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HomeMy WebLinkAboutResolution - 86-310 - Refunding $5,565,000 - Quail Ridge Multiple Family Housing Bonds - 0 RESOLUTION AUTHORIZING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE REFUNDING BONDS TO REFINANCE A MULTIFAMILY RENTAL HOUSING PROJECT (QUAIL RIDGE APARTMENTS PROJECT) BE IT RESOLVED by the Council of the City of Eden Prairie , Minnesota, as follows : 1 . The Council has received a proposal from Eames Apartments Limited Partnership, a Minnesota limited partnership ( the "Company" ) that the City undertake to refinance a certain Multifamily Rental Housing Project as herein described , pursuant to Chapter 462C , Minnesota Statutes ( the "Act" ) , through issuance by the City of its $5 ,565 ,000 Multifamily Housing Revenue Refunding Bonds , Series 1986 ( the "Bonds" ) , in accordance with a Bond Purchase Agreement ( the "Purchase Agreement" ) to be executed by the City, the Company and Miller Securities Incorporated ( the "Bond Purchaser" ) . 2 . The proceeds of the Bonds would be used to redeem and repay the City' s $ 5 ,565 ,000 Multifamily Housing Revenue Bonds (Quail Ridge Apartments Project) dated July 1 , 1985 ( the "Prior Bonds" ) the proceeds of which have never been disbursed to the Company and which proceeds are currently being held by First Trust Company, Inc . as trustee for the holders of the Prior Bonds pursuant to the Indenture of Trust relating to the Prior Bonds . The Council has been advised by the Company that due to conditions beyond the control of the Company, the proceeds of the Prior Bonds will not be made available to the Company upon the terms and conditions of the originally contemplated and set forth in the Indenture of Trust, Loan Agreement and other documents relating to the Prior Bonds . 3 . The Company has acquired certain real estate and constructed thereon a 108-unit multifamily rental housing development building and related improvements and equipment ( hereinafter referred to as the "Project" ) . 4 . It is proposed that , pursuant to a Loan Agreement to be executed by the City, as lender, and the Company, as borrower ( the "Loan Agreement" ) , the City loan the proceeds of the Bonds to the Company to refinance the Prior Bonds and provide permanent financing for the Project . The basic payments to be made by the Company under the Loan Agreement will be fixed so as to produce revenue sufficient to pay the 2 principal of , premium, if :any , and interest on the Bonds when due . It is further proposed that the City assign its rights to the basic payments and certain other rights under the Loan Agreement to a trustee ( the "Trustee" ) as security for payment of the Bonds under an Indenture of Trust to be executed by the City and the Trustee ( the " Indenture" ) and that the Company grant a mortgage and security interest in the Project to the Trustee pursuant to a Mortgage and Security Agreement ( the "Mortgage" ) and to further secure the payment of the Bonds and the interest thereon, enter into an Assignment of Leases and Rents ( the "Assignment of Leases and Rents" ) and such additional security instruments as may be required by the Bond Purchaser . 5 . The Bond Purchaser proposes to offer the Bonds for sale to the public pursuant to an official statement . The City will not need to participate in nor make any independent investigation of the information contained in such official statement and the City will take no responsibility for such information. 6 . It is hereby found, determined and declared that : ( a) it is desirable that the Bonds be issued by the City upon the terms and conditions to be negotiated by the Company and the Bond Purchaser and to be set forth in the various Bond documents ; ( b) the basic payments under the Loan Agreement must be fixed to produce revenue sufficient to provide for the prompt payment of principal of , premium, if any , and interest on the Bonds issued under the Indenture when due , and the Loan Agreement, Mortgage and Indenture must also provide 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 Project Premises and payable during the term of the Mortgage , Loan Agreement and Indenture; ( c) under the provisions of the Act , and as to be provided in the Loan Agreement and Indenture , the Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof; the City will not be subject to any liability thereon; no holder of 3 any Bonds shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Bonds ! or the interest or premium thereon , or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement which will be assigned to the Trustee under the Indenture ; the Bonds shall not constitute a charge , lien or encumbrance , legal or equitable upon any property of the City except the interests of the City in the Loan Agreement which will be assigned to the Trustee under the Indenture ; the Bonds shall recite that the Bonds will be issued without moral obligation on the part of the state or its political subdivisions, and that the Bonds , including interest thereon , will be payable solely from the revenues pledged to the payment thereof; and , the Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 7 . The final terms and conditions of the Bonds and related documents will be subject to the final approval of the City Attorney and this Council at a later meeting. 8 . The Company, Bond Purchaser and Briggs and Morgan , P .A . are authorized to prepare all necessary documenta- tion in consultation with the City Attorney . Passed : December 16 , 1986 May- r Attest r -z Ctt y (i erk Finance Director. z ( SEAL) 4