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06-78 - 11-08 - Multifamily Housing for Hammer Residences Resolution 06-78 November 8, 2006 Member Shaffer introduced the following resolution and moved its adoption: RESOLUTION RELATING TO FINANCING MULTIFAMILY HOUSING DEVELOPMENTS UNDER THE MUNICIPAL HOUSING PROGRAMS ACT; AND CALLING FOR A PUBLIC HEARING THEREON HAMMER RESIDENCES, INC. PROJECT BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota (the "City"), as follows: Section 1. Recitals. 1.1. The City is authorized by Minnesota Statutes, Chapter 462C, as amended (the "Housing Programs Act"), to issue its revenue bond or note to finance multifamily housing developments within its boundaries, which revenue bond or note shall be payable solely from revenues of the developments or other security pledged therefor. The City is also authorized by the Housing Programs Act and Minnesota Statutes, Section 471.59 (the "Joint Powers Act," and referred to together with the Housing Programs Act as the "Acts"), to enter into a joint powers agreement with one or more other cities in connection with the issuance by such other city of its revenue bond or note to finance multifamily housing developments in the City and in such other cities. 1.2. Hammer Residences, Inc., a Minnesota nonprofit corporation (the "Corporation") and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), has requested that the City conduct a public hearing on a proposal by the Corporation that the City of Wayzata (the "Issuer") issue its revenue bond or note in a principal amount not to exceed $2,500,000 (the "Bond"), on behalf of the Issuer, and the Cities of Plymouth and Golden Valley, Minnesota (the Cities of Plymouth and Golden Valley referred to together as the "Participating Jurisdictions"), all pursuant to a joint powers agreement (the "Joint Powers Agreement") between the Issuer and the Participating Jurisdictions. 1.3. Under the proposal by the Corporation, the Issuer and the Participating Jurisdictions will enter into the Joint Powers Agreement, pursuant to which the Issuer will issue the Bond, a portion of the proceeds of which would be applied by the Corporation to financing and refinancing the Golden Valley Projects described below. Proceeds of the Bond would also be applied to finance or refinance costs of facilities of the Corporation located within the corporate boundaries of the Issuer and the City of Plymouth (such facilities, together with the Golden Valley Projects, all collectively referred to as the "Projects"). 1.4. The Golden Valley Projects consist of existing multifamily housing developments for persons with developmental and other disabilities, owned and operated by the Corporation, for which the proceeds of the Bond will provide: (a) refinancing of existing mortgage indebtedness and (b) rehabilitation of the facilities, to the extent required by the Housing Programs Act. The Golden Valley Projects are located at 300 Jersey Avenue North and 2025 and 2027 Unity Avenue North in the City. Resolution 06-78 - Continued November 8, 2006 1.5. In connection with the issuance of the Bond, and pursuant to the Housing Programs Act, the City has developed and there is attached as Exhibit A hereto a Housing Program (the "Housing Program"). Section 2. Public Hearing 2.1. The Housing Programs Act provides that a city may issue its revenue bonds or notes to finance multifamily housing developments upon the conditions specified in Section 462C.05 of the Housing Programs Act, including the holding of a public hearing following not fewer than fifteen days' published notice. 2.2. Section 147(f) of the Code, and regulations thereunder, requires that, as a condition to the exemption from federal income taxation of interest on the Bond, a public hearing be conducted on the proposed issuance of the Bond. 2.3. A public hearing on the Housing Program and the issuance of the Bond is hereby called and shall be held on Tuesday, December 5, 2006, at 7:00 o'clock P.M., held in the City Council Chambers at Golden Valley City Hall. A notice of the public hearing shall be in substantially in the form attached hereto as Exhibit B. 2.4. The City Clerk shall cause notice of the public hearing, substantially in the form attached as Exhibit B, to be published in a newspaper of general circulation in the City at least once not less than fifteen (15) days prior to the date fixed for the public hearing. Linda R. Loomis, Mayor ATTEST: usan M. Virnig, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Freiberg and upon a vote being taken thereon, the following voted in favor thereof: Freiberg, Loomis, Scanlon and Shaffer; and the following was absent: Pentel; 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. Resolution 06-78 - Continued November 8, 2006 EXHIBIT A PROGRAM FOR MULTIFAMILY HOUSING DEVELOPMENTS UNDER MINNESOTA STATUTES, CHAPTER 462C HAMMER RESIDENCES, INC. PROJECT This housing program has been developed by the City of Golden Valley, Minnesota (the "City") in connection with financing certain multifamily housing developments for persons with developmental and other disabilities (the "Developments"), including the refinancing and rehabilitation of the Developments. The Developments are owned by Hammer Residences, Inc., a Minnesota nonprofit corporation (the "Borrower"), and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. Two of the Developments are located at 300 Jersey Avenue North and 2025 and 2027 Unity Avenue North in the City (the "Golden Valley Facilities"). Financing and refinancing for the Developments will be provided through the issuance of a revenue bond or note (the "Bond") to be issued by the City of Wayzata (the "Issuer") in a principal amount not to exceed $2,500,000, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"). The proceeds of the Bond will be used to provide refinancing for outstanding mortgage indebtedness and, to the extent required by the Act, rehabilitation of the Developments, including the Golden Valley Facilities and certain Developments located at 550 Broadway Avenue North and 2412 Sheridan Hills Curve in the City of Wayzata, Minnesota, and at 16205 14th Avenue North, 4525 Zachary Lane North, 420 Merrimac Lane and 11300 42nd Avenue North in the City of Plymouth, Minnesota (the Cities of Plymouth and Golden Valley referred to together as the "Joint Powers Participants"). In connection with the issuance of the Bond, the Issuer and the Joint Powers Participants will enter into a Joint Powers Agreement pursuant to the Act and Minnesota Statutes, Section 471.59, as amended (the "Joint Powers Act"). The Developments will be available for rental primarily to developmentally disabled persons, and each will be operated as a multifamily housing facility for the term of the Bond. With respect to each Development, the Borrower will agree to provide for the rehabilitation of the Development to the extent required by the Act. Rehabilitation expenditures with respect to each Development will be made in a minimum amount equal to $1,000 per dwelling unit. For such purpose, "rehabilitation expenditures" shall mean the improvement of the existing multifamily housing development to improve the basic livability of the housing or restore it to a decent, safe, and sanitary condition. Improvements may include, without limitation, room additions, renovation, improvement or construction of a garage, repair of sidewalks, and improvements used or useful to conserve energy or to convert or refit an existing residential building for the use of any energy source which does not depend on nuclear fuel or nonrenewable fossil fuel, or which makes available another energy source which is wasted including, without limitation, cogeneration or district heating. Improvements shall not include the construction or improvement of recreational facilities, routine or minor repairs or maintenance, or cosmetic improvements unless coupled with the cure of substantial accumulation of deferred maintenance or other permitted improvements. Resolution 06-78 - Continued November 8, 2006 The Borrower will be required, pursuant to a revenue agreement, to make payments sufficient to pay when due the principal of, premium, if any, and interest on the Bond. The repayment of the Bond and security therefor may be structured so as to take advantage of whatever means are available or necessary and are permitted by law to enhance the security for and marketability of the Bond. Substantially all of the net proceeds of the Bond will be used to pay the costs of the Development, including any functionally related and subordinate facilities. Each of the Developments will be operated as a multifamily housing development, within the meaning of the Act. Ownership and operation of the Developments will be carried out by the Borrower, in accordance with applicable land use and development restrictions, and such ownership and operation will be subject to applicable state and local building codes. The Borrower will be required to operate the Developments in accordance with state and local anti- discrimination laws and ordinances. The Issuer may periodically require from the Borrower or such other person deemed necessary evidence concerning compliance with this housing program and the documents prepared in connection with the issuance of the Bond. The costs of the Developments and the program of financing the Developments, including specifically the costs of the City in connection therewith, will be paid or reimbursed by the Borrower or, to the extent legally available therefor, from the proceeds of the Bond. Resolution 06-78 - Continued November 8, 2006 EXHIBIT B NOTICE OF PUBLIC HEARING ON MULTIFAMILY HOUSING DEVELOPMENTS AND THE ISSUANCE OF A REVENUE BOND OR NOTE BY THE CITY OF WAYZATA, MINNESOTA, UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED NOTICE IS HEREBY GIVEN that a public hearing shall be conducted by the City Council of the City of Golden Valley (the "City") on a proposal by Hammer Residences, Inc., a Minnesota nonprofit corporation (the "Borrower"), that the City of Wayzata (the "Issuer"), pursuant to a joint powers agreement (the "Joint Powers Agreement") between the Issuer and the Cities of Plymouth and Golden Valley, Minnesota, issue a revenue bond or note (the "Bond") to provide financing or refinancing for and the rehabilitation of certain multifamily housing developments (the "Developments"), including the Golden Valley Developments described below, all pursuant to Minnesota Statutes, Chapter 462C, as amended, and Minnesota Statutes, Section 471.59, as amended (collectively referred to as the "Acts"). The hearing will be held in the City Council Chambers at Golden Valley City Hall, 7800 Golden Valley Road in the City of Golden Valley, on Tuesday, December 5, 2006, 2006, at 7:00 o'clock P.M. The proposed multifamily housing developments located in the City of Golden Valley consist of the following (referred to as the "Golden Valley Developments"): 1. A multifamily housing development for persons with developmental and other disabilities located at 300 Jersey Avenue North, Golden Valley, Minnesota, for which proceeds of the Bond will provide refinancing of existing mortgage indebtedness, together with the rehabilitation of the development, to the extent required by Minnesota Statutes, Chapter 462C, as amended (the "Housing Programs Act"); and 2. A multifamily housing development for persons with developmental and other disabilities located at 2025 and 2027 Unity Avenue North, Golden Valley, Minnesota, for which proceeds of the Bond will provide refinancing of existing mortgage indebtedness, together with the rehabilitation of the facility, to the extent required by the Housing Programs Act. Under the Borrower's proposal, the City of Wayzata, the City of Plymouth, and the City of Golden Valley will enter into a Joint Powers Agreement, pursuant to which the Issuer will issue its revenue bond or note (the "Bond") to provide funds for, among other things, the Golden Valley Developments, and for related costs, including any required reserves and issuance costs. The Bond will be issued in a principal amount of up to $2,500,000. The Developments involve assistance for housing and, accordingly, the issuance of the Bond is not a business subsidy, within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995, as amended. At said time and place the City Council shall give all parties who appear or submit written comments an opportunity to express their views with respect to the proposal. City of Golden Valley By Susan M. Virnig, City Clerk