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16-38 - 06-07 - Approve Minnetonka Agreement Resolution 16-38 June 7, 2016 Member Clausen introduced the following resolution and moved its adoption.- RESOLUTION doption:RESOLUTION CONSENTING TO AND APPROVING THE ISSUANCE, SALE, AND DELIVERY BY THE CITY OF MINNETONKA OF ITS REVENUE OBLIGATIONS; APPROVING AND AUTHORIZING THE EXECUTION OF A COOPERATIVE AGREEMENT WITH THE CITY OF MINNETONKA; AND TAKING OTHER ACTIONS WITH RESPECT THERETO BE IT RESOLVED by the City Council (the "City Council") of the City of Golden Valley, Minnesota (the "City") as follows: Section 1. Recitals. 1.01. Pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Chapter 462C, as amended (the "Act'), a municipality is authorized to issue revenue bonds to finance multifamily housing developments. 1.02. Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the obligations are issued under a joint powers agreement between the municipality issuing the obligations and the municipality in which the property to be acquired or improved is located. Pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of a joint powers agreement entered into through action of their governing bodies, two municipalities may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised and the joint powers agreement may provide for the exercise of such powers by one or more of the participating governmental units on behalf of the other participating units. 1.03. CHC Minnetonka Affordable Housing LLC, a Minnesota limited liability company, or any of its affiliates (collectively, the "Borrower"), has proposed that the City approve the issuance by the City of Minnetonka, Minnesota ("Minnetonka") of one or more series of revenue obligations (the "Bonds") in the approximate aggregate principal amount of$11,500,000. The Borrower intends to apply a portion of the proceeds of the Bonds to finance the substantial rehabilitation of six (6) existing affordable townhome units located at 2100 Douglas Drive North and two (2) existing affordable townhome units located at 3354 Lilac Drive North in the City (together, the "Golden Valley Project'), each constituting a multifamily housing development authorized under the terms of the Act, as well as the acquisition, construction, and equipping of approximately twenty-seven (27) new affordable apartment units to be located at 5750 Shady Oak Road in Minnetonka and the acquisition and substantial rehabilitation of forty-six (46) existing affordable townhome units located at 5400 Smetana Drive in Minnetonka. 1.04. The City and Minnetonka are proposing to enter into a Cooperative Agreement (the "Cooperative Agreement') pursuant to which the City will consent to the issuance of the Bonds by Minnetonka to finance, in part, the acquisition and substantial rehabilitation of the Golden Valley Project, and Minnetonka will agree to issue the Bonds to finance, in part, the acquisition and substantial rehabilitation of the Golden Valley Project. Resolution No. 16-38 -2- June 7, 2016 1.05. On the date hereof, 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 the following: (i) consent to the issuance of the Bonds by Minnetonka pursuant to the requirements of Section 147(f) of the Code and the regulations promulgated thereunder; and (ii) approval of the financing of the acquisition and substantial rehabilitation of the Golden Valley Project pursuant to the requirements of the Act. 1.06. The Borrower has represented to the City that the principal of, premium (if any), and interest on the Bonds: (i) shall be payable solely from the revenue pledged therefor; (ii) shall not constitute a debt of the City or Minnetonka within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or Minnetonka or a charge against its general credit or taxing powers; and (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City or Minnetonka other than the interest of Minnetonka as set forth in one or more loan agreements to be entered into between Minnetonka and the Borrower (collectively, the "Loan Agreement'). Section 2. Approvals. 2.01. The City Council finds that it is in the best interest of the City to approve the issuance of the Bonds by Minnetonka to finance, in part, the acquisition and substantial rehabilitation of the Golden Valley Project and hereby consents to the issuance of the Bonds by Minnetonka for the purposes set forth above. 2.02. The Bonds shall be special, limited obligations of Minnetonka payable solely from the revenues and security provided by the Borrower to Minnetonka and pledged to the payment of the Bonds. Before issuing the Bonds, Minnetonka will enter into the Loan Agreement with the Borrower, whereby the Borrower will be obligated to make payments at least sufficient at all times to pay the principal of and interest on the Bonds when due. 2.03. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Cooperative Agreement. All of the provisions of the Cooperative 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 Cooperative Agreement shall be substantially in the form on file 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. 2.04. The Mayor and City Manager and other officers, employees, and agents of the City are hereby authorized and directed to prepare and furnish to bond counsel, the trustee, and the original purchaser of the Bonds certified copies of all proceedings and records of the City relating to the approval of the issuance of the Bonds, including a certification of this resolution. 2.05. The Borrower will, upon demand, reimburse the City for costs paid or incurred by the City in connection with this resolution and the Cooperative Agreement. Resolution No. 16-38 -2- June 7, 2016 Section 3. Effective Date. This resolution shall be in full force and effect from and after its passage. Approved by the City Council of the City of Golden Valley, Minnesota this 7t" day of June, 2016. Larry Fn st, Mayor Pro-Tem ATTEST: Kristine A. Luedke, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Snope and upon a vote being taken thereon, the following voted in favor thereof: Snope, Clausen and Fonnest and the following voted against the same: none whereupon said resolution was declared duly passed and adopted, signed by the Mayor and his signature attested by the City Clerk.