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MOUN-DitSVIEW City of Mounds View Staff Report Item No: 8.D. Meeting Date: June 26, 2023 Type of Business: Council Business Administrator Review: To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 9772 Relating to the Issuance of Conduit Revenue Bonds to Finance the Costs of a Multifamily Rental Housing Facility and Under Minnesota Statutes, Chapter 462C, as Amended; Granting Preliminary Approval Thereto; Calling for a Public Hearing; Establishing Compliance with Certain Reimbursement Regulations Under the Internal Revenue Code of 1986, as Amended; and Taking Certain Other Actions with Respect Thereto (Torre De San Miguel, Westminster Place, and Vista Village projects) Introduction: The City Council is asked to consider a proposal to use conduit debt financing to finance the acquisition, renovation, construction and equipping of (a) an existing 142-unit apartment community and related amenities located at 58 Wood Street in St. Paul, Minnesota ("St. Paul"), (b) an existing 48-unit apartment community and related amenities located at 422 Concord Street in St. Paul, and (c) an existing 99-unit apartment community and related amenities located at 1374 Westminster Street in St. Paul (collectively the "Project"); to fund one or more reserve funds to secure the timely payment of the Bonds, if necessary; to pay interest on the Bonds during the construction of the Project, if necessary; and to pay certain costs of issuing the Bonds. The preliminary revenue bond amount is $56,716,000 and the City will receive a 1 % issuance fee for the use of the City's lending authority. The revenue bonds will not constitute a general or moral obligation of the City and 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. Discussion: There are a number of steps that will need to happen before the revenue bonds can be issued. The first steps are for the City Council is to grant preliminary approval for the project to receive approval from the Minnesota Department of Employment and Economic Development (DEED). The application for bonding authority will be submitted in January of 2024. This later step will be the challenge as there is a limited allocation available. Final approval would occur at a future Council Meeting at a Public Hearing. The City Council is not obligated to issue the revenue bonds by this resolution this is just one of the steps necessary to move toward that objective. If at any time during the review process, the City Council determines that this is not in the City's best interest we can withdraw support for the bond issuance. The City is represented by Jenny Bolton as bond council from Kennedy & Graven. Recommendation: Staff recommends that Council review the information, ask questions and if comfortable approve Resolution 9772. Respectfully submitted, Mara weer Mark Beer Finance Director