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HomeMy WebLinkAbout85-233 - ADMIN Resolution - City Council - 1985/12/16BND-joppal Draft 1 RESOLUTION NO. 85-233 RESOLUTION RELATING TO A $1,400,000 CITY OF ST. LOUIS PARK, MINNESOTA, MULTIFAMILY HOUSING DEVELOPMENT REVENUE NOTE; AUTHO- RIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C. BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, as follows: Section 1. Definitions. • 1.01. In this Resolution the following terms have the following respective meanings: "Agreement" means the Loan Agreement, dated as of December 1, 1985, between the City and the Borrower; "Assignment" means the Assignment of Rents and Leases, dated as of December 1, 1985, given by the Bor- rower in favor of the Lender; "Borrower" means Joppa II Lane Associates, a Minnesota general partnership of which Joppa Lane Com- pany, a Minnesota general partnership, John Davis, Elwood Ginkel, Robert Schoening, W. Gene Purdy and Joseph Holmberg are its general partners, its successors and permitted assigns; "City" means the City of St. Louis Park, Minnesota, a municipal corporation and political subdivision under its Home Rule Charter and the constitution and laws of the State of Minnesota, its successors and assigns; "Construction Loan Agreement" means the Construc- tion Loan Agreement, dated as of December 1, 1985, by and between the City, the Borrower, Title Services, Inc., a Minnesota corporation ("Title") and the Lender; i "Costs of Construction" means those costs defined as Costs of Construction in the Agreement; "Development" means the multifamily residential rental project to be constructed, rehabilitated, and/or acquired and rehabilitated by the Borrower on the Land; • "Holder" means the Lender and any subsequent -,V owner(s) of the Note; - 1 - 13 "Housing Act" means "Housing Act", Minnesota Stat- utes, Chapter 462C, as amended or supplemented or re- placed; "Land" means the real property described in the Agreement to be leased to the Borrower by Joppa Lane Company, a Minnesota general partnership, upon which the Development will be constructed; "Lender" means First National Bank of Minneapolis, a national banking association, in Minneapolis, Minne- sota, its successors and assigns; "Letter of Credit" means that certain Irrevocable Letter of Credit in the amount of $325,000 to be issued ="lt by First National Bank of Minneapolis, a national bank- ing association; "Mortgage" means that certain Combination Mortgage, Security Agreement, and Fixture Financing Statement, dated as of December 1, 1985, given by the Borrower in favor of the Lender; "Note" means the $1,400,000 principal amount Multi- family Housing Revenue Note (Joppa Lane Apartments Development), dated as of the date of delivery thereof, issued by the City to the Lender pursuant to the Reso- lution; "Pledge Agreement" means the Pledge Agreement, dated as of December 1, 1985, between the City and the Lender; "Program" means the City's program for Development duly adopted under the Housing Act; "Regulatory Agreement" means the Regulatory Agree- ment, dated as of December _, 1985, between the City, Borrower and the Lender; "Resolution" means this resolution of the City; and < "Title" means Title Services, Inc., in St. Paul, Minnesota, its successors and assigns. , 1 i 2 Ali �a 11+ Section 2. Findings. 2.01. It is hereby found and declared that: (a) based upon representations made to the City by representatives of the Borrower as to the nature of the Development as described in the Agreement, the Develop- ment constitutes a "multifamily housing development" authorized by the Housing Act; (b) the purpose of the Development is and the effect thereof shall be to provide a means of financing the cost of the construction of decent, safe and sani- tary housing for residents of the City at rentals they can afford, and further (1) to provide for and promote, the public health, safety, morals and welfare; (2) to provide for efficient and well-planned urban growth and development, including the elimination and prevention of potential urban blight, and the proper coordination of industrial facilities with public services, mass trans- portation and multi -family housing development; and (3) to assist persons of low and moderate incomes to, -rent decent, safe, and sanitary housing which they can afford, which constitutes valid public purposes for the issuance of revenue bonds under the Housing Act. The City has developed a housing program authorizing the issuance by the City of its Multi -family Housing Devel- opment Revenue Note (Joppa Lane Apartments Project) (the "Note"), and the use of the Note proceeds by the City to make a loan to the Borrower to finance the acquisition, construction and installation of a multi -family housing project (the "Development") within the corporate limits tl of the City; , (c) the financing of the Development, the issuance and sale of the Note, the execution and delivery of the ' Agreement, the Pledge Agreement, the Regulatory Agree- ment and the Construction Loan Agreement, and the per- formance of all covenants and agreements of the City contained in the Note, the Agreement, the Pledge Agree- ment, the Regulatory Agreement and the Construction Loan Agreement and of all other acts and things required under the charter of the City and the Constitution and laws of the State of Minnesota to make the Note, the Agreement, the Pledge Agreement, the Regulatory Agree- ment and the Construction Loan Agreement valid and bind- ing obligations of the City in accordance with their terms are authorized by the Housing Act; YFrr (d) it is desirable that the Note in the principal • amount of $1,400,000 be issued by the City upon the f, terms set forth herein and that the City pledge its - 3 - interest in the Agreement and grant a security interest therein to the Lender as security for the payment of the principal of, premium, if any, and interest on the Note; (e) the Loan Repayments provided in the Agreement are fixed and are required to be revised from time to time as necessary, so as to produce income and revenue sufficient to provide for prompt payment of the princi- pal of, premium, if any, and interest on the Note when due, and the Agreement also provides that the Borrower is required to pay all expenses of the operation and maintenance of the Land and the Development, including, but not limited to, adequate insurance thereon and all taxes and special assessments levied upon or with re- spect to the Land and payable during the term of the Agreement; (f) under the provisions of Minnesota Statutes, Section 462C.07, the Note is not to be payable from nor charged upon any funds of the City other than the reve- nue pledged to the payment thereof; the City is not subject to any liability thereon; no Holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon nor to enforce payment thereof against any pro- perty of the City; the Note, premium, if any, and in- terest thereon shall not constitute an indebtedness of the City within the meaning of any constitutional, char- ter or statutory limitation and shall not constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than its interest in the Development; (g) the execution and delivery of the Note, the Agreement, the Pledge Agreement, the Regulatory Agree- ment and the Construction Loan Agreement shall not con- flict with or constitute, on the part of the City, a breach of or a default under any existing agreement, indenture, mortgage, lease, or other instrument to which the City is subject or is a party or by which it is bound; provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Note, the Agreement, the Pledge Agreement, the Regulatory Agreement or the Construction Loan Agreement by reason of the existence of any facts contrary to this finding; (h) no litigation is pending or, to the best know- ". • ledge of the members of this City Council, threatened yti, against the City questioning the organization or boon - 4 - P daries of the City or the right of any officer of the or n any ques- tomanner City to hold his or her office the and tioning the right and power of Y the validity s deliver the Note or otherwise questioning the execution, delivery, or validity ofreement, of the Note or the Regulatory Agreement, the Pledge Ag the Agreement or the Construction Loan Aem nthe Notet or eo- to tioning the pledge of revenues payment City to loan the proceeds of the Note the right of the to the Borrower; (i) all acts and things required under the Charter the laws of the i' t� of the City and the Constitution and the Note, the Agreement, the State ,of Minnesota to make Pledge Agreement, the Regulatory Agreement and the Con- and th hbindtetmsbliga- struction Loan Agreement the valid City in accordanceshall tions of the been done upon adoption of this Resolution and have ree- execution of the Note, Agreement, the Construct iongLoan ment, the Regulator Agreementand Agreement; and (j) the City, is duly organized and existing under the laws of the its Home Rule Charter, Constitution and is authorized to issue the the State of Minnesota and Note in accordance with the Housing Act. Section 3. Authorization and Sale. 3.01. Authorization. The City is authorized by the for the corporate pur- Housing Act to issue revenue bonds City, including the making of loans to finance poses of the the construction of multi-family housing developments sub - be occupied sub- stantially for the use by or intended to of low and moderate income, and to stantially by persons make all contracts, execute all instruments, and do all of such things necessary or convenient in the exercise authority. 3.02. Preliminary City Approval. By resolutions duly^" 3, 1985, the City .� adopted by the City Council on September adopted a housing program for the Develop- has developed and ment (the "Program") as a program amendment to the Housing hearing thereon Plan of the City, as amended, after public 15 days published notice thereof in a news- after at least of general circulation in the City and the Minnesota in paper Housing Finance Agency has not rejected the Program, all the Housing Act, and conformance with the provisions of preliminary approval to financing the acqui- further give sition, construction and installation of the Development 16, • through the issuance of the Note. - 5 - 3.03. Approval of Documents. Pursuant to the fore- going, there have been prepared and presented to the City Council copies of the following documents, all of which are now or shall be placed on file in the office of the City Clerk: (a) the Agreement; (b) the Pledge Agreement; (c) the Construction Loan Agreement; and (d) the Regulatory Agreement. The forms of the documents listed in (a) through (d) above are approved, and the officers of the City are hereby autho- rized to execute the same with such variations, insertions, and additions as are deemed appropriate by such officials, as evidenced by their execution thereof. Section 4. Authorizations. 4.01. Upon the completion of the Agreement, the Pledge Agreement, the Regulatory Agreement and the Construction Loan Agreement approved in Section 3.03 hereof and the exe- cution thereof, the Mayor and City Manager are authorized to execute and deliver the Note, in substantially the form approved in paragraph 5.01 hereof, and the Mayor and City Manager are authorized to execute such other certifications, documents, or instruments as Bond Counsel shall require, and all certifications, recitals, and representations therein shall constitute the certificates, recitals, and representa- tions of the City. Execution of any instrument or document by one or more appropriate officers of the City shall con- stitute and shall be deemed the conclusive evidence of the approval and authorization by the City and the City Council of the instrument or document so executed. Section 5. The Note. 5.01. Form and Authorized Amount. The Note is hereby authorized to be issued and shall be issued substantially in the form presented to the City Council and set forth as Exhibit A to this Resolution, with such appropriate varia- tions, omissions, and insertions as are permitted or re- quired by this Resolution, in the principal amount of $1,400,000. The offer of the Lender to purchase the Note at a price of par is found reasonable and is hereby accepted. The terms of the Note are set forth therein, and such terms, including, but not limited to, provisions as to interest rate, dates and amount of payment of principal and interest, and prepayment privileges, are incorporated by reference -'A herein. The it is issued IP Act. Note shall in all events contain a recital that pursuant to and in accordance with the Housing 5.02. Execution. The Note shall be executed on behalf of the City by the manual signatures of the Mayor and City Manager, and shall be sealed with the City's corporate seal, and the Certificate of Registration shall be signed by the Note Registrar. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery thereof, such signature shall nevertheless be valid and sufficient for all purposes. 5.03. Mutilated, Lost, and Destroyed Note. In case the Note shall become mutilated or be lost or destroyed, the City shall cause to be executed and delivered a new Note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated Note or in lieu of and in substitution for such Note lost or destroyed, upon the Holder's paying the reasonable expenses and charges of the City in connection therewith and, in case the Note is destroyed or lost, filing with the City evidence satisfactory to it of such loss or destruction. 5.04. Assignment. The Lender is hereby designated as Note Registrar (the "Note Registrar") and shall keep a Note Register in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration of transfer of ownership of the Note. The Note shall be initially registered in the name of the Lender and shall be transferable upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written instrument of transfer duly executed by the Lender or its duly authorized agent in the following form: AT For value received hereby sells, assigns and transfers unto the within Note of the City of St. Louis Park, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of the Note Regi- strar with full power of substitution in the prem- ises. The undersigned certifies that the transfer be made in accordance with the provisions of the Note Resolution of the City. Upon such transfer the Note Registrar shall note the date of registration and the name and address of the new Holder of the Note in the Note Register and in the regi- stration blank appearing on the Note. - / - 5.05. Delivery and Use of Proceeds. Prior to delivery of the Note, the documents referred to in Section 3.03 here- of shall be completed and executed, and an original, exe- cuted counterpart of each such document shall be delivered to the Lender. The City shall thereupon deliver to the Lender the Note in the principal amount of $1,400,000 together with a copy, duly certified by the City Clerk, of this Resolution and such closing certificates as are re- quired by Bond Counsel. Upon delivery of the Note and the above items to the Lender, the proceeds of the Note shall be deposited in a Construction Fund hereby created, to be maintained by the Lender, and disbursement of such proceeds shall be made to the Borrower in reimbursement of or to its order, for pay- ment of Costs of Construction pursuant to the provisions of the Agreement and the Construction Loan Agreement. Upon delivery of the Note, the Borrower shall also provide a irrevocable letter of credit in the amount of $325,000, to be issued by the Lender, to be drawn upon in accordance with the terms of the Letter of Credit and Reimbursement Agree- ment. Any surplus in the Construction Fund shall be applied toward prepayment of the Note as provided in the Agreement and shall not be invested to produce a yield greater than the yield on the Note as required by Internal Revenue Ser- vice Revenue Procedures 79-5 and 81-22 and any regulations amendments or modifications thereto; provided that if the Lender receives an opinion of Bond Counsel that the exemp- tion from federal income taxation of the interest on the Note will not be jeopardized, the surplus funds may be in- vested at a yield greater than the yield on the Note. 5.06 Issuance of 'New Note. The City shall, at the request and expense of ,the Lender, issue new Notes, in an aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and ,the amount of the monthly payment payable thereunder, and be registered by the Note Registrar in the name of the Lender or such transferee as may be des- ignated by the Lender. Section 6. Limitations of the City's Obligations. 6.01 Notwithstanding anything contained herein or in the Note, the Agreement;, the Pledge Agreement, the Regula- tory Agreement or the Construction Loan Agreement or any other documents referred to in Section 3.03 hereof, the Note, the principal thereof, premium thereon, if any, and interest thereon and the Agreement, the Pledge Agreement, the Regulatory Agreement land the Construction Loan Agreement shall not constitute any indebtedness of the City within the 16F 1j , - a= meaning of any constitutional, charter, or statutory limi- tation and shall not constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than their interest in the Development, and no Holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon or to enforce payment thereof against any property of the City other than its interest in the Development. The agreement of the City to perform the cove- nants and other provisions contained in this Resolution or the Note, the Agreement, the Pledge Agreement, the Regula- tory Agreement or the Construction Loan Agreement and the other documents listed in Section 3.03 hereof shall be- sub- ject at all times to the availability of revenues furnished by the Borrower sufficient to pay all costs of such perfor- mance or the enforcement thereof, and neither the City nor any of its officers, employees, or agents shall be subject to any personal or pecuniary liability thereon. Section 7. City Representative. 7.01. The Mayor and the City Manager of the City are hereby designated and authorized to act on behalf of the City as the City Representative and alternate City Repre- sentative, respectively (as defined in the Agreement). Adopted: December 16, 198 JO go V May Attest: /,'mx City Cle k Reviewed for administration: LIVANOMMAM Approved as to form and legality: City Attorney moll ,W