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HomeMy WebLinkAbout15-115 - ADMIN Resolution - City Council - 2015/08/17RESOLUTION NO. 15-115 RESOLUTION CALLING A PUBLIC HEARING REGARDING A HOUSING DEVELOPMENT AND THE ISSUANCE OF REVENUE BONDS THEREUNDER AND PROVIDING PRELIMINARY APPROVAL TO THE ISSUANCE OF THE REVENUE BONDS BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01 The City is a home rule city duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to issue revenue bonds to provide funds to finance multifamily rental housing developments located within the City. 1.03. Bader Development LLC, a Delaware limited liability company, and/or Shoreham Apartments LLC, a Minnesota limited liability company, and/or any affiliate thereof (the "Borrower"), has proposed that the City issue its revenue bonds in the approximate aggregate principal amount not to exceed $40,000,000, in one or more series, bearing interest at fixed and/or variable rates, to be offered publicly and/or privately placed (the "Bonds"). The proceeds of the Bonds are proposed to be loaned by the City to the Borrower to finance the acquisition, construction, and equipping of an approximately 148 -unit multifamily rental housing development and functionally related facilities with approximately 202 parking spaces to be located at 3907 and 3915 Highway 7, 3031 Glenhurst Avenue, and 3914 and 3918 31st Street West in the City (the "Project"). The Borrower will apply the proceeds of the Bonds to the following purposes: (i) to finance the acquisition, construction and equipping of the Project, (n) to fund of one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) to pay the interest on the Bonds during the construction of the Project, if necessary; and (iv) to pay the costs of issuing the Bonds. 1.04. 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 la of the Act (the "Housing Program") The City Council must also grant preliminary approval to the issuance of revenue bonds to finance the multifamily rental housing development referred to in the Housing Program and authorize the submission of an application to the office of Minnesota Management & Budget for an allocation of bonding authority with respect to the Bonds to finance the Project. 1.05. Under Section 147(0 of the Internal Revenue Code of 1986, as amended (the "Code"), prior to the issuance of the Bonds the City Council must conduct a public hearing after one publication of notice in a newspaper circulating generally in the City at least fourteen (14) days before the hearing. Under Section 462C.04, subdivision 2 of the Act, a public hearing must be held on the housing program after one publication of notice in a newspaper circulating generally in the City at least fifteen (15) days before the hearing 1 06. 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 must be made Resolution No 15-115 -2- pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act"). Section 2 Preliminary Findings Based on representations made by the Borrower to the City to date, the City Council hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of a multifamily rental housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan will be applied to the following purposes (1) 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) the payment of interest on the Bonds during the construction of the Project, if necessary, and (iv) the payment 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 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 4 Public Hearing. The City Council shall meet at 7:30 P.M on Monday, September 21, 2015, to conduct a public hearing on the Housing Program, the Project, and the issuance of the Bonds by the City. 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 Clerk of the City is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Sun -Sailor, the official newspaper of and a newspaper of general circulation in the City, at least fifteen (15) days before the meeting of 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 5. Housing Program. Bond Counsel, as described below, shall prepare and submit to the City a draft Housing Program to authorize the issuance by the City of up to $40,000,000 in revenue bonds in one or more series to finance the acquisition, construction, and equipping of the Project by the Borrower. The City is authorized and directed to submit the Housing Program to the Metropolitan Council for review and comment pursuant to Section 462C.04, subdivision 2 of the Act. Section 6 Submission of an Application for an Allocation of Bonding Authority. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of Resolution No. 15-115 -3- the State of Minnesota. 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 Manager, the Controller of the City, and Kennedy & Graven, Chartered, acting as Bond Counsel to the City, shall take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authonty to the office of Minnesota Management & Budget Section 7. Preliminary Approval. The City Council hereby provides preliminary approval to the issuance of the Bonds in the approximate principal amount of $40,000,000 to finance all or a portion of the costs of the Project pursuant to the Housing Program of the City, subject to: (i) a public hearing as required by the Act and Section 147(0 of the Code; (ii) receipt of allocation of bonding authority from the office of Minnesota Management & Budget; (iii) final approval following the preparation of bond documents; and (iv) 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 8 Reimbursement of Costs under the Code 8 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 sixty (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 eighteen (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 three (3) years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the Bonds. 8.02 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 1 150- 2(j)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1 150-2(0(2) of the Regulations, or (iv) expenditures in a "de minimis" amount (as defined in Section 1 150-2(0(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than sixty (60) days before the date of adoption of this resolution of the City. 8.03. 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 Resolution No. 15-115 -4- 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 9 Costs The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Bonds, whether or not the Bonds are issued. Section 10. 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 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 nght, 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. Section 11 Effective Date. This resolution shall be in full force and effect from and after its passage. Adop 2015. the City Council of the City of St. Louis Park, Minnesota, this 17th day of August, Reviewed f• • iii , inistration: .I r City Mana Attest: aiaaL City erk Adopted by the City Council August 17, 2015 Mayo • • Resolution No 15-115 -5- EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF ST. LOUIS PARK, MINNESOTA NOTICE OF PUBLIC HEARING ON THE APPROVAL OF A HOUSING PROGRAM FOR A MULTIFAMILY HOUSING DEVELOPMENT AND THE ISSUANCE OF REVENUE BONDS UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED NOTICE IS HEREBY GIVEN that the City Council of the City of St. Louis Park, Minnesota (the "City") will hold a public hearing on Monday, September 21, 2015, at or after 7:30 p.m at City Hall, 5005 Minnetonka Boulevard in the City, to consider a proposal that the City approve and authorize the issuance of its revenue bonds (the "Bonds"), in one or more series, bearing interest at fixed or variable rates, to be offered publicly and/or privately placed, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), for the purposes of (i) financing the acquisition, construction, and equipping of an approximately 148 -unit multifamily rental housing development and functionally related facilities with approximately 202 parking spaces to be located at 3907 and 3915 Highway 7, 3031 Glenhurst Avenue, and 3914 and 3918 31st Street West in the City (the "Project"); (ii) funding one or more reserve funds to secure the timely payment of the Bonds, if necessary, (iii) paying interest on the Bonds during the construction of the Project, if necessary, and (iv) paying the costs of issuing the Bonds. Bader Development LLC, a Delaware limited liability company, and/or Shoreham Apartments LLC, a Minnesota limited liability company, and/or any affiliate thereof (the "Borrower"), or an affiliated entity, will own the Project The estimated aggregate principal amount of the proposed Bonds is $40,000,000 Following the public hearing, the City Council will consider a resolution approving a housing program prepared in accordance with the requirements of the Act and granting approval to the issuance of the Bonds. 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 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 property of the City except money payable by the Borrower to the City and pledged to the payment of the Bonds 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. At the time and place fixed for the public hearing, the City 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 Clerk, at or prior to said public hearing. Dated: [Date of Publication] BY ORDER OF THE CITY COUNCIL OF THE CITY OF ST LOUIS PARK, MINNESOTA /s/ Melissa Kennedy City Clerk City of St Louis Park, Minnesota