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HomeMy WebLinkAboutResolution 10009 - 2024/11/25CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA Member Pl ee /-7 % h a4-z 5� introduced the following resolution and moved its adoption RESOLUTION 10009 AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS CONDUIT MULTIFAMILY HOUSING REVENUE BONDS FOR THE SIBLEY PARK/SIBLEY COURT PROJECT; ADOPTING A HOUSING PROGRAM; AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED DOCUMENTS; PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE BONDS; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of Mounds View, Minnesota (the "City"), is a home rule city and political subdivision duly organized and existing under the Constitution, its Charter and laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Chapters 462C and 474A, as amended (collectively, the "Act"), the City is authorized to carry out the public purposes described in the Act by issuing revenue bonds and notes or other obligations to finance multifamily housing developments, and as a condition to the issuance of such revenue obligations, adopt a housing program providing the information required by Section 462C.03, subdivision 1 a, of the Act; and WHEREAS, 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 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; and WHEREAS, in the issuance of the City's revenue obligations and in the making of a loan to finance or refinance a multifamily housing development, the City may exercise, within its corporate limits, any of the powers that the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, including without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended; and WHEREAS, OAHS Sibley TC LLLP, a Minnesota limited liability limited partnership (the "Borrower"), has requested that the City issue multifamily housing revenue bonds, pursuant to the Act, in an aggregate principal amount not to exceed $45,000,000, in one or more series, at one time or from time to time (the "Obligations") and lend the proceeds thereof to the Borrower to (i) finance the acquisition, renovation, construction and equipping of an existing approximately 114-unit rental housing facility and related amenities known as Sibley Park and located at 211 7th Street East in Saint Paul, Minnesota ("Saint Paul"); (ii) finance the acquisition, renovation, construction and equipping of an existing approximately SA130-295-988488.v2 122-unit rental housing facility and related amenities known as Sibley Court and located at 484 Temperance Street in Saint Paul; (iii) fund one or more reserve funds to secure the timely payment of the Obligations, if necessary; (iv) pay capitalized interest on the Obligations, if necessary; and (v) pay the costs of issuing the Obligations (collectively, the "Project"); and WHEREAS, on June 10, 2024, the City Council adopted a preliminary resolution (the "Preliminary Resolution") under the terms of which the City (i) granted preliminary approval to the issuance of one or more series of multifamily housing revenue bonds or other obligations (the "Obligations") in an aggregate principal amount not to exceed $45,000,000, pursuant to the Housing Act to finance the Project; (ii) authorized the submission of an application to the Minnesota Department of Management and Budget ("MMB") for an allocation of bonding authority under Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act"); (iii) authorized the preparation of a housing program with respect to the Project in accordance with the requirements of the Act and submission of the housing program to the Metropolitan Council for its review and comment; and (iv) authorized a public hearing to be conducted by the City Council on the Project; and WHEREAS, the Preliminary Resolution constitutes a reimbursement resolution and an official intent of the City to reimburse expenditures with respect to the Project from the proceeds of tax-exempt revenue obligations in accordance with the provisions of Treasury Regulations, Section 1.150-2; and WHEREAS, the City received Certificate of Allocation No. 482, dated July 1, 2024, from Minnesota Management and Budget allocating volume cap bonding authority to the City in the amount of $45,000,000 for the Project; and WHEREAS, the City has prepared a housing program providing the information required by the /) Act (the "Housing Program") regarding the issuance by the City of one or more revenue obligations in the maximum principal amount of $45,000,000 to finance the acquisition, rehabilitation, renovation, construction, and equipping of the Project; and WHEREAS, the Housing Program was prepared and submitted to Metropolitan Council for its review and comment; and WHEREAS, a notice of public hearing (the "Public Notice") was published in accordance with the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to: (i) the required public hearing under the Code; (ii) the required public hearing under Section 462C.04, subdivision 2, of the Act; (iii) the Housing Program; and (iv) approval of the issuance of the Obligations, and on this same date, 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; and WHEREAS, the proceeds derived from the sale of the Multifamily Housing Revenue Bonds (Sibley Park/Sibley Court Project), Series 2024, in one or more series (the "Bonds"), will be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, dated on or after December 1, 2024 (the "Loan Agreement"), between the City and the Borrower, whereby the City will apply the proceeds derived from the sale of the Bonds to fund a loan to the Borrower; and WHEREAS, the City will assign its interest in the Loan Agreement to U.S. Bank Trust Company, National Association (the "Trustee") pursuant to a Trust Indenture, dated on or after December 1, 2024, by and among the City and the Trustee (the "Indenture"); and 2 SA130-295-988488.v2 WHEREAS, the Borrower's repayment obligations in respect of the Series 2024A Loan Agreement will be evidenced by a Promissory Note from the Borrower to the City (the "Promissory Note") and assigned to the Trustee pursuant to an assignment (the "Assignment of Note"); and WHEREAS, the Bonds will be issued pursuant to this resolution and the Bonds and the interest on the Bonds: (i) shall be payable solely from the revenues pledged therefor under the Loan Agreement and the Indenture and additional sources of revenue provided by or on behalf of the Borrower; (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; (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; and (v) shall not constitute a general or moral obligation of the City; and WHEREAS, on June 12, 2024, the City Council of the City of Saint Paul, Minnesota ("Saint Paul") held a public hearing and approved the issuance of the Obligations to finance the Project; and the City Council has been presented with a form of a Joint Powers Agreement, dated on or after December 1, 2024 (the "Joint Powers Agreement"), to be entered into between Saint Paul and the City pursuant to which Saint Paul consents to the issuance of the Bonds to finance, in part, the acquisition, rehabilitation, renovation, construction, and equipping of the Project, all in accordance with Minnesota Statutes, Sections 471.59 and 471.656, as amended, and Section 147(f) of the Code. NOW, THEREFORE, BE IT RESOLVED by the City Council (the "Council") of the City of Mounds View, Minnesota (the "City"), as follows: 1. Findings. The City acknowledges, finds, determines, and declares that the issuance of the Bonds is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Bonds, and the other actions of the City under the Indenture, the Loan Agreement, and this resolution constitute a public purpose and are in the interests of the City. The Project constitutes a "qualified residential rental project" within the meaning of Section 142(d) of the Code and a "multifamily housing development" authorized by the Act. The acquisition, rehabilitation, renovation, construction and equipping of the Project furthers the purposes of the Act. In authorizing the issuance of the Bonds for the financing of the Project and the related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by providing or preserving affordable multifamily housing developments for low or moderate income households and otherwise furthering the purposes and policies of the Act. 2. Financing Structure. The Borrower has requested that the City issue, sell, and deliver the Bonds pursuant to the Indenture to be purchased by Colliers Securities LLC, a Delaware limited liability company (the "Underwriter") pursuant to a Bond Purchase Agreement, dated on or after the date this resolution is approved (the "Bond Purchase Agreement"), among the Underwriter, the City, and the Borrower and the proceeds derived from the sale of the Bonds will be loaned by the City to the Borrower to finance a portion of the cost of the Project pursuant to the terms of the Loan Agreement. Pursuant to the Loan Agreement the City will loan the proceeds of the Bonds to the Borrower. The payments to be made by the Borrower under the Loan Agreement are fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. When executed, the right, title and interest of the City in, to and under, among other things, the Loan Agreement (except as therein provided) will be assigned to the Trustee pursuant to the Indenture. The Bonds shall bear interest at the rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, as executed in accordance with Sections 2 and 4. The Trustee is hereby appointed as the Paying Agent and the Bond Registrar for the Bonds. 3 SA130-295-988488.v2 3. Conversion. Pursuant to the Indenture and a Forward Bond Purchase Agreement, dated on or after December 1, 2024 (the "Forward Bond Purchase Agreement"), to be entered into between the City, the Borrower, Barings Affordable Housing Mortgage Fund III LLC, or an entity affiliated therewith or related thereto (the "Permanent Lender"), and the Trustee, the Bonds will convert from construction financing to permanent financing (the "Conversion"). Upon the satisfaction of certain conditions to Conversion set forth in the Indenture and the Forward Bond Purchase Agreement, (i) the Bonds shall be subject to mandatory tender, (ii) the purchase price of the Bonds shall be paid with amounts on deposit with the Trustee, (iii) the Bonds shall convert to permanent financing; and (iv) the Bonds registered in the name of and delivered to the Permanent Lender. In connection with Conversion, the Borrower will execute and deliver an Amended and Restated Promissory Note (the "Amended and Restated Promissory Note") in favor of the City to continue to secure its obligations under the Loan Agreement which will be assigned by the City to the Trustee (the "Amended and Restated Assignment of Note"). The Amended and Restated Promissory Note will replace and supersede the Promissory Note. 4. Authorization of Bonds. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Bonds in one or more series in a principal amount not to exceed $45,000,000. The Bonds shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, 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 Indenture, in substantially the form now on file with the City, with any necessary and appropriate variations, omissions, and insertions (including but not limited to changes to the aggregate principal amount of the Bonds, the stated maturity of the Bonds, the interest rate or rates on the Bonds and the terms of redemption of the Bonds) as are approved as evidenced by the execution thereof as provided in this Section and Sections 2 and 3. The City hereby authorizes the Bonds to be issued, in whole or in part, as "tax- exempt bonds," the interest on which is excludable from gross income for federal and State of Minnesota income tax purposes; provided that, if necessary, certain Bonds may be issued as taxable obligations. The Council hereby authorizes and directs the execution of the Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Bonds, the City, and the Trustee as set forth therein. The Trustee is hereby appointed as the Paying Agent and the Bond Registrar for the Bonds. All of the provisions of the Bonds, 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 Bonds shall be substantially in the form in the Indenture on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including but not limited to changes to the aggregate principal amount of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds and the terms of redemption of the Bonds) as the Mayor and the City Administrator (the "City Officials"), in their discretion, shall determine. The execution of the Bonds with the manual or facsimile signatures of the City Officials and the delivery of the Bonds by the City shall be conclusive evidence of such determination. Upon Conversion, Bonds for the permanent financing shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, 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 Indenture, in substantially the form now on file with the City, with necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Bonds, the stated maturity of the Bonds, the interest rates on the Bonds and the J terms of redemption of the Bonds) as are approved as evidenced by the execution thereof as provided in Section 7. 4 SA130-295-988488.v2 5. Limitation of Liability. The Bonds shall be special, limited revenue obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement and other funds pledged pursuant to the applicable Financing Documents (as defined below); the City does not pledge its general credit or taxing powers or any funds of the City to the payment of the Bonds. No provision, covenant or agreement contained in the aforementioned documents, the Bonds, or in any other document relating to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to a general or moral obligation of the City or 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 Bonds, as provided therein and as assigned to the Trustee, under the Indenture. 6. Approval of Housing Program; Compliance with Certain Rental and OccupancX Restrictions as to the Project. The Housing Program is hereby adopted, ratified, and approved in all respects without amendment. The City Administrator is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Housing Program in accordance with the Act and any other applicable laws and regulations. To ensure compliance with certain rental and occupancy restrictions imposed by the Act and Section 142(d) of the Code and to ensure compliance with certain restrictions imposed by the City, the Project will be subject to a Regulatory Agreement, dated as of or after December 1, 2024 (the "Regulatory Agreement"), among the City, the Borrower, and the Trustee. 7. Approval of Financing Documents, Execution. The City Officials are hereby authorized and directed to execute and deliver the Indenture, the Loan Agreement, the Bonds, the Bond Purchase Agreement, the Regulatory Agreement, the Assignment of Note, the Amended and Restated Assignment of Note, the Forward Bond Purchase Agreement and the Joint Powers Agreement (collectively, the "Bond Documents"). In addition, the City Officials are hereby authorized and directed to execute and deliver any consents or such other documents and certificates as are necessary or appropriate in connection with the issuance, sale, and delivery of the Bonds, including without limitation various certificates of the City, one or more assignments of mortgages, the Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038, a letter prepared in accordance with Section 42(m)(2)(D) of the Code evidencing the determination of the City, as the issuer of the Bonds, based on conclusions of a third party analyst, that the amount of tax credits to be allocated to the Project will not exceed the amount necessary for the financial feasibility of the Project and its viability as a qualified low-income housing project, a certificate as to arbitrage and rebate and similar documents, so long as City staff and legal counsel approve such documents (together with the Bond Documents, the "Financing Documents"). All of the provisions of the Financing Documents, 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 Financing Documents shall be substantially in the forms currently on file with the City, which are hereby approved, with such necessary and appropriate variations, omissions and insertions as do not materially change the substance thereof, and as the City Officials, in their discretion, shall determine, and the execution thereof by the City Officials shall be conclusive evidence of such determination. The City Officials are authorized and directed to execute any additional documents deemed necessary to carry out the intentions of this resolution and to complete the financing described herein, so long as City staff and legal counsel approve such documents. SA130-295-988488.v2 The City hereby authorizes the Borrower to provide such security for payment of its obligations under the Loan Agreement and for payment of the Bonds, including but not limited to the Promissory Note, any mortgages, guarantees or other documents required by the purchaser of the Bonds, and the City hereby approves the execution and delivery of such security. 8. Bond O inion. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel, to prepare, execute, and deliver its approving legal opinions with respect to the Bonds. 9. Official Statement. The City has not participated in the preparation of the Official Statement relating to the offer and sale of the Bonds (the "Official Statement"), and has made no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information, except for the information under the captions "THE ISSUER" and "NO LITIGATION —The Issuer." Subject to the foregoing, the City hereby consents to the distribution and the use by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Official Statement are the sole material consented to by the City for use in connection with the offer and sale of the Bonds. 10. Council Authority; No Personal Liability. 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. 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, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council nor any officer or employee executing the Bonds shall be personally liable on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Except as otherwise expressly provided herein, 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 Bonds issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, 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 holder from time to time of the Bonds issued under the provisions of this resolution. 11. Severability. In case any one or more of the provisions of this resolution, other than the provisions contained Sections 5 and 10, or of the aforementioned documents, or of the Bonds 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 Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 12. Validity. The Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds 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 Bonds, 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. 6 SA130-295-988488.v2 13. Authorization; Direction. The officers of the City, bond counsel, other attorneys, 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 Bonds, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the aforementioned documents, and this resolution. If for any reason either of the City Officials is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of such City Officials with the same force and effect as if such documents were executed and delivered by such City Officials. 14. City Costs. The Borrower shall pay the City's administrative fee in connection with the issuance of the Bonds, as provided in the Loan Agreement, 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 Bonds, whether or not the Bonds are issued, including any costs for attorneys' fees. The Borrower shall indemnify the City against all liabilities, losses, damages, costs and expenses (including attorney's fees and expenses incurred by the City) arising with respect to the Project or the Bonds, as provided for and agreed to by the Borrower in the Loan Agreement. 15. Future Amendments. The authority to approve, execute and deliver future amendments to the Financing Documents herein authorized entered into by the City in connection with the issuance of the Bonds, any consents required under the Financing Documents, and any documents necessary for the Conversion of the Bonds, is hereby delegated to the City Officials upon consultation with the City's Bond Counsel, subject to the following conditions: (a) such amendments or consents do not require the consent of the holder of the Bonds or such consent has been obtained; (b) such amendments or consents to not materially adversely affect the interests of the City; (c) such amendments or consents do not contravene or violate any policy of the City; and (d) such amendments or consents are acceptable in form and substance to the City's Bond Counsel. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the City Officials shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of either of the City Officials, any instrument authorized by this paragraph to be executed and delivered may be executed by the officer of the City or the City authorized to act in his/her place and stead. 16. Governmental Program. The City has established a governmental program of acquiring purpose investments for qualified residential rental projects. The governmental program is one in which the following requirements of § 1.148-1(b) of the federal regulations relating to tax-exempt obligations shall be met: (a) the program involves the origination or acquisition of purpose investments; (b) at least 95% of the cost of the purpose investments acquired under the program represents one or more loans to a substantial number of persons representing the general public, states or political subdivisions, 501(c)(3) organizations, persons who provide housing and related facilities, or any combination of the foregoing; (c) at least 95% of the receipts from the purpose investments are used to pay principal, interest, or redemption prices on issues that financed the program, to pay or reimburse administrative costs of those issues or of the program, to pay or reimburse anticipated future losses directly related to the program, to finance additional purpose investments for the same general purposes of the program, or to redeem and retire governmental obligations at the next earliest possible date of redemption; 7 SA130-295-988488.v2 (d) the program documents prohibit any obligor on a purpose investment financed by the program or any related party to that obligor from purchasing Bonds of an issue that finances the program in an amount related to the amount of the purpose investment acquired from that obligor; and (e) the City shall not waive the right to treat the investment as a program investment. 17. Effective Date. This resolution shall be in full force and effect from and after its approval. This Resolution shall be in full force and effect from and after its approval. Adopted by the City Council of the City of Mounds View this 25" day of November 2024. ZZ yor ATTEST• �% 4 ) /, j City d ator SA130-295-988488.v2