HomeMy WebLinkAboutResolution - 88-294 - Approval of Amended Housing Plan for Elim Shores - Councilmember. Pidcock introduced the following
Resolution and moved its adoption:
RESOLUTION NO. 88-294
AUTHORIZING SUBMISSION OF A PROGRAM FOR THE
CONSTRUCTION OF A MULTIFAMILY HOUSING DEVELOPMENT
(ELIM SHORES, INC. , PROJECT) TO THE MINNESOTA
HOUSING AGENCY
WHEREAS, pursuant to the Minnesota Municipal Housing
Act, Minnesota Statutes, Chapter 462C (the "Act" ) , a City is
authorized by its housing plan to carry out programs for the
financing of multifamily housing for rental primarily to elderly
and/or handicapped persons as described in Subdivision 4 of
Section 462C. 05 ; and ,
WHEREAS, the City Council of the City of Eden Prairie,
Minnesota by Resolution 82-27 adopted on February 2 , 1982 , has
heretofore approved a comprehensive guide plan and housing
assistance plan (the "Housing Plan") following a public hearing
required by and otherwise in compliance with the requirements of
Section 462C. 01 (a) (b) (c) and Section 462C.04 , Subd . 1 ; and
WHEREAS, the Act ( g462C. 04 , Subd. 2 ) requires approval
of a program after a public hearing held thereon after
publication of notice in a newspaper of general circulation in
the City at least fifteen days in advance of the hearing ; and
WHEREAS, the City of Eden Prairie (the "City" ) has on
November 15, 1988 conducted a public hearing , after publication
of notice as required by the Act, for the Program for the
Construction of a Multifamily Housing Development (Elim Shores ,
Inc . Project) (herein, the "Program" ) and issuance of housing
revenue bonds to finance a housing development described in said
notice (the "Project") to be owned by Elim Homes, Inc. or Elim
Shores, Inc. (collectively, the "Company" ) ; and
WHEREAS, the Act further requires submission of the
Program to the Minnesota Housing Finance Agency (the "MHFA") for
its approval .
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Eden Prairie that:
1 . The Program is hereby amended by revising the
definition of "Qualified Project Period" to read as follows :
(12) "Qualified Project Period" for the set
aside of 2 O% of the Housing Units shall mean
a period beginning on the later of the first
day on which at least 10 percent of the units
( in the Projects are first occupied or the
date of issue of the Bonds for the Project
and ending on the date which is the earlier
t` of ( i) the date on which all Bonds are
redeemed or ( il) the date which is 28 years
after the date on which at least 50 percent
of the units in the Project are first
occupied , but in no event shall such period
be less than 12 years from the date on which
at least 50 percent of the units in the
Project are first occupied.
2. The Program is further amended by the addition of
the following sentence under Subsection C on Page 4 thereof:
"The Company has requested the City to fund
an interest write down program with tax
increments from the Project. "
3. The Program if further amended by revising the
third sentence in the second paragraph to read as follows :
It is estimated that market rents for the Housing Units
will be between $620 and $1, 160 and subsidized rents
will range from $295 to $510 (as further described in
the Tax Increment Financing Plan for the Elim Shores ,
Inc . Project) .
4. That the Program (as amended) is hereby in all
respects adopted, and it is further found and determined that
said Program (as amended) is consistent with the City' s Housing
Plan as presently constituted and approved by the City and the
Metropolitan Council .
5 The City Manager is hereby authorized to submit
the Program (as amended) to the MHFA, and to do all other things
and take all other actions as may be necessary or appropriate to
carry out the Program (as amended) in accordance with the Act and
any other applicable taws and regulations.
Adopted by the City Council , the City of Eden Prairie,
Minnesota , this 3rd day of January , 1989 .
r
Mayor "
i
City Cl k
CITY OF EDEN PRAIRIE
PROGR M FOR THE CONSTRUCTION OF A
MULTIFAMILY HOUSING DEVELOPMENT,
AS AMENDED ON NOVEMBER 15 , 1988
(ELIM SHORES, INC. PROJECT)
Pursuant to Minnesota Statutes, Chapter 462C (the
"Act" ) , the City of Eden Prairie, Minnesota (the "City") has been
authorized to develop and administer programs of multifamily
housing developments under the circumstances and within the
limitations set forth in the Act. Minnesota Statutes ,
Section 462C. 07 provides that such programs for multifamily
ho-.asing developments may be financed by revenue bonds issued by
the City.
The City has received a proposal from Elim Homes , Inc. ,
a Minnesota nonprofit corporation on behalf of itself and Elim
Shores , Inc . , a Minnesota nonprofit corporation (collectively,
the "Company" ) that, pursuant to the authority found in the Act ,
the City approve a program (the "Program" ) for the financing of
the acquisition , construction and equipping by the Company of a
multifamily rental facility with an approximate total of 64 units
for rental primarily to elderly persons together with common
recreation and support facilities (the "Project") . The Project
will be located adjacent to Lake Mitchell near the intersection
of Highway 5 and County Road 4 in the City of Eden Prairie. it
is estimated that rents for the Housing Units will be between
$575 and $1, 250 per month. The apartments will be rented to
members of the general public, without regard to race, religion,
creed or national origin . The Company will not give preference
to any particular class or group of persons, other than elderly
and Lower Income Tenants (as hereinafter defined) . Accessibility
to the handicapped will be considered in the construction of the
Proj ect. The construction of the Project is to be funded through
the issuance of one or more series of up to $4 , 400 , 000 in revenue
bonds issued by the City (the "Bonds") . It is proposed that the
Bonds be sold publicly through an underwriter. . The Bonds will be
secured primarily by a revenue agreement with the. Company .
Following construction of the Project, the Company will own and
operate the Project as a multi-family residential rental project
primarily for the elderly. At least twenty percent (20%) of the
units will be specifically reserved for tenants whose incomes are
not greater than eighty percent (80%) of the area median income
pursuant to Minnesota Statutes 462C. 05, Subd. 2 .
The use of tax-exempt bonds for the Project will allow
approximately 64 more affordable rental units for use by the
elderly and/or low and moderate income families and individuals
as required by law. The Project will also increase the variety
of housing types and costs in the City. The Project, by
providing alternative housing in which the elderly and/or low and
moderate income families and individuals are housed in the same
development as others of varied economic means will meet the
needs and objectives of the City and the public at the least
expense possible.
The City, in establishing this program, has considered
the information contained in the Housing plan, including
particularly (i) the availability and affordability of private
market financing for the construction of multifamily housing
units ; ( ii) the availability and affordabi.lit.y of other
government housing programs ; (iii) an analysis of population and
employment trends and projections of 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 the Program, has further
considered (i) the amount, timing and sale of Bonds to finance
the construction of the. Housing Units , to fund the appropriate
reserves and to pay the cost of issuance ; (ii) the method of
monitoring and implementation of the Program to ensure
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 the Program; and (vi) other
matters deemed relevant.
The City, in adopting the Program, considered the
potential financial impact of a bond issuance on affected public
agencies_ In addition, the City reviewed the method of marketing
the Program. Such review included the examination of the equal
opportunity for participation by: (i) minorities ; (ii ) house-
holds with incomes at the lower end of the range that can be
served by the Program; (iii) households displaced by public or
private action ; (iv) families with children; and (v) access-
ibility to the handicapped.
The Project will be constructed and financed pursuant
to Subd. 1 through 4 of Section 462C. 05 of the Act (particularly
Subd . 2 thereof) and Section 469. 175, Subd. 4 .
Subsection A. Definitions
The following terms used in this Program shall have the
following meanings, respectively:
( 1) "Act" shall mean Minnesota Statutes , Section
�� -- 2 -
462C. 01 , et se . , as currently in effect and as the same may from
time_ to time be amended.
(2 ) "Adjusted -Gross Income" shall mean gross family
income "Less $750 for each adult (maximum of two) and less $500
for each other dependent in the family as provided by and
consistent with Section 462C. 02 , Subd . 7 .
(3 ) "Bonds" shall mean the revenue bonds to be issued
by the City to finance the Program.
(4 ) "City'' shall mean the City of Eden Prairie,
County of Hennepin, State of Minnesota .
(5 ) "Company" shall mean E1im Homes, Inc. , a Minnesota
nonprofit corporation, and/or Elim Shores, Inc. , a Minnesota
nonprof it corporation.
(6) "Housing Man" shall mean the City of Eden Prairie
462C Housing Plan, adopted on February 2 , 1982 , as amended,
setting forth certain information required by the Act.
(7 ) "Housing Unit" shall mean any one of the apartment
units located in the Project, occupied by one person or family,
and containing complete .living facilities .
(8) 'Land" shall mean the real property upon which the
Project will be situated.
(9) "Lower-Income Tenants" shall mean individuals who
on the date of their initial occupancy of dwelling units in the
Projects are individuals of low or moderate income within the
meaning of Section 142 (d) of the Internal Revenue Code of 1986 ,
as amended (the 01Code" ) ; without limiting the foregoing, the
occupants of a unit shall not be considered to be of low or
moderate income if all the occupants are students (as defined in
Section- 151 (e) ( 4) of the Code) , no one of whom is entitled to
file a joint return under Section 6013 of the Code .
(10) "Program" shall mean the program for the financing
of the Project pursuant to the Act.
( 11) "Project" shall mean the multifamily housing
development consisting of approximately 64 Housing Units to be
constructed by the Company on the Land.
( 12 ) "Qualified Project Period" for the set aside of
200 of the Housing Units shall mean a period beginning on the
later of the: first day on which at least 10 percent of the units
in the Projects are first occupied or the date of issue of the
Bonds for the Project and ending on the date which is the earlier
of ( i) the date on which all Bonds are redeemed or ( ii) the date
- 3 -
which is 128 years after the date on which at least 50 percent of
the units- In the Project are first occupied, but in no event
shall such period be less than 12 years from the date on which
at least 50 percent of the units in the Project are first
occupied.
Subsection B. Program for Financing the Project
It is proposed that the City establish this Project to
construct 64 Housing Units to be owned by the Company, at the
price and upon such other terms and conditions as may be agreed
upon in writing between the City and the Company . To do this,
the City expects to issue one or more series of Bonds, the
proceeds of which will be loaned to the Company 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 .
- It is contemplated that the Bonds shall contain a
maturity of not more than thirty ( 30) years and will be priced to
the market at the time of issuance . It is anticipated that the
Bonds will be issued on or about December 1, 1988 .
The City will hire no additional staff for the
administration of the Program. The City intends to select and
contract with a trustee experienced in trust matters to
administrate the Bonds.
Insofar as the City will be contracting with under-
writers , the trustee, and others, all of whom will be reimbursed
from bond proceeds and revenues generated by the Program, little
or no administrative costs will be paid from the City' s budget
with respect to this Program. The City will charge an
administrative fee of 1/8 of one percent of the outstanding
principal amount of bonds annually *for administrative costs . The
Bonds.- will, not be general, bonds of the City, but are
expected to be paid from properties pledged to the payment
thereof, and out of net revenues of the Project or otherwise by
Elim Homes, Inc .
Subsection C. Local Contributions to the Pro ram
The Company has requested the City to fund an interest
write down program with tax increments from the Project. 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 .
Subsection D. Standards and Requirements Relating to
the Financing of the Project Pursuant to the Program
- 4
The following standards -and- -requirements shall apply
with respect to the operation of the Project by the Company
pursuant to this Program :
(1) Substantially all of the proceeds of the sale of
the Bonds will be used to provide funds for the construction or
the Project, which will provide approximately 64 residential
units . The funds will be made available to the Company pursuant
to the terms of the Bond offering, which may include certain
covenants to be entered into between the City and the Company .
(2 ) The Company will not arbitrarily reject an
application from a proposed tenant because of race, color, creed,
religion, national origin, sex, marital status or status with
regard to public assistance or disability. The Housing Units are
intended to be rented primarily to elderly persons.
(3 ) No Housing Unit may be in violation of applicable
zoning ordinances or other applicable land use regulations ,
including any urban renewal plan or development district plan ,
and including the state building code as set forth under
Minnesota Statutes, Section 16. 8 3 , et se_p. -
(4 ) At all times during the Qualified Project Period
the Companywill. allocate (without designation) at least twenty
percent (20 4) of the dwelling units in the Project for occupancy
by Lower-Income Tenants .
(5) The Company has proposed a plan by which it will
use its best efforts to see that approximately 70 percent of the
Housing Units will be made available to individuals or families
whose anticipated annual income is not more than 80 percent of
the median income (adjusted for family size) of the metropolitan
area (approximately $24 , 400) , and 20 percent of the Housing Units
(13 units) are targeted to be set aside for individuals with
50 percent or less of the area median income (adjusted for family
size of 1 and 2) with the proposed limitation that no more than
40 percent of the latter group's income would be spent on rents .
To the extent the foregoing describes a program to assist tenants
of low to median income above and beyond the requirements of the
Act, the Company has stated a good faith intention to implement
such a program subject to the condition that the Company has the
overriding concern and intention to operate the Project so that
the Bonds are payable solely out of net revenues ( i. e. , the
Project is expected to be and remain economically viable and
self-supporting) subject only to ( i) certain subsidies
contemplated by a tax increment interest reduction program being
considered by the City of Eden Prairie and ( ii) the proposal that
Elim Foundation use its best efforts to subsidize rents in the
approximate amount of $50 , 000 per year for certain tenants .
Subsection E . Evidence of Compliance
1- -- The-, City-may require- from the Company or such other
persons deemed necessary, at or before the issuance of the Bonds,
evidence satisfactory to the City of the ability and intention of
the Company to complete the Project, and evidence satisfactory to
the City of compliance with the standards and requirements for
the making of the financing established by the City, as set forth
herein; and in connection therewith, the City or its
representatives may inspect the relevant books and records of the
Company in order to confirm such ability, intention and
compliance. In addition, the City may periodically require
certification from either the Company or such other persons
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 one or more
series of its Revenue Bonds in an aggregate principal amount
estimated to be up to $4 , 400,000 . The Bonds shall be issued
pursuant to Section 462C. 07 , Subd. 1 of the A:t, and shall be
payable primarily from the revenues of the Program authorized by
this Section.
Subsection G. Severability
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.
`! - 6 -