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HomeMy WebLinkAbout2015-034 CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO. 2015-034 APPROVING A HOUSING PROGRAM RELATING TO A SENIOR RENTAL HOUSING DEVELOPMENT TO BE LOCATED IN THE CITY OF ARDEN HILLS; GRANTING PRELIMINARY APPROVAL TO THE ISSUANCE OF REVENUE OBLIGATIONS BY THE CITY TO FINANCE THE SENIOR RENTAL HOUSING DEVELOPMENT; AND APPROVING AND AUTHORIZING CERTAIN RELATED ACTIONS 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 "Company"), and the City of Arden Hills (the "City") entered into a Contract for Private Development, dated December 20, 2010 (the "Development Contract"), pursuant to which the City agreed to issue revenue bonds to finance senior housing facilities (the "Minimum Improvements") the first phase of which was comprised of independent living units, assisted living units, and memory-care units (a combined total of approximately 200 dwelling units) located at 3120 and 3220 Lake Johanna Boulevard in the City("Phase P'); and WHEREAS,the Company is prepared to commence the construction and equipping of the second phase of the Project("Phase IP')to be comprised of forty(40) independent-living, rental apartments to be located in two buildings (twenty (20) apartments per building), together with necessary common areas and community space,to be located as 3200 Lake Johanna Boulevard in the City(the"Project"); and WHEREAS, the Company, has requested the participation of the City in the financing of 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 ("Revenue Obligations")to finance the Housing Program and the Project has been prepared pursuant to the requirements of Section 462C.03, subdivision la, of the Housing Act,and is on file with the City; and 4- WHEREAS, Section 147(f)of the Internal Revenue Code of 1986, as amended(the "Code"),and regulations promulgated thereunder, require that prior to the issuance of the Revenue Obligations to finance the Project and the Housing Program, the City Council of the City must approve the financing of the Project and issuance of the Revenue Obligations after conducting a public hearing thereon and notice of such public hearing must be published at least once, not less than fourteen (14) days prior to the date fixed for the public hearing in a newspaper of general circulation within the City; and WHEREAS, Section 462C.04, subdivision 2, of the Housing Act provides that a public hearing must be held on the Housing Program after one publication of notice in a newspaper circulating generally in the City at least fifteen (15) days before the public hearing and on or before the date of publication of the notice of public hearing the Housing Program must be submitted to the Metropolitan Council for its review and comment; and WHEREAS, pursuant to Resolution No. 2015-032, adopted by the City Council of the City on May 11, 2015, the City Council: (i) determined to conduct a public hearing with respect to the Housing Program and the Project at a regular meeting of the City Council to be held on June 8, 2015; (ii)authorized publication of a notice of public hearing in the Shoreview-Arden Hills Bulletin•, and (iii)authorized submission of the Housing Program to the Metropolitan Council on or before the date of publication of the notice of public hearing; and WHEREAS, the notice of public hearing provided a general, functional description of the Project, as well as the maximum aggregate face amount of the obligations to be issued to finance the Project, the identity of the initial owner, operator, or manager of the Project, and the location of the Project and such public notice was submitted to the Shoreview-Arden Hills Bulletin for publication and was published on May 20, 2015; and WHEREAS, a copy of the Housing Program was delivered to the Metropolitan Council on or before the date of publication of the notice of public hearing; and WHEREAS, on June 8, 2015, the City Council of the City conducted a public hearing on the Housing Program, the Project, and the issuance of the Revenue Obligations by the City to finance the Project and at such public hearing a reasonable opportunity was provided for interested individuals to express their views at the public hearing, both orally and in writing, on the Project and the proposed issuance of such Revenue Obligations. NOW, THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY THAT: Section 1. Approval of Housing Program. The Housing Program is hereby approved. Section 2. Preliminary pproval of Revenue Obligations. Preliminary approval is hereby granted to the issuance of Revenue Obligations by the City in the aggregate principal amount of approximately $10,000,000 to finance the Project, subject to final approval following the preparation of documents, and subject to a final determination by the City Council that the financing of the Project and the issuance of the Revenue Obligations are in the best interests of the City. Section 3. Special Obligations. The Revenue Obligations to be issued by the City to finance the Project shall not constitute a pecuniary liability or charge, lien, or encumbrance, legal or equitable, upon any funds, assets, taxing powers, or any other property of the City except the City's interest in the loan agreement or revenue agreement and any security specifically pledged to the Revenue Obligations; and the Revenue Obligations, when, as, and if issued shall recite in substance that the Revenue Obligations, -2- including interest thereon, are payable solely from the revenues received from the Company and the Project and other property pledged to the payment thereof, and shall not constitute general or moral obligations of the City. The Revenue Obligations shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. The holder or holders of the Revenue Obligations shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal of the Revenue Obligations, or the interest thereon, or to enforce payment thereof against any property of the City. Section 4. Compliance with the Housing Act. Based on representations of the Company set forth in the Development Contract, it is hereby found and determined that the Project furthers the purposes set forth in the Housing Act and the Project constitutes a "multifamily housing development" within the meaning of the Housing Act. Section 5. Bond Counsel. The law firm of Kennedy& Graven, Chartered is authorized to act as bond counsel and to assist in the preparation and review of necessary documents relating to the Revenue Obligations. The Mayor, the Administrator, and other officers, employees, and agents of the City are hereby authorized to assist bond counsel in the preparation of such documents. Section 6. Documents Furnished to Bond Counsel. The Mayor, the Administrator, and other officers of the City are authorized and directed to furnish to Kennedy & Graven, Chartered, as bond counsel, certified copies of all proceedings and records of the City relating to the Housing Program, the Project, and the Revenue Obligations, and such other affidavits, certificates, and other documents as may be required by bond counsel to show the facts relating to the legality of the Housing Program, the Project, and the Revenue Obligations and related documents, as such facts appear from the books and records in the custody and control of such officers or as otherwise known to them; and all such certified copies, certificates, affidavits, and other documents, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. Section 7. Costs. The Company shall pay or reimburse any and all costs incurred by the City in connection with the issuance of the Revenue Obligations, whether or not the Revenue Obligations are issued and the operative instruments are executed and delivered. The Company shall pay the administrative fees of the City in the event the Revenue Obligations are issued in accordance with the terms of the Development Contract. Section 8. Reimbursement. The United States Department of the Treasury has promulgated final regulations governing the use of the proceeds of tax-exempt obligations, all or a portion of which are to be used to reimburse a conduit borrower for project expenditures paid prior to the date of issuance of such tax-exempt obligations. Those regulations, Treasury Regulations, Section 1.150-2 (the "Treasury Regulations"), require that the City or a conduit borrower adopt a statement of official intent to reimburse an original expenditure not later than sixty(60) days after payment of the original expenditure. The Treasury Regulations also generally require that the tax-exempt obligations be issued and the reimbursement allocation made from the proceeds of the tax-exempt obligations occur within eighteen(18) months after the later of. (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three(3)years after the date the expenditure is paid. The Treasury Regulations generally permit reimbursement of capital expenditures and costs of issuance of the tax-exempt obligations. The Company has adopted a reimbursement resolution with respect to the Project that satisfies the requirements of the Treasury Regulations. Section 9. Expiration. All commitments of the City expressed herein are subject to the condition that by December 31, 2015, the City, the Company, and the initial purchaser of the Revenue Obligations shall have agreed to mutually acceptable terms and conditions of the loan or revenue agreement, the -3- Revenue Obligations, and the other instruments and proceedings relating to the Revenue Obligations, and that on or before such date the Revenue Obligations shall have been sold and issued. If the events set forth herein do not take place prior to such date, or any extension thereof, and the Revenue Obligations are not sold within such time,this resolution will expire and be of no further effect. Section 10. Rijzhts of the City. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the Revenue Obligations as requested by the Company. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Revenue Obligations, or issue the Revenue Obligations in an amount less that the amount referred to herein, should the City at any time prior to issuance thereof determine that it is in the best interest of the City not to issue the Revenue Obligations, or to issue the Revenue Obligations in an aggregate amount less than the amount referred to in Section 2 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. Section 11. Effective Date. This Resolution shall be in full force and effect from and after its passage this 8th day of June, 2015. -4- Adopted by the City Council of the City of Arden Hills,Minnesota,this June 8, 2015. CITY OF ARDEN HILLS,MINNESOTA By �1 �'Z'" . David Grant,Mayor Attest: B . Y Amy Dietl, CityJerk AR200-016(SEL) 462299v.1 -5-