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HomeMy WebLinkAbout25-138 - ADMIN Resolution - City Council - 2025/10/20 Resolution No. 25-138 Approving amendments in connection with a conduit revenue note issued for the benefit of St. Louis Park AH I, LLLP Be it resolved by the City Council (the “city council”) of the City of St. Louis Park, Hennepin County, Minnesota (the “city”) as follows: Section 1. Recitals. 1.01. On July 6, 2022, the city issued its Multifamily Housing Revenue Note (Arbor House Apartments Project), Series 2022 (the “series 2022 note”), in the original aggregate principal amount of $27,990,550. The city loaned the proceeds of the series 2022 note to St. Louis Park AH I, LLLP, a Minnesota limited liability limited partnership (the “borrower”), pursuant to a Loan Agreement, dated as of July 1, 2022 (the “original loan agreement”), between the city and the borrower, for the purpose of financing a portion of the costs of the acquisition, construction, and equipping of an approximately 114-unit multifamily housing development for occupancy by persons of low and moderate income and facilities functionally related and subordinate thereto located at 3755 Wooddale Avenue South (formerly 3801 Wooddale Avenue South) in the city (the “project”), which is owned and operated by the borrower. 1.02. On November 30, 2022, the city issued its Multifamily Housing Revenue Note (Arbor House Apartments Project), Series 2022B (the “series 2022B note”), in the original aggregate principal amount of $1,000,000. The city loan the proceeds of the series 2022B note to the borrower pursuant to an Amended and Restated Loan Agreement, dated as of November 1, 2022 (the “loan agreement”), between the city and the borrower, which amends and restates the original loan agreement, for the purpose of financing additional costs of the project. The series 2022B note matured on July 19, 2025 and is no longer outstanding. 1.03. The purchase of the series 2022 note and the series 2022B note by Cedar Rapids Bank & Trust Company, an Iowa banking corporation (the “lender”), is governed by an Amended and Restated Loan Purchase Agreement, dated November 30, 2022 (the “loan purchase agreement”), between the lender and the borrower. 1.04. The lender has determined it is in the best interests of the lender to assign the loan evidenced by the series 2022 note, its interest in the series 2022 note, and all loan documents and security therefor to a custodian in connection with a Federal Home Loan Mortgage Corporation (“Freddie Mac”) securitization of the loan, to permit it to continue to make loans to finance affordable housing. 1.05. In order to assign the loan, the parties have determined that certain amendments to the series 2022 note and the associated loan documents need to be made to change, among other things, certain definitions relating to the interest rate therein to conform with Freddie Mac’s standard language, the maturity date of the series 2022 note from July 19, 2045 to July 1, 2045, and each payment date in the amortization schedule attached to the series 2022 note to the first day of the month. Docusign Envelope ID: A8D7E4D5-183F-4E5C-9A16-F29CE131475F 1.06. The council has reviewed the amendment agreement, including the amended series 2022 note, and has determined that it is in the best interests of the city to approve the amendment agreement and amended series 2022 note. Section 2. Approvals. 2.01. The city council hereby authorizes and directs the mayor and the city manager of the city to execute and deliver the amendment agreement and the amended series 2022 note on behalf of the city, in substantially the forms on file with the city on the date hereof, which are hereby approved, with such changes as shall be approved by the mayor and the city manager; provided that the execution thereof by the mayor and the city manager shall be conclusive evidence of such approval. The finance director of the city, as the registrar of the series 2022 note, is authorized and directed to register the amended series 2022 note. 2.02. The amended series 2022 note shall not be payable from nor charged upon any funds other than the revenues pledged to their payment, nor shall the city be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the amended series 2022 note shall ever have the right to compel any exercise by the city of its taxing powers to pay any of the amended series 2022 note or the interest or premium thereon, or to enforce payment thereof against any property of the city except the interests of the city in the loan agreement, subject to the amendment agreement, and the revenues and assets thereunder, which have been assigned to the lender. The amended series 2022 note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the city, except the interests of the city in the loan agreement, subject to the amendment agreement, and the revenues and assets thereunder, which have been assigned to the lender. 2.03. The approval hereby given to the amendment agreement and amended series 2022 note includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Kutak Rock LLP, acting as bond counsel to the City (“bond counsel”) and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the city. The execution of any instrument by the appropriate officers of the city herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized by this resolution to be executed may be executed without further act or authorization of the city council by any duly designated acting official, or by such other officer or officers of the city as, in the opinion of bond counsel, may act in their behalf. 2.04. The mayor and the city manager are hereby designated as the representatives of the city with respect to the amendment agreement and the amended series 2022 note. The mayor and the city manager, and other officers of the city are authorized and directed to execute and deliver any and all certificates, agreements, or other documents which are required by the amendment agreement, or deemed necessary by bond counsel in connection with the amendment agreement and amended series 2022 note, or are required by bond counsel to deliver an opinion that the proposed amendments do not adversely affect the Docusign Envelope ID: A8D7E4D5-183F-4E5C-9A16-F29CE131475F exclusion from gross income of interest on the series 2022 note for purposes of federal income taxation and do not cause a reissuance of the series 2022 note. To the extent the proposed amendments reflected in the final amendment agreement or the amended series 2022 proposed cause a “reissuance” of the series 2022 note for tax purposes pursuant to Section 1.1001‑3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended, the mayor and city manager are authorized to execute and deliver all documents necessary or required in connection therewith, including but not limited to an 8038, provided such documents are approved by bond counsel. 2.05. The borrower shall pay, or, upon demand, reimburse the city for payment of, any and all costs incurred by the city in connection with the proposed amendments, including any costs for reasonable attorneys’ fees. Section 3. Effective date. This resolution shall be in full force and effect from and after its approval. Reviewed for administration: Adopted by the city council October 20, 2025: Kim Keller, city manager Paul Baudhuin, mayor pro tem Attest: Melissa Kennedy, city clerk Docusign Envelope ID: A8D7E4D5-183F-4E5C-9A16-F29CE131475F