HomeMy WebLinkAboutResolution - 86-285 - Redemption Request for Quail Ridge Housing Bonds - RESOLUTION NO.
Resolution Authorizing the Amendment of A Certain
Trust Indenture Between the City of Eden Prairie
and First Trust Company of Saint Paul Relating
to the City ' s $5 , 565 , 000 Muttifamily Housing
Revenue Bonds ( Quail Ridge Apartments Project )
BE IT RESOLVED by the City Council of the City of Eden
Prairie, Minnesota ( the "City" ) , as follows :
1 . Recitals .
(a ) Pursuant to the Trust Indenture, dated as of
July 1 , 1985 ( the "Indenture" ) , between the City and First
Trust Company of Saint Paul ( now First Trust Company, Inc. ) ,
as Trustee thereunder ( the "Trustee" ) , the City issued
its Multifamily Housing Revenue Bonds (Quail Ridge Apartments
Project ) ( the "Bonds " ) for the purpose of assisting Eames
Apartments Limited Partnership, a Minnesota limited
partnership ( the "Developer" ) , to construct the Quail Ridge
multifamily residential housing project (the "Project" )
within the City.
(b ) The Bonds were secured in part by mortgage
insurance commitments made by Ticor Mortgage Insurance
Company ( the "TICOR" ) .
(c ) Since the date of issuance of the Bonds , TICOR
has encountered certain financial and credit rating
difficulties , and in response thereto, the Trustee has
instituted an action in Minnesota District Court, Second
Judicial District , seeking, among other things , to obtain
an order from the Court that the Trustee, in recognition
of the difficulties encountered by TICOR, should not release
to the Developer the proceeds of the Bonds .
(d ) If the Trustee does not release the proceeds
of the Bonds to the Developer for the Project , which the
Developer has represented to the City is now substantially
completed and rented, the Developer will be without the
permanent financing of the Project which the Bonds, were
intended to provide .
(e ) The Court has indicated that a preferable solution
to this impasse would be that the Bonds should be redeemed.
( f ) The Developer has requested that the City and
the Trustee amend the Indenture to allow the Developer
the option to redeem the Bonds at par plus accrued interest
at any time upon appropriate notice of such redemption
given to all owners of said Bonds.
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(g ) Legal counsel for the Trustee with respect to
the above-mentioned Court action has requested that the
City consider authorizing the above-mentioned amendment
to the Indenture, in anticipation of a Court hearing thereon
on November 24 , 1986 .
2 . Authorization of Amendment to Indenture. The City
Council hereby authorizes the Indenture to be amended by adding
to Section 3 . 01 thereof the following new subsection ( f ) :
The Bonds shall be subject to optional redemption and
prepayment by the Developer at par plus accrued interest
to the date of such redemption on any date specified in
written notice thereof to the Trustee and given by the
Developer at least 25 days prior to the date of such
redemption .
3 . Authorization to City Officials . The officers of the
City are hereby authorized to execute any amendment of the
Indenture, Supplemental Indenture, or similar document, as the
case may be, as may be necessary to effect the foregoing amendment
to the Indenture; provided, however, that the authorization
to make such amendment provided in this resolution shall not
be effective unless the Trustee shall consent to such amendment
and unless the Court shall authorize and approve such amendment
to the Indenture .
Adopted this 18th day of November, 1986 , by the City Council
of the City of Eden Prairie , Minnesota . /
MAYOR
ATTEST:
CITY 6-eERK-FINANCE DIRECTOR.
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