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HomeMy WebLinkAbout22-079 - ADMIN Resolution - City Council - 2022/05/16Resolution No. 22-079 Resolution authorizing the issuance of multifamily housing revenue notes for the benefit of Beltline Station Limited Partnership; approving a housing program; and authorizing the execution of related documents 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. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Act”), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue obligations to provide funds to finance multifamily housing developments located within the City. 1.02. Beltline Station Limited Partnership, a Minnesota limited partnership (the “Borrower”), has proposed that the City issue one or more series of taxable or tax-exempt revenue obligations (the “Notes”) in an estimated aggregate principal amount not to exceed $13,725,800 for the benefit of the Borrower for the purposes of (i) financing the acquisition, construction, and equipping of an approximately 82-unit multifamily housing development for occupancy by persons of low and moderate income and facilities functionally related and subordinate thereto to be located at the intersection of County Road 25 and Monterey Avenue in the City (the “Project”), which will be owned and operated by the Borrower; (ii) funding any required reserve funds; (iii) financing capitalized interest during the construction of the Project, if necessary; and (iv) paying the costs of issuing the Notes. 1.03. On November 15, 2021, the City Council adopted a resolution authorizing the submission of an application to the office of Minnesota Management and Budget for an allocation of bonding authority with respect to the Note to finance the Project in accordance with the requirements of Minnesota Statutes, Chapter 474A, as amended (the “Allocation Act”), and providing preliminary approval for the sale and issuance of the Notes for the Project. 1.04. On January 11, 2022, the City received Certificate of Allocation No. 424 from the Minnesota Department of Management and Budget allocating bonding authority to the City in the amount of $13,725,800 from the State of Minnesota, pursuant to the Allocation Act. 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 Notes to finance the Project, and the Housing Program was prepared and submitted to Metropolitan Council for its revie w and comment. 1.06. A notice of public hearing (the “Public Notice”) was published in the Sun Sailor, the official newspaper of and a newspaper of general circulation in the City, with respect to the 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 . DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 2 1.07. The Public Notice was published at least fifteen (15) days before the regularly scheduled meeting of the City Council, and on the date hereof, the City Council conducted a public hearing on the Housing Program and the issuance of the Note s at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing. 1.08. Cedar Rapids Bank and Trust Company, an Iowa banking corporation, or another financial institution selected by the Borrower (the “Lender”), intends to purchase the Note s. Section 2. The Housing Program. The Housing Program, in the form substantially on file with the City, is hereby approved. Section 3. The Notes. The Borrower has requested that the City issue, sell, and deliver one or more series of the Notes in the estimated aggregate principal amount of $13,725,800. The City may issue two separate series of the Notes (the “Series 2022A Note” and the “Series 2022B Note,” respectively). Section 4. Series 2022A Note. 4.01. The proceeds derived from the sale of the Series 2022A Note will be loaned by the City to the Borrower (the “Series 2022A Loan”) pursuant to the terms of a Loan Agreement (the “Series 2022A Loan Agreement”) between the City and the Borrower. 4.02. The Series 2022A Loan Agreement requires the Borrower to make loan repayments to produce revenue sufficient to pay the principal of, premi um, if any, and interest on the Series 2022A Note when due. The City will assign its rights to the loan repayments, basic payments, and certain other rights under the Series 2022A Loan Agreement to the Lender pursuant to the terms of an Assignment of Loan Agreement (the “Series 2022A Assignment of Loan Agreement”) between the City and the Lender. 4.03. As security for the repayment of principal of and interest on the Series 2022A Loan, the Borrower will execute and deliver to the City a mortgage agreeme nt (the “Series 2022A Mortgage”) to be assigned by the City to the Lender pursuant to an assignment of mortgage (the “Series 2022A Mortgage Assignment”) or such other collateral as determined by the Lender, including but not limited to one or more guaranti es. 4.04. The Series 2022A Note will be issued pursuant to this resolution and the Act, and the Notes and the interest thereon (i) shall be payable solely from the revenues pledged therefor under the Series 2022A Loan Agreement and additional sources of revenues provided by or on behalf of the Borrower, which will be assigned to the Lender pursuant to the Series 2022A Assignment of Loan Agreement; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitatio n; (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 Series 2022A Loan Agreement and the revenues and assets thereunder, which will be pledged to the Lender; and (v) shall not constitute a general or moral obligation of the City. DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 3 4.05. The City acknowledges, finds, determines, and declares that the issuance of the Series 2022A Note is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Series 2022A Note, and the other actions of the City under the Series 2022A Loan Agreement, the Series 2022A Assignment of Loan Agreement, and this resolution constitute a public purpose and are in the interests of the City. In authorizing the issuance of the Series 2022A Note to finance 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 individuals and families of low or moderate income 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 Series 2022A Note. 4.07. The Series 2022A Note 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 the Series 2022A Note now on file with the City, with the amendments referenced herein. The City hereby authorizes the Series 2022A Note to be issued, in whole or in part, as a “tax-exempt obligation,” the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. 4.08. All of the provisions of the Series 2022A Note, 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 Series 2022A Note 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 Series 2022A Note, the stated maturities of the Series 2022A Note, the interest rates on the Series 2022A Note and the terms of redemption of the Series 2022A Note) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Series 2022A Note with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Series 2022A Note by the City shall be conclusive evidence of such determination. 4.09. The Series 2022A Note shall be a special, limited obligation of the City payable solely from the revenues provided by the Borrower pursuant to the Series 2022A Loan Agreement, including revenues derived from the Project. The City Council hereby authorizes and directs the Mayor and the City Manager to execute the Series 2022A Note in accordance with the terms thereof. 4.10. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Series 2022A Loan Agreement and the Series 2022A Assignment of Loan Agreement. All of the provisions of the Series 2022A Loan Agreement and the Series 2022A Assignment of 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 Series 2022A Loan Agreement and the Series 2022A Assignment of Loan DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 4 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. Section 5. Series 2022B Note. 5.01. The proceeds derived from the sale of the Series 2022B Note will be loaned by the City to the Borrower (the “Series 2022B Loan”) pursuant to the terms of a Loan Agreement (the “Series 2022B Loan Agreement”) between the City and the Borrower. 5.02. The Series 2022B Loan Agreement requires the Borrower to make loan repayments to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Series 2022B Note when due. The City will assign its rights to the loan repayments, basic payments, and certain other rights under the Series 2022B Loan Agreement to the Lender pursuant to the terms of an Assignment of Loan Agreement (the “Series 2022B Assignment of Loan Agreement”) between the City and the Lender. 5.03. As security for the repayment of principal of and interest on the Series 2022B Loan, the Borrower will execute and deliver to the City a mortgage agreement (the “Series 2022B Mortgage”) to be assigned by the City to the Lender pursuant to an assignment of mortgage (the “Series 2022B Mortgage Assignment”) or such other collateral as determined by the Lender, including but not limited to one or more guaranties. 5.04. The Series 2022B Note will be issued pursuant to this resolution and the Act, and the Notes and the interest thereon (i) shall be payable solely from the revenues pledged therefor under the Series 2022B Loan Agreement and additional sources of revenues provided by or on behalf of the Borrower, which will be assigned to the Lender pursuant to the Series 2022B Assignment of Loan Agreement; (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 po wers; (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 Series 2022B Loan Agreement and the revenues and assets thereunder, which will be pledged to the Lender; and (v) shall not constitute a general or moral obligation of the City. 5.05. The City acknowledges, finds, determines, and declares that the issuance of the Series 2022B Note is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Series 2022B Note, and the other actions of the City under the Series 2022B Loan Agreement, the Series 2022B Assignment of Loan Agreement, and this resolution constitute a public purpose and are in the interests of the City. In auth orizing the issuance of the Series 2022B Note to finance 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 individuals and families of low or moderate income and otherwise furthering the purposes and policies of the Act. DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 5 5.06. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Series 2022B Note. 5.07. The Series 2022B Note 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 the Series 2022B Note now on file with the City, with the amendments referenced herein. The City hereby authorizes the Series 2022B Note to be issued, in whole or in part, as a “tax-exempt obligation,” the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. 5.08. All of the provisions of the Series 2022B Note, 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 Series 2022B Note 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 Series 2022B Note, the stated maturities of the Series 2022B Note, the interest rates on the Series 2022B Note and the terms of redemption of the Series 2022B Note) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Series 2022B Note with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Series 2022B Note by the City shall be conclusive evidence of such determination. 5.09. The Series 2022B Note shall be a special, limited obligation of the City payable solely from the revenues provided by the Borrower pursuant to the Series 2022B Loan Agreement, including revenues derived from the Project. The City Council hereby authorizes and directs the Mayor and the City Manager to execute the Series 2022B Note in accordance with the terms thereof. 5.10. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Series 2022B Loan Agreement and the Series 2022B Assignment of Loan Agreement. All of the provisions of the Series 2022B Loan Agreement and the Series 2022B Assignment of 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 Series 2022B Loan Agreement and the Series 2022B Assignment of Loan 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. 5.11. Based on a final determination of security required for the Borrower’s repayment obligations with respect to the Notes, the Borrower may determine that only one series of Notes is necessary. If such a determination is made, the Series 2022B Note will not be issued by the City. DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 6 Section 6. Agreements Applicable to the Notes. 6.01. 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 (the “Regulatory Agreement”) between the City, the Borrower, and the Lender. 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. 6.02. To provide a portion of the financing for the Project, the City will consider making a loan to the Borrower in the estimated principal amount of $618,238 (the “Subordinate Loan”) from its Affordable Housing Trust Fund. Provided that the City Council approves the Subordinate Loan at a future City Council meeting, t he Mayor and the City Manager are hereby authorized to execute and deliver, on behalf of the City, a subordination agreement (the “Subordination Agreement”) between the Lender, the City, as the issuer of the Bonds, the City, as the lender of the Subordinate Loan, any additional subordinate lenders, and the Borrower. All of the provisions of the Subordination 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 Subordination Agreement is hereby approved, subject to final review and approval by City staff and legal counsel. 6.03. The Mayor, the City Manager, and the Finance Director of the City 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 Notes, including the Series 2022A Mortgage Assignment, the Series 2022B Mortgage Assignment, various certificates of the City, an Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038, an endorsement of the City to the tax certificate of the Borrower, and similar documents, additional subordination agreements, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Notes. 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 Notes. 6.04. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Series 2022A Loan Agreement and the Series 2022B Loan Agreement and for payment of the Notes, including the Series 2022A Mortgage, Series 2022B Mortgage, one or more guaranties, or any other security agreed upon by the Borrower and the Lender, and the City hereby approves the execution and delivery of such security. DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 7 Section 7. Additional Findings and Certifications. 7.01. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exe rcised or performed by the City or by such members of the City 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 City Council, or any officer, agent or employee of the City in that person’s individual capacity, and neither the City Council nor any officer or employee executing the Notes shall be personally liable on the Notes 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 Notes, or in any other document relating to the Notes, 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 rev enues, other than funds and revenues derived from the Series 2022A Loan Agreement and the Series 2022B Loan Agreement which are to be applied to the payment of the Notes, as provided therein. 7.02. Except 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 Note s 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 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 Notes issued under the provisions of this resolution. 7.03. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Sections 4.09 and 5.09 hereof, or of the aforementioned documents, or of the Notes 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 Notes, but this resolution, the aforementioned documents, and the Notes shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 7.04. The Notes, 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 Notes 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 Notes, and to the execution of the aforementioned documents to happen, exist, DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5 Resolution No. 22-079 8 and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 7.05. 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 Notes, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Notes, 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 City 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. 7.06. 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 pa yment of, any and all costs incurred by the City in connection with the Project and the issuance of the Notes, whether or not the Notes are issued, including any costs for reasonable attorneys’ fees. Section 8. Effective Date. This resolution shall be in full force and effect from and after its approval. The approvals contained in the resolution are effective for one year after the date hereof. Reviewed for Administration: Adopted by the City Council May 16, 2022 Kim Keller, city manager Jake Spano, mayor Attest: Melissa Kennedy, city clerk DocuSign Envelope ID: 8EBAFC20-E7E2-4807-A0D2-C51D8456BAC5