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HomeMy WebLinkAbout2011-042 EN HILLS CITY OF ARDEN HILLS - COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO.2011-042 AUTHORIZING THE ISSUANCE AND SALE OF SENIOR HOUSING REVENUE NOTES (PRESBYTERIAN HOMES OF ARDEN HILLS, INC. PROJECT), SERIES 2011A AND SERIES 2012A, IN THE ORIGINAL - AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $20,000,000; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE NOTES, LOAN AGREEMENTS, AND CERTAIN RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE NOTES WHEREAS, pursuant to the Constitution and laws 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 contemplated thereby in the financing of multifamily housing developments by issuing revenue obligations to defray, in whole or in part, the development costs of multifamily housing developments, and by entering into any agreements made in connection therewith and by pledging any such agreements as security for the payment of the principal of and interest on any such revenue obligations; and WHEREAS, a multifamily housing development financed under the Housing Act may consist of a multifamily housing development combined with a new or existing health care facility if. (i)the multifamily housing development is designed and intended to be used for rental occupancy; (ii)the multifamily housing development is designed and intended to be used primarily by elderly or physically handicapped persons; and (iii)nursing, medical, personal care, and other health-related, assisted-living services are available on a 24-hour basis in the multifamily housing development to the residents; and WHEREAS, Presbyterian Homes of Arden Hills, Inc., a Minnesota nonprofit corporation (the "Borrower"), has requested the participation of the City of Arden Hills(the"City") in the financing of the demolition of an existing senior housing facility and the acquisition, construction, and equipping of a multifamily housing development consisting of a senior rental housing facility comprising independent living units, assisted living units, and memory-care units(a combined total of approximately 166 dwelling units)to be located at 3120 and 3220 Lake Johanna Boulevard in the City(the"Project"); and WHEREAS, a Housing Program for a Multifamily Housing Development (the "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 Section 462C.03, subdivision la, of the Housing Act, and is on file with the City;and l WHEREAS, the Housing Program was submitted 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, with respect to the Housing Program, was received from the Metropolitan Council, and on July 25, 2011, the Housing Program was approved by the City Council of the City pursuant to Resolution No. 2011-039; -_ and WHEREAS, the Borrower has requested that the City issue the following revenue obligations of the City for the benefit of the Borrower: (i) 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 Housing Revenue Note(Presbyterian Homes of Arden Hills,Inc. Project), Series 2012A(the"Series 2012A Note"), in the original aggregate principal amount of$10,000,000; and WHEREAS, the proceeds derived from the sale of the Series 201 IA Note are proposed to be applied to make a loan (the "Series 2011A Loan") to the Borrower pursuant to the terms of a Loan Agreement, to be dated on or after September 1,2011 (the"Series 2011A Loan Agreement"),between the City and the Borrower; and WHEREAS, the proceeds derived from the sale of the Series 2012A Note are proposed to be applied to make a loan (the "Series 2012A Loan") to the Borrower 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 WHEREAS, the Borrower has requested that another city of the State of Minnesota(the "Second Issuer") issue one or more revenue obligations, in an original, aggregate principal amount not to exceed $12,000,000 (the "Additional Notes"), and loan the proceeds derived from the 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")to: (i)the financing of the Project; and (ii)the payment of a portion of the costs of issuing the Additional Notes; and WHEREAS,the Series 2011A Note will constitute a revenue obligation of the City secured solely by: (i) the revenues derived from the Series 2011A Loan Agreement; and (iii) certain security provided by the Borrower to the purchaser of the Series 2011A Note including a mortgage lien on the Project and a guaranty from one or more guarantors related to the Borrower; and WHEREAS,the Series 2012A Note will constitute a revenue obligation of the City secured solely by: (i) the revenues derived from the Series 2012A Loan Agreement; and (iii) certain security provided by the Borrower to the purchaser of the Series 2012A Note including a mortgage lien on the Project and a guaranty from one or more guarantors related to the Borrower; and WHEREAS, Bremer Bank, National Association, a national banking association (the "Lender"), has agreed to purchase the Series 2011A Note and the Series 2012A Note in a manner consistent with the policies of the City relating to the issuance and sale of non-rated conduit revenue bonds; and WHEREAS, the loan repayments required to be made by the Borrower under the terms of the Series 2011A Loan Agreement will be assigned to the Lender under the terms of an Assignment of Loan Agreement, dated on or after September 1,2011 (the "Series 201 IA Assignment'), between the City, the Borrower,and the Lender;and WHEREAS, the loan repayments required to be made by the Borrower under the terms of the Series 2012A Loan Agreement will be assigned to the Lender under the terms of an Assignment of Loan 2 Agreement, dated on or after January 1,2012 (the "Series 2012A Assignment"), between the City, the Borrower, and the Lender; and WHEREAS, the obligations of the Borrower under the terms of the Series 2011A Loan Agreement, the Series 2011A Assignment, the Series 2012A Loan Agreement, and the Series 2012A Assignment will be secured by a Mortgage, Security Agreement, Fixture Financing Statement, and Assignment of 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 Statement, and Assignment of Leases and Rents, dated on or after September 1,2011 (the "Assignment of Mortgage"), from the City and the Second Issuer in favor of the Lender, and by a Collateral Assignment of Contract for Private Development, dated on or after September 1, 2011 (the "TIF Assignment"),between the City,the Borrower,and the Lender;and WHEREAS, the Series 2011A Note and the Series 2012A Note, and the interest on the Series 201 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) shall not constitute a debt of the City within the meaning of any constitutional 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 other than the City's interest in the Series 2011A 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: 1. For the purposes described in this resolution, there is hereby authorized the issuance of the Series 2011A Note in the original aggregate principal amount not to exceed $10,000,000, The Series 2011A Note shall bear interest at such rates, shall be in such denomination, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other details and provisions as are prescribed in the form of the Series 2011A Note on file with the City on the date hereof. All of the provisions 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 same extent as if 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 the issuance of the Series 2012A Note in the original aggregate principal amount not to exceed $10,000,000. The Series 2012A Note shall bear interest at such rates, shall be in such denomination, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other details and provisions as are prescribed in the form of the Series 2012A Note on file with the City on the date hereof. All of the provisions of the Series 2012A Note, when executed 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. 3. The Series 201IA Note and the Series 2012A Note (collectively, the "Notes") shall be special limited obligations of the City payable solely from revenues of the Project, in the manner provided in this resolution and the Series 2011A Loan Agreement and the Series 2012A Loan Agreement, respectively. The Notes do not constitute general 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 political subdivision thereof. The City hereby authorizes and directs the Mayor of the City (the "Mayor") and the Administrator of the City (the "City Administrator")to execute the Notes, and to deliver the Notes to the Lender, and hereby 3 authorizes and directs the execution of the Notes in accordance with their respective terms and the terms of this resolution. The Mayor and the City Administrator are hereby authorized to approve the respective interest rates on the Notes, approve changes to the maturity schedules, optional and mandatory redemption terms, and other terms and provisions of the Notes; provided that the maturity dates for the - Notes shall not be later than the dates set forth in the forms of the Notes on file with the City on the date hereof. - 4. The Notes shall contain a recital that each is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of each Note and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of each of the Notes, and to the execution of the aforementioned documents have happened,exist,and have been performed as so required by law. 5. The proceeds derived from the sale of the Series 2011A Note shall be loaned by the City to the Borrower pursuant to the terms and conditions of the Series 2011A Loan Agreement. The loan repayments to be made by the Borrower under the Series 2011A Loan Agreement are to be fixed so as to produce revenues sufficient to pay the principal of, premium, if any, and 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 the loan repayments and certain other rights under the Series 2011A Loan Agreement shall be assigned to the Lender as security for payment of the Series 201 IA Note pursuant to the terms of the Series 2011A Assignment. The Series 2011A Note, the Series 2011A Loan Agreement, and the Series 2011A Assignment shall be substantially in the forms on file with the City on the date hereof, and 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 discretion, shall determine, and the execution and delivery thereof by the Mayor and City Administrator shall be conclusive evidence of such determination. The Series 2011A Note,the Series 2011A Loan Agreement, and the Series 201 IA Assignment are directed to be executed in the name and on behalf of the City by the Mayor and the City Administrator. 6. The proceeds derived from the sale of the Series 2012A Note shall be loaned by the City to the Borrower pursuant to the terms and conditions of the Series 2012A Loan Agreement. The loan repayments to be made by the Borrower under the Series 2012A Loan Agreement are to be fixed 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 made pursuant to the Series 2012A Loan Agreement and the City's rights to the loan repayments and certain other rights under the Series 2012A Loan Agreement shall be assigned to the Lender as security for payment of the Series 2012A Note pursuant to the terms of the Series 2012A Assignment. The Series 2012A Note, the Series 2012A Loan Agreement, and the Series 2012A Assignment shall be substantially in the forms on file with the City on the date hereof, and 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 discretion, shall determine, and the execution and delivery thereof by the Mayor and City Administrator shall be conclusive evidence of such determination. 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 Mayor and the City Administrator. 7. The Assignment of Mortgage and the TIF Assignment shall be substantially in the forms on file with the City on the date hereof, and 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 discretion, shall determine, and the execution and delivery thereof by the Mayor and City Administrator shall be conclusive evidence of such determination. The Assignment of 4 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 purchase the Series 2011A Note at a price of par is hereby - accepted. The offer of the Lender to 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 independent investigation with respect to the information contained in any such disclosure documents. The City assumes no responsibility for the sufficiency, accuracy,or completeness of any information set forth in any such disclosure documents. 10. The Mayor, the City Administrator, and other officers of the City are authorized and directed to prepare and furnish to the Lender and to Kennedy&Graven, Chartered, as bond counsel to the City (`Bond Counsel"), certified copies of all proceedings and records of the City relating to the Notes, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Notes as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 11. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom, and additions thereto as may be necessary and appropriate and approved by the officials authorized herein to execute said documents,which approval 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 behalf of the City, all other certificates, instruments, and other written documents that may be requested by Bond Counsel, the Lender, the Borrower, or other persons or entities in conjunction with the issuance of the Notes and the expenditure of the proceeds of the Notes. Without imposing any Iimitations on the scope of the preceding sentence, such officers and employees are specifically authorized to execute and deliver a certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, receipts for the proceeds derived from the sales of the Notes, a general certificate of the City, and an Information Return for Tax-Exempt Private Activity Bonds Issues,Form 8038 (Rev.April 2011)with respect to each of the Notes. 12. The City hereby approves the Mortgage, one or more guaranty agreements to be executed and delivered by parties related to the Borrower, one or more collateral assignments of the contracts between the Borrower and the architect and contractor with respect to the Project, and other security documents to be delivered to secure timely payment of the Notes, substantially in the forms to be delivered to the City and kept on file with the City. The City hereby approves a Construction Loan Disbursing Agreement, dated on or after September 1,2011, between the Borrower, the Lender, and a disbursing agent to be selected by the Borrower and the Lender, substantially in the form to be delivered to the City and kept on file with the City. 13. All covenants, stipulations, obligations, representations, and agreements of 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 2012A Assignment, the Assignment of Mortgage, the TIF Assignment, or the other documents referred to above shall be deemed to be the covenants, stipulations, obligations, representations, and agreements 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 otherwise provided in this resolution, all rights, powers, and privileges conferred, and duties and liabilities imposed upon the City by the provisions of this resolution is 5 or of the Series 2011A Loan Agreement, the Series 2012A Loan Agreement, the Series 2011A Assignment, the Series 2012A Assignment, the Assignment of Mortgage, the TIF Assignment, or the other documents referred to above shall be exercised or performed by the City, or by such officers, board, body, or agency as may be required or authorized by law to exercise such powers and to perform such - duties. No covenant, stipulation, obligation, representation, or agreement herein contained or contained in the Series 2011A Loan Agreement,the Series 2012A Loan Agreement, the Series 2011A Assignment, the Series 2012A Assignment,the Assignment of Mortgage, the TIF Assignment, or the other documents referred to above shall be deemed to be a covenant, stipulation, obligation, representation, or agreement of any elected official, officer, agent, or employee of the City in that person's individual capacity, and neither the members of the City Council nor any officer or employee executing the Notes 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 Loan Agreement, the Scries 2011A Assignment, the Series 2012A Assignment,the Assignment of Mortgage, or the TIF Assignment, expressed or implied, is intended or shall be construed to confer upon any person, firm, or corporation, other than the City and the registered and beneficial owners of the Notes, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision hereof or of the Series 2011A Loan Agreement, the Series 2012A Loan Agreement, the Series 201 IA Assignment, the Series 2012A Assignment, the Assignment of Mortgage,the TIF Assignment, or any provision thereof,this resolution,the Series 2011A Loan Agreement, the Series 2012A Loan Agreement, the Series 2011A Assignment, the Series 2012A Assignment, the Assignment of Mortgage,the TIF Assignment, and all of their provisions being intended to be, and being for the sole and exclusive benefit of the City and the registered owners of the Notes issued under the provisions of this resolution and the Series 2011A Loan Agreement and the Series 2012A Loan Agreement, and the Borrower to the extent expressly provided in the Series 2011A Loan Agreement and the Series 2012A Loan Agreement. 15. In case any one or more of the provisions of this resolution, or of the documents mentioned herein, or of the Notes issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Notes, but this resolution, the aforementioned documents, and the Notes shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 16. All acts, conditions,and things required by the laws of the State of Minnesota,relating to the adoption of this resolution, to the issuance of the Notes, and to the execution of the Series 2011A Loan Agreement and the Series 2012A Loan Agreement,the Series 2011A Assignment,the Series 2012A Assignment, the Assignment of Mortgage, the TIF Assignment, and the other documents referred to above to happen, exist, and be performed precedent to and in the enactment of this resolution, and precedent to the issuance of the Notes, and precedent to the execution of the Series 2011A Loan Agreement and the Series 2012A 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 been performed as so required by law. 17. The members of the City Council, officers of the City, and attorneys and other agents or employees of the City are hereby authorized to do all acts and things required by them by or in connection with this resolution and the Series 2011A Loan Agreement and the Series 2012A Loan Agreement and the other documents referred to above for the full,punctual, and complete performance of all the terms, covenants, and agreements contained in the Notes, the Series 201 IA Loan Agreement and the Series 2012A Loan Agreement, the Series 2011A Assignment, the Series 2012A Assignment, the 6 Assignment of Mortgage, the T1F Assignment, and the other documents referred to above, and this resolution. 18. If for any reason the Mayor is unable to execute and deliver those documents referred to in this resolution, any other member of the City Council, or any officer of the City duly delegated to act on behalf of the Mayor, may execute and deliver such documents with the same force and effect as if such documents were executed by the Mayor. If for any reason the City Administrator is unable to execute and deliver the documents referred to in this resolution, such documents may be executed and delivered by any member of the City Council or any officer of the City duly delegated to act on behalf of the City Administrator, with the same force and effect as if such documents were executed and delivered by the City Administrator. 19. The Borrower has agreed and it is hereby determined that any and all costs incurred by the City in connection with the financing of the Project will be paid by the Borrower. It is understood and agreed that the Borrower shall indemnify the City against all liabilities, losses, damages, costs, and expenses (including attorney's fees and expenses incurred by the City) arising with respect to the Project or the Notes, as provided for and agreed to by and between the Borrower and the City in the Series 2011A 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 Administrator are hereby authorized to execute and deliver any amendments or supplements to any of the documents referred to in this resolution if, after review by bond counsel, the Mayor and the City Administrator determine that the execution and delivery of any such amendment or supplement is in the interests of the City. The Mayor and the City Administrator may impose any terms 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 tax-exempt obligations which will be issued by the City during calendar year 2011 does not exceed$10,000,000. For purposes of the preceding sentence, the term "tax-exempt obligation" does not include the tax-exempt obligations described in Section 265(b)(3)(C)(ii) of the Internal Revenue Code of 1986, as amended(the "Code"). The Series 2011A Note is hereby designated as a"qualified tax-exempt 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 amount of tax-exempt obligations which will be issued by the City during calendar year 2012 does not exceed$10,000,000. For purposes of the preceding sentence, the term "tax-exempt obligation" does not include the tax-exempt obligations described in Section 265(b)(3)(C)(ii) of the Code. The Series 2012A Note is hereby designated as a"qualified tax-exempt obligation"by the City for the purposes of Section 265(b)(3) of the Code for calendar year 2012. In the event that Bond Counsel determines that it is necessary that the City confirm in calendar year 2012 that the reasonably anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 2012 does not exceed $10,000,000, the Mayor and the City Administrator are hereby delegated the authority to make such determination and confirm such facts. 23. Pursuant to the provisions of Minnesota Statutes, Section 471.656, as amended, and pursuant to applicable provisions of Section 147(f) of the Internal Revenue Code of 1986, as amended, and of Treasury Regulations, Section 5f.103-2, the City hereby consents to the issuance of the Additional Notes by the Second Issuer, the application of the proceeds derived from the sale of the Additional Notes to the Additional Loans, and the application of the proceeds of the Additional Loans to the financing of the Project. 7 24. This resolution shall be in full force and effect from and after its passage. (The remainder of this page is intentionally left blank.) 8 Adopted by the City Council of the City of Arden Hills,Minnesota,this 29th day of August, 2011 CITY OF ARDEN ILIILLS,IVIINNESOTA - By r David Grant,Mayor Attest: V '•'/ k By Patrick Klaers,Administrator AR200-012(Ju) 3 89036v.2 9