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HomeMy WebLinkAbout17-073 - ADMIN Resolution - City Council - 2017/04/17RESOLUTION NO. 17-073 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF MULTIFAMILY HOUSING REVENUE OBLIGATIONS FOR THE BENEFIT OF VIA AFFORDABLE LIVING LIMITED PARTNERSHIP; AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO; ADOPTING A HOUSING PROGRAM; AND TAKING CERTAIN OTHER ACTIONS 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. The City is a home rule city duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota. 1.02. 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. 1.03. PLACE, a Minnesota nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), 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 36`h Street, 3520 Yosemite Avenue, and the western portion of 3548 Xenwood Avenue in the City. The proposed development includes approximately 299 apartments (200 affordable and 99 market rate), space for local businesses, a hotel, an e -generation facility, and live/work space designed for creatives (collectively, the "Project"). 1.04. Via Affordable Living Limited Partnership, whose general partner is PLACE E -Generation One LLC, a Delaware limited liability nonprofit company registered to do business in Minnesota, Via Apartments, LLC and/or another affiliate of PLACE (collectively, the "Borrower") are requesting that the City issue multifamily housing revenue bonds as tax-exempt obligations (the "Bonds") pursuant to the Act, in the maximum aggregate principal amount of $27,185,503, for the benefit of the Borrower, in order to (i) finance all or a portion of the costs of the acquisition, construction, and equipping of the approximately 299 apartments to be included in the Project (the "Housing Project'); (ii) finance capitalized interest during the construction of the Housing Project, if needed; (iii) fund required reserves, if any; and (iv) pay costs of issuance of the Bonds. The Housing Project will be owned and operated by the Borrower. 1.05. Asa condition to the issuance of the Bonds, the City must adopt a housing program providing the information required by Section 462C.03, subdivision la of the Act (the "Housing Program"). The Housing Program was prepared and submitted to Metropolitan Council for its review and comment. 1.06. Under Section 147(f) of the Code, prior to the issuance of the Bonds, the City Council must conduct a public hearing after one publication of notice in a newspaper circulating generally in the City at least fourteen (14) days before the hearing. Under Section 462C.04, subdivision 2 of the Act, a public hearing must be held on the housing program after one publication of notice in a newspaper circulating generally in the City at least fifteen (15) days before the hearing. Resolution No. 17-073 2 1.07. On the date hereof, the City Council conducted a public hearing on the Housing Program and the issuance of revenue obligations to finance the Housing Project and pay other costs. Notice of the hearing (the "Public Notice") was published as required by Section 462C.04, subdivision 2 of the Act and Section 147(f) of the Code. The Public Notice was published in the Sun Sailor, the official newspaper of and a newspaper circulating generally in the City, on March 30, 2017, a date at least fifteen (15) days before a meeting of the City Council on the date hereof. At the public hearing, a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the Housing Program and the proposed issuance of the revenue obligations. 1.08. On January 23, 2017, the City received Certificate of Allocation No. 299 from Minnesota Management & Budget allocating bonding authority to the City in the amount of $27,185,503, pursuant to Minnesota Statutes, Chapter 474A (the "Allocation Act'). In accordance with Allocation Act, the Bonds must be issued within one hundred twenty (120) days of the allocation award date (the "Allocation Expiration Date"). 1.09. The Bonds are expected to be secured by a mortgage, tax credit investor contributions, and/or other security. The financing approvals necessary to issue the Bonds will not be complete prior to the Allocation Expiration Date. 1.10. In order to provide short-term financing for the Housing Project, the Borrower has requested that the City issue its Multifamily Housing Revenue Note (PLACE St. Louis Park Multifamily Housing Project), Series 2017 (the "Note"), in one or more series, in the maximum principal amount of $27,185,503. The Borrower has further proposed that a commercial lender selected by the Borrower (the "Purchaser") purchase the Note. 1.11. The Note is expected to be issued on a short-term basis. The Bonds are proposed to be issued as permanent financing for the Housing Project within one year of the issuance of the Note, at which time proceeds of the Bonds will refund the Note and finance the remaining costs of the Housing Project. 1.12. With respect to the Note, there have been presented before the City Council (i) a form of Loan Agreement (the "Loan Agreement') proposed to be entered into between the City and the Borrower, pursuant to which the City will loan the proceeds of the Note to the Borrower; (ii) a form of Pledge Agreement (the "Pledge Agreement') proposed to be entered into between the City and the Purchaser, pursuant to which the City will assign the repayments to be made under the Loan Agreement to the Purchaser; (iii) a form of the Note; (iv) a form of Regulatory Agreement (the "Regulatory Agreement') proposed to be entered into between the City, the Borrower, and the Purchaser 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; and (v) a form of Disbursing Agreement (the "Disbursing Agreement') proposed to be entered into between the Borrower and the Purchaser. Section 2. The Housing Program. The Housing Program, in the form substantially on file with the City, is hereby approved. Resolution No. 17-073 Section 3. The Note. 3.01. The Borrower has requested that the City issue, sell, and deliver the Note, in one or more series, in the maximum principal amount of $27,185,503, to the Purchaser for the purposes of financing the Housing Project and paying costs of issuance of the Note. 3.02. The proceeds derived from the sale of the Note will be loaned by the City to the Borrower pursuant to the terms of the Loan Agreement. 3.03. The Note and the interest on the Note (i) shall be payable solely from the revenues pledged therefor under the Loan Agreement and additional sources of revenue provided by or on behalf of the Borrower; (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 (v) shall not constitute a general or moral obligation of the City. 3.04. The loan repayments to be made by the Borrower under the Loan Agreement will be fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Note when due. Such loan repayments will be assigned to the Purchaser under the terms of the Pledge Agreement. 3.05. The City acknowledges, finds, determines, and declares that the issuance of the Note is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Note, and the other actions of the City under the Loan Agreement, the Pledge Agreement, and this resolution constitute a public purpose and are in the interests of the City. In authorizing the issuance of the Note for the financing of the Housing 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 low or moderate income residents of the City and otherwise furthering the purposes and policies of the Act. 3.06. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Note in the maximum aggregate principal of $27,185,503. The Note shall bear interest at the rate or 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 Note, substantially in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes all or a portion of the Note to be issued as a "tax-exempt bond," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the 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 Note shall be substantially in the form now 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 Note, the stated maturity of the Note, the interest rate or rates on the Note and the terms of redemption of the Note) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Note with the manual or facsimile signatures of the Mayor Resolution No. 17-073 4 and the City Manager and the delivery of the Note by the City shall be conclusive evidence of such determination. 3.07. The Note shall be a special, limited obligation of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement and other funds pledged to the payment of the Note. The City Council hereby authorizes and directs the Mayor and the City Manager to execute the Note in accordance with the terms thereof. 3.08. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Loan Agreement, the Pledge Agreement, and the Regulatory Agreement. All of the provisions of the Loan Agreement, the Pledge Agreement, and 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 Loan Agreement, the Pledge Agreement, and the Regulatory 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. 3.09. The Mayor, the City Manager, and the Chief Financial Officer 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 Note, including various certificates of the City, an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038 (Rev. April 2011), an endorsement of the City to the tax certificate of the Borrower, and similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Note. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel (`Bond Counsel'), to prepare, execute, and deliver its approving legal opinion with respect to the Note. 3.10. The Chief Financial Officer of the City is appointed note registrar and paying agent for the Note. 3.11. The City Council authorizes the execution and delivery of the Disbursing Agreement by the Borrower and the Purchaser and authorizes the disbursement of the proceeds of the Note pursuant to the Disbursing Agreement or any other agreement providing for the disbursement of proceeds of the Note. The Purchaser is authorized to accept the Pledge Agreement in order to secure payment of the Note and is hereby authorized to take all actions necessary or appropriate under the terms of the Pledge Agreement to ensure timely payment of the principal of, premium, if any, and interest on the Note. 3.12. The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Loan Agreement and for payment of the Note, including but not limited to one or more guaranties or any other security agreed upon by the Borrower and the Purchaser, and the City hereby approves the execution and delivery of such security by the parties thereto. Section 4. Additional Findines and Certifications. 4.01. 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 Resolution No. 17-073 5 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 Note shall be personally liable on the 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 Note, or in any other document relating to the 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 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 Note, as provided therein. 4.02. 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 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 Note issued under the provisions of this resolution. 4.03. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 3.07 hereof, or of the aforementioned documents, or of the 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 Note, but this resolution, the aforementioned documents, and the Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 4.04. The Note, when executed and delivered, shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Note 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 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. 4.05. 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 Note, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Note, 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 Resolution No. 17-073 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. 4.06. The Borrower shall pay the administrative fee of the City as set forth in the Loan Agreement. 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 Housing Project and the issuance of the Note, whether or not the Note is issued, including any costs for attorneys' fees. Section 5. Effective Date. This resolution shall be in full force and effect from and after itnpproval. The approvals contained in the resolution are effective for one year after the date hkre4f. for Manager Attest: Mehss Kenned , City Uerk by the City Council April 17, 2017