01-28-1998 Council Agenda - Laserfiche WebLink

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TAX CREDIT USAGE AGREEMENT THIS AGREEMENT is made and entered into as of January , 1998 by and between the City of Little Canada, Minnesota, a municipal corporation organized under the laws of the State of Minnesota (the "City ") and Little Canada Leased Housing Associates, L.L.P., a Minnesota limited liability partnership (the "Partnership "). RECITALS The Partnership is the owner of a multifamily rental housing development known as the "Provinces of Little Canada" (the "Project ") located in the City of Little Canada and consisting of approximately 118 residual rental units. The City has previously entered into that certain Indenture of Trust between the City of Little Canada, Minnesota and First Trust National Association dated as of February 1, 1996 (the "Indenture "). Pursuant to the Indenture, the City has issued Multifamily Housing Revenue Bonds, Series 1996 in the aggregate amount of $3,885,000 (the "Bonds "), and subsequently loaned to the Partnership for use in the Project pursuant to that certain Loan Agreement entered into by the City and Partnership and dated as of February 1, 1996. The interest on the Bonds is intended to be exempt from federal taxation under Section 103 of the Internal Revenue Code of 1986. The Partnership intends for a portion of the Project to qualify for, and the Partnership intends to claim, low income housing tax credits (the "Credits ") with respect to the eligible portion of the Project under Section 42 of the Internal Revenue Code of 1986 (the "Code "). The connection with the Project's eligibility for Credits, the Partnership intends to request that the City issue a determination under Section 42(m)(2)(D) of the Internal Revenue Code of 1986 (the "Section 42(m) Determination ") regarding the Project's need for the amount of Credits generated by the Project. The rehabilitation required in connection with the issuance of the Bonds and the qualification for Credits as more particularly described on Exhibit "A" attached hereto and made part hereof has been completed and the costs with respect thereto have been certified. In connection with the Section 42(m) Determination, the City desires to impose certain requirements with respect to the operation of the Project and the percentage of the Project which would be eligible for Credits. COVENANTS NOW THEREFORE, in consideration of the premises set forth above, the parties agree as follows: 1. Restrictions on Low Income. The Partnership will enter into and record a Declaration of land use Restrictive Covenants for Low- Income Housing Credits pursuant to Section 42(h)(6) of Page 79