HomeMy WebLinkAboutResolution - 85-224 - Preliminary Approval Housing Revenue Bonds - Prairie Village Apartments I - $2,226,000 - 10/01/1985 RESOLUTION NO . � -
Counc.iimember _ introduced the following
resolution and moved its adoption :
RESOLUTION RELATING TO THE ISSUANCE OF REVENUE
BONDS OR NOTES PURSUANT TO MINNESOTA STATUTES ,
CHAPTER 462C , FOR THE PURPOSE OF FINANCING A
MULTIFAMILY HOUSING DEVELOPMENT; ADOPTING A
MULTIFAMILY HOUSING PROGRAM; AND AUTHORIZING
SUBMISSION OF THE HOUSING PROGRAI-1 TO THE
MINNESOTA HOUSING FINANCE AGENCY FOR REVIEW AND
APPROVAL
BE TT RESOLVED by the City Cour..cil of the City of Eden
Prairie , Minnesota ( the City ) , as follows :
Section 1 . Recitals .
1 . 01 . Under 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 one
or more multifamily housing developments within its boundaries .
1 . 02 . The Act provides that the City may make or purchase
loans to f iriance one or more developments of the k—inds
described in Subdivisions 2 , 3 , 4 , and 7 of Section 462C . 05 of
the Act upon adoption of a program setting forth the
information required by Subdivision 6 of Section 462C . 05 of the
Act , after a public_ hearing held thereon , and after approval
thereof by the Minnesota Housing Finance Agency, as provided in
Section 462C . 04 , Subdivision 2 , of the Act on the basis of the
considerations stated therein .
1 . 03 . Representatives of Mandara Company , or a limited
partnership of which it wa_11 be a general partner ( the
Developer % have advised this Council that the Developer
proposes to construct a multifamily residential housing
development on approximately three and one-quarter acres of
land owned by the Developer , located just east of the northeast
corner of the intersection of Highway 5 and County Road 4 in
the City, composed of 56 apartment units and other functionally
related and subordinate facilities and to operate the
facilities as a multifamily housing development under the Act ,
to be known as Prairie Village Apartments , Phase II (the
Project ) . At least twenty percent ( 20% ) of the units will be
specifically reserved for tenants whose incomes are not greater
than eighty percent ( 800 ) of the area median income .
Development and financing costs of the Project are presently
estimated by representatives of the Developer to be
approximately Two Million Six Hundred Eighty-four Thousand
Seven Hundred Thirty-five Dollars ( $2 , 684 , 735 ) .
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1 . 04 . Representatives of the Developer have requested that
the City issue its revenue bonds or other obligatioris in the
approximate aggregate face amount of Two Million Two Hundred
Twenty- six Thousand Dollars ( $2 , 226 , 000 ) ( the Bonds or Notes ) ,
pursuant to the Act , and make a loan of the proceeds of the
sale of r.he Bonds or Notes to the Developer for the acquisition
of land for and the construction and equipping of the Project ,
subject to agreement by the Developer, or other persons or
institutions , to promptly pay the principal of , premium, if
any , and .interest on the Bonds or Notes .
1 . 05 . The City has been advised by representatives of the
Developer that conventional commercial financing of the costs
of the Project is available only on a limited basis and at such
high costs of borrowing that the economic feasibility of the
Project would be significantly affected, but that with the aid
of municipal financing the Project will be more economically
feasible .
1 . 06 . This Council has been advised by representatives of
Piper , Jaffray , & Hopwood Incorporated , representing the
Developer , that on the basis of information available to them,
the Project is economically feasible , and the Bonds could be
successfully issued and sold .
1 . 07 . Neither the full faith and credit nor the taxing
powers of the City nor any property of the City will be pledged
to the payment of the Bonds . The Bonds are to be paid from the
revenues of the Project .
1 . 08 . The Citv has caused to be prepared a program for the
proposed Project ( the Program) under the Act which has been
presented to this Council , and which contains information
demonstrating the need for the Project , stating the method of
financing proposed and that the Project is to be acquired,
constructed , and equipped pursuant to subdivision 2 , Section
462C . 05 of the Act .
1 . 09 . Pursuant to the .requirements of the Act and Section
103 ( k ) of the Internal Revenue Code ( the Code ) , a public
hearing has been held relating to the Program proposed by the
Developer under the Act, including the proposed issuance of the
Bonds , after proper publication of notice of the public hearing
in accord with the requirements of the Act and the Code .
1 . 10 . The applicant has agreed to pay, directly or through
the City, any and all costs incurred by the City in connection
with the Project whether or not the Project is approved by the
Minnesota Housing Finance Agency , whether or not the Project is
carried to completion , and whether or not the Bonds or Notes
are executed and issued .
1 . 11 . The adoption of this resolution does not constitute a
guarantee or a firm commitment that the City will issue the
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Bonds or Notes as requested by the applicant . The City retains
the right in i-s sole discretion to withdraw from participation
and accordingly not issue the Bonds or Notes should the City at
any time prior t.o the issuance thereof determine that it is in
the best interest of the City riot to issue the Bonds or Notes
or should the -parties to the transaction be unable to reach
agreement as tc the terms and conditions of any of the
docUI7tents required for the transaction .
1 . 12 . All commitments of the City expressed herein are
subject to the condition that by October 1 , 1986 , the City and
the applicant shall have agreed to mutually acceptable terms
and conditions of the Loan Agreement pursuant to which the
Developer will agree to pay to the City principal , premium, if
any , and interest on the Bond., or Notes , and of the other
instruments and proceedings relating to the Bonds or Notes and
their issuance and sale . If the events set forth harein do not
take place within the time set forth above , or any extension
thereof , and the Bonds or Notes are not sold within such time ,
this resolution shall expire and be of no further effect .
section 2 . Aooroval and Authorization
2 . 01 . The ?roaram is hereby adopted by the City pursuant to
section 462C .05 , Subd . 5 of the Act . The Mayor and the other
officers , ernployees , and agents of the City are hereby
authorized to prepare and execute the required certifications
and to take such other actions as they deem necessary or
advisable in order to submit the Program to the Minnesota
Housing Finance Agency for review and approval in accordance
with the provisions of the Act .
2 . 02 . It is hereby found and determined based upon the
information presented to this Council by the representatives of
the Developer that it would be in the best interests of the
City to issue the Bonds under the provisions of the Act in
order to finance costs to be incurred by the Developer in the
acquisition , construction, and equipping of the described
facilities . The City hereby gives its preliminary approval to
the issuance of the Bonds in the approximate aggregate face
amount of Two Million Two Hundred Twenty-six Thousand Dollars
( $2 , 226 , 0001 , subject to the review and approval of the Program
by the Minnesota Housing Finance Agency under the provisions of
the Act and subject to the City, the Developer, and the
purchaser of the Bonds reaching definitive agreement and the
provisions for their payment .
2 . 03 . The City Attorney, the Mayor, the City Manager and
other officers , employees , and agents of the City are
authorized, in cooperation with bond counsel , to initiate the
preparation of such documents as may be appropriate to evidence
f the terms of all agreements for payment of the Bonds , and the
provisions for payment of the principal of , the premium if any ,
and interest on the Bonds .
3 .
Ir
Adopted by the City Council of. the City of Eden Prairie,
Minnesota , this 1st day of October , 1.985 .
Mayor
ATTEST:
City qier.k
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The Motion for the adoption of the foregoing resolution was
duly seconded by Councilmember , and
upon vote being taken thereon , the following voted in favor
thereof :
and the following voted against_ the same :
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Whereupon the resolution was declared duly passed and adopted
and was signed by the Mayor and attested by the City Clerk .
STATE OF MINNESOTA)
) ss .
COUNTY OF' HENNEP I N )
I , the undersigned , being the duly qualified and appointed
Clerk of the City of Eder. Prairie , Minnesota , hereby certify
that I have carefully compared the foregoing resolution adopted
at a regular meeting of the City Council of said City held on
October 1 , 1985 , with the original. thereof on file in my
office , and the same is a full , true , and complete transcript
thereof .
Witness , my hand officially as such Clerk and the corporate
seal of the City this day of 1985 .
John Frane
Citv Clerk
( SEAL )
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Prairie Village Apartments , Phase I
Construction of a Multifamily Housing Development
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Pursuant to Minnesota Statutes , Chapter 462C ( the Act ) , the
City of Eden Prairie ( the City) has been authorized to develop,
plan , and administer programs of making construction and long-
term financing loans to finance multifamily housing
developments located within its boundaries , under the
circumstances and within the limitations set forth in the Act .
Minnesota Statutes , Section 462C . 07 provides that such programs
for multifamily housing developments may be financed by revenue
bonds issued by the City .
In creating its multifamily housing finance program, the
City Council of the City has found and determined that the
preservation and enhancement of the high quality cf life in the
City is dependent upon the maintenance and provision of
adequate , decent , safe , and sanitary housing stock ; that
accomplishing the provision of such housing stock is a public
purpose and will benefit the citizens of the City; that a need
exists within the City to provide in a timely fashion
additional and affordable housing to persons residing and
expected to reside in the City; that a need exists for mortgage
credit to be made available for the new construction of
additional multifamily housing; that a need exists to encourage
elderly and low income housing projects ; that a need exists to
encourage development of a variety of living and working
environments for all kinds of people by holding development
costs down ; that a need exists to encourage a variety of
housing types and prices through innovative architecture and
land use mixes ; and that a need exists to encourage development
of a vai iety of living and working environments for all people
of all ages , races , and income groups .
The City has received a proposal from Mandara Company or a
limited partnership in which Mandara Company will be a general
partner ( the Developer ) that , pursuant to the authority found
in the Act , the City approve a program providing for the
construction of approximately ,fifty-six ( 56 ) units of rental
housing ( Housing Units ) to be located on land legally described
as :
Part of Outlots B and Outlot C , Gonyea 4th Addition ,
Hennepin County , Minnesota ,
which land is located just east of the northeast corner of the
intersection of Highway 5 and County Road 4 in the City. The
project is to be funded through one issue of revenue bonds , to
be issued by the City for the acquisition of land for and the
construction and equipping of the project . The acquisition of
lard for and construction and equipping of the Housing Units is
hereinafter referred to as -the Project . It is proposed that-
the Bonds ( as hereinafter defined) be either sold publicly
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through an underwriter or privately placed as a. tax-exempt
mortgage , depending upon the condition of the bond market at.
the time of the issuance of the Bonds , and that the Bonds , if
sold. publicly, include Some form of credit enhancement , such as
collateral , insurance , or a letter of credit to provide a
Standard & Poor ' s rating of no less than "A . " Following
construction of the Project , the Developer will own and operate
the Project as a multifamily residential rental project . The
fifty-six ( 56 ) Housing Units will be one and two bedroom
apartments , of which at least twenty percent ( 20% ) of the
Housing Units will be specifically reserved for tenants whose
Adjusted Gross Incomes are not greater than eighty percent
( 800 ) of the Minneapolis/St . Paul metropolitan statistical area
median income . It is estimated that rents for the one-bedroom
Housing Units will be between Five Hundred Eighteen Dollars
( $518 ) and Five Hundred Sixty-five Dollars ( $565 ) , and for the
two-bedroom Housing Units will be between Six Hundred Twenty-
One Dollars ( $621 ) , and Six Hundred Forty-three Dollars ( $643 )
per month .
The City, in establishing this multifamily housing program
( the Program ) , has considered generally available information
regarding conditions in the housing industry and the
information contained in the City ' s 462C Housing Plan , adopted
on October 30 , 1978 , as amended February 2 , 1982 ( the Housing
Plan ) , including particularly ( i ) the availability and
affordability of other government housing programs ; ( ii ) the
availability and affordability of private market financing for
the acquisition of land for and construction of multifamily
housing units ; ( iii ) an analysis of population and employment
trends and projections of future population trends and future
employment needs ; ( iv ) the recent housing trends and future
housing needs of the City; and ( v ) an analysis of how the
Program will meet the needs of persons and families residing
and expected to reside in the City .
The City, in adopting this Program, has further considered
( i ) the amount , timing, and sale of bonds to finance the
estimated amount of construction and mortgage loans to be made
under the Program, to fund the appropriate reserves and to pay
the cost of issuance; ( ii ) the method of monitoring and
implementation of the Program to assure compliance with the
City ' s Housing Plan and its objectives; ( iii ) the method of
administering, servicing, and supervising the Program; ( iv ) the
cost to the City , including future administrative expenses ; (v )
the restrictions on the multifamily development to be financed
under this Program; and ( vi ) certain other limitations .
The City, in adopting this Program, considered the
potential financing impact of bond issuance on affected public
agencies . In addition , the City reviewed the method of
marketing the Program . Such review examined the equal
opportunity for participation by ( i ) minorities ; ( ii )
households with incomes at the lower end of the range that can
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be served by the Program; ( iii ) households displaced by public
or private actions ; ( iv ) families with children; and ( v )
accessibility to the handicapped .
The Project will be constructed and financed pursuant to
Subdivisions 1 and 2 of Section 462C . 05 of the Act .
Subsection A . Definitions
The following terms used in this Program have the following
meanings , resoect.ively :
( 01 ) "Act " means Minnesota Statutes , Sections 462C . 01 , et
seq . , as currently in effect and as the same may be from
time to time amended .
( 02 ) "Adjusted Gross Income " means gross family income,
less $750 for each adult in the family, to a maximum of two
adults , and less $500 for each other dependent in the
family .
( 03 ) "Agency" means the Minnesota Housing Finance Agency,
or any successor to its functions .
( 04 ) "Bonds " means the housing revenue bonds to be issued
by the City to finance the Program and includes any and all
a
other obligations payable as provided hereunder .
�r
( 05 ) "City " means the City of Eder. Prairie , County of
Hennepin , State of Minnesota , or any housing and
redevelopment authority in and for the City authorized by
resolution of the Citv Council to exercise , on its behalf ,
the powers conferred on the City under the Act .
( 06 ) " Developer" means Mandara Company or a limited
partnership of which it will be a general partner .
( 07 ) " Housing Plan" means the City of Eden Prairie ' s 462C
Housing Plan , adopted on October 30 , 1978 , setting forth
certain information required by the Act .
( 08 ) "Housing Unit " means any one of the apartment units
located in the Project , occupied by one person or family,
and containing complete living facilities .
( 09 ) "Program" means this program for the financing of the
Project pursuant to the Act .
( 10 ) " Project " means the fifty-six ( 56 ) unit multifamily
rental housing project known as " Prairie Village
Apartments " given approval by the Eden Prairie City Council
on August 20 , 1985 , pursuant to a development proposal
submitted by the Developer .
3 .
Subsection B . Program For Financing the Project
The City hereby establishes a Program to make a loan for
construction financing and permanent mortgage financing for the
Project . In establishing and carrying out such Program, the
City may exercise , within the corporate limits of the City , any
of the powers the Minnesota Housing Financing Agency is
authorized to exercise under the provisions of Minnesota
Statutes , Chapter 462A. To do this , the City expects to issue
Bonds , the proceeds of which will be loaned to the Developer
for construction and initial financing of the Project . It is
expected that a Trustee will be appointed by the City to
monitor the construction of the Project and any payments of
principal and interest on the Bonds .
The City will hire no additional staff for the
administration of this Program . If required for the sales of
the Bonds , the City will select a trustee for the Program and
the bondholders that is experienced in trust management and has
a large corporate trust portfolio . The trustee will administer
and maintain the Bonds sold to finance the Program. The City
will , however , incur administrative costs for which it will
charge administrative fees of Eight Hundred Dollars ( $800 ) ,
plus one-eighth ( 1 /8 ) of one percent ( 1 % ) annually , calculated
on the outstanding principal balance of the bonds on the date
such fee is due .
The City Council hereby authorizes and directs the City
Manager of the City to monitor all negotiations between the
various parties taking part in the Program to ensure that the
Program documents are consistent with the City ' s Housing Plan
and the requirements of the City as set forth in this Section .
Prior to the adoption of the resolutions authorizing the sale
of Bonds to finance the Program, the City Manager shall report
to the City Council his findings as to the consistency of the
Program documents with the Housing Plan and the policies of the
City contained in this Section .
It is contemplated that the Bonds shall have a maturity of
no more than forty ( 40 ) years and will be priced to the market
at the time of issuance . The Bonds will not be general
obligation bonds of the City , but are expected to be paid from
revenues and properties pledged to the payment thereof , which
may include a credit enhancement item such as insurance or a
letter of credit , or a mortgage or other encumbrance on the
Project .
Subsection C . Local Contributions to the Program
It is not contemplated that any additional financing or
contributions will be needed for the completion of the Project ,
or for the operation of the Program, other than the bond issue
described above .
4 .
Subsection: D . Standards and_R_eauirements Relating to the
Einancinq of the Project Pursuant to the Program
The following standards and requirements shall apply with
respect to the operation of the Project by the Developer
Pursuant to this Program:
( 01 ) Substantially all of the proceeds of the sale of the
Bonds will be used to provide funds for the construction of
the Project , which will include approximately fifty-six
( 56 ) market rate residential units . The proceeds of the
Bonds will, be made available to the Developer pursuant to
the terms of the Bond offering, which will include certain
covenants to be entered .into between the City and the
Developer .
( 02 ) The Developer or owner of the Project will not
arbitrarily reject an application from a proposed tenant
because of race , color , creed , religion , national origin ,
sex , marital status , age , or status with regard to public
assistance or disability .
( 03 ) Each dwelling unit within the Project must be used
primaril._v for residential. purposes .
( 04 ) No Housing Unit may be in violation of applicable
zoning ordinances or other applicable land use regulations ,
including ally urban renewal plan or development district
flan , and including the state building code as set forth
under Minnesota Statutes , Section 16B . 59 , et seq .
( 05 ) The Project shall be designed to be affordable by
persons and families with Adjusted Gross Income not
exceeding the income limits set forth .in Section 462C . 05 ,
Subdivision 2 of the Act and by other persons and families
determined to be necessary to further the policies of
economic integration stated in Minnesota Statutes , Section
462A. 02 , Subdivision 6 . At least twenty percent ( 20% ) of
the Housing Units will be held for occupancy by families or
individuals with Adjusted Gross Income not in excess of
eighty percent ( 80% ) of the median family income as
estimated by the United States Department of Housing and
Urban Development for the Minneapolis-St . Paul metropolitan
area .
Subsection E . Evidence of Compliance
The City may require from the Developer or such other
person deemed necessary, at or before the issuance of the
Bonds , evidence satisfactory to the City of the ability and
intention of the Developer to complete the Project , and
evidence satisfactory to the City of compliance with the
fstandards and requirements for the making of the financing
established by the City, as set forth herein; and in connection
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therewith , the City or its representatives may inspect the
relevant books and records of the Developer in order to confirm
! such ability , intention , and compliance . In addition , the City
may periodically require certification from either the
Developer or such other person deemed necessary concerning
compliance with various aspects of this Program .
Subsection F . Issuance of Bonds
To finance the Program authorized by this Section, the City
may , by resolution , authorize , issue, and sell the Bonds , in an
aggregate principal amount presently estimated not to exceed
Two Million Two Hundred Twenty--six Thousand Dollars
( $2 , 226 , 000 ) , pursuant to the Act . In issuing the Bonds , the
City may exercise , within the corporate limits of the City, any
of the powers the Minnesota Housing Finance Agency is
authorized to exercise under the provisions of Minnesota
Statutes , Chapter 462A, without limitation under the provisions
of Minnesota Statutes , Chapter 475 .
Subsection G . Severabili.ty
The provisions of this Program are severable and if any of
its provisions , sentences , clauses , or paragraphs shall be held
unconstitutional , contrary to statute , exceeding the authority
of the City or otherwise illegal or inoperative by any court of
competent jurisdiction , the decision of such court shall not
affect or impair any of the remaining provisions .
Subsection H . Amendment
The City shall not amend this Program while Bonds
authorized hereby are outstanding, to the detriment of the
holders of such Bonds .
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