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HomeMy WebLinkAboutOrdinance 916Ordinance No. 916 BEING AN ORDINANCE GIVING PRELIMINARY APPROVAL TO A PROJECT AND AUTHORIZING THE ISSUANCE OF ~IOUSING DEVELOPMENT REVENUE BONDS THEREFOR UNDER MIN- NESOTA STATUTES, CHAPTER 462C, AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS 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 84 residential living units available for rental 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 av. ailable 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 residential living units available for rental 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 $4,000,000 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, construct and equip the Project, to apply the proceeds of the Bonds solely to the payment of costs thereof and to make payments 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 WHEREAS, 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 in the approximate principal amount of $4,000,000 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 $4,000,000 to finance the costs thereof, 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. 3. This ordinance shall be in full force and effect from and after thirty (30) days after its passage. ~ First Reading: June 25, 1980 Second Reading: July 7, 1980 Offered by: Hentges Seconded by: Heintz Roll Call: Date of Passage: Logacz, Heintz, Hentges, Norberg--abstain July 7, 1980 Nawrocki--aye Se~cretary -to thL~C'ouneil