internal Revenue Code of 1986; and WHEREAS, forms of the following documents relating to the issuance of the Series 1996 Bonds have been submitted to the City Council and are now on file in the office of the City Clerk: (a) Loan Agreement, dated as of March 1, 1996 (the "Loan Agreement"), between the City and the Corporation, whereby, among other things, the City has agreed to sell the Series 1996 Bonds to provide funds to be loaned to the Corporation to pay a portion of the costs of retiring the Prior Bonds, and the Corporation has agreed to make loan repayments sufficient to pay debt service on the Series 1996 Bonds when due, and to pay related costs, expenses and fees of the City; (b) Indenture of Trust, dated as of March 1, 1996 (the "Indenture"), between the City and First Trust National Association, St. Paul, Minnesota, as trustee (the "Bond Trustee'), whereby the City authorizes the issuance of the Series 1996 Bonds upon the terms and conditions set forth therein; (c) Mortgage and Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents, dated as of March 1, 1996 (the "Mortgage"), from the Corporation to the City whereby the Corporation grants to the City a mortgage lien on and security interest in the Project as security for the performance by the Corporation of its obligations and covenants under the Loan Agreement; (d) Assignment of Mortgage Agreement, dated as of March 1, 1996 (the "Assignment"), from the City to the Bond Trustee whereby the City assigns its interests in the Mortgage, except for certain rights to fees, charges and indemnity thereunder, to the Bond Trustee as security for the payment of the principal of and interest on the Series 1996 Bonds when due; (e) Preliminary Official Statement (the "Preliminary Official Statement") to be circulated by Miller, Johnson & Kuehn, Incorporated (the "Underwriter") in connection with the sale of the Series 1996 Bonds describing the terms thereof and containing material information concerning the Corporation, the financing and other matters; (f) Bond Purchase Agreement (the "Bond Purchase Agreement") between the Underwriter, the Corporation and the City setting forth the terms and conditions upon which the Underwriter proposes to purchase the Series 1996 Bonds; and (g) Second Amendment to Development Agreement (the "Second Amendment") between the City, The Housing and Redevelopment Authority in and for the City of Eden Prairie and the Corporation, effective as of March 12, 1996, pursuant to which the parties amend certain provisions of the Development Agreement, made as of April 1, 1989, and previously amended effective as of January 1, 1993, relating to the development, financing and operation of the Project. The foregoing are referred to from time to time in this Resolution as the Bond Documents. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE: 1. Findings. That it is hereby found and determined that: (a) The City is authorized to issue the Series 1996 Bonds pursuant to the provisions of the Act. -2- (b) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the Project or to the Series 1996 Bonds or the Bond Documents, or questioning the organization of the City or its power or authority to issue the Series 1996 Bonds or to execute and deliver the Bond Documents required to be executed by the City. (c) The execution and delivery of, and the performance of the City's obligations under, the Series 1996 Bonds and the Bond Documents do not and will not violate any material order of any court or other agency of government, or any material provision of any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (d) No member of the City Council (i) has a direct or indirect interest in the Project, the Bond Documents or the Series 1996 Bonds, (ii) has a direct or indirect interest in the Corporation, or (iii) has received or will receive any commission, bonus or other remuneration for or in respect of the Project, the Bond Documents or the Series 1996 Bonds. 2. Ap12roval and Execution of Bond Documents. The forms of Bond Documents referred to above are approved. The Bond Documents required to be executed by the City shall be executed in the name and on behalf of the City by the Mayor and the City Manager in substantially the form on file, but with such changes therein, not inconsistent with the Act or other law, and Section 3 hereof, as may be -3- approved by the City Attorney and the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. The Mayor and the City Manager are also authorized and directed to execute such closing certificates and other documents as may be necessary to complete the issuance and delivery of the Series 1996 Bonds upon approval thereof by the City Attorney, which approval shall be conclusively evidenced by the execution thereof. 3. Approval of Terms and Sale of Series 1996 Bonds. The most recent draft of the Indenture as provided to the City contains the terms and provisions of the Series 1996 Bonds as negotiated to date. At such time as the final terms of the Series 1996 Bonds become available, the Mayor and City Manager are authorized to execute a contract with the Underwriter approving such terms (and to consent to changes in the Bond Documents reflecting such final terms) provided that (i) the total principal amount of Series 1996 Bonds to be issued shall not exceed $3,300,000, (ii) the final maturity of the Series 1996 Bonds shall not be later than March 1, 2026, (iii) the average coupon rate on the Series 1996 Bonds shall not exceed 7.50% per annum and (iv) the purchase price of the Series 1996 Bonds paid by the Underwriter shall not be less than 98% of the par amount thereof, plus accrued interest to the date of issuance of the Bonds. The Underwriter may receive an additional underwriting fee from the Corporation to be paid from funds of the Corporation. 4. Execution and Delivery of Series 1996 Bonds. The Series 1996 Bonds shall be executed by the facsimile signatures of the Mayor and the City Manager, and the Series 1996 Bonds shall be delivered to the Underwriter upon payment of the -4- agreed purchase price therefor, and upon receipt by the Bond Trustee of the signed legal opinion of Dorsey & Whitney LLP, of Minneapolis, Minnesota, bond counsel, and the other documents required pursuant to the Indenture. 5. Consent to Circulation of Official Statement. The City hereby consents to the circulation of the Preliminary Official Statement and a final Official Statement to prepared substantially in the form of the Preliminary Official Statement, provided that the Preliminary Official Statement and the final Official Statement shall recite that the City has neither participated in the preparation thereof nor made any independent investigation of the facts contained therein nor does the City assume any responsibility for the sufficiency, accuracy or completeness of the information contained therein. 6. Certifications. The Mayor, City Manager and other officers of the City are authorized and directed to prepare and furnish to Dorsey & Whitney LLP, bond counsel, to the Corporation, the Bond Trustee and the Underwriter certified copies of all proceedings and records of the City relating to the Project and the Series 1996 Bonds, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the 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 contained therein. 7. Limited Liability. No covenant, provision or agreement of the City herein or in the Bonds, the Bond Documents or in any other document executed by -5- the City in connection with the issuance, sale and delivery of the Series 1996 Bonds, or any obligation herein or therein imposed upon the City or breach thereof, shall give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers or shall obligate the City financially in any way except with respect to the Loan Agreement and the application of revenues therefrom and the proceeds of the Series 1996 Bonds. No failure of the City to comply with any term, condition, covenant or agreement herein or therein shall subject the Issuer 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 the Loan Agreement or revenues therefrom or proceeds of the Series 1996 Bonds. 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 and in the Bond Documents, the City has not obligated itself except with respect to the Loan Agreement and the application of revenues thereunder and the proceeds of the Series 1996 Bonds. The Series 1996 Bonds constitute special obligations of the City, payable solely from the revenues pledged to the payment thereof pursuant to the Loan Agreement and the Indenture, 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 the City's general taxing powers within the meaning of any constitutional or statutory provision whatsoever. -6- Adopted by the City Council of the City of Ed P ' 'e, Minnes t ' th day of March, 1996. Mayor Attest: j - City Clerk -7-