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HomeMy WebLinkAboutResolution 2001-10RESOLUTION NO. 2001-10 ADOPTING A HOUSING PROGRAM WITH RESPECT TO ASSISTED-LIVING SENIOR HOUSING PROJECT; GRANTING pRELIMINARY APPROVAL FOR THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS TO FINANCE THE PROJECT; AND AUTHORIZING THE REIMBURSEMENT OF EXPENDITURES MADE IN ANTICIPATION OF THE ISSUANCE OF SUCH BONDS WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes, Chapter 462C (the "Act"), the City of Columbia Heights, Minnesota (the "City") is authorized to carry out programs for the financing of a multifamily housing facility which is intended primarily for elderly persons; and WHEREAS, the Authority has prepared a housing program (the "Housing Program" or "Program"), a copy of which is attached hereto as Exhibit A, providing for the acquisition, construction and equipping by Crest View ONDC I, a Minnesota nonprofit corporation or Crestview Advanced Missions I, LLC, a Colorado limited liabilty company and a member of Crest View ONDC I) (the "Member") of a 50-unit assisted-living senior housing project, located at 900 - 42"a Avenue N. E. in the City (the "Project"); and WHEREAS, the City has on this date conducted a public hearing on the Program, following publication of notice at least fifteen days prior to the date hereof, all in conformance with the requirements of the Act; and WHEREAS, the Housing Program was prepared and submitted to the Metropolitan Council for its review on February 1, 2001. The preparation of the Housing Program and the submission of the Housing Program to the Metropolitan Council are hereby ratified, confirmed, and approved. A copy of the Housing Program is attached to this resolution and is hereby approved without amendment; and WHEREAS, the Program provides for the issuance by the City of up to $6,250,000 in revenue bonds to finance the acquisition and construction of the Pmject. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA AS FOLLOWS: 1. The Program is hereby adopted in all respects. 2. The staff of the City is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Program in accordance with the Act and any other applicable laws and regulations. 3. The issuance of housing revenue bonds by the City (the "Bonds") pursuant to the Program is preliminarily approved subject to a final determination by the City that such issuance is in the best interest of the City and this Resolution shall not be deemed to obligate the City to issue such Bonds. 4. The City understands that the Borrower will pay directly or through the City any and all costs incurred by the City in connection with the Program, whether or not the Project is completed, and whether or not the Bonds are issued. 5. (a) The United States Department of the Treasury has promulgated final regulations governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City or a borrower from the City for project expenditures paid prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the "Regulations") require that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within eighteen months after the later of: (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. (b) The City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Improvements from the proceeds of the Bonds in an estimated maximum aggregate principal amount of $6,250,000 after the date of payment of all or a portion of the costs of the Improvements. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.150- 2(j)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(1)(2) of the Regulations, or (iv) expenditures in a "de minimus" amount (as defined in Section 1.150-2(1)(1) of the Regulations), no expenditures for the Project have been made by the Corporation more than sixty days before the date of adoption of this resolution. (c) Based on representations by the Borrower, as of the date hereof, there are no funds of the Borrower reserved, allocated on a long term-basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. Passed this 26th day of February, 2001. Offered: Szurek Second: Williams Roll Call: All Ayes ( lYalricia Muscovitz, Deputy CyClerk EXHIBIT A CITY OF COLUMBIA HEIGHTS, MINNESOTA PROGRAM FOR A MULTIFAMILY HOUSING DEVELOPMENT Pursuant to Minnesota Statutes, Chapter 462C (the "Act"), the City of Columbia Heights, Minnesota (the "City") is authorized to develop and administer programs to finance the acquisition and construction of multifamily housing developments under the circumstances and within the limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the City. The City has received a proposal that it approve a program providing for the acquisition, construction and equipping of a 50-unit apartment complex known as Crestview on 42nd Assisted Living Project to provide assisted-living senior apartment rentals for persons 55 and older (the "Project") located at 900 - 42nd Avenue N.E. in the City. The acquisition, construction and equipping of the Project is to be funded through the issuance of up to $6,250,000 in revenue bonds to be issued by the City (the "Bonds"). Crest View ONDC I, a Minnesota nonprofit corporation or Crestview Advanced Missions I, LLC, a Colorado limited liability company and a member of Crest View ONDC I) (the "Member"), will own and operate the Project as a senior residential rental project. The City, in establishing this multifamily housing program (the "Program"), has considered the information contained in the City's comprehensive plan. The Project will be acquired and constructed in accordance with the requirements of Subdivisions 1 and 2 of Section 462C.05 of the Act. Section A. Definitions. The following terms used in this Program shall have the following meanings, respectively: "Act" shall mean Minnesota Statutes, Section 462C.01, et seq., as currently in effect and as the same may be from time to time amended. "Assisted-living Senior Housing Unit" shall mean any one of the apartment units, each located in the Project, occupied by one person or family, and containing complete living facilities. "Bonds" shall mean the revenue bonds to be issued by the City. "City" shall mean the City of Columbia Heights, Minnesota. "Land" shall mean the real property upon which the Project is situated. "Owner" shall mean Crest View ONDC I, a Minnesota nonprofit corporation or Crestview Advanced Missions I, LLC, a Colorado limited liability company and a member of Crest View ONDC I. "Program" shall mean this program for the financing of the Project pursuant to the Act. "Project" shall mean the residential rental housing development consisting of 50 Assisted-Living Senior Housing Units to be acquired, constructed and equipped by the Owner. Section B. Program For Financing the Project. It is proposed that the City establish this Program to provide financing for the acquisition and construction of the Project at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the City, the initial purchaser of the Bonds and the Owner. The City expects to issue the Bonds as soon as the terms of the Bonds have been agreed upon by the City, the Owner and the initial purchaser of the Bonds. The proceeds of the Bonds will be loaned to the Owner to finance the acquisition, construction and equipping of the Assisted-Living Senior Housing Units, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a trustee will be appointed by the City to monitor the construction of the Project and the payment of principal and interest on the Bonds. It is anticipated that the Bonds will have a maturity of approximately thirty years or less and will bear interest at a variable rate or at fixed rates consistent with the market at the time of issuance. The City will hire no additional staff for the administration of the Program. Insofar as the City will be contracting with underwriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Program, no administrative costs will be paid from the City's budget with respect to this Program. The Bonds will not be general obligation bonds of the City, but are to be paid only from properties pledged to the payment thereof, which may include additional security such as additional collateral, insurance or a letter of credit. Section C. Standards and Requirements Relating to the Financing of the Project Pursuant to the Program. The following standards and requirements shall apply with respect to the operation of the Project by the Owner pursuant to this Program: (1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition, construction and equipping of the Project and to the funding of appropriate reserves. The proceeds will be made available to the Owner pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Owner to the City regarding the use of proceeds and the character and use of the Project. (2) The Owner, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, marital status, or status with regard to public assistance or disability. (3) The Project is designed primarily for rental to elderly persons. Thus, Section 462C.05, Subdivision 4 of the Act provides that the limitations set forth in Section 462C.05, Subdivision 2 of the Act are not applicable. Subsection D. Evidence of Compliance. The City may require fi.om the Owner at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Owner to complete the acquisition and construction of the Project, and evidence satisfactory to the City of compliance with the standards and requirements of the City for the financing set forth herein; and in connection therewith, the City or its representatives may inspect the relevant books and records of the Owner in order to confirm such ability, intention and compliance. In addition, the City may periodically require certification from either the Owner or such other person deemed necessary concerning compliance with various aspects of this Program. Subsection E. Issuance of Bonds. To finance the Program authorized by this Section the City will by resolution authorize, issue and sell its revenue bonds in a maximum aggregate principal amount of $6,250,000. The Bonds will be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and will be payable primarily f~om the revenues of the Program authorized by this Section. The costs of the Project, including costs of issuance of the Bonds and required reserve funds; are presently expected to be in excess of the principal amount of the Bonds. It is expected that the Owner and its affiliates will contribute to the Project the difference between the total costs of the Project and the principal amount of the Bonds available to finance the Project. The costs of the Project may change between the date of preparation of this program and the date of issuance of the Bonds. The Bonds are expected to be issued in March, 2001. Subsection F. Severability. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. Subsection G. Amendment. The City shall not amend this Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Subsection H. State Ceiling. None of the state ceiling for private activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and Chapter 474A of Minnesota Statutes, will be applied for with respect to the Bonds.