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HomeMy WebLinkAbout2007-13 bonding conventry aptsCITY OF FALCON HEIGHTS COUNCIL RESOLUTION September 12, 2007 No. 2007-13 ____________________________________________________________________________ RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM, AUTHORIZING AN APPLICATION FOR BONDING AUTHORITY AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS (COVENTRY APARTMENTS PROJECT). WHEREAS, Briggs and Morgan, the City’s bond counsel, has advised the City of Falcon Heights, Minnesota (the “City”) that it is generally authorized, pursuant to Minnesota Statutes, Chapter 462C (the “Act”), to issue revenue bonds to finance a program for the purpose of planning, administering, making or purchasing loans with respect to one or more multifamily housing developments; and WHEREAS, Snelling Apartments Limited Partnership, a Minnesota limited partnership (the “Developer”) has proposed that the City undertake a program to finance the Project (as defined below), through the issuance of approximately $14,000,000 of revenue bonds or other obligations (which may be issued in one or more series) (the “Bonds”) pursuant to the Act; and WHEREAS, the Developer has advised the City that in order to bear tax-exempt interest as bonds for a qualified residential rental project, the Bonds require an allocation of federal volume limit to issue tax-exempt private activity bonds (“bonding authority”), and Minnesota Statutes, Chapter 474A, requires submission of a preliminary resolution in connection with an application for bonding authority; and WHEREAS, the Developer has advised the City that the Developer is currently engaged in the business of real estate development; and the project to be financed by the Bonds will consist of the acquisition, renovation and equipping of an approximately 196-unit multi-family rental housing facility for low and moderate income tenants located at 2820 Snelling Avenue North in the City of Roseville (the “Project”); and WHEREAS, the City has been advised by representatives of the Developer that conventional, commercial financing to pay the capital costs of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but the Developer has also advised the City that with the aid of municipal financing, and resulting low borrowing costs, the Project is economically more feasible; and WHEREAS, this resolution is adopted prior to preparation for the Project of a program meeting the requirements of the Act, and prior to a public hearing on the Project and program; and WHEREAS, in connection with the issuance of the Bonds it is proposed that the City and the City of Roseville enter into a Joint Powers Agreement; and WHEREAS, the Developer has advised the City that no public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project: NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Falcon Heights, Minnesota, as follows: Preliminary Approval. The City hereby gives preliminary approval to the Developer’s proposal that the City undertake the Project, and the program of financing therefor, pursuant to Minnesota Statutes, Chapter 462C. The Project will be undertaken pursuant to a revenue agreement between the City and Developer. The Bonds would be issued in one series pursuant to the Act to finance the acquisition, renovation and equipping of the Project. Said agreement may also provide for the entire interest of the Developer therein to be mortgaged to the purchasers of the Bonds. Findings. On the basis of information provided by the Developer to the City it appears, and the City Council hereby finds, that: (1) the Project constitutes a multifamily housing development within the meaning of Subdivision 5 of Section 462C.02 of the Act and will be occupied, in part, by persons of low and moderate income; (2) the availability of financing under the Act and the willingness of the City to furnish such financing will be a substantial inducement to the Developer to undertake the Project; and (3) the effect of the Project, if undertaken, will be to encourage the provision of multifamily rental housing opportunities to residents of the City, and to assist in the maintenance in the quality of existing housing within the City. Subject to Final Approval. The Project, and the program to finance the Project by the issuance of revenue bonds, are hereby given preliminary, non-binding approval by the City, subject to final approval by the City in its absolute discretion, by the Developer and by the purchasers of the Bonds as to ultimate details of the financing for the Project. Costs Paid by Developer. The Developer has agreed, and it is hereby determined, that any and all costs incurred by the City in connection with the financing for the Project, whether or not the Project is carried to completion and whether or not the Bonds are issued, will be paid by the Developer. Revenue Bonds. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City for this purpose. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City, except the revenues and proceeds pledged to the payment thereof, and the City shall not be subject to any liability thereon. The holders of the Bonds shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereof against any property of the City. The Bonds shall recite in substance that the Bonds, including interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereof. The Bonds shall not constitute a general or moral obligation of the City or a debt of the City within the meaning of any constitutional or statutory limitation. Project Costs and Reimbursements. In anticipation of final approval of the issuance of the Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Developer, at its sole risk and expense, is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds as the Developer considers necessary, subject to reimbursement from the proceeds of the Bonds, if any, when delivered, but otherwise without liability on the part of the City. Non-Binding Commitment. The adoption of this resolution by the City does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Developer. The City reserves the right, in its sole discretion, to withdraw from participation and accordingly not issue any Bonds to finance the Project at any time prior to the adoption of the final resolution authorizing the issuance of such Bonds should the City so determine. Application for Bonding Authority. The Administrator, or his designee, and other City officers and staff are authorized to coordinate with the Developer upon request to apply to the Minnesota Department of Finance for an allocation of bonding authority pursuant to Minnesota Statutes, Chapter 474A, in an amount that is sufficient to finance the Project, now estimated at $14,000,000, for a qualified residential rental project. The fees and deposits for the application shall be supplied by the Developer. The application for bonding authority shall not be submitted until the Developer has paid the fee required by the Department of Finance in connection with an application for an allocation of bonding authority. Adopted on September 12, 2007, by the Falcon Heights City Council. ______________________________________________________________________________ Moved by: Approved by: ________________________ Susan L. Gehrz, Mayor Sept 12, 2007 GEHRZ In Favor Attested by: ________________________ KUETTEL Justin Miller HARRIS Against City Administrator LINDSTROM Sept. 12, 2007 TALBOT