HomeMy WebLinkAbout16-165 - ADMIN Resolution - City Council - 2016/12/19RESOLUTION NO. 16-165
RESOLUTION PROVIDING PRELIMINARY APPROVAL TO THE
ISSUANCE OF 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 or refinance multifamily housing developments.
1.02. PLACE, a Minnesota nonprofit corporation, an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and a publicly
supported charity, has proposed the acquisition, construction, and equipping of a mixed-use,
mixed -income, transit -oriented development on property located at 5725, 5925, and 5815 Highway 7,
3565 and 3575 Wooddale Avenue, 5814 and 5816 361h Street, 3520 Yosemite Avenue, and the western
portion of 3548 Xenwood Avenue in the City to include 300 apartments, affordable and market rate,
space for local businesses, a hotel, an e -generation facility, and live/work space designed for creatives
(collectively, the "Project').
1.03. PLACE is requesting that the City issue revenue obligations, in one or more series, as
taxable or tax-exempt obligations (the "Bonds"), in the approximate principal amount of $55,000,000,
in order to finance a portion of the Project. The Bonds are expected to be issued for the benefit of
PLACE, or any one or more affiliates thereof (collectively, the "Borrower"), as multifamily housing
revenue bonds under the Housing Act to finance the portion of the Project constituting the affordable
multifamily housing development (the "Housing Project').
1.04. Under 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 Housing Project
and authorize 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 Housing 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 finance the Housing Project, finance
capitalized interest during the construction of the Housing 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
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the Borrower to pay all costs of maintaining and insuring the Housing Project, including taxes
thereon.
(c) In preliminarily authorizing the issuance of the Bonds, the City's purpose is to
further the 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 $55,000,000 pursuant to Section 146
of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. The
Mayor of the City, the City Manager, the Chief Financial Officer of the City, and Kennedy & Graven,
Chartered, acting as Bond Counsel to the City, 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. Preliminary Approval. The City Council hereby provides preliminary approval
to the issuance of the Bonds in the estimated principal amount not to exceed $55,000,000, 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; and (iii) final determination by the City Council that
the financing of the Housing Project and the issuance of the Bonds are in the best interests of the City.
Section 5. Reimbursement of Costs under the Code.
5.01. 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 expenditure 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.
5.02. To the extent any portion of the proceeds of the Bonds will be applied to expenditures
with respect to the Housing Project, the City reasonably expects to reimburse the Borrower for the
expenditures made for costs of the Housing 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 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 1.150-20)(2)(i)(B) of the Regulations,
(iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2)
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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 the Housing 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.
5.03. 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 Housing Project to be financed from proceeds of the Bonds, other
than pursuant to the issuance of the Bonds. This 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 6. 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 issuance of the Bonds, whether or not the Bonds are issued.
Section 7. 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 4 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.
its
8. Effective Date. This resolution shall be in full force and effect from and after
for
Thomas K. �iaifhening, City Manager
Attest:
Meli sa Kenne ,—Ci' Clerk
the City Council December 19, 2016