HomeMy WebLinkAbout6A, Host Approval for $30,000,000 City of Spring Park Conduit Debt for Presbyterian Homes�
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EN HILLS :
Re uest for Coun il A'
q c ct�on
Prepared By: Sue Iverson, Council Meetin Date: Ma 10 2010
Finance Director/Treasurer g y '
Host Approval for $30,000,000 City of Spring Park Conduit Debt for Presbyterian Homes
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Recommendation:
1. Motion to adopt Resolution 2010-026, giving host approval to the issuance of
Multifamily Housing and Health Care Revenue Notes under Minnesota Statutes,
Chapter 462c and authorizing the execution of a j oint powers agreement and an
assignment and assumption of regulatory agreement.
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Supporting Documents:
1. See the attached memo from Sue Iverson dated May 10, 2010.
2. Letter from Julie Eddington, City Bond Counsel — Kennedy & Graven.
3. Resolution 2010-026.
4. Joint PoWers Agreement.
5. �ssignment and Assumption of Regulatory Agreement.
%� EN HILLS
MEMORANDUM
DATE: May 10, 2010
TO: Honorable Mayor and City Council Members
Patrick Klaers, City Administrator
FROM: Sue Iverson, Finance Director/Treasurer
SUBJECT: Host Approval for $30,000,000 City of Spring Park Conduit Debt for
Presbyterian Homes
Back�round
The City has been requested to hold a public hearing for host approval of $30,000,000 of
Multifamily Housing and Health Care Revenue Notes to be issued by the City of Spring
Park on behalf of Presbyterian Homes. Host approval is required as part of the proceeds
of these bonds will be used to refund the City of Arden Hills Housing and Health Care
Revenue Bonds (Presbyterian Homes of Arden Hills, Inc.), Series 1999B.
Our Bond Counsel has reviewed this request and attached is a letter describing the proj ect
and their legal opinion for your review. After the public hearing, Council is requested to
approve a resolution giving host approval and the execution of a Joint Powers Agreement
and an Assignment and Assumption of Regulatory Agreement. 4ur Bond Counsel's
opinion is that these transactions do no create any legal liability on the part of the City of
Arden Hills for these bonds.
There will be representatives from our Bond Counsel and on behalf of Presbyterian
Homes at the meeting to explain the proj ect and to answer any questions.
C oun cil Action
Conduct a Public Hearing and provide host approval of the above mentioned bonds so the
City of Spring Park may issue the above referenced bonds.
City Council Meeting
\�Metro-inet\ardenhills�Admin\Council�Agendas & Packet Information\2010\5-10-10 Regular�Packet
Information�.Pres_Homes_Spring_Park conduit_debt.doc
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Extract of Minutes of a Meeting of the
City Council of the City of Arden Hills, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Arden Hills, Minnesota, was duly held at the City Hall in said City on Monday, May 10, 2010,
commencing at 7:00 P.M.
The following members were present:
and the fo llowing were ab s ent :
Member introduced the following resolution and moved its adoption:
RESOLUTION NO. 2010-026
RESOLUTION GIVING HOST APPROVAL TO THE ISSUANCE
OF MULTIFAMILY HOUS ING AND HEALTH CA�RE REVENUE NOTE
L�`�TDER MI]��NESOTA STATUTES, CHAPTER 462C AND
AUTHORIZING THE EXECUTION OF A JOINT POWERS AGREEMENT
AND AN AS SIGI�TMENT AND AS SI:�IVIPTION OF REGULATORY AGREEMENT
The motion for the adoption of the foregoing resolution was duly seconded by member
, and after full discussion thereof and upon vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
2494475v2
RESOLUTION GIVING HOST APPROVAL TO THE ISSUANCE
OF MULTIFAMILY HOUSING AND HEALTH CA�RE REVENUE
LINDER MI7�TNESOTA STATUTES, CHAPTER 462C AND
AUTHORIZING THE EXECUTION OF A JOINT PO�iERS AGREEMENT
AND AN AIVIENDED AND RESTATED REGULATORY AGREEMENT
BE IT RESOLVED, by the City Council (the "Council") of the City of Arden Hills,
Minnesota (the "City") as follows:
Section l. General Recitals.
(a) The purpose of Minnesota Statutes, Chapter 462C (the "Act"), is among other
things, to confer upon cities the power to issue revenue bonds to finance multifamily housing
developments; and
Section 2. Description of the Proi ect.
(a) PHS/Lake Minnetonka, LLC, a Minnesota limited liability company (the
"Borrower") whose sole member is Presbyterian Homes Housing and Assisted Living, Inc., a
Minnesota nonprofit corporation, has proposed that the City of Spring Park, Minnesota ("Spring
Park" or the "Issuer") undertake a program to finance a proj ect (as defined below), a portion of
which is located in the City through the issuance of approximately $30,000,000 of revenue notes
or other obligations, in one or more series (the "Note") pursuant to the Act; and
(b) The proj ect consists of financing and refinancing, on behalf of PHS/Lake
Minnetonka, LLC, a Minnesota limited liability company, whose sole member is Presbyterian
Homes Housing and Assisted Living, Inc., a Minnesota nonpro�t corporation (the "Borrower"),
(i) the acquisition, construction, equipping of new facilities and the demolition of 2 existin
g
structures and the renovation of existing facilities to create a senior housing development which
will consist of approximately 239 senior housing units including approximately 169 independent
living units (the renovation of 160 units and new construction of 9 units), 52 assisted living units
(52 units of new construction with demolition of 37 old units), 18 memory care units
(renovation) and an approximately 20,000 square foot town center (new construction) for use by
the residents of the senior housing units located at 4465, 4497, 4501, 4523, 4527, 4579, 45 89,
4599 Shoreline Drive in the City of Spring Park, Minnesota ("Spring Park"); and refunding
Spring Park's outstanding Multifamily Housing Revenue Bonds (Presbyterian Homes Housing
and Assisted Living, Inc. Project) Series 2007 which were issued to finance the acquisition and
renovation of a 75 unit multifamily housing development comprised of 2 buildings located at
4601/09 Shoreline Drive and 2380 Island Drive in Spring Park (the "Park Hill Apartments") and
to refinance the acquisition and renovation of a 51 unit multifamily housing development
comprised of 3 build�ings located at 4579, 4589, and 4599 Shoreline Drive in Spring Park (the
"Shoreview Apartm.ents") (collectively the "Spring Park Portion"); (ii) refunding of the
outstanding City of Arden Hills, Minnesota Health Care and Housing Revenue Refunding Bonds
(Presbyterian Homes of Arden Hills, Inc. Proj ect), Series 1999B (the "Series 1999B" Bonds)
which were issued to finance the costs of the refinancing, acquisition, construction or renovation
of certain housing and health care facilities located at 3120 and 3220 Lake Johanna Boulevard,
2
2494475v2
Arden Hills, and commonly known as "Lakeview Residence", a 177-unit elderly assisted-living
facility, "Sutton Place," a 19-unit elderly independent-living facility and "McKnight Care
Center," a 208-bed nursing home facility in the City of Arden Hills (the "Arden Hills Portion")
and other facilities located in Spring Park and Bloomington, Minnesota and ��nkeny, IoWa; and
(iii) paying costs of issuance of the revenue obligations (the "Spring Park Portion" and, together
with the Arden Hills Portion, the "Proj ect").
(c) The City has been advised that the Note or other obligations, as and when issued,
will not constitute a charge, lien or encumbrance upon any property of the City or the Issuer,
except the Proj ect and the revenues to be derived from the Proj ect or other financed facilities.
Such Note or obligations will not be a charge against the general credit or taxing powers of the
City or the Issuer, but is payable from sums to be paid by the Borrower pursuant to a revenue
agreement.
(d) In connection with the issuance of the Series 1999B Bonds, a Regulatory
Agreement, dated as of September l, 1999 was entered into among the City, U.S. Bank Trust
National Association (n/k/a U.S. Bank National Association), as Trustee (the "Trustee") and
Mill-Pond, Inc., an Iowa Corporation ("Mill-Pond") (the "Regulatory Agreement"), duly
recorded in the official records of Polk County, Iowa, Instrument No. 030891, on October 7,
1999. In connection with the issuance of the Note, the City shall assign the Regulatory
Agreement to the City of Spring Park.
(e) In connection with the issuance of the Note it is proposed that the Joint Powers
Agreement be entered into among the City, and the City of Spring Park and ��nkeny, Iowa,
pursuant to Minnesota Statutes, Section 471.59 and Iowa Code, Chapter 28E.
Section 3. Recital of Re�resentations Made by the Borrower.
(a) The Borrower has agreed to pay any and all costs incurred by the City in
connection with the issuance of the Note, whether or not such issuance is carried to completion.
(b) The Borrower has represented to the City that no public official of the City has
either a direct or indirect financial interest in the Proj ect nor will any public of� cial either
directly or indirectly benefit �nancially from the Project.
Section 4. Public Hearin�.
(a) As required by the Act and Section 147(� of the Code a Notice of Public Hearing
was published in the City's official newspaper and newspaper of general circulation, for a public
hearing on the proposed issuance of the Note and the proposal to undertake and finance the
Proj ect.
(b) As required by the Act and Section 147(� of the Code the City Council has on
this same date held a public hearing on the issuance of the Note and the proposal to undertake
and finance the portion of the Project located within the jurisdictional limits of the City, at which
all those appearing who desired to speak were heard and written comments were accepted.
3
2494475v2
Section 5. Host Approval. The City Council hereby gives the host approval required
under Section 147(� of the Code and, pursuant to Minnesota Statutes §471.656, Subd. 2(2), the
City Council hereby consents to the issuance of the Note.
Section 6. Joint Powers Agreement and Assignment and Assumption of Regulatory
Agreement. The Joint Powers Agreement and Assignment and Assumption of Regulatory
Agreement are hereby approved in substantially the forms now on file with the City; and the
Mayor and the Administrator of the City are authorized to execute the same in the name of and
on behalf of the City. In the event of the disability or the resignation or other absence of the
Mayor or City Administrator of the City, such other officers of the City who may act in their
behalf shall without further act or authorization of the City do all things and execute all
instruments and documents required to be done or to be executed by such absent or disabled
officials. The approval hereby given to the Joint Powers Agreement and the Assignment and
Assumption of Regulatory Agreement 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 City Attorney and by the City
officials authorized herein to execute the Joint Powers Agreement and the Assignment and
Assumption of Regulatory Agreement prior to its execution; and said City officials are hereby
authorized to approve said changes on behalf of the City.
Stanley Harpstead, Mayor
ATTEST:
Patrick Klaers, Administrator
�
2494475v2
STATE OF MI��ESOTA
COUNTY OF RAIVISEY
CITY OF ARDEN HILLS
I, the undersigned, being the duly qualified and acting Administrator of the City of Arden
Hills, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing
extract of minutes with the original thereof on file in my office, and that the same is a full, true
and complete transcript of the minutes of a meeting of the City Council of said City duly called
and held on the date therein indicated, insofar as such minutes relate to granting host approval to
the issuance of revenue bonds for a proj ect in the City.
WITNESS my hand this day of May, 2010.
Patrick Klaers, Administrator
5
2494475v2
_ _ _ __ _ _
JOINT POWERS AGREEMENT
PROVIDING FOR THE ISSUANCE OF A REVEI�TLJE NOTE TO
FINANCE HOUSING AND HEALTHCI��RE FACILITIES
(PHS/LA,��E MI��TNETOI�TKA CAMPUS PROJECT)
THIS AGREEMENT is entered into as of the 1 St day of May, 2010, by and between the City of
Spring Park, Minnesota ("Spring Park"), the City of Arden Hills, Minnesota ("Arden Hills") and the City of
��nkeny, Iowa ("��nkeny") (collectively, the "Cities", or individually, a"City"). Each of the municipalities
named above is a municipal corporation duly organized under the laws of the State of Minnesota, or the
State of Iowa.
l. Minnesota Statutes, Section 471.59 and Iowa Code, Chapter 28E (the "Joint Powers
Acts") provides that two or more governmental units, by agreement entered into through action of their
governing bodies, may j ointly or cooperatively exercise any power common to the contracting parties, and
may provide for the exercise of such power by one of the participating governmental units.
2. In connection with revenue bonds issued under Minnesota Statutes, Chapter 462C
(the "Housing Prograrns Act"), Section 462C.14, Subd. 3 provides for joint action between cities pursuant
to the Joint Powers Act.
3. Iowa Code, Chapter 419 provides that Iowa municipalities may issue revenue bonds
to defray the costs of facilities for organizations described under Section 501(c)(3) of the Internal Revenue
Code.
4. PHS/Lake Minnetonka, LLC, a Minnesota limited liability company whose sole
member is Presbyterian Homes Housing and Assisted Living, Inc., a Minnesota nonprofit organization,
(the "Borrower") has proposed that the Cities enter into this Agreement pursuant to the Housing Programs
Act and Iowa Code, Chapters 28E and 419, pursuant to which Spring Park will issue a revenue note (the
"Note") in the aggregate principal amount not to exceed $30,000,000 and loan the proceeds thereof to the
Borrower to finance the proj ect described in the next paragraph.
5. The proj ect consists of the financing of (a) the acquisition, construction, equipping
of new facilities and the demolition of 2 existing buildings and renovation of existing facilities to create a
senior housing development which will consist of approximately 239 senior housing units, including
approximately 169 independent living units (the renovation of 160 units and new construction of 9 units),
52 assisted living units (52 units of new construction with demolition of 37 old units), 18 memory care
units (new construction) and an approximately 20,000 square foot town center (new construction) for use
by the residents of the senior housing units located at 4465, 4497, 4501, 4523, 4527, 4579, 4589, 4599
Shoreline Drive in Spring Park, Minnesota (the "Spring Park Facilities") and (b) refund the outstanding
City of Arden Hills, Minnesota Refunding Health Care and Housing Revenue Refunding Bonds
(Presbyterian Home of Arden Hills, Inc. Project), Series 1999B, which were issued to finance and
refinance the acquisition, renov�.tion and improvement of certain health care and housing facilities located
in Ankeny, Iowa, Spring Park, Minnesota, Arden Hills, Minnesota and Bloomington, Minnesota and refund
the outstanding City of Spring Park Multifamily Housing Revenue Bonds (Presbyterian Homes Housing
and Assisted Living, Inc. Proj ect) Series 2007, which were issued to finance the acquisition of certain
health care and housing facilities located in Spring Park.
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6. Spring Park, the City in which a portion of the Note proceeds will be used for a
housing proj ect has adopted a housing program (the "Program") which describes the housing development
to be financed by the Borrower in Spring Park.
7. Each City will adopt a resolution evidencing its intent to enter into this Agreement,
and granting host approval (or, in the case of Spring Park, granting approval) of the issuance of the Note as
required under the Internal Revenue Code of 1986, as amended.
8. Spring Park shall exercise the powers of the Housing Programs Act by adopting,
approving and executing such resolutions, documents, and agreements as shall be necessary or convenient
to authorize, issue, and sell the Note and such other resolutions, documents, and agreements as shall be
necessary or required in connection with the issuance of the Note and giving effect to or carrying out the
provisions of this Agreement and documents under which the Note is issued and/or secured.
9. The Note shall be a special, limited obligation of Spring Park, payable solely from
proceeds, revenues and other amounts pledged thereto and more fully described in the Loan Agreement
executed in connection with the Proj ect. In no event shall the Note ever be payable from or charged upon
the general credit, taxing powers or any funds of either of the Cities; the Cities are not subj ect to any
liability thereon; no owners of the Note shall ever have the right to compel the exercise of the taxing power
of either of the Cities to pay any of the Note or the interest thereon, nor to enforce payment thereof against
any property of either of the Cities; the Note shall not constitute a charge, lien or encumbrance, legal or
equltable, upon any property of either of the Cities; and the Note does not constitute an indebtedness of any
of the Cltles within the meaning of any constitutional, statutory, or charter limitation.
10. This Agreement shall terminate upon the retirement or defeasance of the Note or any
bonds issued by Spring Park to refund the Note, and this Agreement may not be terminated in advance of
such retirement or defeasance.
2
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IN WITNES S WHEREOF, each of the Cities has caused this Agreement to be executed on its
behalf by its duly authorized officers, all as of the day and year first above written.
CITY OF SPRING PARK, MI�NNESOTA,
as Issuer
By
Mayor
By
Clerk
SIGNATLTRE PAGE TO JOINT POWERS AGREEMENT
S-1
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CITY OF ARDEN HILLS, MI��TNESOTA
By
Its Mayor
By
Its Administrator
SIGNATLTRE PAGE TO JOINT POWERS AGREEMENT
S-2
2503985v1
C ITY OF AI���ENY, IO WA
By
Its Mayor
By
Its City Clerk
SIGNATLTRE PAGE TO JOINT POWERS AGREEMENT
S-3
2503985v1
ASSIGNMENT AND ASSUMPTION OF
REGULATURY AGREEMENT
THIS ASSIGI��IVIENT AND ASSUMPTION, dated as of June l, 2010, is made by and
between the City of Arden Hills, Minnesota (the "Prior Issuer"), the City of Spring Park,
Minnesota (the "Issuer"), U.S. Bank Trust National Association, now known as U.S. Bank
National Association (the "Trustee"), and Bremer Bank, National Association (the "Lender").
RECITALS
WHEREAS, the Prior Issuer and the Trustee have previously entered into that certain
Regulatory Agreement dated as of September 1, 1999 with Mill-Pond, Inc., now known as
Presbyterian Homes Mill Pond Care Center, Inc. (the "Owner"), filed with the Office of the
County Recorder of Polk County, Iowa, on October, 1999 as document number 030891 (the
"Regulatory Agreement"), with respect to that certain 49-unit multifamily rental housing
development located in the City of An.keny, Iowa, known as Mill Pond Care Center, on the site
described in Exhibit A attached hereto (the "Proj ect"); and
WHEREAS, a portion of the proceeds of the Prior Issuer's $7,161,000 Health Care and
Housing Revenue Bonds (Presbyterian Homes of Arden Hills, Inc. Proj ect), Series 1999B (the
"Prior Bonds") were used by the Owner to acquire the Proj ect; and
WHEREAS, the Owner proposes to refinance the Proj ect with a portion of the proceeds
of the Issuer's $28,000,000 Multifamily Housing and Health Care Revenue Note (PHS/Lake
Minnetonka Campus Proj ect), Series 2010 (the "Bonds"), which will be purchased by the Lender
and the Prior Bonds will be refunded and redeemed; and
WHEREAS, the Prior Issuer and the Trustee desire to assign and the Issuer and the
Lender desire to assume their respective rights, benefits, and obligations under the Regulatory
Agreement upon the issuance of the Bonds and the redemption of the Prior Bonds.
NOW, THEREFORE, in consideration of the mutual premises and covenants hereinafter
set forth, and of other valuable consideration, the Prior Issuer, the Issuer, the Trustee, and the
Lender hereby agree as follows:
1. Assi�nment by the Prior Issuer. The Prior Issuer hereby assigns all of its rights,
interests, and obligations under the Regulatory Agreement to the Issuer.
2. Assignment by the Trustee. The Trustee hereby assigns all of its rights, interests,
and obligations under the Regulatory Agreement to the Lender.
3. Assumption by the Issuer. The Issuer hereby assumes all of the rights, interests,
and obligations of the Prior Issuer under the Regulatory Agreement.
4. Assum�tion by the Lender. The Lender hereby assumes all of the rights, interests,
and obligations of the Trustee under the Regulatory Agreement.
2504216v1
5. Governin _ Law. It is agreed that this Assignment shall be governed by, construed
and enforced in accordance with the laws of the State of Minnesota.
6. Partial Invalidity. The invalidity of any portion of this Assignment will not and
shall not be deemed to affect the validity of any other provision. In the event that any provision
of this Assignment is held to be invalid, the parties agree that the remaining provisions shall be
deemed to be in full force and effect as if they had been executed by both parties subsequent to
the expungement of the invalid provision.
7. Entirety of Agreement. This Assi�ent shall constitute the entire agreement
between the parties and any prior understanding or representation of any kind preceding the date
of this Assignment shall not be binding upon either party except to the extent incorporated in this
Agreement.
8. Modification. Any modification of this Agreement or additional obligation
assumed by either party in connection with this Assignment shall be binding only if placed in
writing and signed by each party or an authorized representative of each party.
9. Para ��ra�h Headings. The titles to the paragraphs of this Agreement are solely for
the convenience of the parties and shall not be used to explain, modify, simplify, or aid in the
interpretation of the provisions of this Agreement.
10. Execution in Counterparts. This Agreement may be executed, acknowledged and
delivered in any number of counterparts and each of such counterparts shall constitute an original
but all of which together shall constitute one agreement.
2
2504216v1
IN WITNESS WHEREOF, the parties hereto have set their hand as of the date and year
first written.
CITY OF ARDEN HILLS, M�ESOTA
By
Its Mayor
By
Its Administrator
STATE �F MI��TNESOTA )
)ss.
C OUNTY OF I�:��1VI S EY )
The foregoing instrument was acknowledged before me this day of June, 2010, by
and the Mayor and City Administrator
respectively of the City of Arden Hills, Minnesota, a Minnesota municipal corporation, on behalf
of said municipality.
Notary Public
(NOTARIAL SEAL)
3
2504216v1
CITY OF SPRING P��RK, MI��TNESOTA
By
Its Mayor
By
Its Administrator
STATE OF MI��fNESOTA )
)ss.
COUNTY OF HETTNEPIN )
The foregoing instrument was acknowledged before me this day of June, 2010, by
and the Mayor and City Administrator
respectively of the City of Spring Park, Minnesota, a Minnesota municipal corporation, on behalf
of said municipality.
Notary Public
(NOTARIAL SEAL)
!�
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U. S. BANK NATIONAL AS S OCIATION, as Trustee
By
Its
STATE OF MI]NNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this day of June 2010, before me, a notary public in and for said county and
state, personally appeared known to me to be, the of
U.S. Bank National Association, a national banking association who executed the foregoing
instrument.
IN WITNES S WHEREOF, I have hereunto set my hand and official seal this day
o f June, 2 010 .
Notary Public
(NOTARIAL SEAL)
��
2504216v1
BREMER BANK, NATIONAL ASSOCIATION, as
Lender
By
Its
S TATE OF MI7NNE S OTA )
) ss.
C OUNTY OF HEI�TNEP IN )
On this day of June, 2010, before me, a notary public in and for said county and
state, personally appeared known to me to be, the of
Bremer Bank, National Association, a national banking association who executed the foregoing
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day
of June, 2010.
Notary Public
(NOTARIAL SEAL)
�
2504216v1
EXHIBIT A
LEGAL DESCRIPTION
2504216v1