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HomeMy WebLinkAboutResolution 80-81I:}.~S;OLUTION NO. 80-81 A RESOLUTION OF THE CITY OF COLUMBIA HEIGHTS, MIN- NESOTA (THE ';CITY"), AUTHORIZING THE ISSUANCE OF ITS HOUSING DEVELOPMENT REVENUE BONDS (LA BELLE PARK CONDOMINIUMS PROJECT), SERIES 1980 (THE "BONDS"), IN THE AGGREGATE PRINCIPAL AMOUNT OF $9,000,000. WHICH BONDS AND THE INTEREST THEREON SHALL BE PAYABLE SOLELY FROM THE REVENUES DERIVED BY CITY FROM THE LOAN AGREEMENT, THE LETTER OF CREDIT, OR THE PROCEEDS FROM THE SALE OF THE BONDS OR THE EARNINGS FROM THE INVESTMENT OF SUCH PROCEEDS; PRESCRIBING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE INDENTURE OF TRUST, THE LOAN AGREEMENT, THE LETTER OF CREDIT' AGREEMENT, THE INDUCEMENT LETTER, THE FIN- ANCING STATEMENT, AND THE BOND PURCHASE AGREEMENT; APPROVING THE FORM OF THE INVESTMENT AGREEMENT, THE MORTGAGE AND THE LETTER OF CREDIT; APPROVING THE FORM OF AND AUTHORIZING EXECUTION OF THE OFFICIAL STATEMENT; AUTHORIZING THE EXECUTION AND SALE OF THE BONDS AND DIRECTING DELIVERY THEREOF; AND PROVIDING FOR THE SECURITY, RIGHTS AND REMEDIES OF THE HOLDERS OF SAID BONDS. WHEREAS, the Minnesota Legislature has enacted Laws 1980, Chapter 306, as codified in Minnesota Statutes, Chapter 462C (the Act), under which the City of Columbia Heights (the "City") is authorized to establish a housing plan ("Housing Plan") for financing multifamily housing developments ("Housing Developments") by the issuance of revenue bonds; and WHEREAS, in enacting the Act, the Legislature determined that provision, ' maintenance and preservation of an adequate housing stock in conjunction with the removal of blight within redevelopment projects is necessary to preservation of the quality of life in a metropolitan city and is therefore a public purpose; and WHEREAS, Gaughan Land Incorporated (the "Developer"), has indicated an interest and desire to acquire land in the Downtown C.B.D. Revitalization Project Area in the City, and to construct and equip thereon 132 living units under condominium ownership and facilities related thereto (the "Project"), and the Project, as proposed, is to be planned and completed as part of the Housing Program in accordance with the Act; and WHEREAS, the City has been advised by representatives of the Developer that conventional, commercial financing to pay the capital cost of the Project has not been obtained, is available only on a limited basis and is not available upon terms and conditions which are affordable by the Developer so that the economic feasibility of acquiring, constructing, equipping and operating the Project would be significantly impaired; however, the Developer has also advised the City that the use of municipal financing and the lower borrowing cost resudting therefrom will materially increase the economic feasibility of the Project and will constitute a substantial inducement to the Developer to undertake the Project; and WHEREAS, the Develope~ l~as proposed that the City issue and sell its' Housing Development ReYenue Bonds (La Belle Park Condominiums Project), Series 1980 (the ~Bonds') pursuant to the Act and other applicable laws for the purpose of financing the Project, including certain incidental expenses thereto, in the aggre- gate principal amount of $9,000,000 and loan the proceeds realized upon the sale of the Bonds to the Developer, pursuant to a loan agreement between the City and the Developer (the "Loan Agreement"), wherein the Developer will be obligated to acquire, to construct and equip the Project, to apply the proceeds of the Bonds solely to the payment of costs therof, and to make payments under the Loan Agreement at the time and in the amounts sufficient to provide for the prompt payment of principal of and interest on the Bonds and all costs and expenses of the City incidental to the issuance and sale of the Bonds; the proposal further provides that interest on the Bonds will be payable from a portion of the proceeds from the sale of the Bonds and the payment of the principal amount of the Bonds when due will be secured by a letter of credit (the "Letter of Credit") issued by the First National Bank of Saint Paul (the "Bank"); and WHEREAS, the Project is located within the Downtown C.B.D. Revitaliza- tion Project Area and is consistent with and will forward the public purposes of the City in creating the Downtown C.B.D. Revitalization Project Area; and WHEREAS, the City has created and adopted a Housing Plan (the ~Housing Plan"), forwarded the Housing Plan to the Metropolitan Council for its review and' comment, and has received and considered said comments; and WHEREAS, the City has created and adopted a Housing Program (the "Housing Program"), forwarded the Housing Program to the Minnesota Housing .Finance Agency (the "Agency") for review and approval, and has received said approval from t. he Agency; and WHEREAS, the undertaking of the Project has been considered by the Housing and .Redevelopment Authority in and for the City of Columbia Heights (the ."Authority") and the Authority has transmitted and recommended the proposal for financing the Project for review and consideration by the Council; and WHEREAS, the Council has been advised that the Bonds may be sold on terms and ~onditions satisfactory to the City and the Develo. per; and WHEREAS; neither the City nor .the State of Minnesota or any political subdivision thereof shall be liable on the Bonds, and the Bonds shall not be a debt of the City, the State of Minnesota or any political subdivision thereof nor shall give rise to a charge against the general credit or taxing power of the City, the State of Minnesota or any political subdivision thereof (including without limitation the Authority), nor shall be payable out of any funds or properties other than those of the City provided as security by the Indenture; NOW, THEREFORE,. be it resolved by the City Council of the City. of Columbia Heights, Minnesota, Section I. That the City Council of the City acknowledges, finds, deter- mines and declares that the preservation of the quality of life in the City is dependent upon the maintenance, provision and preservation of an adequate housing stock, that accomplishing this is a public purpose, and that the Project is not economically feasible under conventional financing at the present time. Section 2. That the City Council of the City further finds, determines and declares that the purpose of the Housing Program is to finance the acquisition and construction of the Project in order to increase the amount of quality family housing in the City and to assist in the revitalization of a deteriorated area of the City. Section 3. That for the purpose of financing the acquisition and construc- tion of the Project there is hereby authorized the issuance of $9,000,000 City of Columbia Heights, Minnesota, Housing Development Revenue Bonds (La Belle Park Condominiums Project), Series 1980 (the "Bonds"). The Bonds shall bear interest at such rates, shall be in such denomination, shall be numbered, shall be .dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form and shall have such other details and provisions as are prescribed by the Indenture. Section 4. That the Bonds shall be special obligations of the City payable solely from the revenues derived from the Loan Agreement, a portion of the proceeds of the Bonds and revenues derived from the Letter of Credit, all in the manner provided in the Indenture of Trust (as hereinafter defined). The City Council of the City hereby authorizes and directs the Mayor (the "Mayor") and the City Manager of the City (the "City Manager") to execute the Indenture of Trust by and. between the City and First Trust Company of Saint Paul, Saint Paul, Minnesota, as Trustee (the "Trustee") and to deliver to said Trustee the Indenture of Trust, and does hereby authorize and direct the execution of the Bonds in accordance with the Indenture of Trust, and does hereby provide that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties and 'agreements of the bondholders, the City and the Trustee as set forth therein. All of the provisions of the Indenture of Trust, 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 Indenture of Trust shall be substantially in the form before the City Council on this date, .which is hereby approved, with such necessary and appropriate variations, omissions and insertions as are not materially inconsistent with the form annexed hereto and as the M. ayor and the City Manager in their discretion, shall determine; provided that the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. Section 5. That the Mayor' and the City Manager are hereby authorized and directed to execute the Bond Purchase Agreement (the "Bond Purchase Agree- ment'') from Miller & Schroeder Municipals, Inc. (the "Underwriter"). Ail of the Provisions of the Bond Purchase 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 Bond Purchase Agreement shall be substantially in the form before the City Council 'on this date, which is hereby approved, with such necessary and appropriate variations, omissions and insertions as are not materially inconsistent with the form annexed hereto and as the Mayor and the City Manager in their discretion, shall determine; provided that the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. Section 6. That the Mayor and the City Manager are hereby authorized and directed tO execute the Loan Agreement, the Letter of Credit Agreement by and among the City, the Developer, the Trustee, and the Bank (the "Letter of Credit Agreement"), the Inducement Letter to be executed by the City, the Developer and the Underwriter (the "Inducement Letter"), and the Financing Statement. All of the provisions of the Loan Agreement, Letter of Credit Agreement, Inducement Letter and Financing Statement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolut, ion 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, Letter of Credit Agreement, Inducement Letter and the Financing Statement shall be substantially in the form before the City Council on this date, which are hereby approved, with such necessary and appropriate variations, omissions and insertions as are not materially inconsistent with the form annexed hereto and as the Mayor and the City Manager in their discretion, shall determine; provided that the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. Section 7. That the Investment Agreement by and between the Bank and the Trustee (the "Investment Agreement"), the Statutory Mortgage, Assignment of Leases and Rents and Security Agreement by and between the Developer and the Bank (the "Mortgage") and the form of the Letter of Credit to be issued by the Bank are hereby approved in the form before the City Council on this date, with such necessary and appropriate variations, omissions and insertions as are not materially inconsistent with this resolution. Sec'tion 8. That all covenants, stipulations, obligations and agreements of the City contained in this resolution or contained in the Indenture of Trust shall be deemed to be the covenants, stipulations, obligations and agreements of the City to 'the fu1l extent authorized or permitted by law, and all such covenants, stipulations, Obligations and agreements shall be binding upon the City. Except as otherwise pro. vi. deal in this resolution, all rights, powers and privileges conferred and duties ana liabilities imposed upon the City, the Mayor, or the City Manager by the provisions of this resolution or of the Indenture of Trust shall be exercised or .performed by the City, Mayor, or City Manager or by such officers, board, body or agency as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or a~reement herein contained or contained in the Indenture of Trust shall be deemed to be a covenant, stipulation, obligation or agreement of any office, agent or employee of the City in that person's individual .capacity, and neither the members of the City Council of the City nor any officer or employee executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Section 9. That except as herein otherwise expressly provided, nothing in this resolution or in the Indenture of Trust expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation other than the City, the holders of the Bonds issued under the provisions of this resolution and the Indenture of Trust, the Trustee and the Developer, any. right, remedy or claim, legal or equitable, under and by reason of this resolution or any provision hereof or of the Indenture of Trust or any provision thereof, this resolution, the Indenture of Trust and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, the holders from time to time of the Bonds issued under the provisions of this resolution and the Indenture of Trust, and the Developer.. Section 10. That in case any one or more of the provisions of this resolution or of the Indenture of Trust or of the Bonds issued hereunder shall for any reason be held to by illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution or of the Indenture of Trust or of the Bonds, but this resolution, the Indenture of Trust and the Bonds shall be construed as if such illegal or invalid provision had not been contained therein. The terms and conditions set forth in the Indenture of Trust, the pledge of revenues derived from the Loan Agreement, the pledge of collateral derived from the Loan Agreement, the creation of the funds provided for in the Indenture of Trust, the provisions relating to the handling of the proceeds derived from the sale of the Bonds pursuant to and under the Indenture of Trust and the handling of said revenues, collateral and other monies are all commitments, obligations and agreements on the part of the City contained in the Indenture of Trust, and the invalidity of the Indenture of Trust'shall not affect the commitments, obligations and agreements on the part of the City to create such funds and to handle said revenues, other monies and proceeds of the Bonds for the purposes, in the manner and according to the terms and conditions fixed in the Indenture of Trust, it being the intention hereof that such commitments on the part of the City are as binding as if contained in this resolution separate and apart from the Indenture of Trust. Section 11. 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 Bonds and to the execution of the Indenture of Trust to happen, exist and be performed precedent to and in the enactment of this resolution, and precedent to the issuance of the Bonds and precedent to the execution of the Indenture of Trust · have happened, exist and have been perform ed as so required by law. Section 12. That the members of the City Council of the City, officers of the City, attorneys 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 and the Indenture of Trust for the full, punctual and complete perfor- mance of all the terms, 'covenants and agreements contained in the Bonds, the Indenture of Trust and this resolution. Sec{ion 13. That the City hereby approves the form. and authorizes the use by the Underwriter in connection with the sale of the Bonds of the Official Statement, and hereby authorizes and directs the Mayor to execute and deliver copies thereof to Miller & Schroeder Municipals, Inc.; provided that the Mayor may approve such variations, omissions and insertions as are not materially inconsistent with the form before the City Council on this date. The Official Statement is the sole material authorized by the C!ty for use in connection with the offer and sale of the Bonds. Section 14. That the Trustee is hereby appointed as Paying Agent and Bond Registrar for the Bonds. Section 15. That the Mayor, City Manager and ClerkLTreasurer of the City are hereby designated and authorized to execute such documents and to take such other administrative action as is permitted or required by the Indenture of Trust and the Loan Agreement. Section 16. after i(s passage. That this resolution shall be in full force and effect from and PASSED AND APPROVED this 29th day of December, Mayor ATTEST ' Clerk Offered by: Seconded by: 'Ro11 Call: Hentges Helntz Heintz, Hentges, Norberg--abstain Nawrocki--aye