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HomeMy WebLinkAbout17-07-27 RESOLUTION 17-07-27 RESOLUTION PROVIDING FOR A PUBLIC HEARING REGARDING A MULTIFAMILY SENIOR HOUSING DEVELOPMENT AND GRANTING PRELIMINARY APPROVAL TO THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF UNDER MINNESOTA STATUTES,CHAPTER 462C,AS AMENDED; (OAK GREEN VILLAS PROJECT) BE IT RESOLVED by the City 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 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 of the Act(the"Housing Program"). 1.03. Green Twig Villas II 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 $16,000,000, in one or more series at one time or from time to time (the n "Bonds"),the proceeds of which will be loaned by the City to the Borrower to be applied by the Borrower to the(i)acquisition, construction,and equipping of an approximately 72-unit, 3-story apartment building with an underground parking garage to be located at the intersection of Nova Scotia Avenue and Lower 59th Street North in the City(the"Project"); (ii) payment of all or a portion of the interest on the Bonds during the construction of the Project, if necessary; (iii) funding of one or more reserve funds to secure the timely payment of the Bonds, if necessary; and(iv)payment of all or a portion of the costs of issuing the Bonds. 1.04. As a condition to the issuance of the Bonds,the City Council must conduct a public hearing in accordance with Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and Section 462C.04,subdivision 2 of the Act. 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 may be made to the office of Minnesota Management and Budget pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act") after the City must grants preliminary approval to the issuance of the Bonds to finance the Project. Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of the acquisition, construction, and equipping of a multifamily rental housing development designed and intended to be used for rental occupancy. 5026930 JSB AK145-7 (b) The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan n will be applied to: (i)the acquisition,construction,and equipping of the Project;(ii)the funding of one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) payment of all or a portion of the interest on the Bonds during the construction of the Project, if necessary; and(iv)payment of all or a portion of the costs of issuing the Bonds. The City will enter into one or more loan agreements (or other revenue agreements) 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 acquisition, construction, and equipping of the Project and related costs, the City's purpose is to further the policies of the Act. (d) The Bonds will be special, limited obligations of the City payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 3. Public Hearing. The City Council will conduct a public hearing on the Housing Program, the Project, and the issuance of the Bonds by the City at a regular or special meeting on a date to be determined by the City Administrator for which proper notice shall be given as provided below. Notice of such hearing (the "Public Notice") will be published as required by Section 462C.04, subdivision 2 of the Act and Section 147(f)of the Code. The City Administrator is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Stillwater Gazette, a newspaper of general circulation in the City, at least 15 days before the meeting of n the City Council at which the public hearing will take place. At the public hearing reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the Project,the Housing Program,and the proposed issuance of the Bonds. Section 4. Housing Program. Kennedy&Graven, Chartered, acting as bond counsel with respect to the Project and the Bonds ("Bond Counsel") is authorized to prepare and submit to the City a draft Housing Program to authorize the issuance by the City of up to$16,000,000 in revenue bonds in one or more series to finance the acquisition,construction,and equipping of the Project by the Borrower. Section 5. Preliminary Approval. The City Council hereby provides preliminary approval to the issuance of the Bonds in the approximate maximum aggregate principal amount of$16,000,000 to finance all or a portion of the costs of the Project pursuant to the Housing Program, subject to: (i)receipt of an allocation of the bonding authority from the State of Minnesota under the Allocation Act; (ii)the holding of a public hearing as required by the Act and the Code; (iii)final approval by the City Council following the preparation of bond documents; and (iv)a final determination by the City 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 Authority. The City Council hereby 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. The Mayor of the City, the City Administrator, and Kennedy&Graven, Chartered, acting as bond counsel with respect to the Project and the Bonds, are hereby authorized and directed to take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority. n Section 7. Reimbursement of Costs under the Code. 5026930 JSB AK145-7 2 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 (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 60 days after payment of the original expenditure. The Regulations also generally require that the 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 3 years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the 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 and also qualifying expenditures under the Act. Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.1 50-20)(2)(i)(B) of the Regulations, (iii)expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2)of the Regulations, or (iv)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 n have been made by the Borrower more than 60 days before the date of adoption of this resolution of the City. 7.03. Based on representations by the Borrower,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 to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. Section 8. Costs. The Borrower has deposited funds in escrow to pay any and all costs incurred by the City in connection with the Project and the issuance of the Bonds, 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. In addition, the Borrower must also 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. If, as a result of information made available to or obtained by the City during its review of the Project, it appears that the Project or the issuance of Bonds to finance or refinance 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 the City 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. 5026930 JSB AK145-7 3 The motion for adoption of the foregoing resolution was made by Member Swenson, duly seconded by Member L i 1 j egl;and upon vote being taken thereon,the following voted in favor thereof- Councilmember Dougherty, Councilmember Liljegren, Councilmember Runk, Councilmember Swenson, and Mayor McComber and the following voted against the same:None Adopted by the City Council of the City of Oak Park Heights,Minnesota,this 251 day of July,2017. CITY OF OAK PARK HEIGHTS,NIlNNESOTA Attest: By its City�kdrymistrator n 5026930 JSB AK145-7 4 EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF OAK PARK HEIGHTS COUNTY OF WASHINGTON STATE OF MINNESOTA NOTICE OF A PUBLIC HEARING TO BE CONDUCTED BY THE CITY OF OAK PARK HEIGHTS, MINNESOTA TO CONSIDER THE ISSUANCE OF REVENUE BONDS TO FINANCE THE ACQUISITION,CONSTRUCTION,AND EQUIPPING OF A MULTIFAMILY SENIOR RENTAL HOUSING DEVELOPMENT IN THE CITY(OAK GREEN VILLAS PROJECT) NOTICE IS HEREBY GIVEN that the City Council (the "Council") of the City of Oak Park Heights, Minnesota(the"City")will hold a public hearing on Tuesday, ,2017, at or after 7:00 p.m. at City Hall, 14168 Oak Park Boulevard North, to consider a proposal that the City approve and authorize the issuance of its revenue bonds or other obligations, in one or more series, (the "Bonds") at one time or from time to time pursuant to Minnesota Statutes, Chapter 462C,as amended(the"Act'),and a housing program in accordance with the Act(the "Housing Program") for the purposes of(i)financing the acquisition, construction, and equipping of an approximately 72-unit, 3-story apartment building with an underground parking garage and functionally related facilities to be located at the intersection of Nova Scotia Avenue and Lower 59th Street North in the City (the "Project'); (ii)funding one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) paying all or a portion of the interest on the Bonds during the construction of the Project, if necessary; and (iv) paying all or a portion of the costs of issuing the Bonds. Green Twig Villas H LLLP, a Minnesota limited liability limited partnership, or an affiliated entity, (the `Borrower") will own the Project. The estimated maximum aggregate principal amount of the proposed Bonds is $16,000,000. Following the public hearing, the Council will consider a resolution approving the Housing Program prepared in accordance with the requirements of the Act and granting approval to the issuance of the Bonds. A draft copy of the Housing Program is available for public inspection during normal business hours,Monday through Friday,at City Hall in the City. The Bonds will be special, limited obligations of the City,and the Bonds and interest thereon will be payable solely from the revenues and assets pledged to the payment thereof. No holder of any Bond will ever have the right to compel any exercise of the taxing power of the City to pay the Bonds or the interest thereon, nor to enforce payment against any assets, revenues, or other property of the City. Before issuing the Bonds,the City will enter into an agreement with the Borrower,whereby the Borrower will be obligated to make payments at least sufficient at all times to pay the principal of and interest on the Bonds when due(which will be assigned and pledged to the payment of the Bonds). At the time and place fixed for the public hearing,the Council will give all persons who appear at the hearing an opportunity to express their views with respect to the proposal. In addition, interested persons may direct any questions or file written comments respecting the proposal with the City Administrator,at or prior to said public hearing. Dated: [Date of Publication] n 5026930 JSB AK145-7 STATE OF MINNESOTA ) COUNTY OF WASHINGTON )SS. CITY OF OAK PARK HEIGHTS ) 1, the undersigned, being the duly qualified and acting City Administrator of the City of Oak Park Heights,Minnesota(the"City"),do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council held on July 25,2017,with the original thereof on file in my office and the same is a full,true and complete transcript therefrom insofar as the same relates to calling a public hearing on the City's revenue bonds to finance a multifamily senior housing project. WITNESS My hand as Administrator and the corporate seal of the City this day of July,2017. City Administrator City of Oak Park Heights,Minnesota 5026930 JSB AK145-7