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HomeMy WebLinkAbout15-136 - ADMIN Resolution - City Council - 2015/09/21RESOLUTION NO. 15-136 RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF MULTIFAMILY HOUSING REVENUE BONDS; ADOPTING A HOUSING PROGRAM; AND APPROVING THE FORMS OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED 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. 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. Shoreham Apartments LLC, a Delaware limited liability company (the "Borrower"), has proposed that the City issue its revenue bonds in the approximate aggregate principal amount of $40,000,000, in one or more series, bearing interest at fixed and/or variable rates, to be offered publicly and/or privately placed, as taxable and/or tax-exempt obligations (the "Bonds"). 1.04 The proceeds of the Bonds are proposed to be loaned by the City to the Borrower to be applied by 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 Project is designed as market -rate housing with twenty percent (20%) of the units reserved for rental to and occupancy by persons and families of low and moderate income The Borrower will apply the proceeds of the Bonds to the following purposes. (i) 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, (Ili) 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. 1.05. In accordance with the Act, the City has prepared a housing program (the "Housing Program") to authorize the issuance by the City of the Bonds to finance the acquisition, construction, and equipping by the Borrower of the Project. The Housing Program was prepared and submitted to the Metropolitan Council for its review and comment 1.06. On August 17, 2015, the Council authorized 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 in accordance with the requirements of Minnesota Statutes, Chapter 474A, as amended, and providing preliminary approval for the sale and issuance of the Bonds. 1 07. A notice of public hearing (the "Public Notice") was published in the Sun -Sailor, the official newspaper and a newspaper of general circulation in the City, with respect to the Resolution No. 15-136 -2- required public hearing under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and Section 462C.04, subdivision 2 of the Act. 1.08. The Public Notice was published at least fifteen (15) days before the regularly scheduled meeting of the Council, and on the date hereof, the Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing. Section 2. Housing Program. The Housing Program, in the form substantially on file with the City, is hereby approved. Section 3. Senior Bonds. 3 01 The Borrower has requested that the City issue, sell, and deliver its Multifamily Housing Revenue Bonds (The Shoreham Project), Series 2015A (the "Senior Bonds"), in an aggregate principal amount of approximately $34,500,000 The Senior Bonds are proposed to be purchased by TCF Investments Management, Inc , a Minnesota corporation (the "Senior Lender"), an affiliate of TCF National Bank, a national banking association (the "Servicer"). 3.02. The proceeds derived from the sale of the Senior Bonds will be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, to be dated or on after September 1, 2015 (the "Senior Loan Agreement"), between the City and the Borrower. 3.03. The Senior Bonds will be issued pursuant to this resolution and the Act, and the Senior Bonds and the interest thereon (i) shall be payable solely from the revenues pledged therefor under the Senior Loan Agreement and additional sources of revenues provided by or on behalf of the Borrower, (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, (Hi) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers, (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Senior Loan Agreement; and (v) shall not constitute a general or moral obligation of the City. 3.04. The loan repayments to be made by the Borrower under the Senior Loan Agreement will be fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Senior Bonds when due. The City will assign its rights to the basic payments and certain other rights under the Senior Loan Agreement to the Senior Lender pursuant to the terms of an Assignment of Loan Agreement, to be dated on or after September 1, 2015 (the "Assignment of Senior Loan Agreement"), between the City and the Senior Lender. The Borrower will secure its obligations by executing and delivering to the City a Combination Mortgage, Security Agreement and Fixture Financing Statement, to be dated on or after September 1, 2015 (the "Senior Mortgage"), which will be assigned by the City to the Senior Lender. The Borrower will further secure its obligations by executing and delivering to the City an Assignment of Leases and Rents, to be dated on or after September 1, 2015 (the "Assignment of Leases and Rents"), which will be assigned by the City to the Senior Lender. The proceeds of the Senior Bonds will be disbursed by the Senior Lender pursuant to the Senior Loan Agreement and a Disbursing Agreement, to be dated on or after September 1, 2015 (the "Disbursing Agreement"), between the Borrower, the Senior Lender, the Servicer, the Trustee (as defined herein), and a disbursing agent named therein Resolution No 15-136 -3- 3 05 The City acknowledges, finds, determines, and declares that the issuance of the Senior Bonds is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Senior Bonds, and the other actions of the City under the Senior Loan Agreement and this resolution constitute a public purpose and are in the interests of the City In authorizing the issuance of the Senior Bonds for the financing of the Project and the related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by providing multifamily housing developments for low or moderate income residents of the City and otherwise furthering the purposes and policies of the Act. 3.06. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Senior Bonds in the approximate aggregate principal amount of $34,500,000. The Senior Bonds shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the form of Senior Bonds now on file with the City, with the amendments referenced herein. The City hereby authorizes the Senior Bonds to be issued, in whole or in part, as "tax-exempt bonds," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Senior Bonds, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof The Senior Bonds shall be substantially in the form on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Senior Bonds, the stated maturities of the Senior Bonds, the interest rates on the Senior Bonds and the terms of redemption of the Senior Bonds) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Senior Bonds with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Senior Bonds by the City shall be conclusive evidence of such determination. 3.07. The Senior Bonds shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Senior Loan Agreement, including revenues derived from the Project. The Council hereby authorizes and directs the Mayor and the City Manager to execute the Senior Bonds in accordance with the terms thereof. 3.08. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Senior Loan Agreement All of the provisions of the Senior Loan Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Senior Loan Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determinations. 3.09. The Mayor and the City Manager are hereby authorized to execute and deliver, on behalf of the City, such other documents and certificates as are necessary or appropriate in connection with the issuance, sale, and delivery of the Senior Bonds, including the Assignment of Senior Loan Agreement, an Assignment of Combination Mortgage, Security Agreement and Resolution No. 15-136 -4- Fixture Financing Statement and Assignment of Leases and Rents, to be dated on or after September 1, 2015 (the "Assignment of Senior Mortgage"), from the City to the Senior Lender, various certificates of the City, an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038 (Rev April 2011), with respect to the Senior Bonds, an endorsement of the City to the tax certificate of the Borrower, and similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Senior Bonds The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel ("Bond Counsel"), to prepare, execute, and deliver its approving legal opinions with respect to the Senior Bonds. 3.10. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Senior Loan Agreement and for payment of the Senior Bonds, including the Senior Mortgage, one or more guaranties, or any other security agreed upon by the Borrower and the Senior Lender, and the City hereby approves the execution and delivery of such security Section 4 Subordinate Bonds. 4.01. The Borrower has requested that the City issue, sell, and deliver its (i) Variable Rate Demand Multifamily Housing Revenue Bonds (The Shoreham Project), Series 2015B (the "Tax -Exempt Subordinate Bonds"), in an aggregate principal amount of approximately $3,400,000, and (ii) Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (The Shoreham Project), Series 2015C (the "Taxable Subordinate Bonds," and together with the Tax - Exempt Subordinate Bonds, the "Subordinate Bonds"), in an aggregate principal amount of approximately $600,000. The Subordinate Bonds are proposed to be sold publicly and underwritten by Dougherty & Company LLC, a Delaware limited liability company (the "Underwriter"). The Subordinate Bonds will be subordinate in right of repayment to the Senior Bonds 4.02. The proceeds derived from the sale of the Subordinate Bonds will be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, to be dated or on after September 1, 2015 (the "Subordinate Loan Agreement"), between the City and the Borrower. 4.03 The Subordinate Bonds will be issued pursuant to this resolution, the Act, and an Indenture of Trust, to be dated on or after September 1, 2015 (the "Indenture"), between the City and U.S. Bank National Association (the "Trustee"), and the Subordinate Bonds and the interest on the Subordinate Bonds (i) shall be payable solely from the revenues pledged therefor under the Subordinate Loan Agreement and additional sources of revenue provided by or on behalf of the Borrower; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Subordinate Loan Agreement; and (v) shall not constitute a general or moral obligation of the City. 4.04. The loan repayments to be made by the Borrower under the Subordinate Loan Agreement will be fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Subordinate Bonds when due Such loan repayments will be assigned to the Trustee under the terms of the Indenture. The Borrower will secure its obligations by executing and delivering to the City a Subordinate Combination Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement, to be dated on or after September 1, 2015 (the "Subordinate Mortgage"), to be assigned by the City to Bridgewater Resolution No. 15-136 -5- Bank, a Minnesota banking corporation (the "Bank"). The proceeds of the Subordinate Bonds will be disbursed by the Trustee pursuant to the Subordinate Loan Agreement and the Disbursing Agreement. 4.05. The City acknowledges, finds, determines, and declares that the issuance of the Subordinate Bonds is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Subordinate Bonds, and the other actions of the City under the Indenture, the Subordinate Loan Agreement, and this resolution constitute a public purpose and are in the interests of the City. In authorizing the issuance of the Subordinate Bonds for the financing of the Project and the related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by providing multifamily housing developments for low or moderate income residents of the City and otherwise furthering the purposes and policies of the Act 4.06. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Subordinate Bonds in the approximate aggregate principal of $5,500,000. The Subordinate Bonds shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Tax -Exempt Subordinate Bonds to be issued, in whole or in part, as "tax-exempt bonds," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Subordinate Bonds, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof The Subordinate Bonds shall be substantially in the form in the Indenture on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Subordinate Bonds, the stated maturities of the Subordinate Bonds, the interest rates on the Subordinate Bonds and the terms of redemption of the Subordinate Bonds) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Subordinate Bonds with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Subordinate Bonds by the City shall be conclusive evidence of such determination. 4.07 The Subordinate Bonds shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Subordinate Loan Agreement, including, on a subordinate basis to the Senior Bonds, revenues of the Project, and other funds pledged pursuant to the Indenture and from payments made pursuant to an irrevocable letter of credit, to be dated on or after September 1, 2015 (the "Letter of Credit"), issued by the Bank pursuant to the terms of a Reimbursement Agreement, to be dated on or after September 1, 2015, between the Borrower and the Bank. A confirming irrevocable letter of credit, to be dated on or after September 1, 2015 (the "Confirming Letter of Credit"), will be issued by Federal Home Loan Bank of Des Moines. All of the provisions of the Indenture, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof The Indenture shall be substantially in the form on file with the City, which is hereby approved, with Resolution No 15-136 -6- such necessary and appropriate variations, omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. The Mayor and the City Manager are hereby authorized and directed the to execute the Indenture, and to deliver the Indenture to the Trustee, and hereby authorizes and directs the execution of the Subordinate Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Subordinate Bonds, the City and the Trustee as set forth therein 4.08. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Subordinate Loan Agreement and the Bond Purchase Agreement, to be dated after the date hereof (the "Bond Purchase Agreement"), between the City, the Borrower, and the Underwriter. All of the provisions of the Subordinate Loan Agreement and Bond Purchase Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Subordinate Loan Agreement and Bond Purchase Agreement shall be substantially in the forms on file with the City which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determinations. 4 09 The Mayor and the City Manager are hereby authorized to execute and deliver, on behalf of the City, such other documents and certificates as are necessary or appropriate in connection with the issuance, sale, and delivery of the Subordinate Bonds, including an Assignment of Subordinate Combination Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement, to be dated on or after September 1, 2015 (the "Assignment of Subordinate Mortgage"), from the City to the Bank, various certificates of the City, an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038 (Rev. April 2011), with respect to the Tax -Exempt Subordinate Bonds, an endorsement of the City to the tax certificate of the Borrower with respect to the Tax -Exempt Subordinate Bonds, and similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Subordinate Bonds The City hereby approves the execution and delivery by the Trustee of the Indenture and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Subordinate Bonds that require execution by the Trustee. The City hereby authorizes Bond Counsel to prepare, execute, and deliver its approving legal opinions with respect to the Subordinate Bonds 4.10 The City will not participate in the preparation of the Preliminary Official Statement or the Official Statement relating to the offer and sale of the Subordinate Bonds (the "Official Statement"), and will make no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information. Subject to the foregoing, the City hereby consents to the distribution and the use by the Underwriter of the Official Statement in connection with the offer and sale of the Subordinate Bonds. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Subordinate Bonds 4 11. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Subordinate Loan Agreement and for payment of the Subordinate Bonds, including the Letter of Credit, the Confirming Letter of Credit, the Subordinate Resolution No 15-136 -7- Mortgage, one or more guaranties, or any other security agreed upon by the Borrower and the Bank, and the City hereby approves the execution and delivery of such security. Section 5 Additional Findings and Certifications. 5.01. The Bonds are authorized to be issued in an amount not to exceed $40,000,000 On the date hereof the Senior Bonds are expected to be issued in the approximate aggregate principal amount of $34,500,000, and the Subordinate Bonds are expected to be issued in the approximate aggregate principal amount of $4,000,000. However, the final principal amount of both the Senior Bonds and the Subordinate Bonds may change so long as the aggregate principal amount of the Senior Bonds and the Subordinate Bonds combined does not exceed $40,000,000. 5 02. To ensure compliance with certain rental and occupancy restrictions imposed by the Act and Section 142(d) of the Code, and to ensure compliance with certain restrictions imposed by the City, the Mayor and City Manager are also hereby authorized and directed to execute and deliver a Regulatory Agreement, to be dated on or after September 1, 2015 (the "Regulatory Agreement"), between the City, the Borrower, the Senior Lender, and the Trustee. All of the provisions of the Regulatory Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof The Regulatory Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination 5.03. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Council of the City, or any officer, agent or employee of the City in that person's individual capacity, and neither the Council of the City nor any officer or employee executing the Bonds shall be personally liable on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof No provision, covenant or agreement contained in the aforementioned documents, the Bonds, or in any other document relating to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to a general or moral obligation of the City or any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Senior Loan Agreement and the Subordinate Loan Agreement which are to be applied to the payment of the Bonds, as provided therein. 5 04 ExLept as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied is intended or shall be construed to confer upon any person or firm or corporation, other than the City, any holder of the Bonds issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all Resolution No 15-136 -8- of their provisions being intended to be and being for the sole and exclusive benefit of the City, and any holder from time to time of the Bonds issued under the provisions of this resolution. 5.05. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Sections 3.07 and 4 07 hereof, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein 5.06. The Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law 5.07. The officers of the City, Bond Counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Bonds, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the aforementioned documents, and this resolution. If for any reason the Mayor or the City Manager is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any member of the Council or any officer of the City delegated the duties of the Mayor or the City Manager with the same force and effect as if such documents were executed and delivered by the Mayor or the City Manager 5.08. The Borrower shall pay the administrative fee of the City for the issuance of conduit debt. The Borrower will also 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, including any costs for attorneys' fees. 5 09 This resolution shall be in full force and effect from and after its approval. The 1 als contained in the resolution are effective for one year after the date hereof Approved by the City Council of St. Louis Park, Minnesota this 21st day of September, 2015 Reviewfor , • dministration. I4 II„ City Mana Attest Adopted by the City Council September 21, 2015 (IN - May Pr T m • • •