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515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484 -2177 / FAX: (612) 484 4538 <br />February 21, 1997 <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Joel R. Hanson, City Administrator <br />RE: Montreal Courts Financing <br />MAYOR <br />Michael I. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim LaVaile <br />Steve Morelan <br />Bob Pedersen <br />ADMINISTRATOR <br />Joel R Hanson <br />Attached is a preliminary resolution indicating the City's <br />willingness to issue tax - exempt bonds to finance the acquisition <br />and renovation of Montreal Courts. The proposed owner is Housing <br />Alternatives Development Company, a non - profit corporation. It <br />will be managed by Goldmark Property Management, Inc., which is <br />being represented by Mr. Jim Echtenkamp. It is estimated that <br />the size of the issue will be between $10 and $15 million. By <br />rocessing this resoltuion, the City can later decide to withdraw <br />approval of the project. <br />There are three points of interest I want to make you aware of. <br />They are as follows: <br />*The installation of fire suppression systems is being <br />evaluated. It is doubtful we will have a report for <br />Wednesday's meeting, but we will be able to consider this <br />information before any final approval is given to the <br />project. <br />*The size of the issue creates some concerns with IRS <br />regulations. This issue will be a bank - qualified bond given <br />the fact that its size coupled with the previous issue we <br />did for The Provinces is over the $10 million annual limit. <br />At this point in time this does not result in any <br />consequences to us as long as we do not plan on issuing <br />bonds in 1997. Given the current state of our projects, I <br />think we can cash flow any expenditures and not bond until <br />1998 for pending improvement projects and property <br />acquisitions. More research on this matter will be done as <br />details become known. <br />*The project is not going to utilize Section 42 tax credits. <br />However, the resolution does reference all units being <br />designated for low to moderate income residents. You may <br />want to discuss the prospective owners' intent regarding <br />future tenant mix for this project. <br />Jim Echtenkamp and Mary Ippel will be present at Wednesday's <br />meeting to answer any questions you may have on this topic. page 33 <br />