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HomeMy WebLinkAbout15-189 Multifamily Final Rev BondRESOLUTION 15-189 A RESOLUTION APPROVING ISSUANCE OF MULTIFAMILY HOUSING REVENUE NOTE (THE GRAINWOOD PROJECT) AND APPROVING THE EXECUTION OF RELATED DOCUMENTS Motion By: Thompson Second By: Morton WHEREAS, The City Council of the City of Prior Lake, Minnesota (the “City”) adopted the following Resolution No. 15-173 on October 26, 2015: “Resolution Amending Resolution On Proposal For A Multifamily Housing Development Project (Prior Lake Senior Apartments Project)”, amending the original resolution approved by the City on May 11, 2015. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. Authority. The City is, by the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 462C and Section 471.59, as amended (collectively, the "Act"), authorized to issue and sell its revenue bonds in the form of notes or other obligations for the purpose o f financing the cost of the acquisition, construction and equipping of certain senior housing facilities with services, and to enter into agreements necessary or convenient in the exercise of the powers granted by the Act. 2. Proposal. The City Council has received a proposal from Prior Lake Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the "Borrower"), that the City undertake to finance a certain project as herein described pursuant to the Act, by the issuance by the City of a Multifamily Note in a principal amount not to exceed $28,000,000 (the “Governmental Note”). 3. Description of Project. The Borrower has requested that the City issue the Governmental Note pursuant to the Act, to finance the acquisition, construction and equipping of an approximately 168-unit multifamily rental housing development located at 5119 Gateway Street NE in the City (the "Project"). The Project will be owned by the Borrower and managed by the Borrower or a related entity. 4. Plan of Financing. It is proposed that the Governmental Note will be purchased by Wells Fargo Bank, National Association (the "Lender"). The proceeds of the Governmental Note will be loaned to the Borrower pursuant to a Funding Loan Agreement among the City, the Lende r and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”) for the benefit of Wells Fargo Bank, National Association, as construction lender (the "Funding Loan Agreement"). Repayment of the Governmental Note will be secured by certain collateral including a Mortgage (the "Mortgage"), from the Borrower to the City, as further assigned by the City to the Fiscal Agent by an Assignment of Security Instrument (the “Assignment”) by which the Borrower grants to the Lender a mortgage lien on and se curity interest in the Project, as security for the payment of the Governmental Note and assigns to the Lender its interests in all leases and rents with respect to the mortgaged property. The Borrower’s repayment obligations under the Funding Loan Agreement will be evidenced by the Borrower’s execution of a Multifamily Note to the City (the “Project Note”), which Project Note the City will endorse to the Fiscal Agent as provided in the Project Loan Agreement among the Borrower, the City and the Fiscal Age nt (the “Project Loan Agreement”). The City will further enter into a Tax Regulatory Agreement with the Fiscal Agent and the Borrower. 5. Public Hearing. A public hearing on the Project was held on May 11, 2015, after notice was published and materials made available to public inspection at the City Hall, all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, at which public hearing all persons at the hearing were given an opportunity to express their view with respect to the Project and preliminary approval of the Project and issuance of the Governmental Note as authorized. 6. Forms of Documents Submitted. Forms of the following documents related to the Governmental Note have been submitted to the City: (a) The Governmental Note; (b) The Funding Loan Agreement; (c) The Project Note; (d) The Project Loan Agreement; and (e) Tax Regulatory Agreement. (f) Collateral Assignment of Tax Increment Financing Note and Tax Increments. 7. Findings. It is hereby found, determined and declared that: (a) Based on Borrower representations to the City, the Project constitutes a rental housing project authorized by and described in the Act. (b) There is no litigation pending or, to the City's actual knowledge, threatened against the City relating to the Governmental Note, the Funding Loan Agreement, the Project Note and the Project Loan Agreement (collectively, the "City Note Documents") or questioning the due organization of the City, or the powers or authority of the City to issue the Governmental Note and undertake the transactions contemplated hereby. (c) The execution, delivery and performance of the City's obligations under the City Note Documents do not and will not violate any order of any court or other agency of government of which the City is aware or in which the City is a party, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (d) It is desirable that the Governmental Note be issued by the City upon the terms set forth in the Funding Loan Agreement under the provisions of which the City's interest in the Funding Loan Agreement will be pledged to the Lender, as security for the payment of principal of, premium, if any, and interest on the Governmental Note. (e) Under the provisions of the Act, and as provided in the City Note Documents, the Governmental Note is not to be payable from nor charged upon any funds other than amounts payable pursuant to the Funding Loan Agreement and amounts realized under the Mortgage and moneys in the funds and accounts held by the Lender which are pledged to the payment thereof; the City is not subject to any liability thereon; no owners of the Governmental Note shall ever have the right to compel the exercise of the taxing power of the City to pay the Governmental Note or the interest thereon, nor to enforce payment thereof against any property of the City; the Governmental Note shall not constitute a general or moral obligation of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City (other than the interest of the City in the loan repayments to be made by the Borrower under the Funding Loan Agreement); and the Governmental Note issued shall recite that the Governmental Note, including interest thereon, shall not constitute or give rise to a charge against the general credit or taxing powers of the City. 8. Approval and Execution of Documents. The form of the Governmental Note and the City Note Documents are approved. The City Note Documents are authorized to be executed in the name and on behalf of the City by the Mayor and the City Manager, at such time, if any, as they may deem appropriate, or executed or attested by other officers of the City, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof; and then shall be delivered to the Lender. Modifications to the forms of the Mortgage and Disbursing Agreement and other collateral security documents may be made at the discretion of the parties thereto. 9. Approval, Execution and Delivery of Note. The City is authorized to issue the Governmental Note and other obligations issued in connection with the Project, in an aggregate principal amount of not to exceed $28,000,000, in the form and upon the terms set forth in the Governmental Note and the Funding Loan Agreement, which terms are for this purpose incorporated in this resolution and made a part hereof; provided, however, that the interest rates on the Governmental Note sha ll be as set forth in the final form of the Governmental Note, to be approved, executed and delivered by the officers of the City authorized to do so by the provisions of this Resolution, which approval shall be conclusively evidenced by such execution and delivery; and provided further that, in no event, shall such rates exceed eight percent (8%) per annum unless the interest thereon becomes taxable. The Lender has agreed to purchase the Governmental Note at par. The Mayor, City Manager and other City officers are authorized to execute the Governmental Note at such time, if any, as they may deem appropriate, and to deliver it to the Lender, together with a certified copy of this Resolution and the other documents required by the Governmental Note Documents, for authentication, registration and delivery to the Lender. 10. Certificates. The Mayor, City Manager and other officers of the City are authorized at such time, if any, as they may deem appropriate, to prepare and furnish to bond counsel and the Lender, certified copies of all proceedings and records of the City relating to the Governmental Note, and such other affidavits and certificates as may be required to show the facts appearing 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. PASSED AND ADOPTED THIS 23th DAY OF NOVEMBER, 2015. VOTE Hedberg Keeney McGuire Morton Thompson Aye ☒ ☒ ☐ ☒ ☒ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☒ ☐ ☐ ______________________________ Frank Boyles, City Manager