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HomeMy WebLinkAbout19-070 - ADMIN Resolution - City Council - 2019/06/17Resolution No. 19-070 Resolution providing preliminary approval to the issuance of multifamily housing revenue obligations under Minnesota Statutes, Chapters 462C and 474A, as amended, and taking other actions in connection therewith Be it resolved by the City Council (the “City Council”) of the City of St. Louis Park, Minnesota (the “City”), as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Housing Act”), the City is authorized to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds to provide funds to finance multifamily housing developments. 1.02. Oak Park Housing Partners, LP, a Minnesota limited partnership, whose general partner is Oak Park Housing Management, LLC, a Minnesota limited liability company, or an affiliate (the “Borrower”), has proposed to acquire, construct, rehabilitate, and equip an approximately 100-unit existing multifamily rental housing facility and facilities functionally related and subordinate thereto located at 7267 Oak Park Village Drive in the City known as Oak Park Village Apartments (the “Project”) for occupancy by persons of low and moderate income. 1.03. The Borrower is requesting that the City issue condu it revenue obligations, in one or more series, as taxable or tax-exempt obligations (the “Bonds”), in the approximate principal amount of $16,000,000, in order to (i) finance the Project; (ii) fund any required reserve funds; (iii) finance capitalized interest during the construction of the Project; and (iv) pay the costs of issuing the Bonds. 1.04. As a condition to the issuance of such revenue bonds, the City must prepare and adopt a housing program providing the information required by Section 462C.03 , subdivision 1a of the Housing Act (the “Housing Program”). The Council must also grant preliminary approval of the issuance of revenue bonds to finance the multifamily rental housing development referred to in the Housing Program. 1.05. Under Section 147(f) 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 posting notice of such public hearing on the City’s website at least seven (7) days before the hearing. Under Section 462C.04, subdivision 2 of the Housing 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. Pursuant to 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 pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the “Allocation Act”). The City Council must grant preliminary approval to the issuance of the Bonds to finance the Project and authorize the submission of an application to the office of DocuSign Envelope ID: CF183422-191A-4E4E-8473-89AF694093F0 Resolution No. 19-070 2 Minnesota Management & Budget for an allocation of bonding authority w ith respect to the Bonds to finance the Project. 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 Bonds will finance a multifamily 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 thereof, along with other available funds, will be used to f inance the Project, finance capitalized interest during the construction of the Project, fund required reserve funds, and pay costs of issuance of the Bonds. The City will enter into one or more loan agreements (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan of the proceeds of the Bonds 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, the City’s purpose is and the effect thereof will be to promote the public welfare of the City and its residents by retaining and improving multifamily housing developments and otherwise furthering the purposes and policies of the Housing Act. (d) The Bonds will be special, limited obligations of the City payable solely from the revenues pledged to the payment thereof, 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 3. Submission of an Application for an Allocation of Bonding Authority. The City Council hereby authorizes the submission of an application for allocation of bonding authority with respect to the Bonds in the approximate principal amount of $16,000,000 pursuant to Section 146 of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. City staff and Kennedy & Graven, Chartered, acting as bond counsel to the City (“Bond Counsel”), shall take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority to the office of Minnesota Management & Budget. Section 4. Public Hearing. The City Council shall meet at a future date to be determined by City staff, 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 and/or posted as required by Section 462C.04, subdivision 2 of the Housing Act and Section 147(f) of the Code. Bond Counsel 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 the City, and in the Star Tribune, 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. City staff is authorized and directed to post the Public Notice, in substantially the form attached hereto as EXHIBIT A, on the City’s website at least seven (7) days before the meeting of DocuSign Envelope ID: CF183422-191A-4E4E-8473-89AF694093F0 Resolution No. 19-070 3 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 shall prepare and submit to the City a draft Housing Program to authorize the issuance by the City of up to $16,000,000 in conduit revenue bonds to finance the acquisition, construction, rehabilitation and equipping of the Project by the Borrower. Bond Counsel is authorized and directed to submit, on behalf of the City, the Housing Program to Metropolitan Council for review and comment pursuant to Section 462C.04, subdivision 2 of the Housing Act. Section 6. Preliminary Approval. The City Council hereby provides preliminary approval to the issuance of the Bonds in the estimated principal amount not to exceed $16,000,000, subject to: (i) a public hearing as required by the Housing Act and Section 147(f) of the Code; (ii) final approval following the preparation of bond documents; (iii) receipt of an allocation of bonding authority from the office of Minnesota Management & Budget; 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 7. Reimbursement of Costs under the Code. 7.01. 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 expenditu re 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. 7.02. 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 Housing 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(f)(2) of the Regulations, or (iv) expenditures in a “de minimis” amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures with respect to DocuSign Envelope ID: CF183422-191A-4E4E-8473-89AF694093F0 Resolution No. 19-070 4 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. 7.03. 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 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. T his 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 8. 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 9. Commitment Conditional. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Bonds as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Bonds, or issue the Bonds in an amount less than the amount referred to herein, should the City at any time prior to issuance thereof determine that it is in the best interest of the City not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in Section 6 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. Section 10. Effective Date. This resolution shall be in full force and effect from and after its passage. The motion for the adoption of the foregoing resolution was duly seconded by City Council Member Margaret Rog, and, after full discussion thereof and upon a vote being taken thereon, the following City Council Members voted in favor thereof: Tim Brausen, Rachel Harris, and Steve Hallfin. The following City Council Members abstained from voting: Anne Mavity The following City Council Members were absent: Mayor Jake Spano and Thom Miller And the following City Council Members voted in opposition: none Reviewed for Administration: Adopted by the City Council June 17, 2019 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk DocuSign Envelope ID: CF183422-191A-4E4E-8473-89AF694093F0