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HomeMy WebLinkAboutResolution 8288 RESOLUTION NO.8288 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION CALLING A PUBLIC HEARING ON THE ISSUANCE OF A REVENUE NOTE AND PROVIDING PRELIMINARY APPROVAL TO THE PROPOSED ISSUANCE OF THE REVENUE NOTE BE IT RESOLVED by the City Council of the City of Mounds View,Minnesota(the"City"), as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Industrial Development Act"), the City is authorized to issue revenue bonds for the following purposes: (i) to finance, in whole or inpart, the cost of the acquisition, construction, reconstruction, improvement, qp , betterment or extension of a project, defined in the Industrial Development Act as anyproperties, real or pp p personal, used or useful in connection with a revenue producing enterprise; and(ii)to refund, in whole or in part, bonds previously issued by the City under the authority of the Industrial Development Act and interest on such bonds. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the"Housing Act"),the City is authorized to issue revenue bonds to provide funds to finance or refinance multifamily housing developments (including nursing and assisted living facilities) located within the City or outside of the City pursuant to an agreement with the host city. 1.03. Catholic Eldercare, a Minnesota nonprofit corporation, or any of its affiliates (the "Borrower"), has proposed that the City issue its revenue note, in one or more series (the "City Note"), in an aggregate principal amount not to exceed $4,000,000. The Borrower has proposed to apply the proceeds of the City Note,along with the proceeds of a revenue note (the"Lauderdale Note")proposed to be issued by the City of Lauderdale, Minnesota (the "City of Lauderdale") in an aggregate principal amount not to exceed $10,000,000 and a revenue note (the "Minneapolis Note")proposed to be issued by the City of Minneapolis (the "City of Minneapolis") in an aggregate principal amount not to exceed $5,000,000,to(i)finance the acquisition, construction, and equipping of a transitional care unit consisting of the addition of 24 skilled nursing beds to the existing 150-bed skilled nursing facility located at 900 2nd Street NE in the City of Minneapolis (the "TCU Facility"); (ii) fund capitalized interest on the City Note, the Lauderdale Note, and the Minneapolis Note (collectively, the "Notes") during construction of the TCU Facility; (iii) refund the outstanding Variable Rate Demand Multifamily Housing Revenue Bonds(St. Hedwig's Assisted Living Project), Series 2002 (the"2002 Assisted Living Bonds"), issued by the City of Minneapolis on December 23, 2002, in the original aggregate principal amount of$7,570,000; (iv) refund the outstanding Variable Rate Demand Nursing Home Revenue Refunding Bonds (Catholic Eldercare Project), Series 2002 (the "2002 Nursing Home Bonds"), issued by the City of Minneapolis on December 23,2002, in the original aggregate principal amount of $9,580,000; (v) refinance certain outstanding taxable indebtedness of the Borrower; (vi) fund required reserves for the Notes, if any; and (vii)pay the costs of issuing the Notes(collectively,the"Project"). 447996v2 JAE MN475-38 1.04. The City of Minneapolis loaned the proceeds of the 2002 Assisted Living Bonds to Catholic Eldercare Community Services Corporation II, a Minnesota nonprofit corporation and an affiliate of the Borrower, to finance the acquisition, construction, and equipping of a 71-unit assisted living facility located at 2919 Randolph Street NE (commonly known as RiverVillage East) in the City of Minneapolis(the"Assisted Living Facility"). The 2002 Assisted Living Bonds were issued in accordance with the Industrial Development Act. 1.05. The City of Minneapolis loaned the proceeds of the 2002 Nursing Home Bonds to the Borrower, to (i) refinance the acquisition, construction, and equipping of the 150-bed skilled nursing facility located at 900 2nd Street NE (commonly known as Catholic Eldercare on Main) in the City of Minneapolis (the "Skilled Nursing Facility"); and (ii) refinance the acquisition, construction, and equipping of a 51-unit assisted living multifamily rental housing facility located at 909 Main Street NE (commonly known as MainStreet Lodge) in the City of Minneapolis (the "Assisted Living Housing Facility"). The 2002 Nursing Home Bonds were issued in accordance with the Industrial Development Act and the Housing Act, and the City of Minneapolis adopted programs for the facilities financed in accordance with the Housing Act. 1.06. The facilities financed and refinanced with the proceeds of the Notes are referred to herein as the "Facilities." The Facilities will be owned and operated by individual affiliates of the Borrower. 1.07. Prior to the issuance of the City Note, the City Council of the City must conduct a public hearing to (i) approve the issuance of the City Note pursuant to the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the "Code"); and (ii)approve the Project pursuant to Section 469.154, subdivision 4 of the Industrial Development Act. Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: (a) The Assisted Living Housing Facility, which is being refinanced with proceeds of the Notes, consists of a multifamily housing development designed and intended to be used for rental occupancy by seniors. (b) The proceeds of the City Note will be loaned to the Borrower and the proceeds of the loan will be applied to finance a portion of the Project. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan of the proceeds of the City Note when due and requiring the Borrower to pay all costs of maintaining and insuring the Facilities, including taxes thereon. (c) In preliminarily authorizing the issuance of the City Note and the financing and refinancing of the Project,the City's purpose is to further the policies of the Housing Act and the Industrial Development Act. (d) The City Note will be a special, limited obligation of the City payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. 447996v2 JAE MN475-38 2 Section 3. Public Hearing. 3.01. The City Council shall meet at 7:00 p.m. on Monday, September 8, 2014, to conduct a public hearing as requested by the Borrower, notice of which hearing (the "Public Notice") will be published as required by Section 469.154, subdivision 4 of the Industrial Development Act, Section 462C.04, subdivision 2 of the Housing Act, and Section 147(f)of the Code. 3.02. The City Administrator is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Sun Focus,the official newspaper of the City and a newspaper of general circulation in the City. The Public Notice shall be published at least once, at least fifteen (15) days prior to the date of the public hearing. At the public hearing, reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the proposed issuance of the City Note and the Project. 3.03. Pursuant to Section 469.154 of the Industrial Development Act, prior to the issuance of the City Note by the City,the Commissioner of the Minnesota Department of Employment and Economic Development ("DEED") must approve the new costs of the Project to be funded by the City Note on the basis of an application submitted by the City with all required attachments and exhibits (the "DEED Application"). 3.04. In accordance with Section 469.154 of the Industrial Development Act, the City Administrator is hereby authorized and directed to cause a draft copy of the DEED Application, together with drafts of all required attachments and exhibits, to be prepared by Kennedy & Graven, Chartered, as bond counsel. The DEED Application,together with all attachments and exhibits, shall be made available for public inspection in the office of the City Administrator during regular business hours of the City. The City Administrator and other officers, employees, attorneys, and agents of the City are hereby authorized to provide DEED with any information needed for this purpose, and the City Administrator is authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project. Section 4. Preliminary Approvals. 4.01. The City Council hereby states its preliminary intention to issue the City Note in the maximum aggregate principal amount of $4,000,000 to (i)finance a portion of the costs of acquiring, constructing, and equipping the TCU Facility; (ii) refund the outstanding principal amount of the 2002 Assisted Living Bonds and the 2002 Nursing Home Bonds; (iii) fund capitalized interest on the City Note; (iv) fund required reserves for the City Note, if any; and (v)pay the costs of issuing the City Note; provided, however, that the new costs of the Project are approved by DEED. The issuance of the City Note is also subject to the mutual agreement of the City, the Borrower, and the initial purchaser of the City Note as to the details of the City Note and provisions for its payment. 4.02. The Note shall not constitute a charge, lien, or encumbrance, legal or equitable,upon any property of the City except the City's interest in the loan or revenue agreement with respect to the City Note and the Project, and the City Note, when, as, and if issued, shall recite in substance that the City Note, including interest thereon, is payable solely from the revenues received from the Project and property pledged to the payment thereof, and shall not constitute a general or moral obligation of the City. 4.03. The law firm of Kennedy& Graven, Chartered, is authorized to act as Bond Counsel and to assist in the preparation and review of necessary documents relating to the Project and the City Note issued in connection therewith. The Mayor, the City Administrator, and other officers, employees, and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such documents. 447996v2 JAE MN475-38 3 Section 5. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the City Note,whether or not the City Note is issued. Section 6. Commitment Conditional. The adoption of this resolution does not constitute a guaranty or firm commitment that the City will issue the City Note as requested by the Borrower. The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue the City Note, or issue the City Note in an amount less than the amount referred to herein, should the City at any time prior to issuance thereof determine that it is in the best interest of the City not to issue the City Note, or to issue the City Note in an amount less than the amount referred to in Section 4.01 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. Section 7. Effective Date. This resolution shall be in full force and effect from and after its passage. Approved by the City Council of the City of Mounds View, Minnesota, this 11th day of August, 2014. J Flaherty,Mayor Attest: Jim Ericson, City Administrator 447996v2 JAE MN475-38 4 EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF MOUNDS VIEW,MINNESOTA NOTICE OF PUBLIC HEARING WITH RESPECT TO A PROJECT DESCRIBED IN MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655, AS AMENDED, AND CHAPTER 462C, AS AMENDED, AND THE ISSUANCE OF A REVENUE NOTE THEREUNDER NOTICE IS HEREBY GIVEN that the City Council of the City of Mounds View, Minnesota(the "City")will hold a public hearing on Monday, September 8, 2014, at or after 7:00 p.m., at City Hall, 2401 Highway 10, in the City,to consider a proposal for the issuance of a revenue obligation of the City, in one or more series (the "City Note"), under Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Industrial Development Act"), and Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), on behalf of Catholic Eldercare, a Minnesota nonprofit corporation, or any of its affiliates (the "Borrower"). The proceeds of the City Note proposed to be issued by the City for the benefit of the Borrower will be applied, along with the proceeds of a revenue note (the "Lauderdale Note") proposed to be issued by the City of Lauderdale, Minnesota (the "City of Lauderdale") in an aggregate principal amount not to exceed $10,000,000 and a revenue note (the "Minneapolis Note") proposed to be issued by the City of Minneapolis (the "City of Minneapolis") in an aggregate principal amount not to exceed $5,000,000, to (i) finance the acquisition, construction, and equipping of a transitional care unit consisting of the addition of 24 skilled nursing beds to the existing 150-bed skilled nursing facility located at 900 2nd Street NE in the City of Minneapolis (the "TCU Facility"); (ii) fund capitalized interest on the City Note,the Minneapolis Note, and the Mounds View Note (collectively, the "Notes") during construction of the TCU Facility; (iii) refund the outstanding Variable Rate Demand Multifamily Housing Revenue Bonds (St. Hedwig's Assisted Living Project), Series 2002 (the "2002 Assisted Living Bonds"), issued by the City of Minneapolis on December 23, 2002, in the original aggregate principal amount of $7,570,000; (iv) refund the outstanding Variable Rate Demand Nursing Home Revenue Refunding Bonds (Catholic Eldercare Project), Series 2002 (the "2002 Nursing Home Bonds"), issued by the City of Minneapolis on December 23, 2002, in the original aggregate principal amount of$9,580,000; (v) refinance certain outstanding taxable indebtedness of the Borrower; (vi) fund required reserves for the Notes, if any; and (vii)pay the costs of issuing the Notes (collectively, the "Project"). The proceeds of the 2002 Assisted Living Bonds were used by Catholic Eldercare Community Services Corporation II, a Minnesota nonprofit corporation and an affiliate of the Borrower,to finance the acquisition, construction, and equipping of a 71-unit assisted living facility located at 2919 Randolph Street NE (commonly known as RiverVillage East) in the City of Minneapolis (the "Assisted Living Facility"). The proceeds of the 2002 Nursing Home Bonds were used by the Borrower to(i)refinance the acquisition, construction, and equipping of the 150-bed skilled nursing facility located at 900 2nd Street NE (commonly known as Catholic Eldercare on Main) in the City of Minneapolis (the "Skilled Nursing Facility"); and (ii) refinance the acquisition, construction, and equipping of a 51-unit assisted living multifamily rental housing facility located at 909 Main Street NE (commonly known as MainStreet Lodge) in the City of Minneapolis(the "Assisted Living Housing Facility"). The facilities financed and refinanced with the proceeds of the Notes (the "Facilities") will be owned and operated by individual affiliates of the Borrower. A-1 447996v2 JAE MN475-38 Following the public hearing, the City Council will consider adoption of a resolution approving the Project and the issuance of the City Note in accordance with the requirements of the Industrial Development Act and the Housing Act. The aggregate face amount of the City Note proposed to be issued to finance the Project is presently estimated not to exceed $4,000,000 and may be issued in one or more series. The City Note proposed to be issued by the City will constitute a special, limited obligation of the City payable solely from the revenues expressly pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by the taxing power of the City or any assets or property of the City except any interests of the City in the Project that may be granted to the City in conjunction with this financing. A draft copy of the Minnesota Department of Employment and Economic Development for approval of the new costs of the Project is on file with the City and is available for public inspection in the office of the City Administrator during regular business hours. Anyone desiring to be heard during the public hearing will be afforded an opportunity to do so. All interested persons may appear and be heard at the time and place set forth above. Dated: [Date of Publication] BY ORDER OF THE CITY COUNCIL OF THE CITY OF MOUNDS VIEW, MINNESOTA /s/ Jim Ericson City Administrator City of Mounds View,Minnesota A-2 447996v2 JAE MN475-38