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Rf- <br />REQUEST FOR COUNCIL ACTION <br />Date.- 05/16/11 <br />Item No..- 7.d <br />Department Approval City Manager Approval <br />Item Description.- Consider a Supplemental Trust Indenture for Centennial Gardens Project <br />BACKGROUND <br />2 In 2007, the City participated in a $,12 million conduit debt financing for the Centennial Gardens <br />3 Apartments. The proceeds were used to finance the costs of the acquisition, rehabilitation and equipping of <br />4 a 190 unit residential rental housing project located at 1420 Centennial Drive and 2825 North Pascal Street <br />in Roseville. <br />"7 The project has taken longer than originally anticipated to achieve sustained and stable debt service <br />coverage for the Bonds. This is a requirement before amortization of the loan represented by the Bonds can <br />9 begin. <br />'10 <br />The City Council is asked to approve a supplemental Trust Indenture to accommodate the borrower and <br />12 lender. A draft version of the supplemental Trust Indenture along with an enabling resolution is attached. <br />13 Representatives of the Centennial Gardens Apartments project as well as the City's Bond Counsel will be <br />14 on hand to address any questions. The supplemental Agreements would extend the time ram for which the <br />1 f.t bonds would begin to amortize until August 1, 2011. <br />1 POLICY OBJECTIVE <br />1 7 Generally speaking, the public policy reason for City participation in these financings is to promote greater <br />1 ,,, investment in the City's multifamily housing facilities than would otherwise occur by market factors alone. <br />'19 Allowing the bonds to be issued tax-exempt makes the bonds more attractive to investors and results in <br />20 lower borrowing costs compared to traditional financing methods. This in turn, provides more available <br />2,1 dollars for the proposed project. <br />22 FINANCIAL IMPACTS <br />23 Not applicable. <br />24 STAFF RECOMMENDATION <br />25 Staff recommends the Council adopt the attached resolution approving a supplemental Trust Indenture for <br />2, the Centennial Gardens Apartments project. <br />27 REQUESTED COUNCIL ACTION <br />2,' Motion to adopt the attached resolution approving a supplemental Trust Indenture for the Centennial <br />29 Gardens Apartments project. <br />zm� <br />