HomeMy WebLinkAboutResolution 98-30RESOLUTION NO, 98-30
i~SOLUTION RELATING TO A HOUSTNG PROGRAMlOP, THE BENEFIT
OF CREST VIEW CORPORATION AND TFE ISSUANCE OF REVENUE
BONDS TO FINANCE AND RERNANCE THE COSTS THEREOF UNDER
MTNNESOTA STATUTES, CHAPTER 462C, AS AMENDED: GRANTING
PRELIMINARY AFPROVA£ THERETO, APPROVING THE HOUSTNG
PROGleAM, AND ESTABLISHING COMPLIANCE WITH CERTATN
R.EIIv[BURSEMENT I~GULATIONS UNDER THE INTERNAL REVENU~
CODE OF 1986, AS AMENDED
BE IT RESOLVED by the City Council oftbe City of Columbia Heights, Mira~sota (the
"City"), as follows:
Section 1. Recitals.
1.01. The City of Columbia Heights. MimesXa (the 'City'). is a home rule city duly
organized and existing under ~ Coe, stitutjon and laws of the State of Mimgsota trot the Charier
of the City.
1.02. Pursuant to Minnesota Statutes, Chapter 462C. as amemied (the "Act"), the City is
authorized to ca~ out the public purposes described in the Act by i~'u~ng its revenue bonds to
provide funds to finance m reftr~ce facilities located within the City compri.,ed of combined
multifamily housiti developm~ts and health care facilities, As a condition m the issuance of
such revenue boMs. the City must adopt a holt_sing l:wogam providing the information requL~d
by Sc~'tion 462C,03. subdivision It. of the Act (the 'Housing Program'). A public heating must
be held on the Housing Prc~am after oat publication of notice in a newspap~ circulating
generally in the City. at least fifteen days before the heatinl. On or before the clay on which
noti~ of the public hearing is published, the City must submit the Housing Program to the
Metropolitan Cormell for review a~d comment.
1.03. Crest View Corlx~ration, a Mimgsom nonprofit ~orperation (the "Corporation') has
proposed that the City. pttt'su~lt to the AcL issue its revenue bonds in the aplsroximate a~gregate
principal amotmt of S10.500,000. in one or more series at one time or fh~m time to time (the
"Bomls"), the Foeeeds of which will he loaned by the City to the Corporation to retinaace the
curteat indebtedness of the Corporation with respect to its existing facilities in the City (the
"Existing Facilities") and to fimmr, e all or a portion of the costs of certain improvements to the
Existing Facilities (the "Improvements"). The proceeds ofthe Bonds will also be applied to fund
certain reserves and to pay certain costs of ismazge of the Bonds. The Existing Facilities ate
owned by the Corporation azgl are comprised of the following: {i) Crest view Luther~ Home.
a ! 22-bed lie4med nursing facility ('Crest view Lutheran Home"); (ii) The Boulevard. a 77-unit
elderly housing iadeF~t living facility {"The Boulevard"); and fill) Royce Place, a 50-unit
elderly bottling assisted living facility {"Royct Place").
1 .PA. On August 18. 1987, the City issued its Health Care Facility Revenue Bonds (Crest
View Lutheran Home Project). Series 1987 (the "Series 1987 Bonds"l, in the original aggregate
principal amount of $4,400.000. to retinanee the outstanding indebtedness of Crest View Lutheran
1991, the City issued its Board anti Cart Facility ~gm~6:HAlnsu:ed Mort/aEe Loan -
Royce Place Project). 5tries 1991A. in the oriijnal ait&t--~vlz ~vt-amount ofS2.770.000.
and it.~ Board and Care Facility ItA. venue 13omh (Royce ~ ProjeU). 5rues 1991B. in the
o~ginai aigrelate principal amount of S560.000 (collectively. the 'Series 1F)I Bomis"). to
finance the eonsm~on and related costs of R~ce Place. A lx,rtion of the proceeds of the
Bonds are ~opos~ to be applied to the zcduuption of the ~dint principttl tmount of the
Series 1997 Bonds and the Series 1991 Bon~.
1.05- Under Scction 147(f) of the Internal Revcnue Code d 1986. as amended (thc
"Code'). prim to the issuance of the Bonds a public hea~8 duly noticed must be held by the
City Council.
Section 2. Prelimirnrv Fir~dinis. Bascd on representations made by the Corporation to
the City to date. the City Council of the City hereby makes the following prcliminary findings.
determinations, and declarations:
Ca) The Existing Facilities consist of a combination of multifamily housing
developments and health care facilities and the Existing Facilities rn~t the following conditions:
(i) the multifamily housi,qg devclop,,cnts of the l~xisting Facilities were designcd and iraended
to be used for rental occupancy; (ii) the multifamily housing developments of the Existing
Facilities were desiLmcd ~nd intended to be used primarily by elderly or physically handicapped
persons; and dill rn~ing, medical. personal care. and othe' health telreed assisted livir,~ re'vices
arc available on a 24-horn' basis to the resid~ts in the Existing Facilities.
(b) The proceeds of the Bonds wilt be loaned to the Corporation and the proceeds of
the loan will be applied to refund the Series 1987 Bonds and the St, rio 1991 Bonds. to retinarue
cemin other jndebtedness of the Colon with respect to th~ Exi~ing Facilities, to finance
the Improvements, to fund a debt service rcserve fund for the Bonds. am:l to pay certain costs and
expenscs incident to the issuance and sale of the Bonds. The City will enter into a Lomq
AeJ'ecltlent with thc CotpoiSon requiring loan repayments fTOm the Corporation in mounts
stt~cient to repay the loan whLm due and teqUiriftg the CotT~ration to pay nil costs of
maintaining and insuring thc Project, including taxes thereon.
(c) In preliminsrily authorizing the acquisition, construction, furnishing. squipping and
improvement of the Project and the issuance of the Bonds, the City's purpose is and the effect
thereof will he to promote the public welfare of the City and its residents by retaining and
improving multifamily housing developments and health care fs:ilities for the elderly and
otherwin furtheting the purposes and policies of the Act.
(d) The undeflsking of the Housit~ ProFaro and the issuance of the Bonds to finance
all or a potdon of th~ costs thereof are in the public interest.
Section 3. Notice of H-n~'igi. The City Cour,:il authorized the publication of a notice
of public heating with rcspect to: (i) approval of the Housing PToFam. a.~ required by the Act;
(ii) the requited public heating under Section 147(f) of the Code; and (iii) the preliminary
approval of the issuance of the Bond,~. The notice of public bearing was published in the Focus
News, a newspaper of general ci~ulation in the City, ovl Felmmty S. 1998. eighlm~ days prior
to the dat~ of tht public hearing held on Monday, February 23. ~908, at 7:00 p.m. et City Fall
in the City.
Section 4. Housino Pro~am. The Housing Proman was I~zt,-r~ and submitted to the
Meuopoliian Council for it.,~ review on l:dx'Lm-y 5. 1998. The ~on of the l-lousinl
ProBrain and the sutmabsion of the Housing ProFaro to tiM: Metropolitan Coumcil are hereby
rat/fled. confimmxt. and approved. A copy of the Housing Pto~ra.~ is attached to this resolution
and is hereby apprm, zcl without amendment.
Section 5. ~rtlimiplrv ADpmvjI. This Council hereby.gives preliminary approval to the
ismancc of th~ Boeds in the q~mximate agVq~ ~h~ipaLammmt of S!0.500,000 to firerace
all or a potion of the o~ts of the Housin~ Program, subjen te fma| approval following the
preparation of holed dcs:um~ts, and subject to final ~iMtiol~ by this Cour~il that the
financing of th~ Project and the issauce of th~ Bonds are in the best in|~-t of the City.
Section 6. Reimb-'semem of Costs qp,b.r the Code.
6.1. The United States Department of the Ttusury has promulgated final regulations
govcming 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 fi'om the City for project expendit~ paid prim to the date
of issuance of su~ bonds. Those regulations (Tve=n--twy Repletions. Section 1.150-2) (the
"Replations") require that tie City adopt a statement of official intent to reimburse an ori~nal
expenditur~ t~ot later than sixty days aaer paymere of the original expenditme. The Regulations
also generally require that the bonds ix imsed and the r~im~t allocation made from the
pvoceecls of the bonds occur within eilght~en months after the IMe~ of: (i) the date the expenditure
is paid; or (ii) the date the project is placed in service or abandoned, but in no event mote then
thzee yeats after the date the expenditure is paid. The Regulations generally permit
~eimb. atsemem of capital expenditures and costs of issuance of the bonds.
6.2. The City reasonably expects to reimbmse the Corporation for the expenditures
made for casts of the Improvements fTOm the proceeds of the Bonds in an estimated maximran
aggregate principal amount of $2,000,000 after the dalg of payment of all ot a portion of the
costs of the Impmvenmats. All reimErarsed expenditures shell be capital acpendirures. a cost of
issuance of the Bonds or other expentiimres eligible for reimbursement under Section
!. 150-2(d){3) of the Rggulations and also qualifying expenditures under the Act.
Based on tcpre~ons by the Corl~oration, other than (i) expcnditures to be paid or
reimbursed from somees other than the Bonds, (ii) expenditures permitted to be reimbursed under
prior regulations pursuam to the transitional provision comained in Section 1.150-2(j}(2)(iX B)
of the Regulations, (iii) expenditmu con.~tuting preliminary expenditures withiru the me. aiming
of Section 1.150-2(f)(2) of the Regulations, or (iv) expenditures in a "de minitorts" amount
defined in Section 1.150-2(f}Cl) of the Regulations), no expenditmes for the Improvements have
been made by the Corporation rnor~ than sixty days before the date of adoption of this resolution.
6.3. Based or~ representations by the Corporation, as of the date hereof, ther~ are no
funds of the Corporation reserved, allocated on a long term-basis of otherwise set aside (or
I
fr, asoMbly expeetr, d to be reserve, al~ on a loS-term besi~ ot oO~'rwise set sside) to
from proceeds of the Bonds, other than pursuam ~o the ismance of tht lionds. 'l~s resoht/on,
therefore, is ¢~i~ ID be consiam with the budictary a~d ~na~c:ial circumstances of the
COTTX~I~ as they ~ or m rr, ascmably foreseeable on the date hereof.
Section 7. F,G~- Tbe Corporatioe ~11 pay the ..4minlst,~ti,,t fees of tht C/ty and pay.
or upon tiemad reimburse the City for paln~mt of. my .nd all costs/nnrml by the City in
connection with the Ex.i~ng Facilities and the Im~ovemems and t~ isstmtct of the Bonds,
wbettzr or not the Exining Faciliti~ ate tti'~, the lmFovements are e. arried to completion,
or the Bonds me issued.
Section 8. f'nmmitmtnt e'~onditiond, The adoptiOn of this resolution does not coastitute
a guarantee ot a fa, m commitment that th~ City will issue tire Bonds as requested by the
Corporation. If. based on comments rtr, eiv~cl at th~ public hearing to be held pta, suam to this
resolution. ot other information made available to or obtaited by th¢ Cay during its review of
the Project. it aplae. ars that the Project or the issuance of Bonds to fmanc. e the costs ~f is not
in the public interest or inconsist~m with the purpo~s of the Act. th~ City ttsetves the right not
to give final approval to the issus~e of the Bonds. The City also retains the tight in its sole
discretion. to wid,,draw from participation arm accordingly not issue tht Bonds should the City
Council. at any time prior to the issuance thereof, determine that it is in the laest interests of the
City not to issue the Bonds or should the parties to the Irat~saction be unable to reach agreement
as to the terms and conditions of any of t~ documents for the traztsaction.
Section 9- Eff~tive Date. This Re.mhtion shall be in full force ~d effec from and after
Adopted by the City Council of the City of Columbia Heights. Minnesots, on this twenty-third
day of February. 1998.
Offered by: Peterson
Seconded by: Ruettimann
Roll call: All ayes
Secretary
/or~)eph St~s~"~//r~eva4't~