HomeMy WebLinkAboutOrdinance 917Ordinance No. 917
BEING AN ORDINANCE GIVING PRELIMINARY APPROVAL TO A
PROJECT AND AUTHORIZING THE ISSUANCE OF _HousING
DEVELOPMENT REVENUE BONDS THEREFOR UNDER MIN-
NESOTA STATUTES, CHAPTER 462C, AND AUTHORIZING THE
PREPARATION OF NECESSARY DOCUMI~NTS
The City of Columbia Heights does ordain:
Preamble
WHEREAS, the Minnesota Legislature has enacted Laws 1980, Chapter 306
as codified in Minnesota Statutes., Chapter 462C (the Act), under which the City is
authorized to establish a housing plan (Housing Plan) and program (Housing
Program) for financing 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 major metropolitan city and is therefore a public purpose; and
WHEREAS, Gaughan Land, Inc. (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 resulting 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 City has been advised by representatives of the Developer
that conventional, commercial financing is likely not to be available to the
potential purchasers of the condominium units on terms and conditions affordable
by them so that the economic feasibility of purchasing such units would be
significantly impaired, but that the use of municipal financing and the lower
borrowing cost resulting therefrom would make such units available on terms and
conditions affordable by them; and
WHEREAS, the Developer has proposed that the City issue and sell its
Housing Development Revenue Bonds (the Bonds) pursuant to the Act and other
applicable laws for the purpose of financing the Project, including certain
incidental expenses thereto, in the approximate principal amount of $9,000,000 and
loan the proceeds realized upon the sale of the Bonds to the Developer, pursuant to
a revenue agreement wherein the Developer will be obligated to acquire, to
construct and equip the Project, to issue Housing Development Revenue Bonds (the
Bonds) in the approximate amount of $9,000,000 to provide mortgage financing for
individual condominium purchasers, to apply the proceeds of the Bonds solely to the
payment of costs thereof and to make payment~ under the revenue 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
the Project will be mortgaged and a security interest therein granted and the City's
right and interest in the revenue agreement assigned for the benefit and security of
the holders from time to time of the Bonds; and
WHEP~EAS, the Project is located within the Downtown C.B.D. Revitali-
zation 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 full faith and credit of the City will not be pledged or
responsible for the Project or the payment of the principal of and interest on the
Bonds; 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 conditions satisfactory to the City and the Developer.
The City of Columbia Heights does ordain as follows:
1. The undertaking of the Project and the issuance of the Bonds
pursuant to the Act and other applicable laws in the approximate amount of
$9,000,000 to finance the costs thereof together with mortgage financing for
individual condominium purchasers in the approximate amount of $9,000,000, all as
referred to above, is hereby authorized and approved by the' City, subject to the
agreement of the City, the Developer and the Underwriter on the detailed terms
and conditions on which the Project will be financed and the Bonds will be issued,
sold and secured.
2. The City Attorney and all City personnel, in consultation with the
Developer and the Underwriter and Holmes & Graven, as bond counsel, are
authorized to prepare the Housing Plan, the Housing Program, the revenue
agreement and other documents necessary and appropriate for the planning,
completion and financing of the Project and to submit them to the Council for
approval.
o
(30) days after its passage.
· This ordinance shat1 be in full force and effect from and after thirty
- Mayor
First Reading:
Second Reading:
Offered by:
Seconded by:
Roll Call:
Date of Passage:
/~/ ~c~cretary to tl~-C, ouneil
June 25, 1980
July 7, 1980
Heintz
Hentges
Logacz, Heintz,
Norberg--abstain
July 7, 1980
Hentges,
Nawroc k i --aye