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HomeMy WebLinkAbout15-04-20 RESOLUTION NO. 15-0 4-2 0 RESOLUTION RELATING TO A MULTIFAMILY HOUSING DEVELOPMENT, AND THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF UNDER MINNESOTA STATUTES,CHAPTER 462C,AS AMENDED; GRANTING PRELIMINARY APPROVAL THERETO; ESTABLISHING COMPLIANCE WITH CERTAIN REIMBURSEMENT REGULATIONS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT THERETO BE IT RESOLVED by the City Council (the "Council") of the City of Oak Park Heights. Minnesota(the"City"),as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue bonds to provide funds to finance or refinance multifamily housing developments located within the City. 1.02. As a condition to the issuance of such revenue bonds, the City must adopt a housing program providing the information required by Section 462C.03, Subdivision I a of the Act(the"Housing Program"). A public hearing must be held in accordance with the requirements of Section 462C.04, Subdivision 2 of the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"). The Council must also grant preliminary approval to the issuance of revenue bonds to finance the multifamily housing development referred to in the Housing Program, and authorize the submission of an application to Minnesota Management& Budget for an allocation of bonding authority with respect to the Bonds(as hereinafter defined)to finance the Project(as hereinafter defined). 1.03. Green Twig Villas LLLP, a Minnesota limited liability limited partnership (the "Borrower"), has proposed that the City, pursuant to the Act, issue its revenue bonds in an aggregate principal amount not to exceed $7,200,000, in one or more series at one time or from time to time (the "Bonds"), the proceeds of which will be loaned by the City to the Borrower to be applied to the (i) construction and equipping of an approximately 62-unit, two-story senior apartment building with an underground parking garage, to be located at the southeast intersection of Nova Scotia Avenue North and Upper 58th Street North in the City (the "Project"), (ii) payment of interest on the Bonds during the construction of the Project, (iii)funding of one or more reserve funds to secure the timely payment of the Bonds, and (iv)the payment of all or a portion of the costs of issuing the Bonds. 1.04, Under Section 147(f) of the Code, prior to the issuance of the Bonds a duly noticed public hearing must be held by the Council. Additionally, under Section 462C.04, Subdivision 2 of the Act, a public hearing must be held on the Housing Program after one publication of notice in a newspaper circulating generally in the City,at least 15 days before the hearing. 1.05. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of Minnesota Statutes, Chapter 474A,as amended(the"Allocation Act"). Section 2. Preliminary Findings. Based on representations made by the Borrower to the City as of the date of this Resolution, this Council makes the following preliminary findings, determinations, and declarations: (a) The Project consists of a housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Borrower by the City for the purposes described in Section 1.03 hereof. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (c) In preliminarily authorizing the issuance of the Bonds and the financing of the construction and equipping of the Project and related costs, the City's purpose is to further the policies of the Act. (d) The Bonds shall be payable solely from revenues pledged therefor under the loan agreement or other revenue agreement mentioned above, shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers, shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, and shall not constitute a general or moral obligation of the City. Section 3. Public Hearing. The City will conduct a public hearing on Tuesday, May 26, 2015 (the "Public Hearing"), on the Housing Program, the Project, and the issuance of the Bonds, notice of which hearing (the "Public Notice") will be published as required by Minnesota Statutes. Section 462C.04, Subdivision 2 of the Act, and Section 147(f) of the Code. The City Administrator is authorized to cause the publication of the Public Notice in accordance with the aforementioned provisions of the Act and the Code. The Public Notice will provide a general, functional description of the Project, as well as the maximum aggregate face amount of the Bonds 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 is authorized to be published in a newspaper circulating generally in the City on a date at least 15 days before the Public Hearing. At the Public Hearing reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the Housing Program,the Project,and the proposed issuance of the Bonds. Section 4. Horsing Program. Once the Housing Program is prepared, the City Administrator is authorized and directed to review and submit the Housing Program to the Metropolitan. Council for its review on or before the date of publication of the Public Notice, as required by Section 462C.04, Subdivision 2 of the Act. Section 5. Prelimina r Approval. By this Resolution, this Council provides preliminary approval to the issuance of the Bonds in the not-to-exceed principal amount of $7,200,000 to finance all or a portion of the costs of the Project pursuant to the Housing Program, subject to: (i)review of the Housing Program by the Metropolitan Council, (ii)receipt of an allocation of bonding authority from the State of Minnesota, pursuant to the Allocation Act; (iii) holding of the Public Hearing as required by the Act and the Code; (iv) sufficient review and approval of the loan agreement and other financing documents for the Bonds; and (v)the 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. Section 6. Submission of an Application for an Allocation of Bonding AuthqdtY. Under Section 146 of the Code, the Bonds must receive an allocation of bonding authority from the State of Minnesota. An application for such an allocation must be made to Minnesota Management & Budget pursuant to the requirements of the Allocation Act. By approval of this Resolution, this Council, in cooperation with the Borrower. authorizes the submission of an application for allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. Section 7. Reimbursement of Costs under,the Code. 7.01. The United States Department of the Treasury has promulgated regulations governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of such bonds. Those regulations, located at U.S. Treasury Regulations, Section 1.150-2 (the "Regulations"), require that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty(60) days after payment of the original expenditure. The Regrulatious also generally require that tax-exempt bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within 18 months after the later of. (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three (3) years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of tax-exempt bonds. 7.02. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, costs of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3)of the Regulations. Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iii) expenditures in a "de minimis" amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than sixty(60) days before the date of adoption of this Resolution. 7.03. Based on representations by the BorTower, as of the date hereof,there are no funds of the Borrower reserved, allocated on a long term-basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Project other than pursuant to the issuance of the Bonds. Section 8. Costs. The Borrower has heretofore deposited, or will deposit, by the date of the Public Hearing, adequate ftmds in escrow to cover all City costs, including legal fees, as further required by the City's policy on the issuance of tax-exempt bonds, which has been communicated to the Borrower and is on file with the City Administrator. The Borrower also must pay the administrative fee of the City on the date of issuance of the Bonds. Section 9. Commitment Conditional. The adoption of this Resolution does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Borrower. The loan agreement and other financing documents related to the Project and the Bonds are yet to be drafted and submitted to the City. If, as a result of information made available to or obtained by the City during its review of the Project and the financing documents, it appears that the Project or the issuance of Bonds to finance the costs thereof is not in the public interest or is inconsistent with the purposes of the Act,the City reserves the right to decline to give final approval to the issuance of the Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should this Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. Adopted by the City Council of the City of Oak Park Heights, Minnesota, this 28th day of April, 2015. CITY OF OAK PARK HEIGHTS,MINNESOTA V M, Comber, Mayor Attest: &/�Xoll/lso ,City Administrator