08-14-2002 Council Agenda - Laserfiche WebLink

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PUG 0E 2002 4:38 PM FR BR[GGS & MORGAN BRIGGS AND MORGAN TO 96514844538 P.02 2200 FIRST NATIONAL BANK BUILDING 392 MINNESOTA STREET SAINT PAUL, MINNESOTA 55101 TELEPHONE (651) 223 -6600 FACSTMLE (651) 223-6450 PROFESSIONAL ASSOCIATION August 6, 2002 VIA FACSIMILE Mr. Joel Hanson City Administrator City of Little Canada 515 Little Canada Rd. E. Little Canada, MN 55117 WRITERS DIRECT DIAL (651) 223 -6484 WRI'TER'S E -MAIL jaw in(2U,briR¢s.cwn Re: City of Little Canada, Minnesota - Health Care Facility Revenue Note (Wingspan Life Resources Project) Dear Joel and City Council Members: It is proposed that the City of Little Canada, Minnesota issue a tact- exempt Note to Finance and refinance the acquisition and renovation of approximately six homes located in Falcon Heights, Minneapolis, Bloomington and Roseville and an office building located in Little Canada used by Wingspan Life Resources (the "Borrower ") to provide residential health care services and programs for persons with developmental disabilities. Some of the homes have been acquired and renovated by the Borrower, a Minnesota nonprofit corporation, over the past three years using taxable loans from local banks. The Note issued on behalf of the Borrower would not exceed $1,400,000. State and Federal law allow cities to issue bonds and loan the proceeds to nonprofit corporations to finance or refinance capital expenditures, This assistance reduces borrowing costs for nonprofit corporations and enables them to provide their services more cost effectively. To accomplish this purpose, the City would enter a Loan Agreement with the Borrower under which the Borrower will agree to pay all principal and interest on the Note. The City will assign all of its rights and obligations under the Loan Agreement to a local bank (the "Lender ") who will purchase the Note and loan the purchase price of the Note directly to the Borrower, The City is merely a conduit and the money and obligations flow only between the Lender and the Borrower. The Note and the resolutions adopted by the City would recite that the Note, if and when issued, will not to be payable from or charged upon any funds other than the revenues received under the Loan Agreement and pledged to the payment of the Note and the City is not subject to any liability on the Note, No holder of the Note will ever have the right to compel any exercise by the City of its taxing powers to pay any of the principal of the Note or the interest or premium 1435603v1 MINNEAPOLIS OFFICE v IDS CENTER x WWW.gaIGG•COM MEMSER — LEX 11UNDI. A GLOnAL ASSOCIATION OF INDEPENDENT LAW FIRMS