Loading...
HomeMy WebLinkAbout22-174 - ADMIN Resolution - City Council - 2022/11/07 (2)Resolution No. 22-174 Resolution authorizing the issuance of an additional multifamily housing revenue note for the benefit of St. Louis Park AH I, LLLP; approving an amended and restated 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 “Housing Act”), the City is authorized to carry out the public purposes described in the Housing Act by providing for the issuance of revenue obligations to provide funds to finance multifamily housing developments located within the City. 1.02. On December 6, 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 issuance by the City of one or more series of taxable or tax-exempt obligations (the “Notes”) in the approximate maximum principal amount of $19,200,000 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 purpose of financing all or a portion of the costs of the acquisition, construction, and equipping of an approximately 114-unit multifamily housing development for occupancy by persons of low and moderate income and facilities functionally related and subordinate thereto to be located at 3801 Wooddale Avenue South in the City (the “Project”), to be owned and operated by St. Louis Park AH I, LLLP, a Minnesota limited liability limited partnership and an affiliate of Real Estate Equities, LLC (the “Borrower”). 1.03. On January 11, 2022, the City received Certificate of Allocation No. 425 from the Minnesota Department of Management and Budget allocating bonding authority to the City in the amount of $17,490,550 from the State of Minnesota (the “State”), pursuant to the Allocation Act. 1.04. On June 7, 2022, the City of Mahtomedi, Minnesota authorized the reuse of bonding authority in the principal amount of $10,500,000 to provide additional financing for the Project in accordance with Section 146(i)(6) of the Internal Revenue Code of 1986, as amended (the “Code”), and Minnesota Statutes, Sections 471.59 and 471.656, as amended (the “Joint Powers Act”). 1.05. On July 6, 2022, the City issued one series of tax-exempt Notes (the “Series 2022 Note”) in the principal amount of $27,990,550 (including the recycled bonding authority), in accordance with a resolution adopted by the City Council on May 16, 2022, the Housing Act, and the Joint Powers Act, and loaned the proceeds thereto to the Borrower for the purposes of financing all or a portion of the (i) the acquisition, construction, and equipping of the Project; (ii) any required reserve funds; (iii) capitalized interest during the construction of the Project, if necessary; and (iv) costs of issuance. DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74 Resolution No. 22-174 2 1.06. The City loaned the proceeds of the Series 2022 Note to the Borrower pursuant to a Loan Agreement, dated as of July 1, 2022 (the “Original Loan Agreement”), between the City and the Borrower. The City assigned its rights to the loan repayments, basic payments, and certain other rights under the Original Loan Agreement to Cedar Rapids Bank and Trust Company, an Iowa banking corporation (the “Lender”), pursuant to the terms of an Assignment of Loan Agreement, dated as of July 1, 2022 (the “Original Assignment of Loan Agreement”), between the City and the Lender. The Borrower’s obligation to make loan repayments is secured, in part, by a Combination Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents, dated July 6, 2022 (the “Original Mortgage”), by the Borrower in favor of the City, as assigned by the City to the Lender. The City, the Borrower, and the Lender entered into a Regulatory Agreement, dated July 6, 2022 (the “Original Regulatory Agreement”), to ensure compliance with certain rental and occupancy restrictions imposed by the Housing Act and Section 142(d) of the Code and to ensure compliance with certain restrictions imposed by the City. 1.06. The Borrower has notified the City that the Borrower requires additional tax-exempt funds to construct the Project and has proposed that the City issue an additional series of tax-exempt Notes (the “Series 2022B Note”) in the approximate principal amount of $1,000,000 and loan the proceeds thereof to the Borrower. 1.07. On August 15, 2022, the City received Certificate of Allocation No. 435 from the Minnesota Department of Management and Budget allocating bonding authority to the City in the amount of $1,000,000 from the State, pursuant to the Allocation Act. 1.08. In accordance with the Housing Act, the City has prepared an amended and restated housing program (the “Housing Program”) to authorize the issuance by the City of the Series 2022 Note to provide additional financing for the Project, and the Housing Program was prepared and submitted to Metropolitan Council for its review and comment. 1.09. 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 Code and Section 462C.04, subdivision 2 of the Housing Act. 1.10. 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 Series 2022B Note at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing. 1.11. The Lender intends to purchase the Series 2022B Note. Section 2. The Housing Program. The Housing Program, in the form substantially on file .with the City, is hereby approved. Section 3. The Series 2022B Note. DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74 Resolution No. 22-174 3 3.01. The Borrower has requested that the City issue, sell, and deliver the Series 2022B Note in the estimated aggregate principal amount of $1,000,000 to provide additional financing for the Project. 3.02. 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 an Amended and Restated Loan Agreement (the “Loan Agreement”) between the City and the Borrower, which amends and restates the Original Loan Agreement. 3.03. The 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 Loan Agreement to the Lender pursuant to the terms of an Assignment of Amended and Restated Loan Agreement (the “Assignment of Loan Agreement”) between the City and the Lender, which amends and restates the Original Assignment of Loan Agreement. 3.04. As security for the repayment of principal of and interest on the Series 2022B Loan, the Borrower will execute and deliver to the City an Amended and Restated Combination Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents (the “Mortgage”), which amends and restates the Original Agreement, to be assigned by the City to the Lender pursuant to an Assignment of Amended and Restated Mortgage (the “Mortgage Assignment”). 3.05. The Series 2022B Note will be issued pursuant to this resolution and the Housing Act, and the Series 2022B Note and the interest thereon (i) shall be payable solely from the revenues pledged therefor under the 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 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 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 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. 3.06. The City acknowledges, finds, determines, and declares that the issuance of the Series 2022B Note is authorized by the Housing Act and is consistent with the purposes of the Housing Act and that the issuance of the Series 2022B Note, and the other actions of the Ci ty under the Loan Agreement, the 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 2022B Note to finance a portion 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 individuals and families of low or moderate income and otherwise furthering the purposes and policies of the Housing Act. DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74 Resolution No. 22-174 4 3.07. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Series 2022B Note. 3.08. 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. 3.09. 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 an d 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. 3.10. 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 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. 3.11. The Series 2022 Note and the Series 2022B Note shall be parity obligations under the Loan Agreement and any agreements providing security for the repayment of such obligations. Section 4. Agreements. 4.01. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Loan Agreement and the Assignment of Loan Agreement. All of the provisions of the Loan Agreement and the 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 Loan Agreement and the 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. 4.02. To ensure compliance with certain rental and occupancy restrictions imposed by the Housing Act and Section 142(d) of the Code, and to ensure compliance with certain DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74 Resolution No. 22-174 5 restrictions imposed by the City, the Mayor and City Manager are also hereby authorized and directed to execute and deliver an Amended and Restated Regulatory Agreement (the “Regulatory Agreement”) between the City, the Borrower, and the Lender, which amends and restates the Original Regulatory Agreement. 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. 4.03. 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 Series 2022B Note, including the 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 Series 2022B Note. 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 Series 2022B Note. 4.04. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Loan Agreement and for payment of the Series 2022B Note, including the 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. Section 5. Additional Findings and Certifications. 5.01. 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 exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency th ereof 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 Series 2022B Note shall be personally liable on the Series 2022B Note 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 Series 2022B Note, or in any other document relating to the Series 2022B Note, 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 DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74 Resolution No. 22-174 6 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 Loan Agreement which are to be applied to the payment of the Series 2022B Note, as provided therein. 5.02. 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 Series 2022B Note issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any pro visions 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 Series 2022B Note issued under the provisions of this resolution. 5.03. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 3.10 hereof, or of the aforementioned documents, or of the Series 2022B Note 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 Series 2022B Note, but this resolution, the aforementioned documents, and the Series 2022B Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 5.04. The Series 2022B Note, when executed and delivered, shall contain a recital that it is issued pursuant to the Housing Act, and such recital shall be conclusive evidence of the validity of the Series 2022B Note and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State relating to the adoption of this resolution, to the issuance of the Series 2022B Note, 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. 5.05. 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, a nd the Series 2022B Note, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Series 2022B Note, the aforementioned documents, and this resolution. If for any reason the Mayor or the City Manager i s 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. 5.06. 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 payment of, any and all costs incurred by the City in connection with the Project and the issuance of the DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74 Resolution No. 22-174 7 Series 2022B Note, whether or not the Series 2022B Note is issued, including any costs for reasonable attorneys’ fees. Section 6. 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 November 7, 2022 Kim Keller, city manager Jake Spano, mayor Attest: Melissa Kennedy, city clerk DocuSign Envelope ID: 91695294-2AA1-4E86-8FF2-F9554C99CF74