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06-60 - 09-19 - Authorize Issuance Sale of Senior Living Multi Family Housing Resolution 06-60 September 19, 2006 Member Pentel introduced the following resolution and moved its adoption: RESOLUTION OF THE CITY OF GOLDEN VALLEY, MINNESOTA AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS SENIOR LIVING MULTIFAMILY HOUSING REVENUE BONDS (GNMA COLLATERALIZED MORTGAGE LOAN - CALVARY CENTER APARTMENTS PROJECT), SERIES 2006A, AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS SENIOR LIVING MULTIFAMILY HOUSING REVENUE NOTE (CALVARY CENTER APARTMENTS PROJECT), SERIES 2006B, APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND THE NOTE AND RELATED DOCUMENTS; PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE BONDS AND THE NOTE; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of Golden Valley, Minnesota (the "City"), is a statutory city and political subdivision of the State of Minnesota; and WHEREAS, 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 issuing revenue bonds and notes to finance or refinance multifamily housing developments located within the City, and as a condition to the issuance of such revenue bonds or notes, adopt a housing program providing the information required by Section 462C.03, subdivision 1 a, of the Act; and WHEREAS, in the issuance of the City's revenue bonds and in the making of a loan to finance a multifamily housing development the City may exercise, within its corporate limits, any of the powers that the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended; and WHEREAS, Calvary Center Apartments Limited Partnership, a Minnesota limited partnership (the "Borrower"), has requested that the City issue its revenue bonds and a revenue note under the Act and lend the proceeds thereof to the Borrower to finance the following: (i) to the acquisition and renovation of an 80-unit senior independent residential rental multifamily housing development, comprised of a single building located at 7650 Golden Valley Road in the City (the "Project"); and (ii) the payment of certain costs related to the issuance of the bonds and the note; and WHEREAS, the Project is designed and intended to be used primarily for rental to and occupancy by persons and families of low and moderate income; and WHEREAS, the City has prepared a housing program (the "Housing Program" or "Program") to authorize the issuance by the City of up to $3,500,000 in revenue bonds and notes to refinance the acquisition, and renovation by the Borrower of the Project; and WHEREAS, the Housing Program was prepared and submitted to the Metropolitan Council for its review and the City, on July 19, 2006, received notice of the approval of the Housing Program by the Metropolitan Council; and Resolution 06-60 - Continued September 19, 2006 WHEREAS, a notice of public hearing (the "Public Notice") was published in New Hope-Golden Valley Sun Post, the official newspaper and a newspaper of general circulation in the City, with respect to: (i) the required public hearing under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) the Housing Program; and (iii) approval of the issuance of the Bonds and the Note, as hereinafter defined; and WHEREAS, the Public Notice was published at least fifteen (15) days before the regularly-scheduled meeting of the City Council of the City and on August 2, 2006, the City Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on (i) the Housing Program, (ii) the proposed issuance of the Bonds and the Note, in an original aggregate principal amount not to exceed $3,500,000, and (iii) the location and nature of the Project; and WHEREAS, pursuant to Resolution No. 06-52, adopted on August 2, 2006, the City Council of the City approved the Housing Program and provided preliminary approval for the sale and issuance of the Bonds and the Note, in an original aggregate principal amount not to exceed $3,500,000; and WHEREAS, the Borrower has requested that the City issue, sell, and deliver its (i) Senior Living Multifamily Housing Revenue Bonds (GNMA Collateralized Mortgage Loan - Calvary Center Apartments Project), Series 2006A (the "Bonds"), in the original aggregate principal amount not to exceed $3,400,000, and (ii) Senior Living Multifamily Housing Revenue Note (Calvary Center Apartments Project), Series 2006B (the "Note"), in the original aggregate principal amount not to exceed $600,000; and WHEREAS, the proceeds derived from the sale of the Bonds will be loaned by the City to the Borrower pursuant to the terms of a Financing Agreement, dated on or after October 1, 2006 (the "Financing Agreement"), between the City, the Borrower, MMA Realty Capital, a Florida corporation (the "Mortgage Lender"), and Wells Fargo Bank, National Association, as trustee (the "Trustee"), whereby the City will apply the proceeds derived from the sale of the Bonds to fund a loan (the "Mortgage Loan") by the Mortgage Lender to the Borrower, to be evidenced by a promissory note (the "Mortgage Note") of the Borrower, secured by a mortgage lien (the "Mortgage") on the Project and to be insured by the Federal Housing Administration ("FHA"), and upon endorsement of the Mortgage Loan by the FHA, the Mortgage Lender is to issue and deliver to the Trustee, as security for the Bonds, a security (the "GNMA Security") issued by the Mortgage Lender and guaranteed as to timely payment of principal and interest by the Government National Mortgage Association ("GNMA"); and WHEREAS, the Bonds will be issued pursuant to this resolution and an Indenture of Trust, dated on or after October 1, 2006 (the "Indenture"), between the City and the Trustee, and the Bonds and the interest on the Bonds: (i) shall be payable solely from the revenues pledged therefore under the Financing Agreement; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; (iv) shall not constitute a charge, lien, or encumbrance, legal or Resolution 06-60 - Continued September 19, 2006 equitable, upon any property of the City other than the City's interest in the Financing Agreement; and (v) shall not constitute a general or moral obligation of the City; and WHEREAS, the Note will be issued pursuant to this resolution and the terms of a Note Agreement, dated on or after October 1, 2006 (the "Note Agreement"), between the City and the Borrower, whereby the proceeds derived from the sale of the Note to a financial institution (the "Note Lender"), to be determined by Piper Jaffray & Co. and the Borrower, will be loaned from the City to the Borrower pursuant to the terms of the Note Agreement; and WHEREAS, to secure the payments of principal and interest on the Note, the City will assign the Note Agreement to the Note Lender pursuant to an Assignment of Note Agreement, dated on or after October 1, 2006 (the "Assignment of Note Agreement"); and WHEREAS, the Note and the interest on the Note: (i) shall be payable solely from the security pledged therefore under the Note Agreement; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Note Agreement; and (v) shall not constitute a general or moral obligation of the City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GOLDEN VALLEY, MINNESOTA, AS FOLLOWS: 1. The City acknowledges, finds, determines, and declares that the issuance of the Bonds and the Note are authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Bonds and the Note, and the other actions of the City under the Indenture, the Financing Agreement, the Note Agreement, the Assignment of Note Agreement, and this resolution constitute a public purpose and are in the best interests of the City. In authorizing the issuance of the Bonds and the Note for the financing of the Project and the 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 providing multifamily housing developments for low or moderate income residents of the City and otherwise furthering the purposes and policies of the Act. The combined original aggregate principal amount of the Bonds and the Note will not exceed $3,500,000. 2. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Bonds in one or more series in the maximum aggregate principal amount not to exceed $3,400,000. The Bonds shall bear interest at the 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 form, and shall have such other terms, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Bonds to be issued, in whole or in part, as "tax-exempt bonds," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. Resolution 06-60 - Continued September 19, 2006 All of the provisions of the Bonds, 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. The Bonds shall be substantially in the form in the Indenture on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds, the terms of redemption of the Bonds, and variation from City policies regarding methods of offering conduit bonds) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Bonds with the manual or facsimile signature of the Mayor and the City Manager and the delivery of the Bonds by the City shall be conclusive evidence of such determination. 3. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Note in the maximum aggregate principal amount not to exceed $600,000. The Note shall bear interest at the rate, shall be designated, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Note to be issued, in whole or in part, as a "tax-exempt obligation," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Note, 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. The Note shall be substantially in the form on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Note, the stated maturity of the Note, the interest rate on the Note, the terms of redemption of the Note, and variation from City policies regarding methods of offering conduit notes) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Note with the manual or facsimile signature of the Mayor and the City Manager and the delivery of the Note by the City shall be conclusive evidence of such determination. 4. The Bonds shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Financing Agreement and other funds pledged pursuant to the Indenture. The City Council of the City hereby authorizes and directs the Mayor and the City Manager to execute the Indenture, and to deliver the Indenture to said Trustee, and hereby authorizes and directs the execution of the Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Bonds, the City and the Trustee as set forth therein. All of the provisions of the Indenture, 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. The Indenture shall be substantially in the form on file with the City, which is Resolution 06-60 - Continued September 19, 2006 hereby approved, with such necessary and appropriate variations, omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. 5. The Note shall be a special, limited obligation of the City payable solely from the revenues provided by the Borrower pursuant to the Note Agreement. The City Council of the City hereby authorizes and directs the Mayor and the City Manager to execute the Note Agreement and the Assignment of Note Agreement, and to deliver the Assignment of Note Agreement to the Note Lender, and hereby authorizes and directs the execution of the Note in accordance with the terms of the Note Agreement, and hereby provides that the Note Agreement shall provide the terms and conditions, covenants, rights, obligations, duties and agreements of the Borrower, the City and the Note Lender, as owner of the Note, as set forth therein. All of the provisions of the Note Agreement and Assignment of Note Agreement, 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. The Note Agreement and the Assignment of Note Agreement shall be substantially in the forms on file with the City, which are hereby approved, with such necessary and appropriate variations, omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determinations. 6. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Financing Agreement and the Bond Purchase Agreement, dated on or after September 15, 2006 (the "Bond Purchase Agreement"), between the City, Piper Jaffray & Co. (the "Underwriter"), and the Borrower. All of the provisions of the Financing Agreement and Bond Purchase 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 Financing Agreement and Bond Purchase Agreement shall be substantially in the forms on file with the City which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determinations. 7. To ensure compliance with certain rental and occupancy restrictions imposed by the Act and Section 142(d) of the Internal Revenue Code of 1986, as amended (the "Code"), the Mayor and City Manager are also hereby authorized and directed to execute and enter into a Regulatory Agreement, dated on or after October 1, 2005 (the "Regulatory Agreement"), between the City, the Borrower, the Trustee and/or the Note Lender. 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 Resolution 06-60 - Continued September 19, 2006 with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. 8. The Bonds shall be special, limited revenue obligations of the City, the proceeds of which shall be disbursed pursuant to the terms of the Indenture and the Financing Agreement, and the principal, premium, and interest on the Bonds shall be payable solely from the proceeds of the Bonds, the revenues derived from the Financing Agreement, and the other sources set forth in the Indenture. 9. The Note shall be a special, limited revenue obligation of the City, the proceeds of which shall be disbursed pursuant to the terms of the Note Agreement, and the principal, premium, and interest on the Note shall be payable solely from the proceeds of the Note, the security pledged pursuant to the Note Agreement, and other sources pledged by the Borrower. 10. The Trustee is hereby appointed as Paying Agent and Bond Registrar for the Bonds. The Note Lender is hereby appointed as Paying Agent and Bond Registrar for the Note. 11. The Mayor and the City Manager are hereby authorized to execute and deliver, on behalf of the City, such other documents and certificates as are necessary or appropriate in connection with the issuance, sale, and delivery of the Bonds and the Note, including various certificates of the City, including Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038 with respect to the Bonds and with respect to the Note, a certificate as to arbitrage and rebate, and similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Bonds or the Note. The City hereby approves the execution and delivery by the Trustee of the Indenture and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Bonds that require execution by the Trustee. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel to prepare, execute, and deliver its approving legal opinions with respect to the Bonds and the Note. 12. The City has not participated in the preparation of the Preliminary Official Statement or the Official Statement relating to the offer and sale of the Bonds (collectively, the "Official Statement"), and has made no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information. Subject to the foregoing, the City hereby consents to the distribution and the use by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Bonds. 13. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by Resolution 06-60 - Continued September 19, 2006 the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council of the City, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Bonds or the Note shall be personally liable on the Bonds or the Note or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant or agreement contained in the aforementioned documents, the Bonds, the Note, or in any other document relating to the Bonds or the Note, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to a general or moral obligation of the City or any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Financing Agreement which are to be applied to the payment of the Bonds, as provided therein and in the Indenture, and funds and revenues derived from the Note Agreement which are to be applied to the payment of the Note, as provided therein. 14. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City, any holder of the Bonds or Note issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, and any holder from time to time of the Bonds or Note issued under the provisions of this resolution. 15. In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 5 or in the first sentence of Section 6 hereof, or of the aforementioned documents, or of the Bonds or the Note issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds or the Note, but this resolution, the aforementioned documents, and the Bonds and the Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 16. The Bonds and the Note, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds and the Note and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds and the Note, and to the execution Resolution 06-60 - Continued September 19, 2006 of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 17. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, the Bonds, and the Note for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the Note, the aforementioned documents, and this resolution. If for any reason the Mayor or the City Manager is unable to execute and deliver the documents referred to in this Resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of the Mayor or the City Manager with the same force and effect as if such documents were executed and delivered by the Mayor or the City Manager. 18. The Borrower shall pay the administrative fee of the City upon issuance of the Bonds and the Note in the amount of one percent (1.00%) of the original aggregate principal amount of the Bonds and the Note. The Borrower will also 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 and the Note, whether or not the Bonds and Note are issued, including any costs for attorneys' fees. 19. This Resolution shall be in full force and effect from and after its approval and publication. ) (/)2(2/LU ,. Linda R. Loomis, Mayor ATTEST: 0, A* • Susan M. Virnig, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Pentel and upon a vote being taken thereon, the following voted in favor thereof: Freiberg, Loomis, Pentel, Scanlon and Shaffer; 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.