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HomeMy WebLinkAboutResolution - 99-44 - Authorize the Sale and Issuance Of Senior Multifamily Housing Revenue Refunding Bonds (Sterling Ponds Project) Series 1999a, and Subordinate Multifamily Housing Development Revenue Refunding Bonds, Series 1999b. - 03/16/1999 CITY OF EDEN PRAIRIE HENNEPIN COUNTY,NIINNESOTA RESOLUTION NO.99-44 RESOLUTION RELATING TO MULTIFAMILY HOUSING DEVELOPMENT REVENUE REFUNDING BONDS(STERLING PONDS PROJECT),SENIOR SERIES 1999A,AND MULTIFAMILY HOUSING DEVELOPMENT REVENUE REFUNDING BONDS (STERLING PONDS PROJECT),SUBORDINATE SERIES 1999B;AUTHORIZING THE SALE AND ISSUANCE OF THE BONDS AND ESTABLISHING THE SECURITY THEREFOR AND AUTHORIZING THE EXECUTION OF DOCUMENTS BE IT RESOLVED by the City Council of the City of Eden Prairie,Minnesota(the "City"), as follows: Section 1. Recitals. 1.01. By the provisions of Minnesota Statutes, Chapter 462C, as amended(the"Act"), the City is authorized to issue and sell revenue bonds or obligations to make or purchase loans to finance multifamily housing developments within its boundaries and to issue its revenue refunding bonds to provide funds to refund such revenue bonds. Pursuant to the Act,the City has issued and sold its Multifamily Housing Development Revenue Bonds (Sterling Ponds Project), Series 1989A and Series 1989B, dated, as originally issued, as of October 1, 1989, of which approximately$6,735,000 is now outstanding(the "Refunded Bonds")to finance a multifamily housing development described in Section 462C.05 of the Act comprising the construction and equipping on land within the City of an approximately 112-unit multifamily rental housing development(the"Project") owned and operated by Prairie Village Limited Partnership (the"Developer"). 1.02. It has been proposed that the City issue its Multifamily Housing Development Revenue Refunding Bonds (Sterling Ponds Project), Senior Series 1999A, and its Multifamily Housing Development Revenue Refunding Bonds (Sterling Ponds Project), Subordinate Series 1999B in the aggregate principal amount of$6,665,000 (collectively,the"Bonds"),to provide funds for a loan to be made to the Company to provide funds to be used to refund the outstanding principal of the Refunded Bonds. The City will grant a security interest in certain revenues and payments to be received by the City under the Loan Agreement(as hereinafter defined)to a Trustee(as hereinafter defined). The proceeds of the Bonds will be used,together with available funds of the Company and funds on deposit with the trustee for the Refunded Bonds,to refund the Refunded Bonds,to establish a debt service reserve fund for the Bonds and to pay certain costs of issuance of the Bonds and of the refunding. The Project will be subject to the terms and restrictions contained in the Regulatory Agreement(as hereinafter defined). To secure the Company's obligations under the Loan Agreement,the Company will deliver to the City, as mortgagee, a Mortgage(as hereinafter defined)relating to certain real and personal property comprising the Project and an Assignment of Rents(as hereinafter defined), and the City will assign its interest in the Mortgage and the Assignment of Rents to the Trustee pursuant to an Assignment of Mortgage(as hereinafter defined). The Housing and Redevelopment Authority in and for the City(the"Authority")has entered into a First Amended and Restated Project Management Agreement,dated as of October 1, 1989,with the Company,pursuant to which the Authority,upon certain terms and conditions, agreed to provide certain interest reduction payments for the benefit of the Project through 2006. The interest reduction payments were pledged by the Company to the payment of the Refunded Bonds and will be pledged to the payment of the Bonds as provided in the Indenture(as hereinafter defined). Pursuant to a Mortgage Subordination(as hereinafter defined),the Authority will agree to subordinate its existing mortgage on the Project to the lien of the Mortgage. 1.04. Draft forms of the following documents relating to the Bonds have been prepared and submitted to this Council and are hereby directed to be filed with the City Clerk: (a) a Loan Agreement(the"Loan Agreement"),proposed to be entered into by the City and the Company; (b) an Indenture of Trust(the"Indenture"),proposed to be entered into by the City and U.S.Bank Trust National Association, as trustee(the"Trustee"),relating to the Bonds; (c) a Combination Mortgage, Security Agreement and Fixture Financing Statement(the"Mortgage"),proposed to be executed by the Company in favor of the City; (d) an Assignment of Rents and Leases(the"Assignment of Rents"),proposed to be executed by the Company in favor of the City; (e) an Assignment of Mortgage and Assignment of Rents and Leases (the "Assignment of Mortgage"),proposed to be executed by the City in favor of the Trustee; (f) a First Amended and Restated Regulatory Agreement(the"First Amended and Restated Regulatory Agreement"),proposed to be executed by the Company,the City and the trustee for the Refunded Bonds, amending,restating and superseding the Regulatory Agreement, dated as of October 1, 1989, executed by the City,the trustee and the Company(as so amended,the"Regulatory Agreement"); -2- (g) an Official Statement(the"Official Statement"),in the form of a Preliminary Official Statement(the"Preliminary Official Statement"),to be used in connection with the offer and sale of the Senior Series 1999A Bonds by Dain Rauscher Incorporated(the"Underwriter"); (h) a Private Placement Memorandum(the"Private Placement Memorandum"), in the form of a Preliminary Private Placement Memorandum(the"Preliminary Private Placement Memorandum"),to be used in connection with the offer and sale of the Subordinate Series 1999B Bonds by the Underwriter; (i) a Bond Purchase Agreement(the"Bond Purchase Agreement")proposed to be entered into by the City,the Company and the Underwriter; 0) a Continuing Disclosure Agreement(the"Continuing Disclosure Agreement")to be entered into by the Company and the Trustee, as agent; (k) a Subordination Agreement(the"Mortgage Subordination'),to be executed and delivered by the Authority; and (1) an Amendment No. 1 to First Amended and Restated Regulatory Agreement, proposed to be entered into between the Authority and the Company. Section 2. Findings. It is hereby found, determined and declared that: (a) The refinancing of the Project,the issuance and sale of the Bonds,the execution and delivery of the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and the Bond Purchase Agreement and all other acts and things required under the Constitution and laws of the State of Minnesota to make the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and the Bond Purchase Agreement and the Bonds valid and binding special,limited obligations in accordance with their terms, are authorized by the Act. (b) It is desirable that the Bonds be issued by the City upon the terms set forth in this resolution and the Indenture,under the provisions of which the City grants to the Trustee under the Indenture a security interest in certain revenues and payments to be received by the City under the Loan Agreement as security for the payment of the principal of,premium,if any, and interest on the Bonds. (c) The loan payments contained in the Loan Agreement are fined, and are required to be revised from time to time as necessary, so as to produce income and revenue sufficient to -3- provide for prompt payment of principal of and interest on all 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 site of the Project and payable during the term of the Loan Agreement. (d) The execution and delivery of the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and the Bond Purchase Agreement will not conflict with, or constitute on the part of the City a breach of or a default under, any existing agreement, indenture,mortgage, lease or other instrument to which the City is subject or is a party or by which it is bound. (e) No litigation is pending or,to the best knowledge of the members of this Council, threatened against the City questioning the organization or boundaries of the City or the right of any officer of the City to hold his or her office, or in any manner questioning the right and power of the City to execute and deliver the Bonds, or otherwise questioning the validity of the Bonds or the execution, delivery or validity of the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and the Bond Purchase Agreement or questioning the appropriation of revenues to payment of the Bonds or the right of the City to loan the proceeds of the Bonds to the Company. (f) All acts and things required under the Constitution and the laws of the State of Minnesota to make the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement,the Bond Purchase Agreement and the Bonds valid and binding special, limited obligations of the City in accordance with their terms will have been done upon adoption of this Resolution and execution of the Loan Agreement,the Indenture, the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and the Bond Purchase Agreement. (g) The execution and delivery by the City of the Bond Purchase Agreement,the Bonds,the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and all other agreements contemplated hereby, and the compliance by the City with the provisions thereof will not conflict with or result in a material breach by the City under any court or administrative decree or order or any agreement,indenture, mortgage, lease or other instrument to which the City is a party;provided,however,that the representation in this paragraph shall not apply to the qualification of the Bonds under state securities or Blue Sky laws. (h) No member of the governing body or other officer or employee of the City is directly or indirectly interested in the transactions contemplated by the Bond Purchase Agreement, the Bonds,the Indenture,the Loan Agreement,the Assignment of Mortgage,the -4- First Amended and Restated Regulatory Agreement or any related documents or any contract, agreement or job hereby contemplated to be entered into or undertaken. Section 3. Authorization and Approval of Documents. The City is hereby authorized to issue the Bonds to provide funds,to be used,with other available funds,to refund the Refunded Bonds,to establish a debt service reserve fund for the Bonds and pay costs of issuance of the Bonds and of the refunding, and to pledge and assign the Loan Agreement and the loan repayments due thereunder, all as provided in the Loan Agreement and the Indenture. It is acknowledged that the purchase price of the Bonds,the principal amount of the Bonds,the initial reoffering prices of the Bonds,the maturity schedule of the Bonds,the provisions for redemption of the Bonds and the interest rates on the Bonds have not been determined as of the date of adoption of this resolution and are not reflected in the Indenture,the Loan Agreement or the Bond Purchase Agreement. The Mayor or, in the event of his absence or disability,the City Manager is hereby authorized to approve: (1)the purchase price of the Bonds;provided that the purchase price is not less than 98%of the principal amount of the Bonds and the total compensation payable to the Underwriter,including any discount, does not exceed 2.50%of the principal amount of the Bonds; (2)the principal amount of the Bonds (as hereinafter defined); provided that the principal amount of the Bonds is not in excess of$6,665,000; (3)the initial reoffering prices of the Bonds; (4)the maturity schedule of the Bonds;provided that the Bonds mature at any time or times in such amount or amounts no later than December 1,2029; (5)the provisions for redemption of the Bonds; and(6)the interest rates on the Bonds;provided that the weighted average interest rate on the Bonds shall not exceed 7.00%per annum. The approval of such officer of the terms of the Bonds shall be conclusively presumed by the execution of the Bond Purchase Agreement by authorized officers of the City. The forms of the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement,the Bond Purchase Agreement and the Bonds referred to in Section 1.04 are approved, subject to such modifications as are deemed appropriate and approved by the City Attorney and the Mayor,within the limitations provided in the immediately preceding paragraph,which approval shall be conclusively evidenced by execution of the Loan Agreement,the Indenture,the Assignment of Mortgage,the First Amended and Restated Regulatory Agreement and the Bond Purchase Agreement by the Mayor and the City Manager. The Bond Purchase Agreement as so approved is directed to be executed forthwith in the name and on behalf of the City by the Mayor and the City Manager following the execution thereof by the Company and the Underwriter. The Loan Agreement, and the First Amendment of Regulatory Agreement as so approved are directed to be executed in the name and on behalf of the City by the Mayor and City Manager upon execution thereof by the Company. The Indenture and the Assignment of Mortgage as so approved are directed to be executed in the name and on behalf of the City by the Mayor and the City Manager and delivered to the Trustee. Copies of all the documents shall be delivered, filed or recorded as provided therein. The Mayor,the City Manager and the City Clerk are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. -5- Section 4. Official Statement and Private Placement Memorandum. The City hereby consents to the use of the Preliminary Official Statement and the Preliminary Private Placement Memorandum by the Underwriter in connection with the offer and sale of the Bonds to potential investors, and consents to the preparation and use of a final Official Statement and Private Placement Memorandum,in substantially the form of the Preliminary Official Statement and the Preliminary Private Placement Memorandum. The City has consented to the distribution of the Official Statement and the Private Placement Memorandum,but did not prepare the Official Statement or the Private Placement Memorandum, and has not reviewed the financial disclosures of the Company or approved any information or statements contained in the Official Statement or the Private Placement Memorandum or the Appendices thereto and assumes no responsibility for the sufficiency, completeness or accuracy of the same. The City Manager is authorized to deem the Preliminary Official Statement and the Preliminary Private Placement Memorandum"final' as of their respective dates for purposes of SEC Rule 15c2-12. Section 5. The Bonds. 5.01. In anticipation of the receipt of the loan repayments from the Company,the City shall proceed forthwith to issue its Bonds in a series to be designated"Multifamily Housing Development Revenue Refunding Bonds(Sterling Ponds Project), Senior Series 1999A" and "Multifamily Housing Development Revenue Refunding Bonds (Sterling Ponds Project), Subordinate Series 1999B",in the form and upon the terms set forth in the Indenture or established pursuant to this resolution. 5.02. The Mayor and the City Manager are authorized and directed to prepare and execute the Bonds as prescribed herein and in the Indenture and to deliver them to the Trustee, together with a certified copy of this resolution,the other documents required in the Indenture, and such other certificates, documents and instruments as may be appropriate to effect the transactions herein contemplated. Section 6. Modifications,Absence of Officers. The approval hereby given to the various documents referred to above includes an approval of such modifications thereto, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney and the City Manager prior to the execution of the documents. 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 the Mayor, any of the documents authorized by this resolution to be executed,may be executed by the acting Mayor and in the absence or disability of the City Manager by such officer of the City who,in the opinion of the City Attorney,may execute such documents. -6- Section 7. Authentication of Proceedings. The Mayor,the City Manager,the City Clerk 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 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 of fact contained therein. Section 8. Limitations of the City's Obligations. Notwithstanding anything contained in the Bonds,the Loan Agreement,the Indenture,the Assignment of Mortgage,the Regulatory Agreement or the Bond Purchase Agreement,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 specifically 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 interest thereon,or to enforce payment thereof against any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the payment thereof, and the Bonds shall not constitute a charge,lien or encumbrance, legal or equitable,upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the payment thereof. The agreement of the City to perform the covenants and other provisions contained in this resolution or the Bonds,the Loan Agreement,the Indenture,the Assignment of Mortgage,the Regulatory Agreement or the Bond Purchase Agreement shall be subject at all times to the availability of the revenues furnished by the Company 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 other than as stated above. Passed this 16th day of March, 1999. dl�n7L- Harris,Mayor Attest: 4&Le' Ld Kaihleen A.Porta, City Clerk -7-