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99-114 - 12-21 - Multi Family Housing Development Elm Brook Resolution 99-114 December 21, 1999 Member LeSuer introduced the following resolution and moved its adoption: RESOLUTION RELATING TO A MULTIFAMILY HOUSING DEVELOPMENT TO BE ACQUIRED, OWNED AND OPERATED BY ELM BROOK- GV LIMITED PARTNERSHIP, A MINNESOTA LIMITED PARTNERSHIP, AND THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED, PURSUANT TO A JOINT POWERS AGREEMENT WITH THE CITY OF MINNETONKA, MINNESOTA; GRANTING PRELIMINARY APPROVAL THERETO, ESTABLISHING COMPLIANCE WITH CERTAIN REIMBURSEMENT REGULATIONS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, GRANTING APPROVAL FOR ENTERING INTO A JOINT POWERS AGREEMENT, AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT THERETO BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The City of Golden Valley, Minnesota (the "City"), is a statutory 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 "Act"), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue bonds to provide funds to finance multifamily housing developments located within the City. As a condition to the issuance of such revenue bonds, the City must adopt a housing program providing the information required by Section 462C.03, subdivision 1a, of the Act (the "Housing Program"). A public hearing was held on the Housing Program on December 21, 1999 after publication of notice on November 24, 1999 in the Golden Valley New Hope Post, a newspaper circulating generally in the City with respect to: (i) the required public hearing under Section 147(f) of the Internal Revenue Code of 1986, as amended; (ii) the Housing Program; (iii) the preliminary approval of the issuance of the Bonds; and (iv) authorization to apply to the Minnesota Department of Finance for an allocation of bond authority with respect to the Project (as hereafter defined). The City submitted the Housing Program to the Metropolitan Council for review and comment. 1.03. Elm Brook — GV Limited Partnership, a Minnesota limited partnership (the "Company") has proposed that the City, pursuant to the Act, authorizing the City of Minnetonka, Minnesota (the "City of Minnetonka") to issue its revenue bonds in the approximate aggregate principal amount not to exceed $3,000,000, in one or more series at one time or from time to time (the "Bonds"), the proceeds of which will be loaned by the City to the Company to be applied by the Company to the acquisition and renovation of: (i) of an eight-unit multifamily housing development known as Golden Valley Townhomes (the "Project") located at 2400 Rhode Island Avenue North in the City; and (ii) a forty-six-unit multifamily housing development known as Elm Brook Townhomes located in the City of Resolution 99-114 - Continued December 21, 1999 Minnetonka (the "Minnetonka Project", and together with the Project, the "Projects"). The Company will apply the proceeds of the loan to the acquisition costs of the Projects, the costs of the rehabilitation and renovation of the Projects, and the payment of certain costs related to the issuance of 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 City 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 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 of 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 Company to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of a multifamily housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Company and the proceeds of the loan will be applied to the acquisition of the Projects, the rehabilitation and renovation of the Projects, and the payment of costs related to the issuance of the Bonds. The City of Minnetonka will enter into a Loan Agreement with the Company requiring loan repayments from the Company in amounts sufficient to repay the loan when due and requiring the Company to pay all costs of maintaining and insuring the Projects, including taxes thereon. (c) In preliminarily authorizing the issuance of the Bonds and the financing of the acquisition and renovation 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 Act. (d) The issuance of the Bonds to finance all or a portion of the costs of the Project are in the public interest. (e) The Bonds will be limited obligations of the City of Minnetonka payable solely from the revenues pledged to the payment thereof, and will not be a general obligation of or be secured by the taxing power of the City. Section 4. Housing Program. The Housing Program will be prepared and submitted to the Metropolitan Council for its review substantially in accordance with the requirements of the Act. Resolution 99-114 - Continued December 21, 1999 Section 5. Preliminary Approval. This Council hereby gives preliminary approval to the issuance of the Bonds pursuant to a Joint Powers Agreement with the City of Minnetonka in the approximate aggregate principal amount not to exceed $3,000,000 to finance all or a portion of the costs of the Housing Program, subject to final approval by the City Council of the City of Minnetonka, following the preparation of bond documents that the financing of the Projects and the issuance of the Bonds are in the best interest of the City and the City of Minnetonka. Section 6. Joint Powers Agreement. This Council hereby gives approval for the issuance of Bonds pursuant to a Joint Powers Agreement between the City and the City of Minnetonka, Minnesota (the "Joint Powers Agreement"). This Council hereby authorizes the preparation, execution, and delivery of the Joint Powers Agreement consistent with the provisions of this resolution. Section 7. Reimbursement of Costs under the Code. 7.1. 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 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. 7.2. 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 Company 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 Act. Based on representations by the Company, 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(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 have been made by the Company more than sixty days before the date of adoption of this resolution. Resolution 99-114 - Continued December 21, 1999 7.3. Based on representations by the Company, as of the date hereof, there are no funds of the Company 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 Company as they exist or are reasonably foreseeable on the date hereof. Section 8. Costs. The Company 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 9. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City of Minnetonka will issue the Bonds as requested by the Company. If, based on comments received at the public hearing to be held pursuant to this resolution, or other 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 inconsistent with the purposes of the Act, the City reserves the right to decline to execute and deliver the Joint Powers Agreement authorizing the issuance of the Bonds by the City of Minnetonka. The City also retains the right, in its sole discretion, to withdraw from participation should the City Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not participate in the financing of the Project 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. Section 10. Effective Date. This Resolution shall be in full force and effect from and after its passage. P Mary E. derson, Mayor ATTEST: Shirley J. (kl `.n, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Johnson and upon a vote being taken thereon, the following voted in favor thereof: Anderson, Bakken, Johnson, LeSuer, and Micks; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Mayor and her signature attested by the City Clerk.