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08-03 - 01-08 - Housing Program and Providing for the Issuance and Sale of Revenue BondResolution 08-3 January 8, 2008 0 Member Pentel introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING A HOUSING PROGRAM AND PROVIDING FOR THE ISSUANCE AND SALE OF A REVENUE BOND PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED, AT THE REQUEST OF HAMMER RESIDENCES, INC., AND APPROVING A JOINT POWERS AGREEMENT AND OTHER DOCUMENTS TO BE ENTERED INTO IN CONNECTION THEREWITH BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GOLDEN VALLEY: 1. Authorily. By the provisions of Minnesota Statutes, Chapter 462C, as amended (the "Housing Programs Act"), the City of Golden Valley (the "City") is authorized to plan, administer, issue and sell revenue bonds or obligations to make or purchase loans to finance one or more multifamily housing developments within its boundaries, which revenue bonds or obligations shall be payable solely from the revenues of such developments. Pursuant to Section 462C.07, Subdivision 1 of the Housing Programs Act, in the purchase or making of multifamily housing loans and the issuance of revenue bonds or other obligations, the City may exercise within its corporate limits any of the powers of the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A. Pursuant to the Housing Programs Act and Minnesota Statutes, Section 471.59, as amended (the "Joint Powers Act," and together with the Housing Programs Act, referred to collectively as the "Acts"), the City and the City of Plymouth (the "Participating Jurisdiction") have been requested to enter into a Joint Powers Agreement (as further described herein, the "Joint Powers Agreement") under which the City would issue its Revenue Bond (Hammer Residences, Inc. Project) (as further described herein, the "Bond"), on behalf of itself and the Participating Jurisdiction, to provide financing in connection with the housing programs described herein, which were developed pursuant to the Housing Programs Act. 2. The Bond and the Programs. Hammer Residences, Inc., a Minnesota nonprofit corporation (the "Borrower") has requested that the City approve a housing program (the "Golden Valley Program") pursuant to the Housing Programs Act. A copy of the Golden Valley Program has been presented to this Council and has been placed on file with the City Clerk, The Golden Valley Program has been submitted to the Metropolitan Council for review and comment as required by the Housing Programs Act. The Golden Valley Program includes the multifamily housing development described in Exhibit A hereto. The Borrower has further requested that the Participating Jurisdiction approve the housing program referred to and described in the Joint Powers Agreement (referred to collectively with the Golden Valley Program as the "Programs"), and that the City issue and sell the Bond in substantially the form attached hereto as Exhibit B, pursuant to the Acts, on behalf of itself and the Participating Jurisdiction, and loan the proceeds thereof to the Borrower to provide financing and refinancing for the Programs. The street addresses of Resolution 08-3 - Continued January 8, 2008 ithe multifamily housing developments and related property included in the Programs are set forth in the Programs and the Joint Powers Agreement. 3. Public Hearing. This Council conducted a public hearing Tuesday, January 8, 2008, on the proposal to authorize the Golden Valley Program and issue the Bond to provide financing for the Programs. All persons present had an opportunity to express their views with respect to the Golden Valley Program and the issuance of the Bond. 4. Approval of Program. The Golden Valley Program is hereby approved by the City. 5. Documents Presented. Forms of the following documents relating to the Bond and the Programs have been submitted to the City and are now on file in the offices of the City Clerk: (a) Joint Powers Agreement (the "Joint Powers Agreement") dated as of January 1, 2008, between the City and the Participating Jurisdiction, whereby the City agrees to issue the Bond on behalf of itself and the other Participating Jurisdiction, pursuant to the Acts., in order to provide financing and refinancing for the Programs; (b) Loan and Purchase Agreement (the "Loan Agreement") dated as of January 1, 2008, by and between the City, the Borrower and Wells Fargo Brokerage is Services, LLC (the "Lender"), whereby, among other things, the City agrees to sell and the Lender agrees to purchase the Bond, the City agrees to make a loan to the Borrower of the gross proceeds of the sale of the Bond and the Borrower agrees to complete the Programs, and the Borrower covenants to pay amounts sufficient to provide for the prompt payment of the principal of, premium, if any, and interest on the Bond; (c) Loan Agreement Assignment (the "Loan Agreement Assignment"), dated as of January 1, 2008, whereby the City assigns to the Lender all of its interest in the Loan Agreement and Loan Repayments of the Borrower payable thereunder (except for its rights to indemnity and payment of fees, expenses and advances); (d) Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents (the "Mortgage") dated as of January 1, 2008, from the Borrower, as mortgagor, to the City, as mortgagee, whereby the Borrower grants to the City, a mortgage lien on and security interest in the property described therein, as security for the Bond, and the Borrower assigns to the City, for the further security of the Bond, its interest in all leases and rents derived from the Programs; 0 Resolution 08-3 - Continued January 8, 2008 . (e) Assignment of Mortgage (the "Mortgage Assignment") dated as of January 1, 2008, from the City, as assignor, to the Lender, as assignee, whereby the City assigns to the Lender the City's interest in the Mortgage; (f) Escrow Agreement (the "Escrow Agreement"), dated as January 1, 2008, between the City, the Borrower and the Lender, pursuant to which the Lender, as Escrow Agent, agrees to hold, administer, invest and disburse the moneys in the Project Fund established with proceeds of the Bond; (g) Regulatory Agreement (the "Regulatory Agreement"), dated as of January 1, 2008 between the Lender and the Borrower, designed to assure the ongoing tax-exempt status of interest on the Bond. 6. Findin slt is hereby found, determined and declared that: (a) There is no litigation pending or, to the knowledge of the City, threatened against the City relating to any of the Programs or to the Bond, the Joint Powers Agreement, the Loan Agreement, the Loan Agreement Assignment, the Escrow Agreement, the Regulatory Agreement, the Mortgage, or the Mortgage Assignment (the "Bond Documents"), or questioning the organization, powers or authority of the City to issue the Bond or execute such agreements. (b) The execution, delivery and performance of the City's obligations under the Bond and the Bond Documents do not and will not violate any order of any court or any agency of government of which the City is aware or in any proceeding to which the City is a party, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (c) The Loan Agreement provides for payments by the Borrower to the Lender as registered owner of the Bond for the account of the City of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bond when due. The Loan Agreement obligates the Borrower to provide for the operation and maintenance of the Program Facilities (as described therein), including adequate insurance, taxes and special assessments. (d) Under the provisions of the Acts, and as provided in the Loan Agreement, the Bond is not and shall not be payable from or charged upon any funds other than amounts payable pursuant to the Loan Agreement, which are pledged to the payment thereof pursuant to the Loan Agreement Assignment, and, in event of default, moneys derived from foreclosure of the Mortgage; the City is not subject to any liability thereon; no owner of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the interest thereon, nor to enforce payment thereof against any property of the City; neither the Resolution 08-3 - Continued January 8, 2008 Bond nor any document executed or approved in connection with the issuance thereof shall constitute a pecuniary liability, general or moral obligation, charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Bond shall not constitute or give rise to a charge against the general credit or taxing powers of the City. 7. Approval and Execution of Documents. The forms of Joint Powers Agreement, Loan Agreement, Loan Agreement Assignment, Mortgage, Mortgage Assignment, Regulatory Agreement and Escrow Agreement referred to in paragraph 5, are approved. The Joint Powers Agreement, Loan Agreement, Loan Agreement Assignment, Escrow Agreement and Mortgage Assignment shall be executed and delivered in the name and on behalf of the City by the officers identified in paragraph 17, in substantially the forms on file, but with all such changes therein, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. 8. Approval Execution and Delivery of Bond. The City is hereby authorized to issue the Bond, and the Bond shall be substantially in the form, and shall mature, bear interest, and be payable in the installments and shall otherwise contain the terms and provisions set forth in the form of Bond attached hereto as Exhibit B, which terms are for this purpose incorporated in this resolution and made a part hereof; provided, however, that the maturity of the Bond, the interest rate thereon, and the rights of optional or mandatory redemption with respect thereto shall all be as set forth in the final issued Bond, to be approved, executed and delivered by the officers of the City authorized to do so by the provisions of this Resolution, which approval shall be conclusively evidenced by such execution and delivery; and provided further that, in no event, shall the principal amount of the Bond exceed $900,000. A single Bond, substantially in the form of Exhibit B to this Bond Resolution, shall be issued and delivered to the Lender. The proposal of the Lender to purchase the Bond as provided in the Loan Agreement at a purchase price equal to 100% of the par value thereof is hereby found and determined to be reasonable and is hereby accepted. Pursuant to the Loan Agreement, the payment by the Lender of the sale price of the Bond shall constitute a loan of such funds from the City to the Borrower, as further provided in the Loan Agreement. 9. Registration Records. The City Clerk, as Bond registrar, shall keep registration records which shall set forth the name and registered address of the registered owner of the Bond from time to time. Transfer of ownership of the Bond shall be reflected in such registration records, as provided in Section 11 below. 0 Resolution 08-3 - Continued January 8, 2008 10. Mutilated, Lost, Stolen or Destroyed Bondlf the Bond is mutilated, lost, stolen or destroyed, the City may execute and deliver to the Holder a new Bond of like amount, date, number and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Bond, there shall be first furnished to the City and the Borrower evidence of such loss, theft or destruction satisfactory to the City and the Borrower, together with indemnity satisfactory to them. The City and Borrower may charge the Holder with their reasonable fees and expenses in replacing any mutilated, lost, stolen or destroyed Bond. 11. Transfer of Bond; Person Treated as HolderThe Bond shall be transferable by the Holder only on the registration records of the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as Bond registrar, accompanied by a written instrument of transfer in form satisfactory to the City Clerk duly executed by the Holder or its attorney duly authorized in writing. The Bond shall continue to be subject to successive transfers in such manner at the option of the Holder of the Bond. No service charge shall be made to the Holder for any such transfer, but the City Clerk may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith, which the Borrower shall pay under the Loan Agreement. The person in whose name the Bond shall be issued or, if transferred, shall be registered from time to time shall be deemed and regarded as the absolute Holder thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the Holder thereof, or its attorney duly authorized in writing, and neither the City, the City Clerk, the Borrower, nor the Lender shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. The Bond shall be initially registered in the name of the Lender. 12. Amendments Changes and Modifications to Documents and Bond Resol utio n Except as provided in the Loan Agreement, the City shall not enter into or make any change, modification, alteration or termination of the Loan Agreement, the Loan Agreement Assignment, the Mortgage, the Mortgage Assignment, the Escrow Agreement or this Resolution. 13. Pledge to HolderPursuant to the Loan Agreement Assignment, the City shall pledge and assign to the Lender and its successor Holders of the Bond all interest of the City in the Loan Repayments to be made by the Borrower under the Loan Agreement. All collections of moneys by the City in any proceeding for enforcement of the obligations of the Borrower pursuant to the Loan Agreement, except for the rights of the City thereunder reserved under the Loan Agreement Assignment, shall be received, held and applied for the benefit of the Holder of the Bond. 0 Resolution 08-3 - Continued January 8, 2008 • 14. Covenants with Holders; EnforceabilityAll provisions of the Bond and of this Resolution and all representations and undertakings by the City in the Loan Agreement and the Loan Agreement Assignment are hereby declared to be covenants between the City and the Lender and its successor Holders of the Bond and shall be enforceable by the Lender or any Holder in a proceeding brought for that purpose. 15. Certificates, etcOfficers of the City are authorized to prepare and furnish to Bond Counsel, to the Borrower and to the Lender, certified copies of all proceedings and records of the City relating to the Bond, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements of fact contained therein. 16. Nature of City's ObligationsAll covenants, stipulations, obligations, representations, and agreements of the City contained in this Resolution or contained in the aforementioned documents shall be deemed to be the covenants, stipulations, obligations, representations, and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations, representations, and agreements shall be binding upon the City. Except as otherwise provided in this Resolution, all rights, powers, and privileges conferred, and duties and liabilities imposed upon the City by the . provisions of this Resolution or of the aforementioned documents shall be exercised or performed by such officers, board, body or agency as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, representation, or agreement herein contained or contained in the documents referred to above shall be deemed to be a covenant, stipulation, obligation, representation, or agreement of any council member, officer, agent, or employee of the City in that person's individual capacity, and neither the City Council nor any officer or employee executing the Bond or such documents shall be liable personally on the Bond or be subject to any representation, personal liability or accountability by reason of the issuance thereof. No provision, representation, covenant or agreement contained in the Bond, this Resolution or in any other document related to the Bond, 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, or indebtedness or 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 the Bond or in any other document related to the Bond, the City has not obligated itself to pay or remit any funds or revenues. C� Resolution 08-3 - Continued January 8, 2008 17. Authorized OfficersThe Bond and the documents referred to herein are authorized to be executed on behalf of the City by either its Mayor or City Clerk; provided that in the event any of the officers of the City authorized to execute documents on behalf of the City under this Resolution shall have resigned or shall for any reason be unable to do so, the acting Mayor or the acting City Clerk, as the case may be, is hereby directed and authorized to do so on behalf of the City, with the same effect as if executed by any officer specifically authorized to do so in this Resolution. 18. Definitions and InterpretationTerms not otherwise defined in this Resolution but defined in the Loan Agreement shall have the same meanings in this Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in the Loan Agreement. In case any provision of this Resolution is for any reason illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the remaining provisions of this Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not contained herein. ATTEST: r Susan 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, Pentel, Loomis, 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. Resolution 08-3 - Continued EXHIBIT A 40 (Description of Multifamily Housing Development included in Golden Valley Program) • January 8, 2008 An existing residential building and site, for persons with developmental and other disabilities, located at 2825 Lee Avenue, Golden Valley, Minnesota, acquisition financing for which is to be provided through the issuance of a revenue note by the City of Golden Valley, which acquisition financing may include the refinancing of any temporary indebtedness incurred therefor; and the rehabilitation of said residential building, to the extent required by the Housing Programs Act. Resolution 08-3 - Continued No. R-1 EXHIBIT B UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF GOLDEN VALLEY Revenue Bond (Hammer Residences, Inc. Project) January 8, 2008 The City of Golden Valley, a municipal corporation in the County of Hennepin and State of Minnesota (hereinafter sometimes called the "City"), for value received, hereby promises to pay, but solely from the sources and in the manner hereinafter provided, to Wells Fargo Brokerage Services, LLC (the "Registered Owner"), or registered assigns, the principal sum of Eight Hundred Thousand Dollars ($800,000), on January _, 2018, upon the presentation and surrender hereof, and to make prepayment of said principal sum in installments as hereinafter provided, and to pay the Registered Owner hereof interest on the outstanding and unpaid balance of such principal sum from the date hereof until said principal sum is paid, at the rate of % per annum from the date hereof. Principal and interest shall be paid in semi-annual installments of $ each, payable on the day of each July and January, commencing on July _, 2008, each such installment payment to be applied first to accrued interest and then to principal. All payments hereon shall be made to the Registered Owner hereof in lawful money of the United States as provided in the Loan Agreement mentioned below, at its registered address. This Bond is issued pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Housing Programs Act"), and Minnesota Statutes, Section 471.59, as amended (the "Joint Powers Act," and together with the Housing Programs Act, referred to collectively as the "Acts"), and in conformity with the provisions, restrictions and limitations thereof. This Bond does not constitute a charge against the general credit or properties or taxing powers of the City and does not grant to the owner of this Bond any right to have the City levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation of the City or the individual officers or agents thereof. This Bond and interest hereon are payable solely from the moneys received under the Loan Agreement (as hereinafter described) or Mortgage referred to therein, including loan repayments to be made by Hammer Residences, Inc., a nonprofit corporation organized and existing under the laws of Minnesota (hereinafter called the "Borrower"), as provided in the Loan Agreement. 0 Resolution 08-3 - Continued January 8, 2008 This Bond is a special, limited obligation Bond in the principal amount of $800,000, which has been authorized by law to be issued and has been issued for the purpose of funding a loan from the City to the Borrower in order to finance and refinance costs incurred with respect to the Programs described in the hereinafter referred to Loan Agreement (collectively the "Program"). This Bond is issued pursuant to a Loan and Purchase Agreement (herein called the "Loan Agreement") by and between the City, the Borrower and Wells Fargo Brokerage Services, LLC (the "Registered Owner"), dated as of January 1, 2008, and a Bond Resolution duly adopted by the City Council of the City on January 8, 2008 (the "Bond Resolution"). Pursuant to a Loan Agreement Assignment (the "Loan Agreement Assignment"), the City has assigned its interest in the Loan Agreement (except for its rights to indemnity and payment of fees, expenses and advances) to the Registered Owner. This Bond is secured by the Loan Agreement, the Loan Agreement Assignment, the Bond Resolution, a Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents dated as of January 1, 2008 (the "Mortgage"), executed by the Borrower to the City and assigned by the City to the Registered Owner, and an Escrow Agreement dated as of January 1, 2008 (the "Escrow Agreement"), by and between the City, the Borrower and the Registered Owner, as Escrow Agent. Reference is hereby made to all such documents and any supplements thereto for a description and limitation of the property, revenues and funds pledged and appropriated to the payment of the Bond, the nature and extent of the security thereby created, the rights of the owner of the Bond, and the rights, immunities and obligations of the City thereunder. Certified copies of the Bond Resolution and executed counterparts of the Loan Agreement, Loan Agreement Assignment, Mortgage and Escrow Agreement are on file at the office of the City Manager. On July _, 2008, and each semi-annual payment date thereafter, this Bond shall be subject to optional prepayment, at the direction of the Borrower, in whole but not in part, at a prepayment price equal to the regularly scheduled payment otherwise owing on such date together with an amount equal to the Termination Value, as set forth in Exhibit A to the Loan Agreement. This Bond is also subject to mandatory redemption in the event of a Determination of Taxability, as defined in the Loan Agreement, that interest upon the Bond is includible in gross income for purposes of federal income taxation. In the event of a Determination of Taxability, the Borrower is obligated to cause the Bond to be redeemed at a redemption price equal to the unpaid principal amount thereof for the semi-annual payment date next preceding such redemption date, as set forth in Exhibit A to the Loan Agreement, plus accrued interest, together with all taxes, interest and penalties assessed or owing in connection therewith. Notice of any such prepayment or redemption shall be given to the registered owner of this Bond by first class mail, addressed to such owner at its registered address, not earlier than sixty days nor later than thirty days prior to the date fixed for prepayment or redemption and shall be published as may be required by law. Resolution 08-3 - Continued January 8, 2008 0 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Please Insert Social Security Number or Notice: The signature to this assignment Other Identifying Number of Assignee must correspond with the name as it appears on the face of this Bond in every particular, without alteration or any change whatever. Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion Signature Program ("MSP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. 0 Im