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HomeMy WebLinkAboutResolution - HRA 2014-03 - Castle Ridge Apartments Issuance of Revenue Bond - 08/19/2014 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE COUNTY OF HENNEPIN STATE OF MINNESOTA H.R.A. RESOLUTION NO. 2014-03 AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF A REVENUE OBLIGATION UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED; AUTHORIZING THE LOAN OF THE PROCEEDS OF THE REVENUE OBLIGATION TO CASTLE RIDGE APARTMENTS, LLC, TO REFINANCE A MULTIFAMILY HOUSING DEVELOPMENT; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE REVENUE OBLIGATION AND RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE REVENUE OBLIGATION WHEREAS, each city is authorized by Minnesota Statutes, Chapter 462C, as amended (the "Act"), to carry out the public purposes described in the Act by issuing its revenue obligations to provide funds to finance multifamily housing developments within its boundaries and in the issuance of revenue obligations and in the making of loans to finance multifamily housing developments, each city may exercise, within its corporate limits, any of the powers that 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; and WHEREAS, under the provisions of the Act, a city is also authorized to issue its revenue obligations to refund revenue obligations previously issued under the terms of the Act; and WHEREAS, under the provisions of the Act, term "city" is defined to include a housing and redevelopment authority in and for a city if by ordinance the city authorizes the housing and redevelopment authority to exercise, on behalf of the city,the powers conferred by the Act; and WHEREAS, the City of Eden Prairie (the "City") intends, by ordinance, to authorize the Housing and Redevelopment Authority in and for the City of Eden Prairie (the "Issuer"), to exercise on behalf of the City, the powers conferred by the Act; and WHEREAS, 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 City Council of the City on August 3, 2004; and WHEREAS, 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, 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;and WHEREAS, by the terms of a Loan Agreement, dated as of October 1, 2004, between the City and the Borrower, the Borrower agreed to make loan repayments sufficient to pay the principal of, premium, if any, and interest on the Series 2004 Note when due; and I WHEREAS, since the issuance of the Series 2004 Note, the Borrower (or a related entity) has acquired nine(9) additional units of the Development; and WHEREAS, the Borrower has requested that the Issuer issue its Multifamily Housing Development Revenue Refunding Note (Castle Ridge Apartments Project), Series 2014 (the "Series 2014 Note"), in the original aggregate principal amount of up to $10,000,000, under the provisions of the Act; and WHEREAS, if issued, the Series 2014 Note is expected to be purchased by Minnwest Bank (the "Lender"), under terms negotiated by the Borrower and the Lender, and WHEREAS, 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 Issuer and the Borrower, and will be applied to: (i)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; and WHEREAS, 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"); and WHEREAS, the Borrower will be absolutely and unconditionally obligated to repay the loan made under the Loan Agreement (the "Loan"), together with interest thereon, at times and in amounts sufficient to pay when due the principal of and interest on the Series 2014 Note; and WHEREAS, the Issuer will assign its rights to the basic payments and certain other rights under the Loan Agreement to the Lender under the terms of an Assignment of Loan Agreement, dated on or after August 1, 2014 (the "Assignment of Loan Agreement"), between the Issuer, the Borrower, and the Lender; and WHEREAS, to further secure its obligations under the Loan Agreement, including but not limited to its obligation to pay all payments due and owing under the Series 2014 Note,the Borrower will execute and deliver to the Lender a Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents, dated on or after August 1, 2014 (the "Mortgage"), an Assignment of Leases and Rents, dated on or after August 1, 2014 (the "Assignment of Leases and Rents"), between the Borrower and the Lender, and additional security documents required by the Lender as a condition to its purchase of the Series 2014 Note. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE, AS FOLLOWS: 1. The Issuer acknowledges, finds, determines, and declares that the issuance of the Series 2014 Note is authorized by the Act and is consistent with the purposes of the Act. 2. The Issuer further find, determines, and declares: (a) Under the terms of Section 462C.04,subdivision 2, of the Act, the City developed a housing program and on or before the day on which notice of a public hearing regarding the 2 housing program was published, the Issuer submitted the program to the Metropolitan Council for review and comment. By a letter dated June 16, 2004, the Metropolitan Council informed the City that it had completed its review of the program and provided comments. (b) Without inquiry or investigation, there is no pending or threatened suit, action, or proceeding against the Issuer before any court, arbitrator, administrative agency, or other governmental authority that challenges the Issuer's execution and delivery of the Series 2014 Note, this Agreement, and the Assignment of Loan Agreement. (c) Without inquiry or investigation, the execution and delivery of the Series 2014 Note, this Agreement, and the Assignment of Loan Agreement will not constitute a breach of or default under any existing(i) provision of any special legislative act relating to the establishment of the Issuer, or(ii) agreement, indenture, mortgage, lease, or other instrument to which the Issuer is a party or by which it is bound. (d) No proceeding of the Issuer for the issuance, execution, or delivery of the Series 2014 Note, this Agreement, and the Assignment of Loan Agreement has been repealed, rescinded, amended, or revoked. (e) No member of the Board of Commissioners of the Issuer and no other elected or appointed official who is authorized to take part in the approval, execution, or delivery of this Agreement or the issuance of the Series 2014 Note, is directly or indirectly interested in this Agreement, the Series 2014 Note, the Facility, or any contract or agreement hereby contemplated to be entered into or undertaken with respect to the Facility. 3. The City prepared a Program for Financing a Multifamily Rental Housing Development(the "Original Housing Program"), and, as required by the terms of the Act, submitted the Original Housing Program to the Metropolitan Council for its review and comment. There is hereby authorized and approved the Amended and Restated Housing Program for Financing a Multifamily Rental Housing Development(the "Amended Housing Program"), in the form now on file with the Issuer. The Executive Director is hereby authorized to take all actions as may be necessary or appropriate to carry out the Amended Housing Program in accordance with the Act and any other applicable laws and regulations. 4. For the purposes set forth in this resolution, there is hereby authorized the issuance, sale, and delivery by the Issuer of the Series 2014 Note in the maximum aggregate principal amount of $10,000,000. The Series 2014 Note shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the form of Series 2014 Note now on file with the Issuer. The aggregate principal amount of the Series 2014 Note, the interest rate of the Series 2014 Note, the date of the documents referenced in this resolution and the Series 2014 Note, and the terms of redemption of the Series 2014 Note may be established or modified with the approval of the Issuer. The Issuer hereby authorizes the Series 2014 Note to be issued as a "tax-exempt bond," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Series 2014 Note, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Series 2014 Note shall be substantially in the form now on file with the Issuer, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Series 2014 Note, the stated maturity date of the principal of the Series 2014 Note and the principal amount of the Series 2014 Note maturing on such maturity date, the interest rate for the 3 Series 2014 Note, and the term of redemption of the Series 2014 Note), as the Chair and the Executive Director of the Issuer (the "Issuer Off►cials"), in their discretion, shall determine. The execution of the Series 2014 Note with the manual or facsimile signatures of the Issuer Officials, and the delivery of the Series 2014 Note by the Issuer, shall be conclusive evidence of such determination. 5. The Series 2014 Note shall be a special, limited obligation of the Issuer payable solely from the revenues provided by the Borrower under the terms of the Loan Agreement and other funds pledged by the Borrower to the Lender. The Series 2014 Note shall not constitute general or moral obligations of the Issuer, shall not constitute debt of the Issuer within the meaning of any constitutional or statutory limitation, shall not constitute nor give rise to a pecuniary liability of the Issuer or a charge against the general credit or taxing powers of the Issuer, and shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the Issuer other than the Issuer's interest in the Loan Agreement and the Facility. No holder of the Series 2014 Note shall ever have the right to compel any exercise by the Issuer of its taxing powers to pay any of the Series 2014 Note 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 and the revenues and assets thereunder, which will be assigned to the Lender under the terms of the Assignment of Loan Agreement. 6. The offer of the Lender to purchase the Series 2014 Note at a price of par is hereby accepted. 7. The Issuer Officials are hereby authorized and directed to execute and deliver the Loan Agreement and the Assignment of Loan Agreement. All of the provisions of the Loan Agreement and the Assignment of Loan Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement and the Assignment of Loan Agreement shall be substantially in the form on file with the Issuer which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Issuer Officials, in their discretion, shall determine, and the execution of the Loan Agreement and the Assignment of Loan Agreement by the Issuer Officials shall be conclusive evidence of such determination. 8. The loan repayments to be made by the Borrower under the Loan Agreement are fixed to produce revenues sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Series 2014 Note when due, and the Loan Agreement also provides that the Borrower is required to pay all expenses of the operation and maintenance of the Facility, 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 lawfully imposed taxes and special assessments levied upon or with respect to the Facility and payable during the term of the Loan Agreement. Under the terms of the Loan Agreement, the Borrower will pay any and all costs incurred by the Issuer in connection with the issuance of the Series 2014 Note. 9. The proceeds derived from the sale of the Series 2014 Note shall be disbursed in accordance with the terms of the Loan Agreement and applied to the redemption and prepayment of the Series 2004 Note and the Taxable Loan. 10. The Executive Director of the Issuer is hereby appointed as Paying Agent and Note Registrar for the Series 2014 Note. IL. The Issuer Officials are hereby authorized to execute and deliver, on behalf of the Issuer, such other documents as are necessary or appropriate in connection with the issuance, sale, and delivery 4 of the Series 2014 Note, including various certificates of the Issuer; the Information Return for Tax- Exempt Private Activity Bond Issues, Form 8038; an endorsement to the tax certificate of the Borrower; and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Series 2014 Note. The Issuer hereby approves the execution and delivery by the Lender of the Assignment of Loan Agreement, and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Series 2014 Note that require execution by the Lender. The Issuer hereby authorizes the issuance of the Series 2014 Note as an obligation the interest on which is not includable in gross income for federal income tax purposes. The Issuer hereby authorizes Kennedy & Graven, Chartered, as bond counsel of the Issuer, to prepare, execute, and deliver its approving legal opinion with respect to the Series 2014 Note. 12. The Lender is hereby authorized to accept the Assignment of Loan Agreement in order to secure payment of the Series 2014 Note and is hereby authorized to take all actions necessary or appropriate under the terms of the Assignment of Loan Agreement to ensure timely payment of the principal of, premium, if any, and interest on the Series 2014 Note. 13. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the Issuer by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the Issuer or by such members of the Board of Commissioners, or such officers, board, body, or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the Board of Commissioners of the Issuer, any member of the Council of the City, or any officer, agent, or employee of the Issuer or the City in that person's individual capacity, and neither the Board of Commissioners of the Issuer nor any officer or employee executing the Series 2014 Note shall be liable personally on the Series 2014 Note or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant, or agreement contained in the aforementioned documents, the Series 2014 Note, or in any other document relating to the Series 2014 Note, and no obligation therein or herein imposed upon the Issuer or the breach thereof, shall constitute or give rise to any pecuniary liability of the Issuer, or the City, or any charge upon their general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the Issuer has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Series 2014 Note, as provided therein. 14. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the Issuer, the Borrower, and the Lender (or any subsequent holders of the Series 2014 Note) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit of the Issuer, the Borrower, and the Lender(or any subsequent holders of the Series 2014 Note). 15. In case any one or more of the provisions of this resolution, other than the provisions contained in Section 4 of this resolution, or of the aforementioned documents, or of the Series 2014 Note issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Series 2014 5 Notes, but this resolution, the aforementioned documents, and the Series 2014 Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 16. The officers of the Issuer, bond counsel, other attorneys, engineers, and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Series 2014 Note for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Series 2014 Note, the aforementioned documents, and this resolution. In the event that for any reason the Chair of the Issuer is unable to carry out the execution of any of the documents or other acts provided herein, such documents may be executed and such actions may be taken by any member of the Board of Commissioners or officer of the Issuer delegated the duties of the Chair of the Issuer by the Board of Commissioners, with the same force and effect as if such documents were executed and delivered by the Chair of the Issuer, which execution or acts shall be valid and binding on the Issuer. If for any reason the Executive Director of the Issuer is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any officer or employee of the Issuer delegated the duties of the Executive Director by the Board of Commissioners, with the same force and effect as if such documents were executed and delivered by the Executive Director of the Issuer, which execution or acts shall be valid and binding on the Issuer. If the person whose signature appears on any of the foregoing certificates, instruments, or documents shall cease to be an Issuer Official before the date of issuance of the Series 2014 Note such signature shall, nevertheless, be valid and sufficient for all purposes. 17. This resolution shall be in full force and effect from and after its passage this 19th day of August, 2014. ancy�P ra- <en�, ha A TEST: �� �� Rick Getschow, Executiv Director 6