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HomeMy WebLinkAboutResolution - 96-59 - Final Approval of Tanager Creek Project $15,045,985 - 04/16/1996 CITY OF EDEN PRAIRIE,NIINNESOTA RESOLUTION NO. 96-59 AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF MULTIFAMILY HOUSING REVENUE REFUNDING BONDS (GNMA COLLATERALIZED MORTGAGE LOAN-TANAGER CREEK PROJECT) SERIES 1996A; TAXABLE MULTIFAMILY HOUSING REVENUE BONDS (TANAGER CREEK PROJECT) SERIES 1996B AND SUBORDINATE MULTIFAMILY HOUSING REVENUE REFUNDING BONDS (TANAGER CREEK PROJECT) SERIES 1996C IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $15,045,085 (THE "BONDS"); AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, A LOAN AGREEMENT, A SUBORDINATE LOAN AGREEMENT, AN. ESCROW AGREEMENT, AN AMENDMENT TO REGULATORY AGREEMENT AND PRELIMINARY AND FINAL OFFICIAL STATEMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS; AND PROVIDING FOR THE SECURITY, RIGHTS AND REMEDIES OF THE HOLDERS OF SAID BONDS WHEREAS,the City of Eden Prairie, Minnesota(the "Issuer") is authorized by the laws of the State of Minnesota,particularly Minnesota Statutes, Chapters 462A and 462C, as amended (the "Act"), to carry out the public purposes described therein and contemplated thereby by issuing its revenue bonds to defray, in whole or in part, the development costs of a multifamily rental housing development, or to refund any such revenue bonds, and by entering into any agreements made in connection therewith and pledging them as security for the payment of the principal of and interest on any such revenue bonds;and WHEREAS, pursuant to a Trust Indenture dated as of May 1, 1991, between the Issuer and National City Bank of Minneapolis, the Issuer issued its Multifamily Housing Revenue Refunding Bonds (Tanager Creek Project) Series 1991 in the aggregate principal amount of $10,030,000 (the "Prior Bonds") and used the proceeds of the Prior Bonds to provide for the financing of a 185-unit multifamily rental housing development located within the jurisdictional boundaries of the Issuer (the "Project') for the benefit of Tanager Limited Partnership, a Minnesota limitedpartnership(the"Owner"); and WHEREAS, it has been represented to the Issuer by the Owner and Miller& Schroeder Financial, Inc. (the "Underwriter's that adequate arrangements have been or will be made with all holders of the Prior Bonds to permit redemption and prepayment of the Prior Bonds;and WHEREAS, the Issuer, by passage of Resolution No. 95- on December 19, 1995, adopted an amended and restated housing program with respect to the Project (the "Program') pursuant to and in conformity with the Act after public hearing thereon and after publication of notice in a newspaper circulating generally within the jurisdictional boundaries of the Issuer, at least fifteen(15)day before the date of the hearing,as required by the Act; and WHEREAS, on or prior to the date of publication of such notice, the Program was submitted to the Metropolitan Council, and the Metropolitan Council presented its favorable comments to the Issuer, by letter dated November 17, 1995; and no material changes or changes inconsistent with the Metropolitan Council's comments were made to the Program; and WHEREAS, the Issuer proposes to refinance the Project by the issuance of (i) Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized Mortgage Loan - Tanager Creek Project) Series 1996A(the "Series A Bonds"); (ii) Taxable Multifamily Housing Revenue Bonds (GNMA Collateralized Mortgage Loan - Tanager Creek Project) Series 1996B (the "Series B Bonds"); and (iii) Subordinate Multifamily Housing Revenue Refunding Bonds (Tanager Creek Project) Series 1996C (the "Series C Bonds") (together the Series A, B and C Bonds are hereinafter referred to as the`Bonds")under the Act pursuant to this Resolution;and WHEREAS,the Bonds will be issued under an Indenture of Trust, as hereinafter defined, and the Series A Bonds and Series B Bonds will be secured by a fully modified mortgage-backed security (the "GNMA Security") issued by the lender referenced in the Loan Agreement, as hereinafter defined(the "Lender"), and guaranteed as to timely payment of principal and interest by the Government National Mortgage Association ("GNMA") and payment of the Series C Bonds will be secured by the issuance of a note (the "Series C Borrower Note' by the Owner pursuant to the Subordinate Loan Agreement, as hereinafter defined, and a second mortgage on the Project pursuant to a Subordinate Mortgage,as hereinafter defined;and WHEREAS, it is intended that interest on the Series A Bonds and the,Series C Bonds (the "Tax-Exempt Bonds") be excluded from gross income of the holders thereof for federal income tax purposes;and WHEREAS, the Bonds and the interest on said Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation,nor shall the Bonds constitute nor give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable;upon any property of the Issuer other than the Issuer's interest in said Project; and WHEREAS, the GNMA Security will be backed by a mortgage loan insured by the Federal Housing Administration(the`.`Mortgage Loan")made by the Lender to the Owner,and WHEREAS, the owners of the Series C Bonds shall have no right, title or interest in the security provided by the GNMA Security;and -2- WHEREAS, in order to comply with the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended, on December 19, 1995, the City Council held a public hearing, after publication of notice thereof in a newspaper of general circulation in the Issuer at least fourteen (14) days before the hearing and adopted a resolution providing preliminary approval to the issuance of the Bonds; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE,NIINNESOTA,AS FOLLOWS: 1. For the purpose of refunding the Prior Bonds and for paying certain costs of issuance in connection with the issuance of the Bonds and thereby refinancing the Project, and in order to provide funds to finance the payment of interest on the obligations of the Issuer with respect to the Project, the establishment of reserves to secure such obligations, and the payment of all other expenditures incident to and necessary or convenient to carry out the purposes of the Project, there is hereby authorized the issuance, sale and delivery of. the Series A Bonds, the Series B Bonds, and the Series C Bonds,the proceeds of which, together with funds provided by the Owner and held under the indenture for the Prior Bonds, shall be applied to redemption of the outstanding Prior Bonds and payment of costs of issuance in connection therewith. The Bonds shall be in such principal amounts, shall bear interest at rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture of Trust,to be dated as of April 1, 1996 (the "Indenture"), between the Issuer and First Trust National Association, as trustee (the"Trustee"), substantially in the form now on file with the Issuer;provided that(i) the aggregate principal amount of the Tax-Exempt Bonds (together with any proceeds from a sales premium on any series of Tax-Exempt Bonds) shall not exceed the lesser of$ or the outstanding principal amount of the Prior Bonds and the aggregate principal amount of all Series of Bonds shall not exceed $15,045,085; (ii) the maximum interest rate on the Series A Bonds shall not exceed 8.50% per annum, the maximum interest rate on the Series B Bonds shall not exceed 10.00% per annum, and the maximum interest rate on the Series C Bonds shall not exceed 9.00%per annum; (iii)the final maturity of the Tax-Exempt Bonds shall not be later than 35 years from the date of issuance and in no event shall the average maturity of the Tax-Exempt Bonds exceed 120% of the remaining average reasonably expected economic life of the Project; and (v) there shall be maturities or mandatory sinking fund redemptions of the Bonds so as to result in approximate level debt service throughout the term of the Bonds. The Mayor and the City Manager are hereby authorized and directed to confirm the principal ahaount of the Bonds, the final interest rates and maturities thereof and the premium or discount on the Bonds in connection with the issuance thereof. The Bonds shall be speciaP obligations of the Issuer payable solely from the revenues provided by the GNMA Security and other funds pledged pursuant to the Indenture. The Bonds are not to be payable from nor charged upon any funds of the Issuer other than the revenues pledged to their payment, nor is the Issuer subject to any liability thereon; no holders of the Bonds shall ever have the right to compel-any exercise of the taxing power of the Issuer to pay any of the principal of premium, if any, or interest on the Bonds;the Bonds shall not constitute a charge,lien or encumbrance,legal or equitable,upon any property of the Issuer, and each Bond shall recite that the Bonds, including interest thereon, are -3- payable solely from the revenues pledged to the payment thereof and that no Bond shall constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation. The Bonds shall contain a recital that they are issued pursuant to the Act and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. The Mayor and City Manager are authorized and directed to prepare and execute by manual or facsimile signature the Bonds as prescribed in the Indenture, to affix the seal of the Issuer manually or by facsimile and to deliver them to the Trustee, together with a certified copy of this resolution and other documents required by the Indenture,for authentication and delivery to the Underwriter. 2. The City Council of the Issuer hereby authorizes and directs the Mayor and City Manager of the Issuer (the "Mayor" and "Manager" respectively) to execute and deliver the Indenture,affix the seal of the Issuer thereto,and to deliver the Indenture to the Trustee. All of the provisions of the Indenture, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Indenture shall be substantially in the form on file with the Issuer, which is hereby approved, with such necessary or desirable and appropriate variations, omissions and insertions as do not materially change the substance thereof, or as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 3. The Mayor and the Manager are hereby authorized and directed to execute and deliver the Loan Agreement (the "Loan Agreement") to be dated as of April 1, 1996 by and among the Issuer, the Trustee, the Lender and the Owner providing for the loan of the proceeds of the Series A Bonds and the Series B Bonds. All of the provisions of the Loan Agreement, when executed and delivered as authorized herein shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement shall be substantially in the form on-file with the Issuer which is hereby approved,with such variations,omissions and insertions as to not materially change the substance thereof, or as the Mayor, in his discretion, shall.determine, and -the execution thereof by the Mayor shall be conclusive evidence of such determination. 4. The Mayor and the Manager are hereby authorized and directed to execute the Subordinate Loan Agreement (the "Subordinate Loan Agreement") to be dated as of April 1, 1996 by and among the Issuer,the Trustee and the Owner,providing for the loan of proceeds of the Series C Bonds. All of the provisions of the Subordinate Loan Agreement, when executed and delivered as authorized herein shall be in full force and effect from the date of execution and delivery thereof. The Subordinate Loan Agreement shall be substantially in the form on file with the Issuer,which is hereby approved,with such necessary or desirable and appropriate variations, omissions and insertions as are not materially inconsistent with the form on file with the Issuer or as the Mayor, in his discretion, shall determine and execution thereof by the Mayor shall be conclusive evidence of such determination. The form of the Series C Borrower Note(as defined in the Indenture) and the Subordinate Multifamily Mortgage, Assignment of-Rents and Security Agreement (the "Subordinate Mortgage"), each executed by the Owner in favor the Issuer are hereby approved and shall be in the form on file with the Issuer, with such variations as shall be -4- permissible in connection with any modifications to the Subordinate Loan Agreement as approved in accordance with the preceding sentence. 5. The Mayor and the Manager are hereby authorized and directed to execute the Escrow Agreement (the "Escrow Agreement"), by and among the Issuer, the Owner and the Escrow Agent (as defined therein), to be dated as of April 1, 1996 relating to the application of the proceeds of the Tax-Exempt Bonds to the redemption and prepayment of the Prior Bonds. All of the provisions of the Escrow Agreement, when executed and delivered as authorized herein shall be in full force and effect from the date of execution and delivery thereof. The Escrow Agreement shall be substantially in the form on file with the Issuer, which is hereby approved, with such necessary or desirable and appropriate variations, omissions and insertions as are not materially inconsistent with the form on file with the Issuer or as the Mayor, in his discretion, shall determine and execution thereof by the Mayor shall be conclusive evidence of such determination. 6. The Mayor and the Manager are hereby authorized and directed to execute and deliver the Amendment Number One to Regulatory Agreement(the"Regulatory Agreement")to be dated as of April 1, 1996 by and between the Issuer and the Owner. All of the provisions of the Regulatory Agreement, when executed and delivered as authorized herein shall be in full force and effect from the date of execution and delivery thereof. The Regulatory Agreement shall be substantially in the form on file with the Issuer which is hereby approved, with such variations, omissions and insertions as do not materially change the substance thereof, or as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 7. The Mayor and the Manager are hereby authorized and directed to execute the Bond Purchase Agreement among the Issuer, the Owner, and the Underwriter relating to the Bonds (the- "Bond Purchase Agreement"). All of the provisions of the Bond Purchase Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bond Purchase Agreement shall be substantially in the form on file with the Issuer, which is hereby approved, with such necessary or desirable and appropriate variations, omissions and insertions as are not materially inconsistent with the form on file with the Issuer or as the Mayor, in his discretion, shall- determine and execution thereof by the Mayor shall be conclusive evidence of such determination. 8. The Trustee is hereby appointed as Paying Agent and Bond Registrar for the Bonds. 9. The Mayor and the Manager of the Issuer or either of them are hereby authorized to execute and deliver, on behalf of the Issuer, such other documents and certificates as are necessary or appropriate in connection with the issuance, sale and delivery of the Bonds, including without limitation, assignment of the Borrower Notes, Subordinate Loan Agreement and Subordinate Mortgage to the Trustee and/or the Lender, request and authorization to the -5- Trustee to authenticate and deliver the Bonds, a Tax Certificate and a Letter of Representations to The Depository Trust Company C DTC") for appointment of DTC as securities depository for all Bonds or any separate series of Bonds as provided in the Indenture; and such other certificates, instruments, and other documents as are necessary, customary, appropriate or necessary to establish the validity or enforceability of the Bonds, or are required by Bond Counsel to establish the validity or enforceability of the Bonds or the exclusion from gross income of interest on the Tax-Exempt Bonds for purposes of Federal and State of Minnesota income taxation. 10. The Mayor and the Manager of the Issuer are hereby authorized to execute and deliver, on behalf of the Issuer, such instruments as may be necessary and appropriate to effect the funding of the Mortgage Loan and the purchase of the GNMA Security by the Trustee. 11. The Issuer hereby consents to the distribution of the Preliminary Official Statement relating to the Bonds, substantially in the form on file with the Issuer. The Issuer hereby consents to 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 Issuer for use in connection with the offer and sale of the Bonds. The Issuer has not participated in the preparation thereof,has not made any independent investigation of the information contained therein and shall have no liability in connection with the contents of or use of such offering materials. 12. All covenants, stipulations, obligations and agreements of the Issuer contained in this resolution and the aforementioned documents shall be deemed to be the covenants, stipulations, obligations and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the Issuer. Except as otherwise provided in this resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the Issuer or the City Council, 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 shall be deemed to be a covenant,. stipulation, obligation or agreement of any member of the City Council of the Issuer, or any officer, agent or employee of the Issuer in that person's individual capacity, and neither the City Council of the Issuer 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 Bonds or in any other document related to the Bonds, and no obligation therein or herein imposed upon the Issuer or the breach thereof, shall constitute or give rise to any pecuniary liability of the Issuer or any charge upon its general credit or taxing powers. In making the agreements,provisions, covenants and representations set forth in such documents,the Issuer has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived -6- from the Loan Agreement and Subordinate Loan Agreement and related security instruments which are to be applied to the payment of the Bonds,as provided therein and in the Indenture. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied,is intended or shall be construed to confer upon any person or firm or corporation, other than the Issuer 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 all of their provisions being intended to be and being for the sole and exclusive benefit of the Issuer and any holder from time to time of the Bonds issued under the provisions of this resolution. 13. In case any one or more of the provisions of this resolution, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to be legal 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 endorsed as if such illegal or invalid provision had not been contained therein. 14. The Bonds, when executed and delivered, shall contain a recital and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof,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: 15. The officers of the Issuer and its attorneys, agents and employees are hereby authorized to do all acts and things required of them by or in connection with this resolution,the aforementioned documents, and the Bonds for the full,punctual and complete performance of all the terms, covenants and agreements contained in the Bonds,the aforementioned documents and this resolution. In the event that for any reason the Mayor of the Issuer is unable to carry out the execution of any of the documents or other acts provided herein, any other member of the City Council of the Issuer shall be authorized to act in his capacity and undertake such execution or acts on behalf of the Issuer with full force and effect,which execution shall be valid and binding on the Issuer. If for any reason the Manager of the Issuer is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by the Assistant Manager of the Issuer with the same force and effect as if such documents were executed and delivered by the Manager of the Issuer. 16. On February 20, 1996,the Issuer adopted its resolution providing for the issuance of bonds, the proceeds of which were intended to refund the Prior Bonds. To the extent provisions or actions provided in such prior resolution conflict with provisions contained in this resolution, the provisions under this resolution supersede those provisions contained in the prior resolution. -7- 17. This resolution shall be in full force and effect from and after its passage. Adopted this�day of April, 1996. ayor Attest: Ci 1 GP:275142 0 -8-