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HomeMy WebLinkAbout2017-71CITY OF COLUMBIA HEIGHTS, MINNESOTA RESOLUTION NO. 2017-71 ADOPTING A HOUSING PROGRAM WITH RESPECT TO A MULTIFAMILY HOUSING PROJECT; GRANTING PRELIMINARY APPROVAL FOR THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS TO FINANCE THE PROJECT UNDER MINNESOTA STATUTES, CHAPTER 4620, AS AMENDED; AND AUTHORIZING THE REIMBURSEMENT OF EXPENDITURES MADE IN ANTICIPATION OF THE ISSUANCE OF SUCH BONDS BE IT RESOLVED by the City Council of the City of Columbia Heights, Minnesota (the "City "), as follows: Section 1. Recitals. 1.01. The City, is a home rule charter city duly organized and existing under the Constitution and laws of the State of Minnesota. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Housing Act "), the City is authorized to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds or other obligations to finance or refinance multifamily housing developments located within the City. As a condition to the issuance of revenue bonds under the Housing Act, the City must adopt a housing program providing the information required by Section 462C.03, subdivision la of the Housing Act (the "Housing Program "). A public hearing must be held in accordance with the requirements of Section 147(f) of the Internal Revenue Code of 1986, . as amended (the "Code "), and regulations promulgated thereunder (the "Regulations "), and the requirements of the Housing Act. The City Council of the City (the "Council ") must also grant preliminary approval to the issuance of revenue bonds to finance the multifamily housing development referred to in the Housing Program, and authorize the submission of an application to Minnesota Management & Budget for an allocation of bonding authority with respect to the Bonds (as hereinafter defined) to finance the Project (as hereinafter defined). 1.03. Columbia Heights Leased Housing Associates I11, LLLP, a Minnesota limited liability limited partnership (the "Borrower "), has proposed that the City, pursuant to the Housing Act, issue its revenue bonds in an aggregate principal amount not to exceed $45,000,000, in one or more series (the "Bonds "), the proceeds of which will be loaned by the City to the Borrower. The Borrower will apply the proceeds of such loan to: (i) the acquisition, construction, and equipping of a multifamily housing facility comprised of up to 190 affordable rental apartments to be located in two four -story buildings, together with related common amenity spaces, including a fitness facility, a club room, and 140 or more underground parking spaces and an additional 130 or more surface parking spaces, to be located at 1069 Grandview Court NE and 4729 Grand Avenue NE in the City (the "Project "); (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; (iii) the payment of interest on the Bonds during the construction of the Project; and (iv) the payment of the costs of issuing the Bonds. 1.04. Under Section 147(f) of the Code, prior to the issuance of the Bonds a public hearing duly noticed must be held by the Council. Under Section 462C.04, subdivision 2 of the Act, a public hearing must be held on each housing program after one publication of notice in a newspaper circulating generally in the City, at least fifteen (15) days before the hearing. 1.05. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act "). Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the Council hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of a housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan will be applied to: (i) the acquisition, construction, and equipping of the Project; (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; (iii) the payment of interest on the Bonds during the construction of the Project; and (iv) the payment of the costs of issuing the Bonds. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (c) In preliminarily authorizing the issuance of the Bonds and the financing of the acquisition, construction, and equipping of the Project and related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by retaining and improving multifamily housing developments and otherwise furthering the purposes and policies of the Housing Act. (d) The Bonds will be limited obligations of the City payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 4. Public Hearing. On the date hereof (June 26, 2017), the Council conducted a public hearing on the Housing Program, the Project, and the issuance of the Bonds, notice of which hearing (the "Public Notice ") was published as required by Minnesota Statutes, Section 462C.04, subdivision 2 of the Housing Act, and as required by Section 147(f) of the Code and applicable Regulations promulgated thereunder. The Public Notice provided a general, functional description of the Project, as well as the maximum aggregate face amount of the obligations to be issued for the purposes referenced above, the identity of the initial owner, operator, or manager of the Project, and the location of the Project. The Public Notice was published in the Sun Focus, the official newspaper and a newspaper circulating generally in the City, on June 2, 2017, a date at least fifteen (15) days before the meeting of the Council on June 26, 2017. At the public hearing a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the Project and the proposed issuance of the Bonds. Section 5. Housing Program. Bond counsel, as described below, prepared and submitted to the City` a draft Housing Program to authorize the issuance by the City of the Bonds, in an aggregate principal amount not to exceed $45,000,000, to finance the acquisition, construction, and equipping of the Project by the Borrower. The Housing Program was prepared and submitted to the Metropolitan Council for its review on or before the date of publication of the Public Notice. Section 6. Preliminary Approval. The Council hereby provides preliminary approval to the issuance of the Bonds, in the aggregate principal amount not to exceed $45,000,000, to finance all or a portion of the costs of the Project pursuant to the Housing Program of the City, subject to: (i) review of the Housing Program by the Metropolitan Council; (ii) receipt of an allocation of the bonding authority from the State of Minnesota; (iii) final approval following the preparation of bond documents; and (iv) final determination by the Council that the financing of the Project and the issuance of the Bonds are in the best interests of the City. Section 7. Submission of an Application for an Allocation of Bonding Authority. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of the Allocation Act. The Council hereby authorizes the submission of an application for allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act. The Mayor of the City, the City Manager, and Kennedy & Graven, Chartered, acting as bond counsel for the City with respect to the Project and the Bonds, are hereby authorized and directed to take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority to Minnesota Management & Budget. Section 8. Reimbursement of Costs under the Code. 8.1. The United States Department of the Treasury promulgated by Section 1.150 -2 of the Regulations, which governs the use of the proceeds of tax - exempt bonds, all or a portion of which are to be used to reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of such bonds. Section 1.150 -2 of the Regulations requires that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty (60) days after payment of the original expenditure. Section 1.150 -2 of the Regulations also generally requires that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within eighteen (18) 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 (3) years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 8.2. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. 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 Housing 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- 20)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.1.50- 2(f)(2) of the Regulations, or (iv) expenditures in a "de minimus" amount (as defined in Section 1.150- 2(f)(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than sixty (60) days before the date of adoption of this resolution of the City. 8.3. 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. Section 9. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Bonds, whether or not the Bonds are issued. Section 10. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Borrower. If, as a result of information made available to or obtained by the City during its review of the Project, it appears that the Project or the issuance of Bonds to finance or refinance the costs thereof is not in the public interest or is inconsistent with the purposes of the Housing Act, the City reserves the right to decline to give final approval to the issuance of the Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. passage. Section 11. Effective Date. This resolution shall be in full force and effect from and after its (The remainder of this page is intentionally left blank.) 0 Adopted: June 26, 3017. Offered by: Buesgens Seconded by: Murzyn, Jr Roll Call: All Ayes Donna Schmitt, Mayor '4� �%ft-jL' Katie Bruno, City Clerk STATE OF MINNESOTA ) COUNTY OF ANOKA ) SS. CITY OF COLUMBIA HEIGHTS ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Columbia Heights, Minnesota (the "City "), do hereby certify, that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council held on June 26, 2017, with the original thereof on file in my office and the same is a full, true and complete transcript therefrom insofar as the same relates to adopting a housing program, preliminarily granting approval for the issuance by the City of multifamily housing revenue bonds to finance a multifamily housing project, and authorizing the reimbursement of expenditures made in anticipation of the issuance of such bonds. WITNESS My hand as Clerk and the corporate seal of the City this day of , 2017. City Clerk City of Columbia Heights, Minnesota CL 162-054 (SEL) 500247v.3