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HomeMy WebLinkAbout01-023 RESOLUTION NO. 0]-23 RESOLUTION APPROVING THE ISSUANCE AND SALE OF THE $5,006,800 REVENUE NOTES, SERIES 200] (PRESBYTERIAN HOMES BLOOMINGTON CARE CENTER, INC. PROJECT) AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO BE IT RESOLVED by the City Council of the City of Arden Hills, Minnesota (the "City"), as follows: SECTION I. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findings. The City hereby finds, determines and declares as follows: (a) The City has received a proposal that it issue its revenue notes in the aggregate principal amount of $5,006,800 to provide funds to be loaned to Presbyterian Homes Bloomington Care Center, Inc., a nonprofit corporation organized under the laws of the State of Minnesota (the "Borrower") to provide funds to finance the acquisition of approximately 39-45 cooperative senior housing units in the Gideon Pond Cooperative located at 9901 Penn Avenue South, Bloomington, Minnesota, to refinance the acquisition of its health care facilities known as the Bloomington Care Center, an 80-hed skilled nursing facility located at 401 W. 95th St., Bloomington, Minnesota and to refinance capital costs incurred by the Borrower and affiliated entities in connection with the Bloomington Care Center and the McKnight Care Center, a 208-bed nursing home facility located at 3220 Lake Johanna Boulevard, Arden Hills, Minnesota (collectively, the "Project"). The Borrower will initially be the owner and operator of the Bloomington Care Center and the Gideon Pond Cooperative units acquired as part of the Project and the McKnight Care Center is owned and operated by Presbyterian Homes of Arden Hills, Inc. All facilities will be initially managed by Presbyterian Homes Management and Services, Inc. (b) The City is a municipal corporation and a political subdivision of the State of Minnesota and is authorized under Minnesota Statutes, Section 469.152 to 469.1651, as amended (the "Industrial Development Act") to assist the revenue producing Project herein referred to, and to issue and sell the Notes, as hereinafter defined, for the purpose, in the manner and upon the tenns and conditions set forth in the Industrial Development Act and in this Resolution. (c) Minnesota Statutes, Chapter 462C (the "Housing Program Act") confers upon cities, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multifamily housing developments within its boundaries and the boundaries of the parties to a Joint Powers Agreement. (d) It is proposed that the City and the City of Bloomington, Minnesota enter into a Joint Powers Agreement (the "Joint Powers Agreement") pursuant to Minnesota Statutes, Section 471.59. 1 320443v2 (e) As required by the Act and Section I 47(f) of the Internal Revenue Code of 1986, as amended (thc "Code"), the City has, on September 10,2001, held a public hearing on the issuance of the Notes to finance the Project. (f) The issuance and sale by the City of the Health Care Facility Revenue Refunding Note, Series 200lA (Presbyterian Homes Bloomington Care Center, Inc. Project), pursuant to the Industrial Development Act, and thc Housing Facility Revenue Note, Serics 200lB (Presbyterian Homes Bloomington Care Center, Inc. Project) pursuant to the Housing Program Act, (collectively, the "Notes") is in the best interest of the City, and the City hereby determines to issue the Notes and to sell the Notes to Dakota Bank, in Mendota Hcights, Minnesota (the "Lcndcr"), as provided herein. The City will loan the proceeds of the Notes (the "Loan") to the Borrower to finance the Projcct. (g) Pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the City and the Borrower, the Borrower has agreed to repay the Notes in specified amounts and at spccified times sufficicnt to pay in full when due the principal of, premium, if any, and interest on the Notes. In addition, the Loan Agreement contains provisions relating to the acquisition, the maintenance and operation of the Project, indemnillcation, insurance, and other agreements and covenants which are required or permitted by the Act and which the City and the Borrower deem necessary or desirable for the financing of the Project. A draft of the Loan Agrecment has been submitted to the City Council. (h) Pursuant to a Pledge Agreement (the "Pledge Agreement") to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the City Council. (i) Pursuant to a Mortgage, Security Agreement and Fixture Financing Statement to be executed by the Borrower in favor of the Lender (the "Mortgage"), the Borrower has secured payment of amounts due under the Loan Agreement and Notes by granting to the Lender a mortgage and security interest in the property described therein. A draft of the Mortgage has been submitted to the City although the City is not a party to this document. U) As additional security for the Notes the Borrower will deliver to the Lender a Security Agreement (the "Security Agreement"), a Guaranty (the" Guaranty") and an Assignment of Leases and Rents (the "Assignment") and various other agreements and certificates required by the Lender. (k) The Notes will be special limited obligations of the City. The Notes shall not be payable from or charged upon any funds other than the revenues pledgcd to the paymcnt thereof, nor shall the City be subject to any liability thereon. No holder of the Notes shall ever have the right to compel any exercise of the taxing power of the City to pay the Notes or the interest thereon, nor to enforce payment thereof against any property I 320443v2 2 of thc City. The Notes shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (I) It is desirable, feasiblc and consistent with thc objccts and purposcs of thc Act to issue the Notes, for thc purpose of financing the costs of the Project. 1.2 Authorization and Ratification of Proiect. The City has heretofore and does hereby authorize the Borrowcr, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, to provide for the refinancing and acquisition ofthe Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction and acquisition of other municipal facilities; and the City hereby ratifies, aftirnls, and approves all actions heretofore taken by the Borrower consistent with and in anticipation of such authority. SECTION 2. THE NOTES. 2.1 Authorized Amount and Form of Notes. The Notes issued pursuant to this Resolution shall be in substantially the form submitted to the Council on the date hereof, and shall mature in the years and amounts and be subject to rcdcmption as thcrein specificd, as such may be modified by agreement of the Lender, the Borrower and the City; and the total aggregate principal amount of the Notes that may be outstanding hereunder is expressly limited to $5,006,800, unless a duplicate Note is issued pursuant to Section 2.7. The Notes shall bear interest, initially at a rate of 5.25% per annum for five years and then at a variable rate adjusted every five years with a maximum interest rate of 7.75% and a minimum intcrcst ratc of 5.25%. The offer of the Lender to purchase the Notes at a purchase price of $5,006,800 is hereby accepted. 2.2 The Notes. The Notes shall be dated as ofthe date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and shall be subject to such other terms and conditions as are set forth therein. 2.3 Execution. The Notcs shall be executed on behalf of the City by the manual or facsimile signatures of its Mayor and City Administrator and shall be sealed with the seal of the City; provided that the seal may he intentionally omitted as provided by law. ln case any officer whose signature shall appear on the Notes shall cease to be such officer before the delivery of the Notes, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such signatory had remained in office until delivery. In the event of the absence or disability of the Mayor or the City Administrator such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the City Council execute and deliver the Notes. 2.4 Deliverv of Initial Notes. Before delivery of the Notes there shall be filed with the Lender (except to the extent waived by the Lender) the following items: (a) an executed copy of each of the following documents: (i) the Loan Agreement; 1 J20443v2 3 (ii) the Pledge Agreement; (iii) the Mortgage; (iv) the Security Agreement; (v) the Guaranty; (vi) the Assigmnent; (h) an opinion of Counsel for the Borrower as prescribed by the Lender and Bond Counsel; (c) the opinion of Bond Counsel as to the validity and tax exempt status of the Notes; (d) a 501(c)(3) dctcrmination lcttcr from the lnternal Revenue Service evidencing that the Borrower is exempt from income taxation under Section 501(c)(3) of the Code; (e) such other documents and opmions as Bond Counsel may reasonably rcquire for purposes of rendering its opinion required in subsection (c) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Note Proceeds. Upon delivery of the Notes to Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Notes for payment of Project Costs in accordance with the terms of the Loan Agreement. 2.6 Registration of Transfer. The City will cause to be kept at the office of the City Administrator a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for thc rcgistration of transfers of ownership of the Notes. The Notes shall be initially rcgistered in the name of the Lender and shall bc transferable upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Notcs together with a written instrument of transfer satisfactory to the Administrator, duly exccuted by the Lender or its duly authorized agent. The following fonn of assignment shall be sufficient for said purpose: For value received hereby sells, assigns and transfers unto this Note of the City of Arden Hills, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Notc on the books of said City with full powcr of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registcrcd Owncr 1320443v2 4 Upon such transfer the Administrator shall note the date of registration and the name and address of the new Lender in the Note Rcgister and in the registration blank appearing on the Notes. 2.7 Mutilated. Lost or Destroved Notc. In casc any Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be cxecuted and delivercd, a new Note of like series, outstanding principal amount, numbcr and tenor in exchange and substitution for and upon cancellation of such mutilatcd Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, dcstroyed or lost Note has already matured or been callcd for redemption in accordance with its tem1S it shall not be neccssary to issue a new Note prior to payment. 2.8 Ownership of Notes. The City may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as thc absolute owner of such Note for the purpose of receiving payment of or on account of thc Principal Balance, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any noticc to the contrary. 2.9 Limitation on Note Transfers. The Notes have bccn issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Notcs may not be assigned or transferred in whole or part, nor may a participation interest in the Notes be given pursuant to any participation agreement, except as an exempt security or as an excmpt transaction. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the City shall, at the request and expcnse of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the monthly installmcnts payable thereunder, and registered in the name of thc Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 Severabilitv. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular casc in any jurisdiction or jurisdictions or in all jurisdictions or in all cascs becausc it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rcndering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not ailect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificatcs as to all other matters which are reasonably necessary to evidence the validity of the Notes. All such certified copies, certificates and affidavits, including any 1320443v2 5 heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 3.3 Authorization to Execute Agreements. The forms of the proposed Loan Agreement and the Pledge Agreement are hereby approved in substantially the form heretofore presented to the City Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may bc necessary and appropriate and approved by Bond Counsel and the City Attorney prior to the execution of the documents, and the Mayor and City Administrator of the City are authorized to execute the Loan Agreement and the Pledge Agreement in the name of and on behalf of the City and such other documents as Bond Counsel considcr appropriate in connection with the issuance of the Notes. In the evcnt of the absence or disability of the Mayor or the City Administrator such officers of the City as, in the opinion of the City Attorney, may act in their behalf; shall without further act or authorization of the City Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the tenns hereof. 3.4 Qualified Tax Exempt Obligation. In order to qualify the Notes as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), the City hereby makes the following factual statements and representations; (a) the Code; the Notes are not treated as a "private activity bonds" under Section 265(b)(3) of (b) the City hereby designates the Notes as qualified tax-exempt obligations for purposes of Section 265(b )(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than obligations described in clause (ii) of Scction 265(b)(3)(C) of the Code) which will be issued by the City (and all entities whose obligations will be aggregated with those of the City) during the calendar year 2001 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during the calendar year 2001 have been designated for purposes of Section 265(b)(3) of the Code. 1320443v2 6 Adopted by the City Council of the City of Arden Hills, Minnesota, this loth day of December, 2001. Attest: DENNIS PROBST, MAYOR JOSEPH P. LYNCH, CITY ADMINISTRATOR I 320443v2 7 CITY OF ARDEN HILLS STATE OF MINNESOTA COUNTY OF RAMSEY CERTIFICATION BY ADMINISTRATOR RESOLUTION NO. 01-23 I, the undersigned, being the duly qualified and acting City Administrator of the City of Arden Hills, Minnesota, hereby certify that I have carefully compared the attached and foregoing Resolution No. 01-23 with the original thereof on file in my office and the same is a full, true and complete transcript therefrom, insofar as the same relates to a Resolution Approving the Issuance and Sale of the $5,006,800 Revenue Notes, Series 2001 (Presbyterian Homes Bloomington Care Center, Inc. Project) and Authorizing the Execution of Documents Relating Thereto. WITNESS my hand officially as such City Administrator of the City of Arden Hills, Minnesota, this II th day of December, 2001. JOSEPH P. LYNCH, CITY ADMINISTRATOR (SEAL) ] 320443v2 8