HomeMy WebLinkAbout21-149 - ADMIN Resolution - City Council - 2021/12/06Resolution No. 21-149
Resolution approving modifications to the housing revenue bonds
(PLACE Via Sol development), series 2018 (green bonds), and authorizing
the execution and delivery of documents related thereto
Be it resolved by the City Council (the “City Council”) of the City of St. Louis Park,
Hennepin County, Minnesota (the “City”) as follows:
Section 1. Recitals.
1.01. On December 28, 2018, the City issued its Housing Revenue Bonds (PLACE Via Sol
Project), Series 2018 (Green Bonds) (the “Series 2018 Bonds”), in the original aggregate
principal amount of $43,650,000 and loaned the proceeds thereof to PLACE E-Generation One,
LLC, a Delaware limited liability nonprofit company registered to do business in the State of
Minnesota (the “Borrower”), the sole member of which is PLACE, a Minnesota nonprofit
corporation (the “Sole Member”). The Series 2018 Bonds were issued pursuant to a resolution
adopted by the City Council on November 5, 2018 (the “Bond Resolution”) and an Indenture of
Trust, dated as of December 1, 2018 (the “Indenture”), between the City and UMB Bank, N.A., a
national banking association (the “Trustee”). The City loaned the proceeds of the Series 2018
Bonds to the Borrower pursuant to a Loan Agreement, dated as of December 1, 2018 (the
“Loan Agreement”), between the City and the Borrower, for the purposes of (i) financing the
acquisition, construction, and equipping of a multifamily housing project, including
approximately 217 total units with a mix of affordable and market rate units, which will include
underground parking (the “Project”), to be located at the intersection of Wooddale Avenue and
Highway 7 in the City; (ii) financing capitalized interest; (iii) funding required reserves; and
(iv) paying costs of issuance of the Series 2018 Bonds.
1.02. The Borrower has notified the City of its inability to complete construction of the
Project and its plans to issue additional corporate debt in the amount of $10,000,000 (the
“Completion Bonds”) in order to complete the Project.
1.03. In order for the Completion Bonds to be issued, the purchaser of the Completion
Bonds requires that the Series 2018 Bonds be subordinated to the Completion Bonds. This
change may cause a change in payment expectations for the holders of the Series 2018 Bonds
and may prolong payments to the holders of the Series 2018 Bonds, which may extend the
weighted average maturity of the Series 2018 Bonds (collectively, the “Modifications”).
1.04. The City has been advised by Kennedy & Graven, Chartered, acting as bond
counsel to the City (“Bond Counsel”), that the proposed Modifications constitute a significant
modification of the Series 2018 Bonds and will cause a “reissuance” of the Series 2018 Bonds
for tax purposes pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under
the Internal Revenue Code of 1986, as amended (the “Code”). For tax purposes, the
Series 2018 Bonds will be treated as being refunded on the effective date of the Modifications.
1.05. On the date hereof, the City Council held a duly noticed public hearing regarding
the approval of the Modifications, where all persons interested were given the opportunity to
be heard.
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Resolution No. 21-149 2
Section 2. Findings; Authorizations; and Approvals.
2.01. The City Council hereby consents to and approves the Modifications to the
Series 2018 Bonds.
2.02. The Mayor and the City Manager are hereby designated as the representatives of
the City with respect to the Modifications. The Mayor, the City Manager, and other officers of
the City are authorized and directed to execute and deliver any and all certificates, agreements,
or other documents which are required by the Indenture or the Loan Agreement, or any other
agreements, certificates, or documents which are deemed necessary by Bond Counsel to
documents as are necessary, customary, or appropriate in connection with the reissuance of the
Series 2018 Bonds, or are required by Bond Counsel to complete the Modifications to the Series
2018 Bonds and establish the validity or enforceability of the Series 2018 Bonds or the exclusion
from gross income of interest on the Series 2018 Bonds for purposes of federal income taxation
and State of Minnesota taxation (including but not limited to the ex ecution of an Information
Return for Tax-Exempt Private Activity Bond Issues, Form 8038).
2.03. As provided in the Indenture, the Loan Agreement, and the Bond Resolution, the
Series 2018 Bonds shall not be payable from nor charged upon any funds other th an the
revenues pledged to their payment, nor shall the City be subject to any liability thereon, except
as otherwise provided in this paragraph. No holder of the Series 2018 Bonds shall ever have the
right to compel any exercise by the City of its taxing powers to pay any of the Series 2018 Bonds
or the interest or premium thereon, or to enforce payment thereof against any property of the
City except the interests of the City in the Loan Agreement and the revenues and assets
thereunder, which have been assigned to the Trustee pursuant to the Indenture. The Series
2018 Bonds shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any
property of the City, except the interests of the City in the Loan Agreement, and the revenues
and assets thereunder, which have been assigned to the Trustee pursuant to the Indenture.
Section 3. Effective Date. This resolution shall be in full force and effect from and
after its passage.
Reviewed for Administration: Adopted by the City Council December 6, 2021
Kim Keller, city manager Jake Spano, mayor
Attest:
Melissa Kennedy, city clerk
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