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HomeMy WebLinkAboutResolution 8322 RESOLUTION NO.8322 CITY OF MOUNDS VIEW,MINNESOTA COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION AUTHORIZING THE ISSUANCE, SALE,AND DELIVERY OF A REVENUE OBLIGATION FOR THE BENEFIT OF CATHOLIC ELDERCARE; AUTHORIZING THE EXECUTION AND DELIVERY OF THE REVENUE OBLIGATION AND RELATED DOCUMENTS; AND TAKING OTHER ACTIONS RELATED THERETO BE IT RESOLVED by the City Council of the City of Mounds View, Minnesota(the "City"), as follows: Section 1. Findings. 1.01. Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), authorizes the City to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds to provide funds to finance or refinance multifamily housing developments (including nursing and assisted living facilities). Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Industrial Development Act"), authorizes the City to issue revenue obligations to finance or refinance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement, betterment, or extension of a "project," defined in the Industrial Development Act, in part, as any properties, real or personal,used or useful in connection with a revenue producing enterprise. 1.02. Pursuant to Minnesota Statutes, Section 471.656, as amended, a municipality may 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. 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 "Mounds View Note"), in an aggregate principal amount not to exceed $4,000,000. The Borrower has proposed to apply the proceeds of the Mounds View 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 "MCDA Note") proposed to be issued by the Minneapolis Community Development Agency (the "MCDA") 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 (the "TCU Facility") located at 900 2nd Street NE in the City of Minneapolis (the "City of Minneapolis"); (ii)fund capitalized interest on the Mounds View Note, the Lauderdale Note, and the Minneapolis Note (collectively, the "Notes") during construction of the TCU Facility; (iii) refund the 449010v2 JAE MN475-38 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 taxable indebtedness of the Borrower (the "Prior Loans"); (vi) fund required reserves for the Notes, if any; and(vii)pay the costs of issuing the Notes(collectively,the"Project"). 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. 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. 1.05. The facilities financed and refinanced with the proceeds of the Notes are referred to herein as the "Facilities" and will be owned and operated by the Borrower and individual affiliates of the Borrower. 1.06. The City, the City of Lauderdale, and the City of Minneapolis are proposing to enter into a Cooperative Agreement, to be dated on or after December 1, 2014 (the "Cooperative Agreement"), pursuant to which the City of Minneapolis will consent to the issuance by the City and the City of Lauderdale of the Mounds View Note and the Lauderdale Note and the financing of the Project by the City and the City of Lauderdale. 1.07. The Borrower has represented to the City that it is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as a result of the application of Section 501(c)(3) of the Code. 1.08. On September 8, 2014, the City Council conducted a duly noticed public hearing at which a reasonable opportunity was provided for interested individuals to express their views,both orally and in writing, on the approval of the Project and the issuance of the Mounds View Note pursuant to the requirements of Section 147(f)of the Code and the regulations promulgated thereunder. 1.09. The Mounds View Note is to be issued under the terms of this resolution. Northeast Bank, a Minnesota banking and insurance corporation(the "Lender"), has agreed to purchase the Mounds View Note. The proceeds derived from the sale of the Mounds View Note to the Lender(the"Loan") are to be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, to be dated on or after December 1, 2014 (the "Loan Agreement"), between the City and the Borrower. Proceeds of the Mounds View Note will be applied by the Borrower to (i) refund a portion of the outstanding principal amount of the 2002 Assisted Living Bonds and the 2002 Nursing Home Bonds; (ii)refinance a portion of 449010v2 JAE MN475-38 2 the Prior Loans; (iii) fund required reserves for the Mounds View Note, if any; and (iv)pay the costs of issuing the Mounds View Note. 1.10. The loan repayments required to be made by the Borrower under the terms of the Loan Agreement and certain other rights will be assigned to the Lender under the terms of a Pledge Agreement, to be dated on or after December 1, 2014 (the"Pledge Agreement"),between the City and the Lender. 1.11. In consideration of the Loan by the City and to secure the payment of its obligations under the Loan Agreement and the principal of, premium, if any, and interest on the Mounds View Note when due, the Borrower and one or more of its affiliates will execute and deliver one or more mortgage documents granting a mortgage lien on certain property of the Borrower or its affiliates (the "Mortgage") and other security documents that are intended to secure timely payment of the Loan. One or more guarantors are expected to deliver one or more guaranty agreements (the "Guaranty") to the Lender pursuant to which the obligations of the Borrower under the Loan Agreement will be guaranteed. 1.12. The principal of, premium, if any, and interest on the Mounds View Note (i) shall be payable solely from the revenues pledged and otherwise available therefor; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; and (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan Agreement. Section 2. The Mounds View Note. 2.01. For the purposes set forth above, there is hereby authorized the issuance, sale and delivery of the Mounds View Note in an aggregate principal amount not to exceed $4,000,000. The Mounds View Note shall bear interest at rates designated by the terms of the Mounds View Note, and shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the form of the Mounds View Note now on file with the City, with the amendments referenced herein. The City hereby authorizes the Mounds View Note to be issued as a "tax-exempt bond"the interest on which is not included in gross income for federal and State of Minnesota income tax purposes. 2.02. All of the provisions of the Mounds View Note, when executed 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 Mounds View Note shall be substantially in the form now on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the name of the Mounds View Note,the aggregate principal amount of the Mounds View Note, the stated maturity of the Mounds View Note and the maturity date of the Mounds View Note, the interest rate on the Mounds View Note, and the terms of optional and mandatory redemption of the Mounds View Note) as the Mayor and the City Administrator, in their discretion, shall determine. The Mayor and the City Administrator are authorized and directed to prepare the Mounds View Note, and the Mounds View Note shall be delivered to the Lender. The execution of the Mounds View Note with the manual or facsimile signatures of the Mayor and the City Administrator and the delivery of the Mounds View Note by the City shall be conclusive evidence of such determination. The City Council of the City hereby authorizes and directs the Mayor and the City Administrator to execute and deliver the Mounds View Note. 2.03. The Mounds View Note shall be a special, limited obligation of the City, and the principal of, premium, if any, and interest on the Mounds View Note shall be payable solely from the 449010v2 JAE M1N475-38 3 proceeds of the Mounds View Note,the revenues derived from the Borrower pursuant to the terms of the Loan Agreement and the security provided by the Borrower in accordance with the terms of the Loan Agreement, the Mortgage, and any and all other security of any kind or nature provided by the Borrower (or an affiliate)to the Lender. 2.04. As provided in the Loan Agreement, the Mounds View Note shall not be payable from nor charged upon any funds other than the revenues pledged to its payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Mounds View Note shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Mounds View Note or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which will be assigned to the Lender under the Pledge Agreement. The Mounds View Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the interests of the City in the Loan Agreement, and the revenues and assets thereunder,which will be assigned to the Lender under the Pledge Agreement. The Mounds View Note shall recite that the Mounds View Note is issued pursuant to the Housing Act and the Industrial Development Act, and that the Mounds View Note, including interest and premium, if any, thereon, is payable solely from the revenues and assets pledged to the payment thereof, and the Mounds View Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitations. Section 3. The Cooperative Agreement. The Cooperative Agreement is hereby approved. The Mayor and the City Administrator are hereby authorized and directed to execute and deliver the Cooperative Agreement. 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, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and City Administrator, in their discretion, shall determine, and the execution of the Cooperative Agreement by the Mayor and the City Administrator shall be conclusive evidence of such determination. Section 4. The Loan Agreement. The Mayor and the City Administrator are hereby authorized and directed to execute and deliver the Loan Agreement. All of the provisions of the Loan 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 Loan 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. Section 5. Disbursements of Mounds View Note Proceeds. The proceeds of the Mounds View Note shall be disbursed in accordance with the terms of the Loan Agreement. Section 6. The Pledge Agreement. The Mayor and the City Administrator are hereby authorized and directed to execute and deliver the Pledge Agreement. All of the provisions of the Pledge 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 Pledge 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, 449010v2 JAE MN475-38 4 shall determine, andermination.the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such det Section 7. Other Documents. The Mayor, the City Administrator, and the Finance Director of the City are hereby authorized to execute and deliver, on behalf of the City, such other documents as are necessary or appropriate in connection with the issuance, sale, and delivery of the Mounds View Note, including one or more certificates of the City, an endorsement of the City to the tax certificate of the Borrower, an Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Mounds View Note. The City hereby authorizes Kennedy & Graven, Chartered to prepare, execute, and deliver its approving legal opinion with respect to the Mounds View Note. Section 8. The City and Its Officers,Employees, and Agents. 8.01. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body, or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. 8.02. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the City Council of the City, or any officer, agent, or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Mounds View Note shall be liable personally on the Mounds View Note or be subject to any personal liability or accountability by reason of the issuance thereof. 8.03. No provision, covenant, or agreement contained in the aforementioned documents, the Mounds View Note, or in any other document relating to the Mounds View Note, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Mounds View Note, as provided therein. 8.04. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City or any holder of the Mounds View Note, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City and any holders from time to time of the Mounds View Note. Section 9. Severability. In case any one or more of the provisions of this resolution, other than the provisions contained in Section 2.03 hereof, or of the aforementioned documents, or of the Mounds View Note issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Mounds View Note, but this resolution, the aforementioned documents, and the Mounds View Note shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. Section 10. Validity of the Mounds View Note. The Mounds View Note, when executed and delivered, shall contain a recital that it is issued pursuant to the Housing Act and the Industrial 449010v2 JAE M1N475-38 5 Development Act, and such recital shall be conclusive evidence of the validity of the Mounds View Note and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Mounds View Note, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. Section 11. Authorization for Other Acts. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Mounds View Note for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Mounds View Note, the aforementioned documents and this resolution. In the event that for any reason the Mayor is unable to carry out the execution of any of the documents or other acts provided herein, any persons delegated the duties of the Mayor shall be authorized to act in the capacity of the Mayor and undertake such execution or acts on behalf of the City with full force and effect, which execution or acts shall be valid and binding on the City. If for any reason the City Administrator is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any person delegated the duties of the City Administrator, with the same force and effect as if such documents were executed and delivered by the City Administrator. Section 12. Designation as Bank-Qualified Obligation. The City hereby designates the Mounds View Note as a"qualified tax-exempt obligation"for purposes of Section 265(b)(3)of the Code. Section 13. Payment of Costs. The Borrower has agreed to pay directly or through the City any and all costs paid or incurred by the City in connection with the transactions authorized by this resolution,whether or not the Mounds View Note is issued. Section 14. Payment of City's Administrative Fee. The Loan Agreement will require the Borrower to pay the City's bond administrative fee in the amount of one percent (1.0%) of the original aggregate principal amount of the Mounds View Note when the Mounds View Note is issued. Section 15. Effective Date. This resolution shall be in full force and effect from and after its passage. Adopted by the City Council of the City of Mounds View,Minnesota,this 10th day of November, 2014. j /9"- oe Flaherty, Mayor Attest:, Jim Ericson, City Administrator Seal: 449010v2 JAE MN475-38 6