HomeMy WebLinkAbout7A, Presbyterian Homes Conduit Debt�
�4 U�EN�HILLS
Request for Council Action
Prepared By: Sue Iverson, Director of Finance
and Administrative Services Council Meaiing Date: August 29, 2011
Presbyterian Homes Conduit Debt
Budgeted Amount: Actual Amount: Funding Source:
NA NA NA
Reco�mendation:
1. A motion to adopt Resolution 2011-042, a resolutian authorizing the issuance and sale af
Senior Housing Revenue Notes (Presbyterian Homes of Arden Hills, Inc. Project), Series
2011A and Series 2012A, in the original aggregate principal amoutrt not to exceed
$20,000,000; approving the forn� of and authorizing the execuiion and delivery oi the
notes, Ioan agreements and certain related documents; and providing for the security
rights, and re�edies with respect to the notes.
Supportin� Documents;
1. Memorand�m dated August 29, 2011 from Sue Iverson.
2. Memorandum dated August 24, 2011 frozn. 7ohn Uiley, Kennedy & Grav�n.
3. Resoiution 2011-042.
�
EN H�LLS
MEMORANDUM
DATE: August 29, 20ll
TO: Honorable Mayor and City Councilmernbexs
Pairick Klaers, City Adrninistrator
FROM: Sue �verson, Directar af Finance and Administrative Services
SUBJECT. Presbyterian Homes Conduit Debt
Back�round
The City held a Public Hearing on 7uly 25, 2011, and adopted a resolution approving a
housing progratn, granting preliminary approval to the issuance of housing revenue bonds
to finance the project, and authorized certain other actions to be taken by the Mayor,
Administrator, and ihe City's bond counsel.
Presbyterian Homes is now requestir�g the City Council io consider a resolutian
auti�orizing the issuance of twa bonc� issues, Series 20� 1A for $10,00�,000 and Series
2012A for $10,000,000. Because we can only issue $10,000,000 of bank qualified debt
per calendar year, they are issuing $1p,000,000 in 2011 and $10,000,00Q in early 2012.
They are using another "host" city to issue the remaining $14,�00,000 in a similar
manner. The City of Arden Hills will receive the entire �'ee as if we issued the
$34,000,000.
The City's Bond Counsel has provided the attached letter an.d will be present at the
meeting to answer any additional questions the Council may have.
Council Ac�ion Re uested
A motion to adapt Resolution 2011-042, a resolution authorizing the issuance and sale of
Seniar Housing Revenue Notes {Presbyterian Hornes of Ard.e� Hil�s, Inc. Praject), Series
201 l A and Series 2012A, in the original aggregate principal amount not to e�ceed
$20,000,000; approving the form of and a�thorizing t�e e�ecution and delivery of the
nofes, loan agreements, and certain related documents; and providing for the security,
rights, and remedies with respect ta the notes.
City GvunciI Meeting
11Metro-inetlardenhi11s1AdminlCouncillAgendas & Packet Information1201115-29-i 1 Regu]arlPacket InformationlPres
Homes Conduit Debit.doc
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'C H A R T E.R E D
Wednasday; August 24, 20.11
Patrick Kiaers
Administrator
Ci�y of P,rden HilIs
1245 Highway 96 West
Arde�t Hills, Minnesata SS112-5'143
470 Li.S. Sank Plaza
2Q0 5ouch Sixth Saeet
Minneapolis, ME+1554D2
(G12J 337-930D tdephone
(�iz) 33�-��ya �
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�rmarivelkceion, Equ�] C3ppormnity Emplayer
Re: Pr�sbyteriari Homes ofArden Hills, inc. Project
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The City of Aard�n Hills, (the "City"} �nfer� .into a Cantract..for Private Devslapment; dat�d
December Z�, 20 TO {the "Development Con�ract"}; with Presbyterian Homes flf Arden Hills, Inc., a
Minnesata nonpro�t carporation (the "BpiipWEi"}, vvit� respect to the proposed developmant by the
Borrowcr o� a seniar housing faciliiy compz�sing independenfi liv�ng units, assisted iiving units, and
memory-eare unit� (a comhined total nf apprax�€xnately 166 dwe�liz�g units} to be lacated. at 3120 and 3220
La1ce Johanna 8oule�ard iri the City (tl�e "Projec�'). Th� Project wiil replace an existing senior hausing
facility of the Borrower located at the sarne address: Pitrsuant �o tl�,e ter�ns of Article V�[ af t�ze
D�velapmeni Can#ract, the Ciiy agreed to issue housizxg revenue bonds under the Municipai Honsing Act,
Minnesota 5.tatutss, Clxapter 4�i2C, as amended.�the "Housing Ac�"}, to make a loan to the Borrower to
itnance the consix2tction and equipping oifhe Praject a.�d related aosts.
At the request ofthe Bozrower, the City Council ofthe City held a public hearing an the praposecl
issuance of housing revenue bonds fo finance .the P-rojec:t and, followin.g #he p.ublic hearing, adapted
Resolution No,. 2U11-039 whiah; (i} apprflved a housing �ragra3n pre�iarec� in accordance. vvifh the
requiremenfs of the Housing Act; (ii) .granteii preliminary:apgroval ta the issuance af housing revenue.
bon.ds to finance tire Project; and (iii} authorized certasn o�her actions ta he taken by the 1Viay�nr, the
Adrninis�ator, and K�nnedy & Graven, Chartered, as hond counsel to the City.
The Borrnwer is naw aequesting that the City Council consider a resolution (tlie "Final
ResoIution'� authorizing the iss�ance of: (i) a Senior Housi�g Revenue Note (Presbyterian Homes a�
Arden Hzils, Inc. Project), Seriea 2011A (the "Series 2D11A Note"), .iun the original aggregate prineipal
arnount oi $10,000,000; and (ii) a Senior Housing Revenue Nate (Pxesb�erian Homes of Arden Hilis,
Ittc. PI'pJ�Gt}, 8eries 2(il.2A (tlae "Series 2fl12A Nate"), ia the origi�tial aggregate principal atnount of
$i0;OQ0;U00. The Final Resolution a�so approves certain documents referred;to therein which authorize a.
loan o£ .ihe prc►ceeds clerived frorri Y,Iie saIe of the Seriss 201"lA Note and the Series 2412,� l�l'ote.
(collectively, tlie `�Totes"� to the Borrower and wl�ich provide securiity for �e .Notes. The proceeds
aerivect from such iaans are proposed to be applied by the Bqrrower ta the fxrtancing of the Project.
`The Borrowsr has proposed that the Bonds be issued as "qualifi�cl ta�c-exe�npt obligat�ons" as
cleftned in $ec�ion 265{b}(3}. of th� Internal Revenue Coda of 19.86, as amended (tl�e "Code"�, and the
Final Res�latiazi designates ihe Nates as qual�fied tax-exerni�t obliga�ions. The Boriravver �ias agreed that
the adminislra�i�e fee payable by the Borrower pursuai�t tn SeCtion 7.1{b) of the Development Contract
will be paid by tha Borrower to �te Ci#y with respect ta ail tax-exempt obligati4ns issued to finanos the
Pro�act regardless of the actual issuer oi s�ah ohIigations. In �xchange for such fee payment, the City has
s
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waived iiae appl.ication o� Section 7.1(d) which precZudes the issuance oi any tax-exeznpt obligatians by
any unit of govei•nmen� other than the City.
The Final Resn]ution: wili be the_ fYnal aetion reqZzired to ha taken by t�e City Counail to authozize
the issaanee and deli�rery of #.be Nofes. If tlie Ciiy Coeuicil:adopts -t�e Final Resolution, the Borrower will
finalize the terms of the security to be proviiieai by the Borrower ta the purchaser of flie Nntes a�d vvi21
arrange for the closing of the financing transaction and the cozistruction of the Project.
Please cnntact the undersigned at your eonvenience with any q�zestzons �v�€th regard to the
foregaing.
KENNEDY & GRAVEN, CHARTERED
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�
�N HILLS
CITY OF ARDEN fIILLS
COUNTY OF RAMSEY
STATE OF MINNESOTA
RESOLUTION NO. 2011-042
AUTHORIZING THE ISSUANCE AND SALE OF SENIOR H�USING
REVENUE NOTES (PRESBYTERIAN HOMES OF ARDEN HILLS, INC.
PROJECT), SERIE� 20I1A AND SERIES 2012A, IN THE ORIGINAL
AGGREGATE PRINCIPAL AMOUNT NOT TQ EXCEED $20,000,000;
APPROVING THE FORM OF AND AUTHORYZlNG THE EXECUTION AND
DELIVERY OF THE NQTES, LOAN AGREEMENTS, AND CERTAIN
RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS,
AND REMEDIES WITH RESPECT TO T�-IE NUTES
WI�REAS, pursuant ta fihe Constitution and Iaws of the State of Minnesota, particularly
Minnesota Statutes, Chapter 462C, as amended {the "Housing Act"), statutory and home rule cities and
other political subdivisions of the State of Minnesota are authorized to carry out the public purposes
described therein and cantemplated thereby in the frnancing of rnultifamily hausing developments by
issuing revenue obligations to defray, in whole or in part, the development costs of multifa�aily housing
developments, and by entering into any agreements made in connection therewith and by pledging any
such agreements as security for the payrr�ent of tt�e principal of and interest on any such rev�nue
obiigatians; and
WHEREAS, a�nultiiamiIy housing development financed under the Housing Act may consist of
a multifamily housing development co�nbined with a new or existing health care faciliry ii (i) the
multifamily ho�sing develo�ment is designed and intended to be used for rental occupancy; (iz) the
�nultifamily housing development is deszg�ned and intended to be used primarily by elderly or physically
handicapped persans; and (iii) nursing, medical, personal care, and other healt�-related, assisted-living
services are available on a 24-hour basis in the multifamily housing developmen� to the residents; and
WI�REAS, Presbyterian Homes af Arden Hilis, Inc., a Minnesota nonpro�t corporation (the
"Borrawer"), has requested the participation ot�the City of Arden HilIs (the "City") in the financing of the
demolition of an existing senior housing facility and the acquisitian, construction, and equipping of a
multifamiIy �ousing developmant consisting of a senior rental housing facility comprising independent
living units, assisted living units, and memory-care units {a ca�nbined total of a�proximately 166 dwelling
units) to be located at 3120 and 322Q Latce Johanna Baulevard in the City (the "Project"); and
WHEREAS, a Housing Program for a MuItifamily Housing Development {iha "Housing
Program") with respect to the Project and the issuance of revenue obligations to finance the Housing
Program and the Project was prepared pursuant to the requirements of Seciion 462C.03, subdivision I a,
of the Housing Act, and is on file with the City; and
WHEREAS, the Housing Program was subrnitted to the Metropolitan Council for its review and
comments in accordance with the requirements of the Housing Act, a comment letter dated July 11, 2011,
witl� respect to the Housing Program, was received from t.�e Metropatitan Council, and an July 2S, 20I l,
the Houszng Program was approved by the City Councii of th� City pursuant to Resol�tion Na. 20i 1-039;
and
WI�REAS, the Borrower has requested that the City isseze the following reven�e obligatians of
the City for the benefit of the Borrower: (�} Senior Housing Revenue Note {Presbyterian Homes of Arden
Hills, Inc. Project), Series 2011A {the "Series 2011A Note"), in the original aggregate principal amount
of $10,000,000; and (ii) Senior Hausing Revenue Note {Presbyterian Hornes of Arden HiIls, I�nc. Project),
Series 2012A (tlte "Series 2012A Note"}, in the original aggregate principal arnount of $10,000,040; and
WHEREAS, the proceeds derived from the sate of the Series 2011A Note are proposed to be
applied to malce a loan (the "Series 2011A Loan") to the Borrower pursuant to ihe terxns of a Loan
Agreement, to be dated on or after September 1, 2011 (the "Series 241 lA Loan Agreement"}, between the
City and the Borrower; and
WHEREAS, the proceeds derived from the saIe af the Series 2012A Note are propased to be
applied to make a Ioan (the "Series 2012A Loan") to the Borrowez pursuant to the terms of a Loan
Agreement, to be dated on or after January 1, 2012 (the "Series 2012A Loan Agreement"), between the
City and the Borrower; and
WFiEREAS, the Borrower has requested that another city of the State of Minnesata (the "Second
Issuer") issue ane or more revenue obligations, in a� oxiginal, aggregate principal a�ount not to exceed
$12,000,000 (the "Additional Notes"), and Ioan the proceeds deri�ed fram �he sale of the Additional
Notes to the Borrower pursuant to one or more loan agreements, and apply the proceeds derived from
such loans (the "Additional Loans") ta: {i) the financing of the Project; and (ii) the payment of a portion
of the costs of issuing the Additionai Notes; and
WHEREAS, the Series 20I lA Note wili constitute a revenue obligatian of the City secured solely
by: (i} the revenues derived �rom tk�e Series 2011A Loan Agreement; and (iii} certain security provided
by #he Borrower to the purchaser of the Series 2011A Note incl�ding a mortgage lien on the Project and a
guaranty from one or znore guarantorrs related to the Borrower; and
WHEREAS, the Series 2fl 12A Note will constit�tte a revenue obligation of the City s�cured solely
by: {i) the rever�ues derived from the Series 2012A Loan Agreement; and (iii} certain security pravided
by t1�e Borrawer to the purchaser of the Series 2012A Note including a mortgage lien on the �'roject and a
guaranty from one oe more guarantors related to the Borrower; and
WHEREAS, Bremer Bank, National Association, a naiional banking association {the "Lender"),
has agreed to purchase the Series 201 lA Note and the Series 2012A Nate in a manner consistent with the
polici�s of the City relating to the issuance and sale oF non-rated conduit revenue bonds; and
WHEREAS, the laan repayments required ta be made by the Borrower ttnder the terms of t�e
Series 20f 1A Laan Agreement will be assigned to the Lender under the terms of an Assignment of Loan
Agree�nent, dated on ar after September 1, 2fl11 {the "Series 20llA Assignment"), between ihe City, the
Borrower, and the Lender; and
WI�REAS, the loan repayments required to be rnade by the Borrower ur�der the terms of the
Series 2012A Loan Agxeemen� will be assigned to the I�ender under the tertns of an Assigntnent of Loan
Agreennant, dated on or after January 1, 2012 (t�e "S�ries 2012A Assignment"), between the City, the
Bor:rower, and the Lender; and
V�I�REAS, the abligations of the Borrower under the t�rms of the Series 2011A Loan
Agreement, the Series 2011A Assignment, the �eries 2012A Loan Agreernent, and the Series 2012A
Assignrr�ent will be secured by a Mortgage, Security Agreement, Fixture Financing Statement, and
Assignment oi Leases and Rents, dated on or after September 1, 2011 (the "Mortgage"), from the
Borrower in favor of the City and the Second Issuer, an Assignment of Mortgage, Security Agreement,
Fixture Financing Staterr�ent, and Assignment of Leases and Rents, dated on or after Sepfiember i, 2011
{the "Assignment of Martgage"), from the City and the Second Issuer in favor of the Lender, and by a
Collateral Assignment oi Contract for Private Development, dated on or after Sep�ember 1, 2411 (the
"TIF Assignment"), befween the City, the Borrawer, and tha Lender; and
W�IEREAS, the Series 2011A Note and the Series 2Q12A Note, and the interest on the
Series 20I IA Note and the Series 2012A Note: (i) shall not constitute general or moral obligations of the
City and shall be payable solely from the revenues pledged therefor; (ii} shail not constitute a debt of the
City within the meaning of aay constit�tional or statutory limitation; (iii) shall not constitute nor give rise
to a pecuniary liability of the City 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 otl�er t�an the
City's interest in the Series 20I lA Loan Agreement and the Series 2012A Loan Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ARDEN HILLS, MINNESOTA, AS FOLLOWS:
l. For the purposes cfescribed in this resolution, there is hereby authorized the issuance of
the Series 2011A Note in the original aggregata principal amount not to exceed $10,000,000. The
Series 201 lA Note shall bear interest at such rates, shall be in such denomination, sha11 be numbered,
shall be dated, shall mature, shall be subject ta redemption prior to maturity, shall be in such form, and
shall have s�ch other details and provisions as are prescri6ed in the form of the Series 2011A Note on file
with the City or� the date hereof. All of the pravisions of the Series 2011A Note, when executed as
authorized herein, shall be deemed to be a part of this resolution as fully and to the satne extent as ii
incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery
thereof.
2. For the purposes described in this resolution, there is hereby authorized ihe issuance of
the Series 2012A Note in the original aggregate principal amount not to exceed $10,fl00,000. The
Series 2012A Note shall bear interest at such rates, shall be in such denomination, shall be numbered,
shall be dated, shall mature, shaIl be subject to redemptian prior to maturity, shall be in such farm, and
shall have such other details and provisions as are prescribed in the form of tlie 5eries 2012A Note on file
with ihe City on the date hereof Ali of the provisions of the Series 2012A No�e, when executed as
autharized herein, sha1I be dee�ed to be a part of this resolution as fully and ta the same extent as if
incarporated verbatim herein and shall be in full force and efFect from the date of execution and delivery
thereaf.
3. The Series 2011A Note and the Series 2012A Note (collectively, the "Notes") shaIt be
special linn�ited obligations of the City payable solely fronn reven�es of the Pzoject, in the manner provided
in this resolution and the 5eries 2011A Loan Agreement and the Series 2012A Laan Agreement,
respectively. The Notes do not constitute gen�ral or moral obligations of the City, or a pledge of the Faith
and credit or any taxing powers of the City, the State of Minnesota, or any palitical subdivision thereof.
Th� City hereby auihorizes and directs the Mayor of ihe City {the "Mayar") and the Administraior of the
Cify {the "City Administrator") to execute th� Notes, and to deliver the Notes to the Lender, and hereby
authorizes and directs the execution of the Notes in accordance with their respective ternns and the te�aas
of this resolution. The Mayor and the City Administrator are hereby authorized to approve the respeciive
znterest rates on the Notes, approve changes to the mai�arity schedules, optional and mandatory
redemption terms, and other #erms and provisians of tl�e Notes; provided that the rt�aturity dates for the
Notes shall not be iater than �he dates set forth in the forms of the Notes on file with the City on t.�e date
hereof.
A. The Nates shall contain a recital that each is issued pursuant to the Act, and such recital
shaII be canclusive evidence of the validity of each Note and the regularrity of fhe issuance thereof, and
that all acts, c�ndi�ions, and things required by the laws of the State of Minnesota relating to the adoption
of this resolution, to the issuance of each of t�e Notes, and to the execution of the aforernentioned
docutnents have happened, exist, and have been performed as so required by law.
5. The proceeds der�ved fram �e saIe of the Series 2011A Note shall be loaned by the City
to the Borrower pursuant to the terms and canditions of the Series 2011A Loan Agreement. The loan
repayments to be made by the Borrower under the Series 2Q11A Loan Agreement are to be fixed so as to
produce re�enues sufficient tq pay the principal o�, premium, if any, arzd interest on the Series 2011A
Note when due. The Loan made pursuant to the Series 201 iA Loan Agreement and the City's rights to
fhe loan repayments and certain ot�er rights under the Series 20llA Loan Ageement shall be assigned to
the Lender as security for payment of the Series 2011A Nflte pursuant to the terms of the Series 2011A
Assignment. The Series 2011A Note, the Series 2011A Loan Agreement, and the Series 2011A
Assignnnent shalt be substantially in the forn�s on file with the City on the date hereof, and are hereby
approved, with such necessazy and appropriate variations, omissions, and insertions as do not materially
change the substance thereof, or as the Mayor and City Administratar, in their discretion, shall determine,
and the execution and delivery thereof by the Mayor and City Aciminis�rator shall be conclusive eWidence
of such determination. TI�e Series 2011A Note, the Series 2011A Loan Agreement, and the Series 2011A
Assign naent are directed to be executed in the name and on behal� oi the City by the Mayor and the City
Administrator.
6. The proceeds derived from the sale of the Series 2412A Note shaIl be loaned by the City
to the Sorrower pursuant to the terrns and conditions of the 5eries 2012A Loan Agreament. The Ioan
repayments to be tzaade by the Borrower under the Series 2012A Loan Agreement are to be fxed so as to
produce revenues sufficient to pay the principal of, premium, if any, and interest on the Series 2012A
Note when due. The Loan zxaade pursuant to ihe Series 2012A Loan Agreement and �he City's rights to
the loan repayments and certain other rights under the Series 2� 12A Loan Agreement shall be assignec� to
the I,e�der as security for payrnent of the Series 2012A Note pursuant to the terrns of the Series 2012A
Assigt�ment. The Series 2012A Note, the Series 2Q12A Loan Agreement, and the Series 2012A
Assignrr�en# shall be substantially in the forms on �le with tk�e City on the date hereof, a�d are hereby
approved, with such necessary and appropriate variations, omissions, and insertions as do not materially
change the substance thereof, or as the Mayor and City Administrator, in their discretian, shall determine,
and the execution and delivery thereof by the Mayor and City Administra#or shall be conclusive evidence
of such deter�nination. The Series 2012A Note, the Series 2012A Loan Agreement, and the Series 2012A
Assignment are directed to be executed in the name and on behalf of the City by the Mayar and the City
Administrator.
7. The Assign�nent of Mortgage and the TIF Assignment snalI be substantialiy in the forms
on �le with t�e City on the date hereof, and are hereby appraved, with such necessary and appropriate
variations, omissions, and insertions as da not materially change the substance thereof, ar as the Mayor
azad City Adminis�eator, in their discretion, shall determine, and the execution and delivery thereof by the
Mayor and City Administrator shall be conciusive evidence of such determination. The Assignment of
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Mortgage and the TIF Assignment are directed to be executed in the name and on behalf of the City by
the Mayor and the City Administrator.
8. The offer of the Lender to �urchase the Series 2011A Note a# a price of pa�r is hereby
accepted. The offer of ihe Lender io purchase the Series 2012A Note at a price of par is hereby accepted.
9. The City has not participated in the preparation of any disclosure documents relating to
the offer and sale of the Notes and has made no inc�ependent investigatian with respect to tha information
contained in any such disclosure docutnents. The City assumes no responsibility for the sufficiency,
accuracy, or completeness of any informatior� set forth in any such disclosure documents.
I0. The Mayor, the City Administrator, and ather officers of the City are authorized and
directed to prepare and furnish to the Lender and to Kennedy & Graven, Charterec�, as bond counseI to the
City (`Bond CaunseI"), certifi�d copies of all proceedings and records of the City reIating ta the Notes,
and such other affic�avits and certi�cates as may be required to shaw the fac�s relating to the Iegali�ty of
the Notes as such facts appear from the books and records in the officers' custody and controI or as
otherwise known to them; and alI such certi�ed copies, cer�ificates, and affidavits, incIuding any
heratofore furnished, shall canstitute representaiions of the City as to the truth. of all sta�ements contained
therein.
1 L The approval hereby given to the vario�s documents referred to above includes approvai
of s�zch additional details therein as rr�ay be necessary and appropria#e and such modifications thereof,
deletions therefrom, and additions thereto as may be necessary and appropriate and approved by �the
officials authozized herein to execute said documents, which appraval shall be conclusively evidenced by
the execution thereof. The Mayor, the City Administrator, and other officers and employees of the City
are hereby authorized to execute and deliver, on behaif of the City, all other certifica#es, instru�nnents, and
other written documents that may be requested by Bond Counsel, the Lender, the Borrower, or other
persons or entities in conjunction with tlie issuarzce of the Notes and the expenditure of the proceeds of
the Notes. Without i�nposing any limitatians on the scope of the preceding sentence, such officers and
employees are specifically authorized to execute and deliver a certifcate relating to federal tax rr�atters
including matters ralating to arbitrage and arb�trage rebate, rec�ipts far the proceeds derived fronn tha
sates of the Notes, a generat ce�rtificate of the City, and an Information Return for Tax-Exempt Private
Activity Bonds Issues, Farm 803 8(Rev. Apri1201 l) with respect ta each of the Notes.
12. The City hereby approves khe Mortgage, one ar more guaranty agreements to be execut�d
and delivered by parties related to tha Borrower, one or more collateral assignments oi the contracts
between the Borrower and the architect and contractor with respect to the Project, and other security
docuznents to be delivered to secure timely payment of ihe Notes, substantially in tlae forms to be
deIivered to the City a�d kept on file with the City. The City hereby approves a Construction Loan
Disbursing Ageeement, dated on ar after Septembar 1, 2011, between the Borrawer, the Lender, and a
disbursing agent to �e selected by the Borrower and the Lander, substantialty in �he form to be dalivered
to the City and kept on file with the City.
13. All covenants, stipuIations, obligations, representations, and agreements af the City
contained in this resolution or contained in the Series 2011A Loan Agreement, the Series 2012A Loan
Agreement, the Series 2011A Assignment, the Series 2412A Assigntnent, the Assignment of Mortgage,
the TIF Assignment, ar the other documents referred to above shall be deerrzed to be the covenants,
stipulatians, obligations, representations, and agreeznents 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 othenvise provided. in this resolution, all rights, powers, and
pri�ileges conferred, and duties and liabilities imposed upon the City by the provisions af this resolution
or of the Series 2011A Loan Agreemant, the Series 2012A Loan Agreement, the Series 2011A
Assignment, the Series 2012A Assignment, the Assignment of Mortgage, the TIF Assigz�ment, or the
ather docunnents referred to above shall be exercised or performed by the City, or by suc� of�cers, board,
body, or agency as may be required or authorized by law to exercise such powers and ta parform such
duties. No cavenant, stipulation, obligation, representation, or agreernent herein contained or contained
in the Series 201 lA Loa� Agreetnent, the Series 2012A Loan Agreement, t�e Series 2011A Assignment,
the Series 2012A Assignment, the Assignment of Mortgaga, th� TIF Assignment, or the other documer�ts
referred to above shall be deamed to be a covenant, stipu(ation, obligation, representation, or agree�nent
of any elected afficial, officer, agent, �r employee of the City in that person's individual capacity, and
neither the rnembers of the City Cauncil nor any officer ar employee executing the Nates shall be liable
personally on the Notes or be subject to any personal liability or accountability by reason of the issuance
thereof.
14. Except as herein otherwise expressly provided, nothing in this resolution or in the
Series 2011A Loan Agreement, the Series 2012A Loa� Agreemant, the Series 201 lA Assignmen�, ihe
Series 2012A Assignment, the Assignment of Mortgage, or the TIF Assignment, expressed or �mplied, is
intended or shall be constr�ed io con�er upon any person, firm, or corporation, ot�Zer than the City and the
registered and beneficial owners of the Notes, any rzght, remedy, or claim, legal or equitable, under and
by r�ason of this resolution or any provision hereof or of the Series 2011A Loan Agr�ement, the
Series 2012A Loan Ageement, the Series 2011A Assignnaent, �he Series 2012A Assignment, the
Assignment of Mortgage, the TIF Assignznent, or any provision thereof; this resolution, the Series 20I lA
Loan Agreement, the Series 2012A Loan Agreement, the Series 2011A Assignrnent, the Series 2012A
Assignment, the Assignment of Mortgage, the TIF Assignment, and all of their provisions being intencled
to be, and being for the sole and exclusive benefit oi the City and the registered owners of the Notes
issued under the provisions of this resol�tion and ihe Series 2011A Loan Agreement and the
Series 2012A Loan Agreement, and the Barrower to the extent expressly provided in the Series 2011A
Loan Agreement and the Series 2012A Loan Agreement.
15. T�tt case any one or more of the provisions of this resolution, or of the documents
mentioned k�erein, or of the Notes issued hereunder shall for ar�y reasan be held to be illegal or invalid,
such iIlegality or invalidity shaIl not affeci any other provision of this resolution, or o�' the
aforeme�:tioned documents, or of the Notes, but this resoIution, the aforementioned documents, and the
Notes shall be construed and endarsed as if such illegal or invalid provisions had not bean contained
therein.
16. All acts, conditions, and things required by the laws oi the State af Minnesota, relating to
the adaption of this resolution, to the issuance of the Notes, and to the execution of the Series 2011A
Loan Agreement and the Seri�s 2012A Loan Agreement, the Series 2Q11A Assignment, the Series 2012A
Assignment, the Assignrr�ent of Mortgage, t�e TIF Assi�nent, arid the other documents referrad to
above to happen, exist, and be performed precedent to and in the enactrnent �i this resolution, and
precedent to the issuance of the Notes, and precedent to the execution of the Series 2011A Loan
Agreement and the Series 2Q12A Loan Agreement, the Series 2011A Assignment, the Series 2012A
Assignment, the Assignment of Mortgage, the TIF Assignment, and the other documents referred to
above have happened, exist, and have taeea perfarmed as so required by taw.
17. The members of the City CounciI, ofFcers of the City, and attorneys and aiher agents or
empIoyees of the City are hereby authorized ta da alt acts and things rec�uired by them by or in
connection with this resolutian a�.d tk�e Seri�s 2011A Loan Agreerr�er�t and the Series 2012A Loan
Agreement and the ather documents referred to above for tlae full, punctual, and complete performance o�
all the terms, covenants, and agreements contained in the Notes, the Series 2011A I.,oan Agreement and
the Series 20I2A Loan Agreeraent, the Series 2d11A Assigr�ment, the Series 2012A Assignrnent, the
�
Assi�unent of Mortgage, the TIF Assignment, and the o�her documents referred to above, and this
resolution.
18. If for any reason the Mayor is unable ta execute and deliver those documents referred to
in this resolution, any other member of tha City Council, or any officer of the City duly delegated to act
on behalf of the Mayor, r�ay execute and deliver such documents with the same force and effect as if
such documents were executed by th.e Mayor. If for any reason the City Adnninistraiar is unable to
execute and deliver th� documents referred ta in this resol�tion, such documents may be executed and
delivered by any member of the City Council or any officer of the City duly deiegated to act on behalf of
the City Administrator, with the sam.e forc� and effect as if such documents were exec�ted and delivered
by the City Administrator.
19. The Borrawer has agreed and it is hereby detetmined that any and aIl costs incurred by
the City in connection w�th the �nancing of the Project will be paid by the Bprrower. It is understood and
agreed that the Borrower shall indemnify the City against all liabilities, losses, damages, costs, and
expenses (incIuding attorney's fees and expenses incurred by tha City) arising with respect to the Project
or the Notes, as provided for and agreed to by and be�veen the Borrower and th� City in the Series 201 lA
Loan Agreement and the Series 2012A Loan Agreement.
20. On any date subsequent to the date of issuance of the Notes, the Mayor and the City
Adrninistrator are hereby autharized to execute and deliver any amendments or supplem�nts ta any of the
documents referred to in this resolution if, after review by band counsel, the Mayar and the City
Administrator determine that the execution and deIivery of any such amencimen# or supplement is in the
interests of the City. The Mayor and tha City Administrator may impase any tertns or conditions on their
execution and delivery of any such amendment or supplement as the Mayor and the City Administrator
deem appropriate.
21. The City hereby determines that the reasonably anticipated amount of t�-exempt
abligations which will be issued by the City during calendar year 2011 does not exceed $10,004,000. For
purposes oF the preceding sentence, the term "tax-exempt obligation" does not include the tax-exempt
obIigations described in Sectio� 2b5{b}{3)(C}{ii) of the Internal Revenue Code of 1986, as amended {the
"Code"). The Series 2011A Note is hereby designated as a"qualiiied tax-exe�npt obligation" by the City
for the purposes of Section 265(b)(3) of the Code for calendar year 2011.
22. The City hereby determines that the reasonably anticipated amo�nt of tax-exempt
obligations wnich will be issued by the City during calendar year 2012 does not exceed $10,000,000. For
purposes ai the preceding sentence, the term "tax-exempt obIigation" daes nat include the tax-exempf
obligations described in Section 265(b}(3){C}(ii) of the Code. The Series 2012A Note is hereby
desigt�ated as a"qualified tax-exempt obIigation" by flie City for the purposes of Section 265(b)(3) of the
Code for calendar year 2012. In the event that Bond Counsel dete:rtn�ines that it is necessary that the City
confirrn in calendax year 2012 that the reasonabty anticipated amount of taX-exempt obligations which
will be issued by the City during caIendar year 2012 does not exceed $10,000,000, the Mayar and the
City Administrator are hereby delegated tk�e authority to make such detern�ination and confirm such facts.
23. Pursuant to the provisions of Mi�nesota Statutes, Section 471.G56, as amended, and
pursuant to applicable provisions of Section I47(� of the Internal Revenue Code of 1986, as amended,
a�d of Treasury Regulations, Section 5£103-2, the Ciiy hereby consents to the issuance of the Additional
Notes by the Seco�d Issuer, the appiication of the proceeds derived fram the sale of the Addi�ional Notes
to the Additional Loans, anc� the applicatioza of the proceeds of the Additianal Loans to the f nancing of
the Froject.
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24. This resolution shall be in full Force and effect from and after its passage.
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Adopted by the City Council of the City of Arden Hills, Minnesota, this 29th day of August, 2011
:
Attest:
:
Patrick Klaers, Ad�ninistrator
CITY OF ARDEN HILLS, MINNESOTA
David Grant, Mayar
AR2oo-o12 (7IJ)
389036v.2