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HomeMy WebLinkAbout98-115 - ADMIN Resolution - City Council - 1998/09/08RESOLUTION NO.98 98 '' 1 1 5 RESOLUTION GIVING PRELIMINARY APPROVAL TO REFINANCING A PROJECT THROUGH THE ISSUANCE OF REVENUE REFUNDING BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN AGREEMENT AS TO INDEMNITY AND PAYMENT OF EXPENSES; AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the City Council (the "Council") of the City of St Louis Park, Minnesota (the "City"), as follows SECTION 1 Recitals and Findings 1 1 Minnesota Statutes, Chapter 462C, Chapter 462A and Chapter 475, as amended (the "Act"), authorize the City to issue revenue bonds to finance programs or developments described in any housing plan, upon approval of the program as provided in the Act, including one or more rental housing developments within its boundaries and to refund any bonds then outstanding including the payment of any redemption premiums thereon and any interest accrued or to accrue to the redemption date next succeeding the date of delivery of the refunding bonds. 1 2 The Home Rule Charter of the City authorizes the issuance of bonds "for any public purpose not prohibited by law" 1.3 On September 4, 1985, the City issued its $2,455,000 aggregate principal amount Mortgage Revenue Bonds, Series 1985 (Park Ridge Apartments Project), pursuant to the Act (the "Series 1985 Bonds"), to finance the acquisition, construction and equipping of a 93 unit, MultiFamily apartment complex located in the City at 2480 South Highway 100, St. Louis Park, Minnesota (the "Project") by Park Ridge Associates Limited Partnership (the "Borrower"), a Minnesota limited partnership. 1 4 The Council has received a proposal from the Borrower that the City issue its rental revenue refunding bonds (the `Bonds") in one or more series in an aggregate principal amount of approximately $2,600,000 to refund all of the outstanding principal amount of the Series 1985 Bonds. 1 5 The City hereby finds and determines the issuance of the Bonds is authorized under the Act and the City's Home Rule Charter and constitutes a public purpose under the City's Home Rule Charter for which bonds can be issued. 1.6 Section 147(f)(2)(D) of the Internal Revenue Code of 1986, as amended (the "Code"), and Section 1313(b)(3)(A) of the Tax Reform Act of 1986 require a public hearing following reasonable public notice prior to the approval of the Bonds by the Council. 1 7 The City has published a public notice for a public hearing on September 8, 1998 in the officiale newspaper of the City and has held such public hearing 1 8 The City hereby finds and determines that prior to proceeding with the proposed issuance of the Bonds, the City requires the Borrower to authorize, execute and deliver to the City an Agreement as to Indemnity and Payment of Fees and Expenses (the "Agreement"), substantially in the form attached hereto as Exhibit A and in form and substance acceptable to the Mayor, City Manager and City Clerk herein authorized to execute the Agreement on behalf of the City. 1 9 This Council has been advised by representatives of the Borrower that (i) conventional commercial financing to refinance the cost of the Project is available only on a limited basis and at such high costs of borrowing that, with the aid of municipal borrowing, and its resulting lower borrowing cost, the Project is economically more feasible, and (ii) the refinancing of the Project would not be undertaken but for the availability of tax exempt revenue bond financing 1.10 This Council has also been advised by underwriters to the Borrower that, on the basis of their discussions with potential buyers of tax-exempt bonds, revenue bonds and refunding revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project. SECTION 2 Determination to Proceed with the Project and its Financing 2.1 On the basis of the information given the City to date, it appears that it would be desirable of the City to issue its revenue bonds under the provisions of the Act to refinance the Project in the maximum aggregate principal amount of $2,600,000 2.2 It is hereby determined to proceed with the Project and its refinancing and this Council hereby declares its present intent to have the City issue its revenue bonds under its Home Rule Charter and the Act to refinance the Project. Notwithstanding the foregoing, however, the adoption of this resolution shall not be deemed to establish a legal obligation on the part of the City or its City Council to issue such revenue bonds. All details of such revenue bond issue and the provisions for payment thereof shall be subject to such further conditions as the City may specify. The revenue bonds, if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and each bond, when, as and if issued, shall recite in substance that the bonds, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation. 2.3 This resolution and the intentions set forth herein are subject to the members of the Borrower entering into the Agreement as to Indemnity and Payment of Expenses, between the City and the Borrower substantially in the form approved by this resolution with such changes as approved by the City Manager. 2.4 Briggs and Morgan, Professional Association is hereby designated as Bond Counsel and is authorized to proceed with the preparation of documents as directed by the Borrower. SECTION 3 Authorization of An Agreement as to Indemnity and Payment of Expenses 3.1 The form of Agreement as to Indemnity and Payment of Expenses presented to this meeting is hereby approved in substantially the form so presented for use in connection with the revenue bonds which may be issued to refinance the Project, and the Mayor, City Manager and City Clerk are hereby authorized to execute such an agreement by and between the City and the City of St. Louis Park with such changes, additions or deletions as the Mayor, City Manager and Clerk deem appropriate. SECTION 4 General 4 1 If the bonds are issued and sold, the City will enter into a loan agreement or similar agreement satisfying the requirements of the Act (the "Revenue Agreement") with the Borrower. The loan payments or other amounts payable by the Borrower to the City under the Revenue Agreement shall be sufficient to pay the principal of, and interest and redemption premium, if any, on the bonds as and when the same become due and payable 4 2 This resolution shall become effective immediately upon its passage and without publication. Attest: Reviewed for Administration: Adopted by the City Council September 8, 1998 aj Mayor