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HomeMy WebLinkAbout84-117 - ADMIN Resolution - City Council - 1984/08/06RESOLUTION No. 84-117 Member Martin introduced the following resolution and moves its adoption: RESOLUTION RELATING TO THE ISSUANCE OF REVENUE BONDS PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, FOR THE PURPOSE OF FINANCING A MULTIFAMILY HOUSING DEVELOPMENT; ADOPTING A MULTIFAMILY HOUSING PROGRAM AND AUTHORIZING SUBMISSION OF THE HOUSING PROGRAM TO THE MINNESOTA HOUSING FINANCE AGENCY FOR REVIEW AND APPROVAL BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota (the City), as follows: Section 1. Recitals. 1.01. Under Minnesota Statutes, Chapter 462C, as amended (the Act), the City is authorized to issue and sell revenue bonds or obligations to make or purchase loans to finance one or more multi- family housing developments within its boundaries. 1.02. Representatives of Gary S. Holmes and Leonard Gasparre, and a partnership in which they will be the general partners (the Developer) have advised this Council that the Developer proposes to acquire approximately 6.052 acres of land located at 9935 Betty Crocker Drive in the City, to construct thereon approximately 182 apartment units and other functionally related and subordinate facilities, and to operate the facilities as a multifamily housing development under the Act. The Developer has requested that the City issue its revenue bonds or obligations (the Revenue Bonds) under the Act and make a loan of the proceeds of the sale of the Revenue Bonds to the Developer in order to finance the acquisition of the land and the construction of the facilities. The approximate maximum aggregate face amount of the Revenue Bonds proposed to be issued and sold"under the Developer's proposal would be $7,300,000. 1.03. The City has been advised by representatives of the Developer that conventional commercial financing of the costs of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of the Project would be significantly affected, but that with the aid of municipal financing the Project will be more economically feasible. 1.04. This Council has been advised by representatives of Miller & Schroeder Municipals, Inc., Minneapolis, Minnesota, repre- senting the Developer, that on the basis of information available to them, the Project is economically feasible, and the Bonds could be successfully issued and sold. 1.05. Neither the full faith and credit, nor the taxing powers of the City nor any property of the City will be pledged to the payment of the Bonds. The Bonds are to be paid from the revenues of the Project. The Motion for the adoption of the foregoing resolution was duly seconded by Memober Duffy , and upon vote being taken thereon, the following voted in favor thereof: Duffy, Martin, Meland, Mitchell and the following *U-WXIWtXXUMXAUUXXXX abstained: Backes Whereupon the resolution was declared duly passed and adopted and was signed by the Mayor and attested by the City Clerk. PROGRAM FOR THE CONSTRUCTION OF A MULTIFAMILY HOUSING DEVELOPMENT Pursuant to Minnesota Statutes, Chapter 462C (the "Act"), the City of St. Louis Park (the City") will be authorized to develop and administer programs of multifamily housing developments under the circumstances and within the limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the City. The City has received a proposal from Gary S. Holmes and Leonard Gasparre Minnesota residents (jointly referred to as the "Developer") that, pursuant to the authority found in the Act, the City approve a program providing for the construction of approximately one hundred eighty-two (182) units of rental housing ("Housing Units") located at 9935 Betty Crocker Drive in the City (the "Project"). The construction of the project is to be funded through the issuance of up to $7,300,000 in revenue bonds issued by the City (the "Bonds"). It is proposed that the bonds be sold publicly through an underwriter and that the Bonds will include some form of credit enhancement, such as additional collateral, insurance or a letter of credit, in order to provide favorable interest rates. Following construction of the Project, the Developer, or a related entity, will own and operate the Project as a multifamily residential rental project. The one hundred eighty-two (182) units will be one, and two bedroom apartments, of which twenty percent (20%) of the units will be specifically reserved for tenants whose incomes are not greater than eighty percent (80%) of the area median income. It is estimated that rents for the Housing Units will be between $500 and $570 per month. The City, in establishing this multifamily housing program (the "Program"), will consider the information to be contained in the City's 462C Housing Plan, adopted on February 8, 1980 and amended on July 13, 1984 (the "Housing Plan"), including particularly (i) the availability and affordability of other government housing programs; (ii) the availability and affordability of private market financing for the construction of multifamily housing units; (iii) an analysis of population, unemployment trends and projections of future population trends and future employment needs; (iv) the recent housing trends and future housing needs of the City; and (v) an analysis of how the Program will meet the needs of persons and families residing and expected to reside in the City. The City, in adopting the Program, has further considered (i) the amount, timing and sale of Bonds to finance the estimated costs of the housing units, to fund the appropriate reserves and to pay the cost of issuance; (ii) the method of monitoring and implementation of the Program to insure compliance with the City's housing plan and its objectives; (iii) the method of administering, servicing and supervising the Program; (iv) the costs to the City, including future administrative expenses; (v) the restrictions of the multifamily development to be financed under the Program; and (vi) certain other limitations. -1- The City, in adopting the Program, considered the potential financing impact of a bond issuance on affected public agencies. In addition, the City reviewed the method of marketing the Program. Such review examined the equal opportunity for participation by (i) minorities; (ii) households with incomes at the lower end of the range that can be served by the Program; (iii) households displaced by public or private actions; (iv) families with children; and (v) accessibility to the handicapped. The Project will be constructed and financed pursuant to Subdivisions 1 and 2 of Section 462C.05 of the Act. Subsection A. Definitions The following terms used in this Program shall have the following meanings, respectively: (1) "Act" shall mean Minnesota Statutes, Section 462C.01, et seq., as currently in effect and as the same may be from time to time amended. (2) "Adjusted Gross Income" shall mean gross family income less $750 for each adult and less $500 for each other dependent in the family. (3) "Bonds" shall mean the Revenue Bonds to be issued by the City to finance the Program. (4) "City" shall mean the City of St. Louis Park, County of Hennepin, State of Minnesota. (5) "Developer" shall mean Gary S. Holmes and Leonard Gasparre, a Minnesota Resident. (6) "Housing Plan" shall mean the City of St. Louis Park 462C Housing Plan, adopted March 15, 1982, setting forth certain information required by the Act. (7) "Housing Unit" shall mean any one of the market rate apartment units located in the Project, occupied by one person or family, and containing complete living facilities. (8) "Land" shall mean the real property upon which the Project is situated. (9) "Program" shall mean the program for the financing of the Project pursuant to the Act. (10) "Project" shall mean the multifamily housing development consisting of one hundred eighty-two (182) market rate Housing Units to be constructed by Gary S. Holmes and Leonard Gasparre on the Land, subject to review and approval by the City Council in accordance with the St. Louis Park Zoning Ordinance. -2- Subsection B. Program for Financing the Project It is proposed that the City establish this Project to construct one hundred eighty-two (182) housing units to be owned by the Developer, or a related entity, at the price and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the City, the Lender and the Developer. To do this, the City expects to issue Bonds, the proceeds of which will be loaned to the Developer for the construction of the Project. It is expected that a Trustee will be appointed by the City to monitor the construction of the Project and any payments of principal and interest on the Bonds. The cost of a credit enhancement item will be borne by the Developer and payable in addition to the principal and interest on the Bonds. It is contemplated that the Bonds shall contain a maturity of at least ten (10) years and will be priced to the market at the time of issuance. The City will hire no additional staff for the administration of the Program. The City intends to select and contract with a trustee, experienced in trust matters to administrate the Bonds. Insofar as the City will be contracting with underwriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Program, no administrative costs will be paid from the City's budget with respect to this Program. The Bonds will not be general obligation bonds of the City, but are expected to be paid from properties pledged to the payment thereof, which may include a credit enhancement item such as additional collateral, insurance or a letter of credit. Subsection C. Local Contributions to the Program It is not contemplated that any additional financing or contributions from the City will be needed for the completion of the Project, or for the operation of the Program. Subsection D. Standards and Requirements Relating to the Financing of the Project Pursuant to the Program The following standards and requirements shall apply with respect to the operation of the Project by the Developer pursuant to this Program. (1) Substantially all of the proceeds of the sale of the Bonds will be used to provide funds for the construction of the Project, which will provide one hundred eighty-two (182) market rate residential units. The funds will be made available to the Developer pursuant to the terms of the Bond offering, which may include certain covenants to be entered into between the City and the Developer. (2) The Developer or owner of the Project, will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, marital status, age or status with regard to public assistance or disability. -3- (3) No Housing Unit may be in violation of applicable zoning ordinances or other applicable land use regulations, including any urban renewal plan or development district plan, and including the state building code as set forth under Minnesota Statutes, Section 16.83, et seq. (4) Pursuant to Section 462C.05, Subdivision 2 of the Act, at least twenty percent (20X) of the Housing Units wll be held for occupancy by families or individuals with an Adjusted Gross Income not in excess of eighty percent (80X) of the median family income as estimated by the United States Department of Housing and Urban Development for the Minneapolis -St. Paul metropolitan area. The remaining Housing Units in the Project shall be designed to be affordable by persons and families with an Adjusted Gross Income not in excess of the limits set forth in Section 462C.03, Subdivision 2 of the Act. Subsection E. Evidence of Compliance The City may require from the Developer or such other person deemed necessary at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Developer to complete the Project, and evidence satisfactory to the City of compliance with the standards and requirements for the making of the financing established by the City, as set forth herein; and in connection therewith, the City of its representatives may inspect the relevant books and records of the Developer in order to confirm such ability, intention and compliance. In addition, the City may periodically require certification from either the Developer or such other person deemed necessary concerning compliance with various aspects of this Program. Subsection F. Issuance of Bonds To finance the Program authorized by this Section, the City may by resolution authorize, issue and sell its Revenue bonds in an aggregate principal amount estimated to be $7,300,000. The bonds shall be issued prusuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primarily from the revenues of the Program authorized by this Section. Subsection G. Severability The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. Subsection H. Amendment The City shall not amend this Program while Bonds authorized hereby are outstanding to the detriment of the holders of such Bonds. QC 1.06. Pursuant to the requirements of the Act and Section 103(k) of the Internal Revenue Code (the Code), a public hearing has been held relating to the Program proposed by the Developer under the Act, including the proposed issuance of the Bonds, after proper publication of notice of the public hearing in accord with the requirements of the Act and the Code. Section 2. Approval and Authorization. 2.01. The Program is hereby adopted by the City pursuant to Section 462C.05, Subd. 5 of the Act. The Mayor and the other officers, employees and agents of the City are hereby authorized to prepare and execute the required certifications and to take such other actions as they deem necessary or advisable in order to submit the Program to the Minnesota Housing Finance Agency for review and approval in accordance with the provisions of the Act. 2.02. It is hereby found and determined based upon the information presented to this Council by the representatives of the Developer that it would be in the best interests of the City to issue the Bonds under the provisions of the Act in order to finance costs to be incurred by the Developer in the acquisition and construction of the described facilities. The City hereby gives its preliminary approval to the issuance of the Bonds in the approximate aggregate face amount of Seven Million Three Hundred Thousand Dollars ($7,300,000), subject to the review and approval of the Program by the Minnesota Housing Finance Agency under the provisions of the Act and subject to the City, the Developer and the purchaser of the Bonds reaching definitive agreement regarding the terms and conditions under which the Bonds will be issued and the provisions for their payment. 2.03. The City Attorney, the Mayor, the City Manager and other officers, employees and agents of the City are authorized, in cooperation with bond counsel, to initiate the preparation of such documents as may be appropriate to evidence the terms of all agreements to be made in connection with the issuance of the Bonds, the security for payment of the Bonds, and the provisions for payment of the principal of, the premium if any, and interest on the Bonds. Adopted by the Minnesota, this 6th day ATTEST: vwa , City C er Reviewed for administration: i y Manager - City Council of the City of St. Louis Park, of August, 1984. Mayor �J Approved as to form and legality: City Attorney STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF ST. LOUIS PARK I, the undersigned, being the duly qualified and acting City Clerk of the City of St. Louis Park, Minnesota, or an appropriate official of said City authorized to execute documents on behalf of said City Clerk, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete trans - script of the minutes of a meeting of the City Council of said City duly called and held on the date therein indicated, insofar as such minutes relate to the adoption of a Program and preliminary approval for issuance of housing revenue bonds under Minnesota Statutes Chapter 462C relating to a project proposed to be developed at 9935 Betty Crocker Drive in the City. WITNESS my hand and seal this 3rd day of August, 1984. ( SEAL)