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HomeMy WebLinkAboutResolution - 2008-98 - Approving Bloomington Senior Housing - 10/07/2008 CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2008-98 APPROVING A HOUSING PROGRAM RELATING TO A SENIOR MULTIFAMILY HOUSING DEVELOPMENT TO BE LOCATED IN THE CITY OF BLOOMINGTON; GRANTING PRELIMINARY APPROVING TO THE ISSUANCE OF REVENUE OBLIGATIONS BY THE CITY TO FINANCE THE SENIOR MULTIFAMILY HOUSING DEVELOPMENT; AND APPROVING AND AUTHORIZING CERTAIN RELATED ACTIONS BE IT RESOLVED By the City Council of the City of Eden Prairie, Minnesota (the "City") as follows: Section 1. Findings Pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Chapter 462C, as amended (the "Act"), cities and other political subdivisions of the State of Minnesota are authorized to carry out the public purposes described therein and contemplated thereby in the financing of multifamily housing developments by issuing revenue bonds to defray, in whole or in part, the development costs of the multifamily housing development, and by entering into any agreements made in connection therewith and by pledging any such agreements as security for the payment of the principal of and interest on any such revenue bonds. A multifamily housing development financed under the Act may consist of a multifamily housing development combined with a new or existing health care facility if: (i)the multifamily housing development is designed and intended to be used for rental occupancy; (ii)the multifamily housing development is designed and intended to be used primarily by elderly or physically handicapped persons; and(iii)nursing, medical,personal care, and other health-related, assisted-living services are available on a 24-hour basis in the multifamily housing development to the residents. Bloomington Bethany Senior Housing, Inc., a Minnesota nonprofit corporation (the"Company"), has requested the participation of the City in the financing of the acquisition,construction,and equipping of a senior multifamily housing development consisting of a 182-unit senior Iiving community consisting of 99 independent-living units, 66 assisted-living units, and 17 memory-care units (the "Project") to be located at 11501 Hampshire Road, 11551 Hampshire Road, and 11601 Hampshire Road in the City of Bloomington,Minnesota(`Bloomington"). The City is authorized and empowered, pursuant to the Act, to carry out the public purposes described therein by financing, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement, betterment, or extension of a multifamily housing development located in another city of the State of Minnesota when authorized by such other city under the Act, Minnesota Statues, Section 471.656,as amended,and Minnesota Statutes, Section 471.59,as amended. Pursuant to the requirements of Section 462C.04 of the Act,a Housing Program for a Multifamily Housing Development (the "Housing Program") with respect to the Project and the issuance of revenue obligations by the City to finance the Project in accordance with the terms of the Housing Program has been prepared and is on file with the City. 1 The total cost of the Project will be approximately $36,700,000. Additional financing for the Project is expected to be provided from the proceeds of revenue bonds issued under the Act by the Housing and Redevelopment Authority in and for the City of Bloomington, Minnesota(the`Bloomington HRA"), the Hennepin County Housing and Redevelopment Authority (the "Hennepin County HRA"), and the Burnsville Economic Development Authority (the`Burnsville EDA"). The revenue bonds of the Hennepin County HRA are expected to be issued in a principal amount not to exceed approximately $9,750,000. The revenue bonds of the Bloomington HRA are expected to be issued in a principal amount not to exceed $10,000,000. The revenue bonds of the Burnsville EDA are expected to be issued in a principal amount not to exceed approximately$5,000,000. On October 7, 2008, the City conducted a public hearing on the Housing Program, the Project, and the issuance of revenue obligations by the City, notice of which hearing (the "Public Notice"), was published as required by Minnesota Statutes, Section 462C.04, subdivision 2, of the Act, and Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"). The Public Notice provided a general, functional description of the Project, as well as the maximum aggregate face amount of the obligations to be issued for the purposes referenced above, the identity of the initial owner, operator, or manager of the Project, and the location of the Project. The Public Notice was published in the Eden Prairie News, a newspaper circulating generally in the City, on September 18, 2008, a date at least fifteen(15) days before a meeting of the City Council of the City on October 7, 2008. The City Council of the City conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the Project and the proposed issuance of such revenue obligations. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE,MINNESOTA THAT: Section 1. Preliminary_Approval of Issuance of Revenue Obligations by the City. 1.01 Preliminary approval is hereby granted to the issuance of revenue obligations by the City (the "Bonds") in the approximate aggregate principal amount not to exceed $6,000,000 to finance the Project, subject to final approval following the preparation of bond documents, and subject to final determination by this Council that the financing of the Project and the issuance of the Bonds are in the best interests of the City. The principal amount of the Bonds shall be limited to an amount which, when added to the principal amount of general obligation bonds to be issued by the City in calendar year 2008, will not exceed $10,000,000 in order to ensure that both the general obligation bonds of the City and the Bonds may be designated as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code. 1.02 The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the City's interest in the loan or revenue agreement with respect to the Bonds and the Project. The Bonds, when, as, and if issued, shall recite in substance that the Bonds are issued pursuant to the Act and the Bonds, including interest thereon,are payable solely from the revenues derived from the Project and property pledged to the payment thereof,and shall not constitute a general or moral obligation of the City and shall not be secured by the taxing powers of the City. Section 2. Housing Program. The Housing Program was submitted to the Metropolitan Council for its review and comment. All comments received from the Metropolitan Council were presented to the City Counsel on or prior to the public hearing. 2 Section 3. Compliance with the Act. Based on representations of the Company set forth in a Term Sheet prepared with respect to the financing of the Project on file with the City and based on representations set forth in a Market Feasibility Study (February 2008) prepared by Maxfield Research Inc. at the direction of the Company regarding the Project on file with the City, it is hereby found and determined that the Project furthers the purposes set forth in the Act and the Project constitutes a "multifamily housing development"within the meaning of the Act. Section 4. Bond Counsel. The law firm of Kennedy& Graven,Chartered is authorized to act as bond counsel and to assist in the preparation and review of necessary documents relating to the Bonds. The Mayor, City Manager,and other officers,employees,and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents. Section 5. Documents Furnished to Bond Counsel. The Mayor, City Manager,and other officers of the City are authorized and directed to furnish to Kennedy & Graven, Chartered, as bond counsel, certified copies of all proceedings and records of the City relating to the Housing Program and such other affidavits,certificates, and other documents as may be required by bond counsel to show the facts relating to the legality of the Housing Program and related documents, as such facts appear from the books and records in the custody and control of such officers or as otherwise known to them; and all such certified copies, certificates, affidavits, and other documents, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. Section G. Costs. The Company has agreed to pay or reimburse,directly or through the City, any and all costs incurred by the City in connection the issuance of the Bonds, whether or not the Bonds are issued and the operative instruments are executed and delivered. The Company has also agreed to pay the administrative fee of the City in the event the Bonds are issued. Section 7. Expiration. All commitments of the City expressed herein are subject to the condition that by December 31, 2008, the City, the Company, and the initial purchaser of the Bonds will have agreed to mutually acceptable terms and conditions of the Ioan or revenue agreement, the Bonds, and the other instruments and proceedings relating to the Bonds, and that on or before such date the Bonds shall have been sold and issued. If the events set forth herein do not take place prior to such date, or any extension thereof, and the Bonds are not sold within such time, this resolution will expire and be of no further effect. Section 8. Rights of the City. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Bonds as requested by the Company. 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 that the amount referred to herein, should the City at any time prior to issuance thereof determine that it is in the best interest of the City not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in Section 1 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. (The remainder of this page is intentionally left blank.) 3 Section 9. Effective Date. This Resolution shall be in full force and effect from and after its passage this 7th day of October,2008. ADOPTED by the City Council on October 7, 2008. P it Young,May VV ATTEST: K leen Porta,City Clerk 4