09-09-2020 Council Packet - Laserfiche WebLink

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A-2 City, by other persons who are not the beneficiaries of such governmentally sponsored or assisted activities. Housing Purposes. More particularly, the City finds that there exists a need for senior housing facilities for elderly persons, due to a variety of factors, including that the cost of new construction may in many cases prove economically unfeasible, given the high costs of construction and prevailing area rental levels, and that therefore appropriate levels of public assistance may be helpful and necessary in bridging that gap. General Description of the Program. This Housing Program consists of assisting in financing the acquisition, construction and/or improvement of the Developments; however, this Housing Program is limited to the facility located in the City. The owner and operator of the Developments will be State Housing Holdings of Minnesota, LLC, a Wyoming limited liablity company (the “Borrower”), the sole member of which is State Housing & Community Services Corporation, a California nonprofit public benefits corporation. The Developments are intended for residency solely by elderly and disabled persons pursuant to Section 462C.05, Subd. 4, of the Act, and consequently, no income limits apply under the Act or other state law. Revenue Bonds. Financing for the Developments will be obtained through the issuance of taxable and/or tax-exempt revenue bonds by the City of Deephaven, Minnesota (the “Issuer”) pursuant to the Act (the “Bonds”). The maximum principal amount of Bonds to be issued by the Issuer is expected not to exceed $55,000,000. The proceeds of the Bonds will be loaned to the Borrower under a loan agreement. Loan repayments made by the Borrower under the loan agreement will be applied to payments of principal of and interest and premium, if any, owing on the Bonds. The proceeds of the Bonds will provide financing for (i) the acquisition, construction and/or improvement of the Developments; (ii) certain capital expenditures and working capital costs related to the Developments, as necessary; (iii) the funding of one or more reserve funds to secure the timely payment of the Bonds, as necessary; and (iv) the payment of certain costs of issuing the Bonds. Monitoring Methods. It is believed the oversight exercised by the trustee bank and certain other parties will be adequate to ensure the Housing Program as presented is in fact carried out. The Developments must be operated by the Borrower in accordance with various operating covenants (relating to such things as maintenance, insurance, etc.) to be contained in the loan agreement(s) and related documents to be entered into by the Issuer, the Borrower and certain other parties, which loan agreement(s) and related documents will be assigned by the Issuer, to the extent of the Issuer’s interests, to the trustee bank as security for the holders of the Bonds. Meeting Needs. The City believes that this Housing Program will meet the need identified by the City for ongoing availability of senior housing facilities. The specific methods anticipated to be used include the issuance of revenue bonds under the Act to provide feasible financing for the Developments. Authorization. This Housing Program is undertaken pursuant to Minnesota Statutes, Chapter 462C.