7E, Presbyterian Homes Conduit Debt - Call for PH and Authorize Publication of Hearing

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I �' O�ces in q � 1 Minneapolis . Saint Paul r 5t. Cloud c H A �x � e � � ❑ Wsdnesda.y, June 22, 2011 Patrick Klaers Admir�i'strator City of Arden Hi�ls t245 �iighway 9b West Ardex� Hi1�s, Minnesata 55112-5743 470 U.S. Bank Plaz1 � ZOO $OLlC}1 $U[t}I SC[CCL Minnrapolis, MI3 55402 f612) 337-9�QD re[ephone (G12J 337-I310 fa�c �vvvw:kennedy-graven.rom hfFirm�tivc Auion, Equal bpporcuniry E�nplpyer Re: Presbyterian Hames of Arilen Hills, Inc. Project The Czty of Arden Hi11s {the "City") entered into a Contract for Private Developrnent, dated Decernber 20, 201U (the "Development Gontract"}, with Presb�erian Homes of Arden Hills, Inc., a Minnesot$ monprofit �orporation (the "Company"), wi#h respect to the proposed de�elopment by the Company of a se�ior housi�g faeility aomprising independent Iiving units, assisted living units, and �nemary-care uni#s (a combined total of approxirnat�iy 2n0 dweliing units) to be located at 3].20 and 32Z0 Laice 7ohanna Boulevard in the City (th� "Prnject"}, The Frojeetwill replace an exisiing senior housing facili#y af the Campany located at the same address. Pursuant tp the terms of Articie "E�II of the Development Corttract, the �ity agreea to i.ssue hoUsing re�enue bands under the Munieipal Housing Act, Minneso#a Statutes, Chagter 4f2C, as a�nended (the "Housing Act"), to make a.�oan to the Company to finance the onnstntciaon and equipping of the Project and reIated costs. 'Phe Company is now prepared ta oommence �the �nancing of the construchan and equigping o� the Project and has req�ested that the �ity' Coun:cil of the City aciopt a pragram prepared in accordance with the requirements af the Housing A�t. with respeat to #he Project (#he "Pragram"} and g�rant preliininary approval to the issuance af znultifgmiiy ho�s�ng developnnent r�ven�e bonds or other obligations (the `Bonds"). The proceeds deriverl from ihe sale,of the Bands are prapased fn t�.e loaned to the Company and appli:ed by the Coinpany to the finanoing of thc Pio;ject. A resolu�ion esta:l�lis�iing tlie date far a public hearing u+i�F,h respect to the adoption of fihe Prograrn and granting preisrr�nar,y approvat ta the issuance of the Bonds has been prepared by Kennedy &{`rraven, Chartered, as bond eounsel to the City. Ti1e Company has requested that f,he City Council adopt t�is initial resolution and cnnduct the public hearing at the regularly-scheduled meeting of the City Council on Monday, 7une 27, 2dI1. FolIowing Yhe public; hsaring, the City Counail wili b� asked to consic�er a resolu�son granting preliminary approval #v the issuance of the Bonds (the "Preliminary ResoIution"}. The Company has proposed #o have the Bonds issned as "qualified tax exempt obligations" as rlefined in Sec�ion 265(b)(3) of the �ternal Revsnue Code of 1986, as amended (tlie "Code"). Qaalified tax-exemp# abliga�ions are sometimes referred. ta as. "bank-q�alified bar�ds." Siuce no issuer ai tax- exempt bonds rnay desi�ate more than $10,OOQ,OQU of ta�c-�xempt bonc3s as bank-quaIif�ed bonds zn a calendaz year, the Company will reques# that ths City issue na more �han $IU,OQO,QO� of the Bonds and that the City autho�ize other political sutidi�sians of th� 5fate to issue the re�naining $24,00(?,000 of $onds ta finance the Project. The Company has agreed that the ad�ni�istrative fee payable by t'he Company pursuant to Section 7.1(b) of the Developrnent Contract will be paid I�y the Cornpany to the City with respect tn all the Bonds regardless of the actua� issuer of tkie Bands. In exchange far such fes _1..