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16-50 - 09-06 - Approve Finance of Brookview Community Center Resolution 16-50 September 6, 2016 Member Fonnest introduced the following resolution and moved its adoption: RESOLUTION RELATING TO THE ISSUANCE BY THE CITY HOUSING AND REDEVELOPMENT AUTHORITY OF LEASE REVENUE BONDS; AUTHORIZING THE EXECUTION OF A GROUND LEASE AND LEASE-PURCHASE AGREEMENT PROVIDING FOR THE LEASE OF CERTAIN PROPERTY WHEREAS, the Housing and Redevelopment Authority of the City of Golden Valley, Minnesota (the "Authority") is authorized by Minnesota Statutes, Section 469.012, subdivision 1(h), to undertake redevelopment projects; and WHEREAS, the Authority is authorized by said section and Section 471.64 to make any of its land in a redevelopment project available for use by public agencies by sale, lease or otherwise; and WHEREAS, the City of Golden Valley, Minnesota (the "City") and the Authority have determined that it is in the best interests of the City and its residents to provide for the redevelopment of certain land in the City and the construction of a new community center facility (the "Project'); and WHEREAS, the City has agreed is to convey its interest in the real property comprising the Project to the Authority and the Authority has agreed to issue its lease revenue bonds (the "Bonds") pursuant to Minnesota Statutes, Section 469.033, for the purpose of financing all or a portion of the costs of the Project; and WHEREAS, the City will lease-purchase the Project back from the Authority, as improved, pursuant to Minnesota Statutes, Section 465.71, in exchange for rental payments; and WHEREAS, the Bonds will be payable from such rental payments received by the Academy from the City. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City (the "Council") as follows: 1. Authorization. The City is authorized by Minnesota Statutes, Sections 471.64 to lease real property and by said section and Minnesota Statutes, Section 465.71 to lease real and personal property with an option to purchase under a lease-purchase agreement, provided that the City retains the right to terminate said lease-purchase agreement at the end of any fiscal year during its term. 2. Ground Lease and Lease. It is hereby found, determined and declared to be necessary and desirable and in the best interest of the City to enter into a Ground Lease with the City, as lessor, and the Authority, as lessee (the "Ground Lease") and a Lease- Purchase Agreement (the "Lease") with the Authority, as lessor, and the City, as lessee, in order to provide for the construction of the Project by the Authority and the lease of the Project to the City. The Council hereby approves the forms of the Ground Lease and the Lease attached as exhibits hereto. The Mayor and City Manager, or their authorized Resolution 16-50 -2- September 6, 2016 designees, are hereby authorized and directed to execute and deliver the Ground Lease and the Lease and such other documents which are required to accomplish the issuance of the Bonds in the name of and on behalf of the City with such variations, omissions, deletions and insertions as the Chair and City Manager, or their authorized designees, shall approve, which approval shall be conclusively presumed by the execution and delivery of the Ground Lease and the Lease. All of the provisions of the Ground Lease and Lease, when executed and delivered as authorized herein, will be deemed to be a part of this resolution as fully and to the same extent as if incorporated herein and such provisions will be in full force and effect from the date of execution and delivery thereof. 3. Net Debt. The obligation created by the Lease in excess of$1,000,000 shall, as provided in Minnesota Statutes, Section 465.71, be included in the calculation of net debt of the City for purposes of Minnesota Statutes, Section 475.53, and such obligation does not cause the net debt of the City to exceed its debt limit. 4. General Tax Covenant. The City agrees that it will not take, or permit to be taken by any of its officers, employees or agents, any action that would cause interest on the Bonds to become includable in gross income of the recipient under the Internal Revenue Code of 1986, as amended (the "Code") and applicable Treasury Regulations (the "Regulations"), and agrees to take any and all actions within its powers to ensure that the interest on the Bonds will not become includable in gross income of the recipient under the Code and the Regulations. All proceeds of the Bonds deposited in the Project Fund established pursuant to the Trust Indenture between the Authority and U.S. Bank National Association relating to the Bonds (the "Indenture") will be expended solely for the payment of the costs of the Project as set forth in the Indenture. So long as any Bonds are outstanding, the City shall not enter into any contract for the sale of all or a portion of the Project financed by such Bonds or enter into any lease, management contract, use agreement or other agreement with any non-governmental person relating to the use of all or a portion of the Project financed by such Bonds or security for the payment of such Bonds which might cause such Bonds to be considered "private activity bonds" or "private loan bonds" pursuant to Section 141 of the Code. 5. Authority Resolution. The Council hereby approves the sale and issuance of the Bonds pursuant to the Indenture and the resolution of the Authority with respect to the Bonds adopted as of the date hereof (the "Authority Resolution"). In connection with the disclosure requirements set forth in Section 7.05 of the Authority Resolution, the officers of the City are hereby authorized and directed to supply to the Authority such updated financial and other information relating to the City as may be required from time to time by the Authority so as to permit the Authority to comply with the terms of said Section 7.05. 6. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2-12 promulgated by the Securities Exchange Commission (the "SEC') under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as in effect and interpreted from time to time, the "Rule"), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and Resolution 16-50 -3- September 6, 2016 agreements for the benefit of the Owners (as hereinafter defined)from time to time of the Outstanding Bonds. The Authority and the City are the only obligated persons in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. If the City fails to comply with any provisions of this section, any person aggrieved thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this section, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or under any other provision of this resolution. As used in this section, Owner or Bondowner means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner(as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, Beneficial Owner means, in respect of a Bond, any person or entity which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries), or(b) is treated as the owner of the Bond for federal income tax purposes. (b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or before twelve months after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2016, the following financial information and operating data in respect of the City (the "Disclosure Information"): (A) the audited financial statements of the City for such fiscal year, containing balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the City, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and (B) to the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type contained in the Official Statement under Resolution 16-50 -4- September 6, 2016 headings: City Property Values; City Indebtedness; and City Tax Rates, Levies and Collections. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been submitted to each of the repositories hereinafter referred to under subsection (c) or the SEC. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board (the WSRB"). The City shall clearly identify in the Disclosure Information each document so incorporated by reference. if any part of the Disclosure Information can no longer be generated because the operations of the City or the Authority have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by other Authority or City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner, not in excess of 10 business days, to the MSRB through EMMA, notice of the occurrence of any of the following events (each a "Material Fact"): (A) principal and interest payment delinquencies; (B) non-payment related defaults, if material; (C) unscheduled draws on debt service reserves reflecting financial difficulties; (D) unscheduled draws on credit enhancements reflecting financial difficulties; (E) substitution of credit or liquidity providers, or their failure to perform; (F) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the security or other material events affecting the tax status of the Bonds; (G) modifications to rights of holders of the Bonds, if material; (H) bond calls, if material, and tender offers; (1) defeasances; (J) release, substitution or sale of property securing repayment of the Bonds, if material; Resolution 16-50 -5- September 6, 2016 (K) rating changes; (L) bankruptcy, insolvency, receivership, or similar event of the obligated person; (M) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (N) appointment of a successor or additional trustee or the change of name of a trustee, if material. For the purposes of the event identified in (L) hereinabove, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. As used herein, for those events that must be reported if material, an event is "material" if it is an event as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed hereunder or information generally available to the public. Notwithstanding the foregoing sentence, an event is also "material' if it is an event that would be deemed material for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. (3) In a timely manner, to the MSRB through EMMA, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (c)(1) at the time specified thereunder; (B) the amendment or supplementing of this section pursuant to subsection (e), together with a copy of such amendment or supplement; (C) the termination of the obligations of the City under this section pursuant to subsection (e); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information are prepared; and (E) any change in the fiscal year of the City. Resolution 16-50 -6- September 6, 2016 (c) _Identifying Information to Accompany Documents. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. (d) Term; Amendments; Interpretation. The covenants of the City in this section shall remain in effect so long as any Bonds are outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. This section may be amended or supplemented by the City from time to time, without notice to or the consent of the Owners of any Bonds, by a resolution of this Board filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the Authority or the City or the type of operations conducted by the Authority or the City, or(b) is required by, or better complies with, the provisions of paragraph (d)(2) of the Rule; (ii) this section as so amended or supplemented would have complied with the requirements of paragraph (d)(2) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. This section is entered into to comply with, and should be construed so as to satisfy the requirements of, paragraph (d)(2) of the Rule. BE IT FINALLY RESOLVED that this resolution shall be in full force and effect from and after its passage and that a certified copy hereof shall be provided to the Authority. She and M. Harriis,Wyor ATTEST: Kristine A. Luedke, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Clausen and upon a vote being taken thereon, the following voted in favor thereof: Harris, Snope, Fonnest, Schmidgall and Clausen 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.