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HomeMy WebLinkAbout2021-077 Council Resolution CITY OF LINO LAKES,MINNESOTA RESOLUTION NO.21-77 RESOLUTION PROVIDING HOST APPROVAL TO THE ISSUANCE OF REVENUE OBLIGATIONS BY THE CITY OF BETHEL FOR THE BENEFIT OF LYNGBLOMSTEN OF LINO LAKES,LLC BE IT RESOLVED by the City Council (the "City Council") of the City of Lino Lakes, Minnesota(the"City"), as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), a municipality is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue bonds to provide funds to finance multifamily housing developments (including independent living, assisted living, and memory care facilities). 1.02. Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the obligations are issued under a joint powers agreement between the municipality issuing the obligations and the municipality in which the property to be acquired or improved is located. Pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of a joint powers agreement entered into through action of their governing bodies, two or more municipalities may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised and the joint powers agreement may provide for the exercise of such powers by one or more of the participating governmental units on behalf of the other participating units. 1.03. Lyngblomsten at Lino Lakes, LLC, a Minnesota limited liability company, or any of its affiliates (collectively, the "Borrower"), the sole member of which is Lyngblomsten Services, Inc., a Minnesota nonprofit corporation, has proposed that the City approve the issuance by the City of Bethel, Minnesota (the "Issuer") of one or more series of revenue obligations (the "Notes") in the approximate maximum principal amount of$45,000,000, pursuant to Act and Minnesota Statutes, Sections 471.59 and 471.656, as amended (the "Joint Powers Act"). The Borrower intends to apply the proceeds of the Notes to acquire, construct, and equip an approximately 167-unit senior housing development, including approximately 96 independent living apartments, 20 detached independent living townhomes, 35 assisted living units, and 16 assisted memory care units (the "Project"), to be located near the intersection of Hodgson Road and County Road J/Ash Street in the City. The Borrower will own and operate the Project. 1.04. Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder require that, prior to the issuance of the Notes, the City Council must consent to the issuance of the Notes by the Issuer after conducting a public hearing thereon preceded by publication of a notice of public hearing (in the form required by Section 147(f) of the Code and applicable regulations) in a newspaper of general circulation within the City at least seven(7) days prior to the public hearing date. 1.05. A notice of public hearing (the "Public Notice") was published at least seven (7) days before the regularly scheduled meeting of the City Council on the date hereof in the Quad Community Press, the official newspaper of and a newspaper of general circulation in the City, with respect to the required public hearing under Section 147(f)of the Code. 1.06. On the date hereof, the City Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on providing consent to the issuance of the Notes by the Issuer pursuant to the requirements of Section 147(f) of the Code and the regulations promulgated thereunder. 1.07. The City and the Issuer are proposing to enter into a Cooperative Agreement (the "Cooperative Agreement) pursuant to which the City will consent to the issuance of the Notes by the Issuer to finance the Project, and the Issuer will agree to issue the Notes for such purpose, in accordance with the provisions of the Joint Powers Act. Section 2. Approvals. 2.01. The City Council finds that it is in the best interest of the City to approve the issuance of the Notes by the Issuer to finance the Project and hereby consents to the issuance of the Notes by the Issuer in an approximate principal amount not to exceed $45,000,000. 2.02. The Mayor and the City Administrator are hereby authorized and directed to execute and deliver the Cooperative Agreement and any other documents deemed necessary to fulfill the intentions of this resolution. All of the provisions of the Cooperative Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Cooperative Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such determination. 2.03. The Mayor and City Administrator and other officers, employees, and agents of the City are hereby authorized and directed to prepare and furnish to bond counsel and the original purchaser of the Notes certified copies of all proceedings and records of the City relating to the approval of the issuance of the Notes, including a certification of this resolution. 2.04. The Borrower shall pay to the City any and all costs paid or incurred by the City in connection with the Notes or the financing contemplated herein, whether or not the financing is carried to completion, and whether or not the Notes or operative instruments are executed and delivered. 2.05. This resolution shall be in full force and effect from and after its passage. Adopted by the City Council of the City of Lino Lakes,Minnesota this 26th day of July,2021. Error!Unknown document property name. 2 The motion for the adoption of the foregoing resolution was introduced by Councilmember Lyden and was duly seconded by Councilmember Cavegn and upon vote being taken thereon, the following voted in favor thereof: Lyden, Cavegn, Stoesz,Ruhland,Rafferty The following voted against same:None Rob Rafferty,Mayor ATTEST: Juliann artell, City erk Error!Unknown document property name. 3 CITY COUNCIL AGENDA ITEM 2A STAFF ORIGINATOR: Hannah Lynch, Finance Director MEETING DATE: July 26, 2021 TOPIC: Public Hearing for and Consideration of Resolution No. 21-77, Providing Host Approval to the Issuance of Revenue Obligations by the City of Bethel for the Benefit of Lyngblomsten of Lino Lakes, LLC VOTE REQUIRED: 3/5 BACKGROUND Lyngblomsten at Lino Lakes, LLC (the "Borrower") is looking to finance the acquisition, construction, and equipping of an approximately 167-unit senior housing development, including approximately 96 independent living apartments, 20 detached independent living townhomes, 35 assisted living units, and 16 assisted memory care units (the "Project"), to be located near the intersection of Hodgson Road and County Road J/Ash Street in the City. The Project will be owned and operated by the Borrower. The Borrower has requested that the City of Bethel issue revenue obligations to finance the Project. In order for the City of Bethel to issue the Revenue Note, the City of Lino Lakes must grant "host approval" to the issuance of the Note. State Statute authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the governing body of the city in which the property is located consents by resolution to the issuance of such obligations. The City of Lino Lakes is not able to issue the revenue obligations for the Borrower due to the City's General Obligation Street Reconstruction Bonds, Series 2021A which sold on July 15, 2021. These bonds were designated "bank qualified" and a city is limited to issuing $10,000,000 of bank-qualified bonds per year. Further explanation is provided in the attached letter from Julie Eddington, the City's Bond Counsel. She will be in attendance at the July 26th meeting to answer any questions. RECOMMENDATION Following the public hearing, staff recommends approval of Resolution No. 21-77. ATTACHMENTS Host Approval Letter Resolution No. 21-77 Offices in 150 South Fifth Street Kennedy Suite 700 • Minneapolis Minneapolis,MN 55402 (612)337-9300 telephone Graven Saint Paul (612)337-9310 fax CHARTERED St.Cloud www.kennedy-graven.com Affirmative Action,Equal Opportunity Employer JULIE A.EDDINGTON Attorney at Law Direct Dial(612)337-9213 Email:jeddington@kennedy-graven.com July 20,2021 Hannah Lynch Finance Director City of Lino Lakes 600 Town Center Parkway Lino Lakes,Minnesota 55014 Re: Host approval for Lyngblomsten senior housing project Dear Hannah, Lyngblomsten at Lino Lakes, LLC, a Minnesota limited liability company, or any of its affiliates (collectively,the"Borrower")has proposed to acquire,construct,and equip an approximately 167-unit senior housing development, including approximately 96 independent living apartments, 20 detached independent living townhomes, 35 assisted living units, and 16 assisted memory care units (the "Project") to be located near the intersection of Hodgson Road and County Road J/Ash Street in the City of Lino Lakes(the"City"). The Borrower will own and operate the Project, which will be used to further the Corporation's mission to promote dignity through providing informed choices for senior living options and orchestrating the best life possible for senior citizens. In order to finance the Project,the Borrower and the Corporation have requested that the City of Bethel(the"City of Bethel")issue one or more series of revenue obligations(the"Notes"), in the approximate maximum principal amount of$45,000,000. Pursuant to Minnesota Statutes, Section 471.656, a city is authorized to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such city if the obligations are issued under a joint powers agreement between the city issuing the obligations and the city in which the property to be acquired or improved is located. Under Minnesota Statutes, Section 471.59, by the terms of a joint powers agreement entered into through action of their governing bodies, two or more cities may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised and the joint powers agreement may provide for the exercise of such powers by one or more of the participating cities on behalf of the other participating cities. The Corporation and the Borrower request that the City Council (the "Council") of the City grant "host approval"for the issuance of the Notes by the City of Bethel,a portion of the proceeds of which will be used to finance the Project. The City of Lino Lakes is unable to issue the Notes due to the fact that the City issued its own bank-qualified bonds this year. If Lino Lakes had agreed to issue the Notes for the Project,the City would not have been able to designate its general obligations bonds as bank-qualified. The Council has been asked to conduct a public hearing on July 26, 2021, on the proposed issuance of the Notes by the City of Bethel and to consider granting host approval to the issuance of such Notes. Following the public hearing, the Council will be asked to consider the enclosed resolution for the purposes Error!Unknown document property name. described herein. If the Council authorizes the City of Bethel to issue the Notes,the Notes will be issued as a conduit revenue bond of the City of Bethel secured solely by the revenues derived from the loan agreement to be executed by the Borrower and from other security provided by the Borrower. The Notes will not constitute a general or moral obligation of the City, will not be secured by or payable from any property or assets of the City, and will not be secured by any taxing power of the City. The Notes will not be subject to any debt limitation imposed on the City and the issuance of the Notes will not have any adverse impact on the credit rating of the City, even in the event that the Borrower encounters financial difficulties with respect to the Project. Please contact me if you have questions regarding the foregoing. Sincerely, Julie A.Eddington Error!Unknown document property name.