12-20-2023 Council Packet - Laserfiche WebLink

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130312234v1 Taft Stettinius & Hollister LLP / Taftlaw.com / The Modern Law Firm Catherine J. Courtney 612.977.8765 CCourtney@taftlaw.com 2200 IDS Center, 80 South 8th Street Minneapolis, MN 55402-2210 Tel: 612.977.8400 | Fax: 612.977.8650 taftlaw.com Affirmative Action, Equal Opportunity Employer December 15, 2023 BY E-MAIL Chris Heineman City Administrator City of Little Canada 515 Little Canada Road E Little Canada, MN 55117-1633 Re: Issuance of Conduit Revenue Bonds by the City of Little Canada for Multifamily Affordable Housing Project known as Rice & Demont Dear Mr. Heineman: This letter is provided to follow-up on prior actions and discussions regarding the City of Little Canada (the “City” or “Issuer”) acting as the issuer of multifamily housing development bonds (the “Bonds”) to finance the acquisition and construction of a multifamily housing development for households of low and moderate income, and functionally related facilities, including an underground parking garage, expected to be known as Rice & Demont Apartments, located at 2550 Rice Street, on the east side of Rice Street north of W. Demont Avenue, in the City (the "Project"), at the request of RIDE Limited Partnership, a Minnesota limited partnership (the “Borrower”), with RIDE GP LLC, a Minnesota limited liability company, as the general partner, which is associated with Reuter Walton. Taft Stettinius & Hollister LLP will act as bond counsel on the issuance of such Bonds. As you recall, the City adopted a resolution in June giving preliminary approval to the issuance of the Bonds for the Project. However, after applying to Minnesota Management and Budget ("MMB") for an allocation, the Project was subsequently not awarded an allocation due to insufficient availability in the pool. Instead, MMB placed the Project fourth in priority position on the Master Priority List for Residential Rental Housing Projects. The Borrower is requesting the City to resubmit an application for allocation for the Project, in the hopes of receiving an allocation award from MMB in January 2024. State and federal laws allow local government units to enter into arrangements to issue bonds and loan the proceeds to private developers to finance or refinance affordable housing projects. This assistance reduces borrowing costs for such borrowers and enables them to provide affordable housing for the residents of the City more cost effectively. It is a fairly common means of obtaining necessary financing for such projects. Oftentimes such projects will also take advantage of low-income housing tax credits, as is the case with this project. To accomplish this purpose, the Issuer will enter into a Loan Agreement with the Borrower under which the Borrower will agree to pay all principal and interest on the Bonds. The Issuer will assign all of its rights to payments under the Loan Agreement to a lender or trustee and loan the purchase price of the