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HomeMy WebLinkAboutResolution - 85-269 - Preliminary Approval Housing Revenue Bonds - Chimo- $10,000,000 - RESOLUTION NO. (0)5 69 Councilmember _ Anderson introduced the following resolution and moved its adoption: RESOLUTION RELATING TO THE ISSUANCE OF REVENUE BONDS 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 PROGRAM TO THE MINNESOTA HOUSING FINANCE AGENCY FOR REVIEW AND APPROVAL EE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. Under the 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 multifmaily housing developments within its boundaries. 1.02. The Act provides that the City may make or purchase loans to finance one or more developments of the kinds 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 Chimo Development, a Minnesota corporation or a partnership in which it will be a general partner in a Minnesota general partnership (the "Developer") have advised this Council that the Developer proposes to construct a multifamily residential housing development consisting of approximately 208 units of rental housing, located at the northeast quadrant of the intersection of Baker Road and Cardinal Creek Road in the City and to operate the facilities as a multifamily housing development under the Act (the "Project"). The Project will consist of acquisition of land, the construction of the building thereon, and the installation of equipment in connection therewith. At least twenty percent (20%) of the units will be specifically reserved for tenants whose incomes are not greater then eighty percent (80%) of the area median income. Development and financing costs of the Project are presently estimated by representatives of the Developer to be approximately Eleven Million Dollars ($11,000,000). 1.04. Representatives of the Developer have requested that the City issue its revenue bonds in the approximate aggregate face amount of Ten Million Dollars ($10,000,000) (the "Bonds"), pursuant to the Act, and make a loan of the proceeds of the sale of the Bonds to the Developer for 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. 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 Miller & Schroeder Financial, Inc., 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 City 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 constructed and equipped pursuant to Subdivision 2, Section 462C.05 of the Act. 1.09. The Developer has agreed to pay any and all costs incurred by the City in connection with the Project and its financing whether or not the program is approved by the Minnesota Housing Finance Agency, whether or not the Project is completed, and whether or not the Bonds are issued. 1.10. 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. Section 2. Approval and Authorization 2.01. The Program is hereby adopted by the City pursuant to Section 462C.05, Subd. 5 of the Act. The Mayor and the other officers, employees, 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 of issue the Bonds under the provisions of the Act in order to finance costs to be incurred by the Developer in the 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 Ten Million Dollars ($10,000,000), 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, and further subject to the Findings of Fact setting forth the basis for issuance of 462C Housing Revenue Bonds for this project attached hereto. 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 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. i' J 2.04 The Developer 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 operative instruments are executed. 2.05 All commitments of the City expressed herein are subject to the condition that by November 19, 1986, the City and the Developer shall have agreed to mutually acceptable terms and conditions of the Revenue Agreement relating to the Bonds, the Bonds and of the other instruments and proceedings relating to the Bonds for their issuance and sale. If the events set forth herein do not take place within the time set forth above, or any extension thereof, and the Bonds are not sold within such time, this Reslution shall expire and be of no further effect. 2.06 The adoption of this Resolution does not constitute a guartanee or a firm commitment that the City will issue the Bonds as requested by the Developer. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Bonds , or issue the Bonds in an amount less than the amount referred to in paragraph 2. 02 hereof, should the City at any time prior to issuance thereof determine that it is in the best interests of the City not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in paragraph 2.02 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. 2.07 Any persons relying upon or making use of this Resolution shall understand that the City Council ' s approval of this Resolution does not imply any consent or approvals whatsoever with respect to any subsequent rezoning or development activities related to this project. 2.08 The Developer has agreed to pay to the City at the end of each twelve month period, commencing on a date twelve months after the issuance of the Bonds, a sum equal to one-eight (1/8) of one percent (1%) of the unpaid principle balance of the Bonds. Adopted by the City Council of the City of Eden Prairie, Minnesota, this 19th day of November, 1985 . Mayor Attest• It City Cl erk —'^