Loading...
HomeMy WebLinkAboutResolution - 2005-126 - Issuance of Multifamily Housing Revenue Bonds to Refinance a Development Under Minnesota Statutes (Bluffs At Nine Mile Creek) - 10/18/2005 CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2005-126 RESOLUTION ADOPTING AN AMENDED FINANCING PROGRAM AND AUTHORIZING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS TO FINANCE AND REFINANCE A DEVELOPMENT UNDER MINNESOTA STATUTES, CHAPTER 462C AND THE EXECUTION OF VARIOUS DOCUMENTS IN CONNECTION WITH THE EDEN PRAIRIE LEASED HOUSING ASSOCIATES I, LIMITED PARTNERSHIP PROJECT A. WHEREAS, the City of Eden Prairie, Minnesota (the "Issuer") has previously issued its $23,500,000 Variable Rate Demand Multifamily Housing Revenue Bonds (Eden Prairie Leased Housing Associates I, Limited Partnership Project), Series 2003A (the "Series 2003A Bonds"), its $260,000 Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Eden Prairie Leased Housing Associates I, Limited Partnership Project), Series 2003B (the "Series 2003B Bonds"), its $2,000,000 Subordinate Variable Rate Demand Multifamily Housing Revenue Bonds (Eden Prairie Leased Housing Associates I, Limited Partnership Project), Series 2003C (the "Series 2003C Bonds") and its $1,000,000 Subordinate Multifamily Housing Revenue Bonds (Eden Prairie Leased Housing Associates I, Limited Partnership Project), Series 2003D (the "Series 2003D Bonds") (collectively, the "Series 2003 Bonds"), the proceeds of which were loaned to Eden Prairie Leased Housing Associates I, Limited Partnership, a Minnesota limited partnership (the "Borrower") to finance the acquisition and construction of a certain Project(described below); and B. WHEREAS, the Issuer has on April 16, 2002, approved the program for the issuance of the Series 2003 Bonds after a public hearing on the Project and said program (the "Original Program") in accordance with the requirements of Minnesota Statutes, Chapters 462A and 462C (collectively, the "Act"); and C. WHEREAS, it is now proposed that there be issued Variable Rate Demand Multifamily Housing Revenue Refunding Bonds (Eden Prairie Leased Housing Associates I, Limited Partnership Project), Series 2005A (the "Series 2005A Bonds"), and Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Eden Prairie Leased Housing Associates I, Limited Partnership Project), Series 2005B (the "Series 2005B Bonds", jointly with the Series 2005A Bonds the"Series 2005 Bonds")to finance and refinance the Project, in part; and D. WHEREAS, the Borrower has proposed that the Issuer adopt an amended multifamily housing bond financing program, a copy of which amended program is attached hereto as Exhibit A (as amended, the "Amended Program"), in accordance with Section 462C.04, subd. 2 of the Act, which requires that a public hearing be held thereon, but does not require any further review r comment since the Amended Program makes changes only in the financial aspects of the proposed issue of bonds; and E. WHEREAS, the Issuer has on October 18, 2005, has conducted a public hearing on the Amended Program after publication of notice as required by Minnesota Statutes, Section 462C.04 of the Act; and F. WHEREAS, the Amended Program provides for the issuance of the Series 2005 Bonds by authorizing the issuance by the Issuer of housing revenue bonds, in an aggregate amount presently estimated not to exceed $27,500,000 to finance the acquisition and construction of the Project; and G. WHEREAS, the City is authorized to issue bonds for any of its corporate purposes, including financing and refinancing the Project pursuant to the Amended Program, under the Act; H. WHEREAS, sufficient details of the revenue bonds and other aspects of the financing have been agreed to and the Borrower requests that this final bond resolution should be adopted on this date and a proposal for the revenue bonds be accepted: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota, as follows: 1. Amended Program. The Amended Program for the issuance of the Series 2005 Bonds is hereby adopted in the form attached hereto as Exhibit A. 2. Proposal. The City Council has received a proposal from Eden Prairie Leased Housing Associates I, Limited Partnership (the "Company"), that the Issuer undertake to finance and refinance a certain Project, in part, as herein described pursuant to the Act, through issuance by the Issuer of the Series 2005 Bonds in accordance with a Bond Purchase Agreement (the "Purchase Agreement") among the Issuer, Dougherty & Company LLC (the "Purchaser") and the Company. 3. Project. The Company desires to finance and refinance, in part, the acquisition and construction of a residential rental project with 188 units located at the northwest corner of Valley View Road and Flying Cloud Drive in the City (the "Project'). The Project as described above will further the policies and purposes of the Act. 4. Structure. It is proposed that, pursuant to a Loan Agreement dated as of February 1, 2003, by and between the Issuer and Company (the "Original Loan Agreement'), as amended by a First Amendment to Loan Agreement, dated as of November 1, 2005 (the "First Amendment to Loan Agreement' and, together with the Original Loan Agreement, the "Loan Agreement'), the proceeds of the Series 2005 Bonds be loaned to the Company to pay or reimburse certain costs of the Project, directly and by refunding the Series 2003C Bonds and the Series 2003D Bonds. The payments to be made by the Company under the Loan Agreement are established so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Series 2003A Bonds, the Series 2003B Bonds and the Series 2005 Bonds when due. The Series 2003A Bonds, the Series 2003B Bonds and the Series 2005 Bonds are sometimes referred to herein as the "Bonds." It is further proposed that the Issuer assign its 2 rights to the payments and certain other rights under the Loan Agreement to LaSalle Bank National Association (the "Trustee"), as security for payment of the Bonds under an Indenture of Trust dated as of February 1, 2003 (the "Original Indenture")between the Issuer and the Trustee, as amended by a First Supplemental Indenture of Trust, dated as of November 1, 2005 (the"First Supplemental Indenture" and, together with the Original Indenture, the "Indenture"). The Bonds may be tendered for purchase optionally or mandatorily under certain circumstances, and will be remarketed pursuant to a Remarketing Agreement entered into in connection with the issuance of the Series 2005 Bonds (the "Remarketing Agreement") by and between the Company and Purchaser. The Bonds will be secured by an Irrevocable Letter of Credit, as amended by an Amendment No. 1 to Letter of Credit (the "Letter of Credit") issued by LaSalle Bank National Association (the "Bank"). The Company will grant a mortgage and security interest in the Project to the Bank pursuant to an Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing dated as of February 1, 2003, as amended by a First Amendment to Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing dated as of November 1, 2005 (the "Mortgage"). Additional documents securing the Bank to which the Issuer is not a party include a Reimbursement Agreement, Pledge Agreement, Assignment of Rents and Leases and Guaranty of Payment, including all amendments thereto. The Series 2005 Bonds will be offered for sale by the Purchaser pursuant to an"Official Statement." Certain aspects of operations of the Project will be governed by a Regulatory Agreement between the Trustee and Company dated as of February 1, 2003, as amended by a First Amendment to Regulatory Agreement, dated as of November 1, 2005 (as amended, the "Regulatory Agreement"). Certain representations, covenants and agreements with respect to the Project and the Series 2005 Bonds are set forth in a Tax Compliance Agreement among the Issuer, Trustee and Company dated as of the closing date (the"Tax Compliance Agreement"). Additional documents will govern other aspects of the transaction. 5. Preliminaa Approval. The City Council by action taken on October 4, 2005, gave preliminary approval to the proposal. 6. Forms of Documents Submitted. Forms of the following documents have been submitted to the City Council for approval or review: (a) The First Amendment to Loan Agreement; (b) The First Supplemental Indenture; (c) The Letter of Credit documents between the Bank and Company(not to be executed by the Issuer); (d) The First Amendment to Regulatory Agreement (not to be executed by the Issuer); (e) The Tax Compliance Agreement; 3 (f) The Purchase Agreement; (g) The draft Official Statement as the operative draft on the date hereof of the Official Statement(not to be executed by the Issuer). 7. Findings. It is hereby found, determined and declared that: (a) the Project described in the Loan Agreement constitutes a "qualified residential rental project" within the meaning of Section 142(d) of the federal Internal Revenue Code of 1986, as amended, and a "multifamily housing development" authorized by the Act, and furthers the purposes of the Act; (b) the findings and conclusions made by the Issuer in connection with the adoption of the Amended Program of the Issuer for the Project under the Act are hereby reaffirmed, including the provision of units at estimated initial rents which are designed to be affordable to persons and families of low and moderate income and other persons and families to the extent necessary in furtherance of a policy of economic integration; (c) the purpose of the Project is, and the effect thereof will be, to promote the public welfare by financing or refinancing the acquisition, construction and equipping of a facility for use as a multifamily housing development designed primarily for occupancy by persons and families of low and moderate income and by other persons and families in furtherance of the policy of economic integration in accordance with the provisions of Minnesota Statutes, Sections 462C.05, subdivision 2 and 462A.02, subdivision 6; (d) the Project is to be located within the jurisdiction of the Issuer at a site which is easily accessible to employment opportunities, health facilities and other amenities within the City and the surrounding communities; (e) the Act authorizes (i) the acquisition and construction of the Project, (ii) the issuance and sale of the Bonds, (iii) the execution and delivery by the Issuer of the First Amendment to Loan Agreement, Tax Compliance Agreement, First Supplemental Indenture and Purchase Agreement, (iv) the performance of all covenants and agreements of the Issuer contained in the First Amendment to Loan Agreement, Tax Compliance Agreement, First Supplemental Indenture and Purchase Agreement, and (v) the performance of all other acts and things required under the constitution and laws of the State of Minnesota to make the First Amendment to Loan Agreement, Tax Compliance Agreement, First Supplemental Indenture, Purchase Agreement and Series 2005 Bonds valid and binding obligations of the Issuer in accordance with their terms; (f) it is desirable that the Series 2005 Bonds be issued by the Issuer upon the terms set forth in the First Supplemental Indenture and established pursuant to this resolution; (g) the payments under the Loan Agreement are established to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Series 2005 Bonds issued under the Indenture when due, and the Loan Agreement and the Indenture also provide that the Company is required to pay all 4 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 and payable during the term of the Loan Agreement and the Indenture; and (h) under the provisions of Section 462C.07 of the Act, and as provided in the Loan Agreement and the Indenture, the Series 2005 Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof; the Issuer is not subject to any liability thereon; no holder of any Series 2005 Bonds shall ever have the right to compel any exercise by the Issuer of its taxing powers to pay any of the Series 2005 Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the Issuer except the interests of the Issuer in the Loan Agreement which have been assigned to the Trustee under the Indenture; the Series 2005 Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Issuer except the interests of the Issuer in the Loan Agreement which have been assigned to the Trustee under the Indenture; the Series 2005 Bonds shall recite that the Series 2005 Bonds do not constitute or give rise to a pecuniary liability or moral obligation of the Issuer, the state or its political subdivisions, and that the Series 2005 Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof, and the Series 2005 Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory or home rule charter limitation of indebtedness. The Series 2005 Bonds are neither a moral or legal obligation nor an annual appropriation obligation of the Issuer. 8. Approval of Forms; Execution. Subject to the approval of the City Attorney and the officers authorized to execute such documents, and the provisions of Section 13 herein, the First Amendment to Loan Agreement, the First Supplemental Indenture and the Purchase Agreement, and exhibits thereto and all other documents listed in paragraph 6 hereof or otherwise necessary or appropriate to the transaction are approved (1), if submitted to this meeting, substantially in the forms submitted (except as otherwise provided for the Official Statement in paragraph 9 hereof) and (2), if not submitted to this meeting, in such forms as may be necessary or appropriate and approved by Bond Counsel. The Loan Agreement and the Indenture, in substantially the forms submitted, are directed to be executed in the name and on behalf of the Issuer by the Mayor and City Manager. Any other Issuer documents and certificates necessary or appropriate to the transaction described above shall be executed by the appropriate Issuer officers. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in the Loan Agreement and the Indenture. 9. Official Statement. The Issuer has been presented with a draft of the Official Statement, which is to be completed and dated on or about the date of the delivery of and payment for the Series 2005 Bonds. The Issuer hereby consents to the presentation of information relating to the Issuer in the Official Statement under the caption "The Issuer". The Issuer hereby finds that the information in the sections of the Official Statement captioned "The Issuer" and "Absence of Material Litigation" do not contain any untrue statement of a material fact, and hereby approves in substantially the form submitted to the City Council at this meeting 5 such information for inclusion in the Official Statement; and the Issuer hereby ratifies, confirms and consents to the use of said sections in the Official Statement in connection with the sale of the Series 2005 Bonds. The Issuer has not prepared nor made any independent investigation of the information contained in the Official Statement other than the sections therein captioned "The Issuer" and "Absence of Material Litigation" and the Issuer takes no responsibility for such information. Subject to the statements above in this paragraph, the Issuer approves the form of the Official Statement and authorizes its use in connection with the sale of the Series 2005 Bonds. 10. Issuance; Acceptance of Offer. Subject to Section 13 hereof, the Issuer shall proceed forthwith to issue its Series 2005 Bonds, in the form and upon the terms set forth in the First Supplemental Indenture, including the years and amounts of maturities of the Series 2005 Bonds;provided that the amounts of maturities may be sinking fund installment amounts of term bonds if so specified by the Purchaser. The Bonds shall be in an amount.not to exceed $3,000,000 for the Series 2005A Bonds and not to exceed $600,000 for the Series 2005B Bonds, or in a lesser amount if the Mayor and City Manager of the Issuer determine that a smaller amount is sufficient and is desirable. The Series 2005 Bonds shall bear interest at the variable rates established pursuant to the Indenture, but in no event shall the interest rate or rates exceed 8% for the Series 2005A Bonds or 8% for the Series 2005B Bonds. The offer of the Purchaser to purchase the Series 2005 Bonds for a sum equal to the par value (one hundred percent, 100%) of the aggregate principal amount thereof as reduced by any original issue discount, is hereby accepted, and the Mayor and City Manager of the Issuer are hereby authorized and directed to execute the Purchase Agreement when the principal amounts have been so established. The Mayor and City Manager of the Issuer and other officials are hereby authorized and directed to prepare and execute the Series 2005 Bonds as prescribed in the First Supplemental Indenture and to deliver them to the Trustee for authentication and delivery to the Purchaser. 11. Records and Certificates. The Mayor and City Manager and other officers of the Issuer are authorized and directed to prepare and furnish to the Purchaser certified copies of all proceedings and records of the Issuer relating to the Series 2005 Bonds and such other affidavits and certificates as may be required to show the facts relating to the legality of the Series 2005 Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the Issuer as to the truth of all statements contained therein. 12. Changes in Forms Approved; Absent and Disabled Officers. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved prior to their delivery by Bond Counsel and by the Issuer officials authorized herein to execute or accept, as the case may be, said documents; and said Issuer officials are hereby authorized to approve said changes on behalf of the Issuer. The execution of any instrument by the appropriate officer or officers of the Issuer herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the event of absence or disability of the Mayor or City Manager, any of the documents authorized by this resolution to be executed may be executed without further act or authorization of the City Council by the Acting Mayor, or the 6 person authorized to act in the stead of the City Manager, respectively, or by such other officer or officers of the Issuer as, in the opinion of Bond Counsel, may act in their behalf. 13. Future Amendments. The authority to approve, execute and deliver future amendments to the documents described herein entered into by the Issuer in connection with the issuance of the Bonds and consents required under the documents described herein is hereby delegated to the Mayor and City Manager, subject to the following conditions: (a) such amendments or consents do not require the consent of the holders of the Bonds; (b) such amendments or consents to not materially adversely affect the interests of the Issuer; (c) such amendments or consents do not contravene or violate any policy of the Issuer; and (d) such amendments or consents are acceptable in form and substance to the counsel retained by the Issuer to review such amendments. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this Resolution. The execution of any instrument by the Mayor and City Manager shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Mayor and City Manager, any instrument authorized by this paragraph to be executed and delivered may be executed by the officer of the Issuer authorized to act in their place and stead. 14. Headings; Terms. Paragraph headings in this resolution are for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Capitalized terms used, but not defined, herein shall have the meanings given them in, or pursuant to, the Indenture and the Loan Agreement. Passed by the City Council of the City of Eden Prairie, Minnesota, this 18th day of October, 2005. CITY OF EDEN PRAIRIE, MINNESOTA Ron Case, Acting Mayor ATTEST: K hleen orta, City Clerk 7 EXHIBIT A AMENDED FINANCING PROGRAM FOR THE ACQUISITION AND CONSTRUCTION OF A MULTIFAMILY HOUSING FACILITY This financing program amends and restates the financing program developed in connection with the Project (described below) and previously approved by the City of Eden Prairie,Minnesota (the"City") on April 16, 2002: Pursuant to Minnesota Statutes, Chapter 462C (the "Act'), the City of Eden Prairie, Minnesota (the "City") is authorized to undertake housing development projects and to issue its revenue bonds for the financing and refinancing of housing development projects. The City proposes to loan the proceeds of revenue bonds to finance the acquisition and construction by Eden Prairie Leased Housing Associates I, Limited Partnership, a Minnesota limited partnership (the "Borrower"), of the multifamily housing facility as more fully described in Appendix A attached hereto (the"Project'). Minnesota Statutes, Chapter 462C requires the adoption of a housing program following a public hearing as required prior to the issuance of housing revenue bonds or other obligations under Chapter 462C. The City intends that financing of the Project may be provided through any one or more of the following: (a) the issuance of up to $27,500,000 in one or more series of tax-exempt and taxable housing development bonds of the City (the "Bonds") secured by the Project financed and refinanced therefrom; and (b) the making or entering into any contracts, agreements, reimbursement agreements, mortgages, assignments, security agreements, guarantees, or similar agreements or instruments as may be necessary in connection with accomplishing the purposes set forth in the Program. The amount of financing and refinancing for the Project is not expected to exceed $27,500,000. The Project will be owned and operated by the Borrower as a qualified multifamily residential rental project. Rents anticipated to be collected for the various units in the Project are anticipated to be as set forth in Appendix A. The City, in financing and refinancing the Project, has determined that financing and refinancing the Project is in the best interest of the public health, safety and welfare of the people of the City of Eden Prairie,Minnesota. Section A. Definitions. The following terms used in this Program shall have the following meanings,respectively: "Housing Unit" shall mean any one of the apartments located in the Project, occupied by one or more persons or a family, and containing complete living facilities. "Land" shall mean the real property upon which the Project is situated as more fully described in Appendix A attached hereto. "Program" shall mean this program for the financing and refinancing of the Project. A-1 Section B. Program for Financing and Refinancing_ the Project. The City is establishing this Program to provide financing and refinancing for acquisition and construction of the Project, by the Borrower, at such cost and upon such other terms and conditions as may be determined by the City in accordance with the Act. The City expects to issue up to $27,500,000 of one or more series of taxable and tax-exempt Bonds to finance and refinance the Project under the Program. The proceeds of the Bonds will be loaned to the Borrower and applied to finance or refinance (as the case may be) the acquisition of the Land, construction and equipping of the Project, to fund required reserves and to pay the costs of issuing the Bonds. It is anticipated that any Bonds issued under this Program shall have a maturity of approximately thirty-five (35) years or less and will bear interest at a rate of approximately, but not to exceed, 8.5% per annum with respect to tax-exempt bonds and 9.0% per annum with respect to taxable bonds; however, the Bonds will, of course, be priced to the market at the time of issuance. Section C. Local Contributions to the Program. The Borrower has also requested assistance from the City in the form of tax increment financing and a Community Development Block Grant. The Borrower may also request HOME funds from the Minnesota Housing Finance Agency ("MHFA"), a Super RFP from MHFA and waiver of certain SAC and WAC fees from the Metropolitan Council. Section D. Standards and Requirements Relating to the Financing and Refinancing of the Project Pursuant to the Program. The following standards and requirements shall apply with respect to the operation of the Project by the City and the Borrower: (1) The Borrower will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, gender, marital status, or status with regard to public assistance or disability. (2) The Project will be constructed in accordance with applicable zoning ordinances or other applicable land use regulations, including the State Building Code as set forth under Minnesota Statutes, Section 16.83, et seg. (3) The affordability standards and set-aside requirements of Section 462C.05, Subdivision 2 of the Act, and the requirements of Minnesota Statutes, Chapter 474A and Section 142(d) of the Internal Revenue Code of 1986, as amended, will be met. Section E. Issuance of Bonds. To finance and refinance the Project pursuant to this Program, the City expects to issue its taxable and tax-exempt bonds in a principal amount not to exceed $27,500,000 in the aggregate, in any calendar year secured by the Project and other moneys pledged to the payment of such Bonds. The cost of the Project is presently expected not to exceed $36,000,000. The cost of the Project may change between the date of preparation of this Program and the date of making of construction loans or issuance of Bonds for such Project. A-2 Section F. 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. Section G. Amendment. The City shall not amend this Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Section H. State Ceiling. Up to $26,500,000 of the state ceiling for private activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and Chapter 474A of Minnesota Statutes, will be used with respect to the Bonds A-3 APPENDIX A Estimated Estimated Anticipated Location Financing Units G 88 total) Initial Needs Rents Northwest corner of $27,500,000 4—Studio $623 Valley View Road 67— 1 Bdrm $653-1,127 and Flying Cloud 4— 1 Bdrm+Den $1,196 Drive 22—2 Bdrm/1 Bath $934-$1,261 75 —2 Bdrm/2 Bath $1,444 4—2 Bdrm/2 %2 Bath $2,100 12—2 Bdrm+Den $2,308 015492/202837 396118_2