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HomeMy WebLinkAbout2017-119CITY OF COLUMBIA HEIGHTS, MINNESOTA RESOLUTION NO. 2017-119 BE IT RESOLVED by the City Council (the "Council ") of the City of Columbia Heights, Minnesota (the "City" or the "Issuer "), as follows: Section 1. Recitals. 1.01. The City is a home rule charter city duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Housing Act "), the Issuer 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 or other obligations under the Housing Act, the Issuer must prepare and adopt a housing program providing the information required by Section 462C.03, subdivision 1 a of the Housing Act after a public hearing. 1.03. The 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 the regulations promulgated thereunder (the "Regulations "), and the requirements of the Housing Act. Section 147(f) of the Code requires a public hearing duly noticed to be held by the Council on the proposed issuance of revenue bonds or other obligations and the location and nature of the proposed facility to be financed. Section 462C.04, subdivision 2 of the Housing Act requires a public hearing to be held on the housing program after one publication of notice in a newspaper circulating generally in the City, at least fifteen (15) days before the hearing. Section 462C.04, subdivision 2 of the Housing Act further requires that on or before the day on which the notice of public hearing is published, the Issuer submit a housing program to the Metropolitan Council for its review and comment as to whether such housing program furthers local and regional housing policies. 1.04. The Council may grant approval to the issuance of revenue bonds or other obligations to finance the multifamily housing development referred to in a housing program, and may authorize the submission of an application to the State of Minnesota Department of Management and Budget ( "MMB ") for an allocation of bonding authority with respect to such revenue bonds or other obligations to finance the Project (as hereinafter defined) in accordance with the requirements of Section 146 of the Code and Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act "). 1.05. On June 26, 2017, following a duly noticed public hearing, the Council adopted Resolution No. 2017 -71 (the "Preliminary Resolution ") under the terms of which the Council, among other things: (i) granted preliminary approval to the issuance of multifamily housing revenue bonds or other obligations (the "Obligations "), in the aggregate principal amount not to exceed $45,000,000, under the terms of the Housing Act for the benefit of Columbia Heights Leased Housing Associates 111, LLLP, a Minnesota limited liability limited partnership (the `Borrower ") to finance 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) adopted a housing program providing the information required by Section 462C.03, subdivision la of the Housing Act (the "Housing Program ") with respect to the Project; (iii) authorized the submission of an application for an allocation of bonding authority of the State of Minnesota pursuant to Section 146 of the Code and in accordance with the requirements of the Allocation Act; and (iv) stated the official intent of the Issuer to reimburse the Borrower for expenditures made for costs of the Project from the proceeds of tax - exempt bonds or other obligations under Section 1.150 -2 of the Regulations. 1.06. The Project is now proposed to include 148 units, with 134 underground parking spaces and an additional 88 surface parking spaces. 1.07. The Preliminary Resolution constitutes a reimbursement resolution and an official intent of the Issuer to reimburse expenditures with respect to the Project from the proceeds of tax - exempt revenue obligations in accordance with the provisions of Section 1.150 -2 of the Regulations. 1.08. In accordance with the requirements of Section 462C.04, subdivision 2 of the Housing Act, the Housing Program was submitted to the Metropolitan Council for its review and comments. The City received a letter from the Metropolitan Council providing its comments to the Housing Program and the Project. 1.09. In accordance with the authority granted under the Preliminary Resolution, the Issuer, in cooperation with the Borrower, submitted an application for an allocation of bonding authority to MMB. The Issuer received Certificate of Allocation No. 315, dated August 4, 2017 (the "Allocation Certificate "), from MMB allocating bonding authority to the Issuer in the amount of $20,060,719. 1.10. The Borrower has requested that the Issuer issue the Obligations, in the aggregate principal amount not to exceed $20,060,719 (representing the amount of bonding authority allocated to the Issuer pursuant to the Allocation Certificate), to be designated as: (i) Multifamily Housing Revenue Funding Note (Grand Central Flats Project), Series 2017A (the "Series A Funding Note "); and (ii) Taxable Multifamily Housing Revenue Funding Note (Grand Central Flats Project), Series 2017B (the "Series B Funding Note" and together with the Series A Funding Note, the "Funding Notes "). 1.11. With respect to the Funding Notes, there have been presented before the Council (i) a form of Funding Loan Agreement (the "Funding Loan Agreement ") proposed to be entered into by and among Citibank, N.A., a national banking association, or another financial institution selected by the Borrower (the "Funding Lender "), the City, and U.S. Bank National Association, a national banking association, or another financial institution selected by the Borrower (the "Fiscal Agent "), pursuant to which the Funding Notes are proposed to be issued; (ii) a form of Borrower Loan Agreement proposed to be entered into by and between the City and the Borrower, pursuant to which the City will loan the proceeds of the Funding Notes to the Borrower; and (iii) a form of Regulatory Agreement (the "Regulatory Agreement ") proposed to be entered into between the City, the Fiscal Agent, and the Borrower, pursuant to which certain rental and occupancy restrictions will be imposed on the Project. 2 Section 2. Findings, Determinations, and Declarations. Based on representations made by the Borrower to the Issuer to date, the Council hereby makes the following findings, determinations, and declarations: 2.01. The Project constitutes a "qualified residential rental project" within the meaning of Section 142(d) of the Code, and a "multifamily housing development" authorized by the Housing Act, and furthers the purposes of the Housing Act. The purpose of the Project is, and the effect thereof will be, to promote the public welfare by the acquisition and construction of a facility for use as a multifamily housing development designed primarily for occupancy by persons of low and moderate income. 2.01 The Issuer hereby authorizes the Borrower, in accordance with the provisions of the Housing Act and subject to the terms and conditions imposed by the Funding Lender (as hereinafter defined), to provide for the development of the Project and the payment of the costs of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower. Section 3. Ratification of Submission of Housing Program. The Housing Program adopted pursuant to the Preliminary Resolution and submission thereof to the Metropolitan Council for its review and comment is hereby ratified, confirmed, and approved. The City Manager is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Housing Program in accordance with the Housing Act and any other applicable laws and regulations. Pursuant to the Housing Program, one hundred percent (100 %) of the housing units within the Project will be held for occupancy by families or individuals with gross income not in excess of sixty percent (60 %) of median family income, adjusted for family size. Section 4. Ratification of Submission of Application for Allocation of Bonding Authority. The submission of an application for an allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act is hereby ratified, confirmed, and approved. Section 5. Authorization to Issue the Funding Notes; Approving the Forms of and Authorizing the Execution and Delivery of the Funding Notes and Related Documents; Providing for the Security Rights, and Remedies with Respect to the Funding Notes. 5.01 There is hereby authorized the issuance, sale, and delivery of the Funding Notes, in the aggregate principal amount not to exceed $20,060,719, for the following purposes: (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 Funding Notes; (iii) the payment of interest on the Funding Notes during the construction of the Project; and (iv) the payment of the costs of issuance with respect to the Funding Notes. The Funding Notes shall bear interest at the rate or rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such forms, and shall have such other terms, details, and provisions as are prescribed in the Funding Loan Agreement, substantially in the form now on file with the Issuer, with necessary and appropriate variations, omissions, and insertions (including changes to the titles of the Funding Notes as deemed appropriate, and changes to the aggregate principal amounts of the Funding Notes, the stated maturities of the Funding Notes, the interest rates on the Funding Notes and the terms of redemption of the Funding Notes) as the Mayor and the City Manager (together the "City Officials "), in their discretion, shall determine. The execution of the Funding Notes with the manual or facsimile signatures of the City Officials and the delivery of the Funding Notes by the Issuer shall be conclusive evidence of such determination. All of the provisions of the Funding Notes, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. 5.02 The Issuer hereby authorizes the Series A Funding Note to be issued as a "tax- exempt bond," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. The Funding Notes shall be a special, limited obligation of the Issuer payable solely from the revenues provided by the Borrower pursuant to the terms of the Borrower Loan Agreement and from the revenues and security pledged, assigned, and granted pursuant to the security documents provided by the Borrower. The Funding Notes shall not be payable from, nor charged upon any funds other than the revenue pledged to their payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No owner of the Funding Notes shall ever have the right to compel any exercise by the City of any of its taxing powers to pay the Funding Notes or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Borrower Loan Agreement and the revenues and assets thereunder, which will be assigned to the Funding Lender. The Funding Notes shall recite that the Funding Notes are issued pursuant to the Housing Act, and that the Funding Notes, including interest and premium, if any, thereon, is payable solely from the revenues and assets pledged to the payment thereof, and the Funding Notes shall not constitute a debt of the City within the meaning of any constitutional or statutory limitations. 5.03 The Funding Notes shall be sold to the Funding Lender under the terms and conditions of the Funding Loan Agreement. The Funding Loan Agreement is hereby approved and the City Officials are hereby authorized to execute and deliver the Funding Loan Agreement on behalf of the City. All of the provisions of the Funding Loan Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Funding Loan Agreement shall be substantially in the form now on file with the City with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, as the City Officials, in their discretion, shall determine, and the execution and delivery thereof by the City Officials shall be conclusive evidence of such determination. 5.04 The proceeds derived from the sale of the Funding Notes shall be loaned by the Issuer to the Borrower in accordance with the terms and conditions of the Borrower Loan Agreement. The Borrower Loan Agreement is hereby approved and the City Officials are hereby authorized to execute and deliver the Borrower Loan Agreement on behalf of the City. All of the provisions of the Borrower Loan Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Borrower Loan Agreement shall be substantially in the form now on file with the City with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, as the City Officials, in their discretion, shall determine, and the execution and delivery thereof by the City Officials shall be conclusive evidence of such determination. The proceeds of the loan to be made under the terms of the Borrower Loan Agreement are hereby authorized to be applied to the payment of a portion of the costs of the acquisition, construction, and equipping of the Project and related costs. 5.05 The obligations of the Borrower under the Borrower Loan Agreement shall be secured by such mortgages, assignments of mortgages, security agreements, assignments of rents, guarantees, and other security instruments and documents as the Borrower and the Funding Lender shall agree (the "Security Documents "). The Issuer hereby authorizes and approves the execution and delivery of the Security Documents by the Borrower to the Funding Lender, 5.06 To ensure compliance with certain rental and occupancy restrictions imposed by the Housing Act and Section 142(d) of the Code, and to ensure compliance with certain restrictions imposed El by the Issuer, the City Officials are also hereby authorized and directed to execute and deliver the Regulatory Agreement. All of the provisions of the Regulatory Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Regulatory Agreement shall be substantially in the form on file with the Issuer which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the City Officials, in their discretion, shall determine, and the execution thereof by the City Officials shall be conclusive evidence of such determination. 5.07 The Council authorizes the execution and delivery of the following closing documents relating to the Funding Notes (collectively, the "Closing Documents "): (i) one or more certificates of the Issuer; (ii) an Information Return for Tax - Exempt Private Activity Bond Issues, Form 8038; (iii) an endorsement to a tax certificate of the Borrower relating to arbitrage, rebate, and other tax matters; and (iv) similar documents. All of the provisions of the Funding Notes, the Funding Loan Agreement, the Borrower Loan Agreement, and the Regulatory Agreement (collectively, the "Note Financing Documents "), and the Closing Documents, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. 5.08 The Issuer hereby authorizes Kennedy & Graven, Chartered, bond counsel to the Issuer ( "Bond Counsel "), to prepare, execute, and deliver its approving legal opinions with respect to the Funding Notes and related matters. 5.09 Simultaneously with the execution and delivery of the Note Financing Documents and the Closing Documents (collectively, the "Issuer Documents "), there shall be delivered to the Issuer the following: (i) an opinion of counsel to the Borrower as to such matters as shall be required by the Issuer and Bond Counsel; (ii) one or more opinions of Bond Counsel as may be required by the Issuer, the Funding Lender, counsel to the Funding Lender, the Borrower, and counsel to the Borrower; and (iii) such other opinions, instruments, and documents as the Issuer may require as a condition to the issuance of the Funding Notes and the other actions of the Issuer authorized by this resolution. Section 6. Additional Findings and Certifications. 6.01 The authority to approve, execute, and deliver future amendments to the Note Financing Documents or other documents executed and delivered by the Issuer in connection with the issuance of the Funding Notes is hereby delegated to the City Officials and such other officials of the Issuer who execute and deliver the Funding Notes and related documents whose signature shall appear on the Issuer Documents (the "Issuer Officials "), subject to the following conditions: (i) such amendments do not materially adversely affect the interests of the Issuer; (ii) such amendments do not contravene or violate any policy of the Issuer; and (iii) such amendments are acceptable in form and substance to Bond Counsel. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the Issuer Officials shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. 6.02 hl case an Issuer Official shall cease to be such officer before the delivery of the Issuer Documents, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such signatory had remained in office until delivery. In the event of the absence or disability of any Issuer Official, such officers of the Issuer as, may act on the behalf of such Issuer Official shall, without further act or authorization of the Issuer, execute and deliver the Issuer Documents. 6.03 The Issuer will not participate in the preparation of any disclosure document relating to the offer and sale of the Funding Notes (the "Disclosure Documents "), and will make no independent investigation with respect to the information contained in any Disclosure Documents and the Issuer assumes no responsibility for the sufficiency, accuracy, or completeness of such information, except for any information contained therein describing the Issuer, or litigation with respect to the Issuer. The Issuer hereby consents to the distribution of the Disclosure Documents. The Issuer hereby approves the execution and delivery by the Borrower (and any guarantor of the obligations of the Borrower) of any continuing disclosure agreement prepared and delivered for the benefit of the Funding Lender or any successors or assigns. Section 7. Costs. The Borrower shall pay to the City any and all reasonable costs incurred by the City in connection with the Obligations or the financing of the Project, whether or not the financing of the Project is carried to completion, and whether or not the Obligations or operative instruments are executed and delivered. The Borrower shall also pay to the City the administrative fee of the City, as set forth in the Borrower Loan Agreement. Section 8. Bond Counsel Is Empowered to Take All Necessary Actions. The Issuer Officials, Bond Counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to take all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Funding Notes, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Funding Notes, the aforementioned documents, and this resolution. passage. Section 10. Effective Date. This resolution shall be in full force and effect from and after its (The remainder of this page is intentionally left blank.) Adopted: November 13, 2017. Motion by: Buesgens Seconded by: Novitsky All Ayes J , LI, Donna Schmitt, Mayor ATTEST: 1 Katie Bruno, City Clerk