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HomeMy WebLinkAboutResolution - 2014-80 - Issuance of Revenue Bonds - Castle Ridge - 08/19/2014 CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2014-80 BE IT RESOLVED by the City Council (the "Council") of the City of Eden Prairie, Minnesota (the"City"), as follows: l. Statutory Authorization. Under the provisions of the Minnesota Municipal Housing Act, Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), cities are authorized to finance and refinance multifamily housing developments through the issuance and sale of revenue bonds payable exclusively from the revenues of the multifamily housing development. Among the purposes authorized by the Housing Act, proceeds derived from the sale of revenue bonds issued under the terms of the Housing Act may be applied to make a loan to finance the acquisition and preparation of a site and the construction of a new multifamily housing development. In the making of loans to finance multifamily housing developments and the issuance of revenue bonds, the city may exercise any of the powers of the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended. For purposes of the Housing Act, the term "city" is defined to include the housing and redevelopment authority in and for a statutory city if authorized by ordinance of the statutory city to exercise the powers conferred by the Housing Act on behalf of the statutory city. On the date hereof, the Council of the City is scheduled to consider an ordinance authorizing the Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota (the "Eden Prairie HRA") to exercise, on behalf of the City, the powers conferred by the Housing Act. 2. Eden Prairie HRA. The City is a statutory city organized and existing under the Constitution and laws of the State of Minnesota. The Eden Prairie HRA is the housing and redevelopment authority in and for the City established as a public body, corporate and politic, under the provisions of Minnesota Statutes, Sections 469.001-469.047, as amended (the "Housing and Redevelopment Authority Act"). In accordance with the requirements of Section 469.003 of the Housing and Redevelopment Authority Act, the Council of the City authorized the Eden Prairie HRA to transact business and exercise powers under the provisions of the Housing and Redevelopment Authority Act. It is the intent of the Council of the City to adopt an ordinance authorizing the Eden Prairie HRA to exercise, on behalf of the City, the powers conferred by the Housing Act. 3. The Borrower, the Corporation, and the Project. On October 18, 2004, the City issued its Multifamily Development Revenue Note of 2004 (Broadmoor Apartments, Inc. Project) (the "Series 2004 Note"), in the original aggregate principal amount of $8,000,000, under the terms of Resolution 2004- 1 18, adopted by the Council of the City on August 3, 2004. Castle Ridge Apartments, LLC, a Minnesota limited liability company(the "Borrower"),the sole member of which is Castle Ridge Care Center, Inc., a Minnesota nonprofit corporation and an organization exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as a result of the application of Section 501(c)(3) of the Code (the "Corporation"), acquired two hundred twenty- seven (227) units of a two hundred forty (240) unit multifamily housing development located at 635 Prairie Center Drive in the City(the "Development") by the transfer of the Series 2004 Note to the owner of the Development. Since the issuance of the Series 2004 Note, the Borrower (or a related entity) has acquired nine(9) additional units of the Development. The Borrower has requested that the Eden Prairie HRA issue its Multifamily Housing Development Revenue Refunding Note (Castle Ridge Apartments 1 Project), Series 2014 (the "Series 2014 Note"), in the original aggregate principal amount of up to $10,000,000, under the provisions of the Housing Act to be purchased by Minnwest Bank (the "Lender"), under terms negotiated by the Borrower and the Lender. The proceeds derived from the sale of the Series 2014 Note will be loaned to the Borrower under the terms of a Loan Agreement, dated on or after August 1, 2014 (the "Loan Agreement"), between the Eden Prairie HRA and the Borrower, and will be applied to: (1) redeem and prepay the Series 2004 Note, currently outstanding in the approximate principal amount of$6,600,000; (ii) redeem and prepay a taxable loan (the "Taxable Loan"), currently outstanding in the approximate principal amount of $3,300,000, assumed by the Borrower in connection with its original acquisition of the two hundred twenty-seven (227) units of the Development; and (iii) pay a portion of the costs of issuing the Series 2014 Note. The facility to be refinanced with the proceeds of the Series 2014 Note will be comprised of two hundred thirty-six(236) units of the Development (the "Facility"). 4. Required Approval by an Applicable Elected Representative. Under the terms of Section 147(f) of the Code, private activity bonds (such as the Series 2014 Note) will not be qualified bonds the interest on which is excludable from gross income for federal income tax purposes, unless the issuance of the bonds has been approved by the applicable elected representative of the governmental unit which issued the bonds or on behalf of which the bonds were issued. The applicable elected representative of a governmental unit means its elected legislative body or its chief elected executive officer. If a governmental unit has no applicable elected representative then the applicable elected representative of such governmental unit is deemed to be the applicable elected representative of the next higher governmental unit from which the governmental unit derives its authority by: (i) the enactment of a specific law by or under which the governmental unit is created; (ii) otherwise empowering or approving the creation of the governmental unit; or(iii) appointing members to the governing body of the governmental unit. The Eden Prairie HRA has no applicable elected representative. The City is the next higher governmental unit from which the Eden Prairie HRA derives its authority. The Council is an applicable elected representative of the City. 5. Council Approval of Issuance of the Bonds. As an applicable elected representative of the City and, therefore, the applicable elected representative of the Eden Prairie HRA, the Council hereby approves the issuance of the Series 2014 Note by the Eden Prairie HRA in the principal amount of up to $10,000,000 to refinance the Facility. 6. 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 ("Bond Counsel"), certified copies of all proceedings and records of the City relating to the Eden Prairie HRA, the Facility, the Series 2014 Note, and such other affidavits, certificates, and other documents as may be required by Bond Counsel to show the facts relating to the validity of the Series 2014 Note 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. 7. Costs. The Council has adopted this resolution in reliance upon the assurances from the Company that the Company will, upon demand, reimburse the City for costs paid or incurred by the City in connection with this resolution, the Series 2014 Note, and the Facility. 8. Effective Date. This resolution shall be in full force and effect from and after its passage this 19th day of August, 2014. 2 This Resolution was declared duly passed and adopted and was signed by the Mayor and attested to by the City Clerk on the 19th day of August, 2014. Na cy T -Lu h 'ir ATTEST: Rick Getschow, Execu e Director 3 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) I, the undersigned, being the duly qualified and acting Clerk of the City of Eden Prairie (the "City"), do hereby certify that attached hereto is a compared,true, and correct copy of a resolution giving approval to the issuance of revenue bonds by the Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota, on behalf of Castle Ridge Apartments, LLC, duly adopted by the City Council of the City on August 19, 2014, at a regular meeting thereof duly called and held, as on file and of record in my office, which resolution has not been amended, modified, or rescinded since the date thereof, and is in full force and effect as of the date hereof. WITNESS My hand this�&day of t 2014. Cl rk GD185-001 (JU) 447647v.2 1