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<br />Wednesday, June 24, 2015
<br />
<br />Patrick Klaers
<br />Administrator
<br />City of Arden Hills
<br />1245 Highway 96 West
<br />Arden Hills, Minnesota 55112-5743
<br />
<br />Re: Presbyterian Homes of Arden Hills, Inc. — Resolution Authorizing Issuance of Revenue
<br />Obligations of the City to Finance Phase II of the Minimum Improvements and Amendments
<br />to the Notes Issued in Calendar Years 2011 and 2012
<br />
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<br />Presbyterian Homes of Arden Hills, Inc., a Minnesota nonprofit corporation (the “Borrower”) has
<br />requested that the City issue its Senior Housing Revenue Note (Presbyterian Homes of Arden Hills, Inc.
<br />Project), Series 2015 (the “Series 2015 Note” or “Note”), in the original aggregate principal amount of
<br />$10,000,000 to finance the acquisition, construction, and equipping of a senior housing facility comprised of
<br />forty (40) independent-living, rental apartments to be located in two buildings (twenty (20) apartments per
<br />building), together with necessary common areas and community space, to be located at 3200 Lake Johanna
<br />Boulevard in the City (the “Phase II Project”). The Phase II Project will constitute the second phase of the
<br />Minimum Improvements that were proposed to be developed by the Borrower under a Contract for Private
<br />Development, dated December 20, 2010 (the “Development Contract”), between the City and the Borrower.
<br />The Borrower proposes to apply the proceeds derived from such loan to the financing of the Phase II Project,
<br />and to the payment of a portion of the costs of issuing the Series 2015 Note by the City.
<br />
<br />On June 8, 2015, the City Council (the “City Council”) of the City of Arden Hills (the “City”) held a
<br />public hearing in connection with a housing program for a multifamily housing development (the “Housing
<br />Program”) and the proposed issuance of the Series 2015 Note under the Municipal Housing Act, Minnesota
<br />Statutes, Chapter 462C, as amended (the “Housing Act”) to finance a loan to the Borrower for the Phase II
<br />Project. Following the public hearing on June 8, the City Council adopted a resolution (the “Preliminary
<br />Resolution”), which: (i) approved the Housing Program; (ii) granted preliminary approval to the issuance of
<br />the Series 2015 Note by the City to finance the costs of the Housing Program and the Phase II Project; and
<br />(iii) authorized certain other actions to be taken by the City and the Borrower in connection with the
<br />financing of the Phase II Project.
<br />
<br />The Series 2015 Note is proposed to be sold to Bremer Bank, National Association (the “Lender”),
<br />under the terms and conditions of a Note Purchase Agreement, dated on or after June 1, 2015 (the “Note
<br />Purchase Agreement”), between the City, the Borrower, and the Lender. The interests of the City in the Loan
<br />Agreement, including loan repayments to be made by the Borrower thereunder, are proposed to be assigned
<br />(subject to the retention of certain reserved rights of the City) to the Lender under the terms of an Assignment
<br />of Loan Agreement, dated on or after June 1, 2015 (the “Assignment of Loan Agreement”), between the City,
<br />the Lender, and the Borrower. The obligations of the Borrower under the terms of the Loan Agreement and
<br />the Assignment of Loan Agreement will be secured by a Second Mortgage, Security Agreement, Fixture
<br />Financing Statement, and Assignment of Leases and Rents, dated on or after June 1, 2015 (the “Second
<br />Mortgage”), from the Borrower in favor of the City, an Assignment of Second Mortgage, Security
<br />Agreement, Fixture Financing Statement, and Assignment of Leases and Rents, dated on or after June 1, 2015
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