Loading...
HomeMy WebLinkAbout16-096 - ADMIN Resolution - City Council - 2016/08/15RESOLUTION NO. 16-096 RESOLUTION ACKNOWLEDGING THE ISSUANCE OF A SUBSTITUTE CONFIRMING LETTER OF CREDIT TO SECURE THE CITY'S SUBORDINATE VARIABLE RATE DEMAND MULTIFAMILY HOUSING REFUNDING REVENUE BONDS (URBAN PARK APARTMENTS PROJECT), SERIES 2010B, AND APPROVING AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATED THERETO WHEREAS, the City of St. Louis Park, Minnesota (the "City") is a home rule charter city duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), a resolution adopted by the City Council of the City on September 20, 2010 (the "Bond Resolution"), and a Trust Indenture, dated as of September 1, 2010 (the "Original Indenture"), between the City and Wells Fargo Bank, National Association, as trustee (the "Trustee"), the City issued its Subordinate Variable Rate Demand Multifamily Housing Refunding Revenue Bonds (Urban Park Apartments Project), Series 2010B (the "Series 2010B Bonds"), in the original aggregate principal amount of $1,500,000, forthe benefit of West Suburban Housing Partners VII Limited Partnership, a Minnesota limited partnership (the `Borrower"); and WHEREAS, pursuant to the terms of a Financing Agreement, dated as of September 1, 2010 (the "Original Financing Agreement"), between the City and the Borrower, the City loaned the proceeds of the Bonds to the Borrower for the purpose of redeeming and prepaying a portion of the Variable Rate Demand Multifamily Housing Revenue Bonds (At the Park Project), Series 2002A (the "Prior Bonds"), issued by the City in the original aggregate principal amount of $9,560,000; and WHEREAS, the proceeds of the Prior Bonds were used to finance the acquisition, construction, and equipping of a 90 -unit multifamily rental housing development now known as "Urban Park" at located at 3601 Phillips Parkway in the City (the "Project"); and WHEREAS, pursuant to the terms of a Reimbursement Agreement, dated as of September 1, 2010 (the "Reimbursement Agreement"), between the Borrower and Crown Bank, a Minnesota banking corporation (the "Bank"), the Bank issued its direct -pay Irrevocable Letter of Credit No. 4990177 (the "Letter of Credit") for the benefit of the Trustee in order to secure the Borrower's repayment obligations under the Original Financing Agreement; and WHEREAS, in conjunction with the issuance of the Original Letter of Credit, pursuant to a Confirming Letter of Credit Reimbursement Agreement, dated September 28, 2010 (the "Initial Confirming Letter of Credit Reimbursement Agreement"), between the Bank and the Federal Home Loan Bank of Des Moines (the "Initial Confirming Bank"), the Initial Confirming Bank issued its Irrevocable Confirming Letter of Credit No. 2492-6 (the "Initial Confirming Letter of Credit"), which was delivered to the Trustee and could be drawn upon by the Trustee in the event that the Letter of Credit is wrongfully terminated, repudiated, or dishonored; and WHEREAS, the Initial Confirming Letter of Credit expires on September 30, 2016 and will not be renewed by the Initial Confirming Bank; and WHEREAS, the Borrower has arranged for a new confirming letter of credit to be issued by U.S. Bank National Association, a national banking association (the "Confirming Bank"), as a Resolution No. 16-096 -2- substitute Irrevocable Confirming Letter of Credit (the "Substitute Confirming Letter of Credit") for the benefit of the Trustee to secure the Bank's obligations under the Letter of Credit; and WHEREAS, the Substitute Confirming Letter of Credit is proposed to be delivered by the Confirming Bank to the Trustee and become effective on or after September 1, 2016, pursuant to the terms of a Reimbursement Agreement or similar agreement (the "Confirming Letter of Credit Reimbursement Agreement"), between the Bank and the Confirming Bank; and WHEREAS, unless the holders of the Series 2010B Bonds provide a waiver, Section 4.2(1) of the Indenture requires a mandatory tender of all Series 2010B Bonds upon the expiration or termination of the Initial Confirming Letter of Credit; and WHEREAS, a supplement to the Official Statement, dated September 24, 2010, related to the Series 2010B Bonds, has been prepared and is proposed to be distributed in connection with the Confirming Bank's issuance of the Substitute Confirming Letter of Credit and to provide for the remarketing of the Series 2010B Bonds in the event that the holders of the Series 2010B Bonds do not waive the mandatory tender of the Series 2010B Bonds; and WHEREAS, in conjunction with the delivery of the Substitute Confirming Letter of Credit, the City, as issuer of the Series 2010B Bonds, must approve certain actions of the parties and execute various document amendments to incorporate the terms of the Substitute Confirming Letter of Credit into the documents related to the Series 2010B Bonds; and WHEREAS, there have been presented before this City Council a form of First Supplemental Trust Indenture (the "First Supplemental Indenture") proposed to be entered into by the City and the Trustee and consented to by the Bank, which supplements and amends the Original Indenture (as so supplemented and amended, the "Indenture"), and a First Amendment to Financing Agreement (the "First Amendment to Financing Agreement") proposed to be entered into between the City and the Borrower and consented to by the Trustee and the Bank, which amends and supplements the Original Financing Agreement (as so amended and supplemented, the "Financing Agreement"), which incorporate, among other things, the proposed terms of the Substitute Confirming Letter of Credit; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota: 1. The City Council acknowledges the issuance of the Substitute Confirming Letter of Credit by the Confirming Bank to be delivered to the Trustee to secure the Bank's obligations under the Letter of Credit. 2. The City Council hereby approves the First Supplemental Indenture and the First Amendment to Financing Agreement substantially in the forms on file with the City on the date hereof, which are hereby approved, with such changes as shall be approved by the City Manager and Kennedy & Graven, Chartered, as bond counsel to the City ("Bond Counsel"); provided that the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such approval. 3. The Mayor and the City Manager are hereby designated as the representatives of the City with respect to the Substitute Confirming Letter of Credit transaction. The Mayor, the City Manager, and other officers of the City are authorized and directed to execute and deliver any Resolution No. 16-096 -3- and all certificates, agreements, or other documents which are required by the Original Indenture, or any other agreements, certificates or documents which are deemed necessary by Bond Counsel [ to complete the Substitute Confirming Letter of Credit transaction or to evidence compliance with applicable provisions of the Internal Revenue Code of 1986, as amended, and any applicable Treasury Regulations promulgated thereunder. In the event that for any reason the Mayor is unable to carry out the execution of any of the documents or other acts provided herein, any other member of the City Council of the City shall be authorized to act in his or her capacity and undertake such execution or acts on behalf of the City with full force and effect, which execution or acts shall be valid and binding on the City. If for any reason the City Manager is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by a member of the City Council, with the same force and effect as if such documents were executed and delivered by the City Manager. All such agreements or representations when made shall be deemed to be agreements or representations, as the case may be, of the City. 4. The City has not participated in the preparation of the supplement to the Official Statement (the "Official Statement Supplement") and has made no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information. Subject to the foregoing, the City hereby consents to the distribution and the use by Dougherty & Company LLC of the Official Statement Supplement in connection with the issuance of the Substitute Letter of Credit by the Confirming Bank and, if deemed necessary, to remarket the Series 2010B Bonds. 5. As originally stated in the Bond Resolution, the Series 2010B Bonds are special, Q limited obligations of the City payable solely from the revenues of the Project. The principal of, premium, if any, and interest on the Series 2010B Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the City within the meaning of any constitutional, statutory, or Charter limitation nor give rise to a pecuniary liability of the City or a charge against its general credit or assets and 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 Project. The Bonds are not general or moral obligations of the City and are not secured by any taxing power of the City. This resolution shall be in full force and effect from and after its passage. by the City Council of the City of St. Louis Park, Minnesota, on this 15`h day of August, 20,16. fo dministration: A ted by the City Council August 15, 2016 K. AYJqnenir1gGe Manager J ce Spane, ayor ` �Attest: Melis a Kennedy, City Clerk