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HomeMy WebLinkAboutResolution 10257 - 2026/06/08CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA Member H'1-P� 1 h ­L� introduced the following resolution and moved its adoption: RESOLUTION NO. 10257 AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS MULTIFAMILY HOUSING REVENUE OBLIGATIONS RELATING TO THE SILVER LAKE POINTE APARTMENTS PROJECT; APPROVING THE FORMS OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE OBLIGATIONS AND RELATED DOCUMENTS; PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE OBLIGATIONS; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of Mounds View, Minnesota (the "City"), is a home rule charter city and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Chapter 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 or refinance multifamily housing developments located within the City, 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, in the issuance of the City's revenue obligations and in the making of a loan to finance 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, TDP Mounds View Housing, LP, a Minnesota limited partnership (the "Borrower"), has requested that the City issue its revenue obligations, in one or more series, under the Act and lend the proceeds thereof to the Borrower to finance the costs of the acquisition, rehabilitation, and equipping of an approximately 83-unit senior rental housing facility known as Silver Lake Pointe and located at 2701 County Road I in the City (the "Project"); and WHEREAS, on November 24, 2025, the City Council adopted a preliminary resolution (the "Preliminary Resolution") which 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. 525, dated January 12, 2026, from Minnesota Management and Budget allocating volume cap bonding authority to the City in the amount of $7,000,000 for the issuance of the Obligations; and 4933-6580-5482.2 WHEREAS, the City has prepared a housing program providing the information required by Section 462C.03, subdivision la of the Act (the "Housing Program") regarding the issuance of the Obligations (as defined below) by the City to finance the acquisition, rehabilitation, and equipping of the Project; and WHEREAS, the Housing Program was submitted to Metropolitan Council for its review and comment; and WHEREAS, a notice of public hearing 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 Borrower has requested that the City issue, sell, and deliver its revenue obligations in an original aggregate principal amount not to exceed $7,000,000, (i) a portion of the principal amount of which would be issued pursuant to an Indenture of Trust, dated on or after June 1, 2026 (the "Indenture"), between the City and U.S. Bank Trust Company, National Association, as trustee (the "Trustee") as the Multifamily Housing Revenue Bonds (Silver Lake Pointe Apartments Project), Series 2026A (the "Series A Bonds") to be purchased by Colliers Securities LLC (the "Underwriter"); and (ii) a portion of the principal amount of which would be issued as a Subordinate Multifamily Housing Revenue Note (Silver Lake Pointe Apartments Project), Series 2026B (the "Series B Note" and, together with the Series A Bonds, the "Obligations") to be purchased by Silver Lake Mounds View LLC (or another financial institution selected by the Borrower, the "Lender"); and WHEREAS, the proceeds derived from the sale of the Series A Bonds will be loaned by the City to the Borrower (the "Series A Loan") pursuant to the terms of a Loan Agreement, dated on or after June 1, 2026, by and between the Borrower and the City (the "Series A Loan Agreement"), and the proceeds derived from the sale of the Series B Note will be loaned by the City to the Borrower (the "Series B Loan") pursuant to the terms of a Subordinate Loan Agreement, dated on or after June 1, 2026, by and between the Borrower and the City (the "Series B Loan Agreement" and, together with the Series A Loan Agreement, the "Loan Agreements"); and WHEREAS, the Obligations will be issued pursuant to this Resolution and the Obligations and the interest on the Obligations: (i) shall be payable solely from the revenues pledged therefor under the Loan Agreements and the Indenture; (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 Agreements; and (v) shall not constitute a general or moral obligation of the City; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MOUNDS VIEW, MINNESOTA, AS FOLLOWS: 1. Findings. The City acknowledges, finds, determines, and declares that the issuance of the Obligations is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Obligations, and the other actions of the City under the Indenture, the Loan Agreements, 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, and furthers the purposes of the Act. In authorizing the 2 4933-6580-5482.2 issuance of the Obligations 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 residents of the City and otherwise furthering the purposes and policies of the Act. 2. Series A Bonds Structure. Pursuant to the Series A Loan Agreement the City will loan the proceeds of the Series A Bonds to the Borrower to finance a portion of the Project. The payments to be made by the Borrower under the Series A Loan Agreement are fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Series A Bonds when due. When executed, the right, title and interest of the City in, to and under, among other things, the Series A Loan Agreement (except as therein provided) will be assigned to the Trustee pursuant to the Indenture. The Series A Bonds will be purchased by the Underwriter pursuant to the Bond Purchase Agreement, dated on or after the date this Resolution (the "Bond Purchase Agreement"), among the Underwriter, the City, and the Borrower. The Series A 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 8 and 16. The Trustee is hereby appointed as the Paying Agent and the Bond Registrar for the Series A Bonds. 3. Series B Note Structure. Pursuant to the Series B Loan Agreement, the City will loan the proceeds of the Series B Note to the Borrower to finance a portion of the Project. The payments to be made by the Borrower under the Series B Loan Agreement are fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Series B Note when due. When executed, the right, title and interest of the City in, to and under, among other things, the Series B Loan Agreement (except as therein provided) will be assigned to the Lender pursuant to an Assignment of Loan Agreement, dated on or after June 1, 2026, between the City and the Lender (the "Loan Assignment Agreement"). The Series B Note will be further secured by certain security instruments required by the Lender and in forms authorized by the Borrower to be executed by or on behalf of the Borrower in favor of the Lender which may include: (i) a Subordinate Mortgage, Security Agreement, Fixture Financing Agreement and Assignment of Leases and Rents, dated on or after June 1, 2026 (the "Subordinate Mortgage"), from the Borrower in favor of the City, as assigned to the Lender by an Assignment of Mortgage, dated on or after June 1, 2026 (the "Mortgage Assignment"); (ii) one or more security agreements and indemnity agreements; and (iii) other security documents that are intended to ensure timely payment of the Series B Loan and the Series B Note (collectively, the "Series B Security Documents"). The Series B Note shall bear interest at a fixed rate. The Series B Note shall be in the principal amount, 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 set forth therein, as executed in accordance with Sections 8 and 16. 4. Additional Provisions Relating to Series B Note. (a) Registration of Transfer. The City will cause to be kept at the office of the City Finance Director a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Series B Note. The Series B Note shall be initially registered in the name of the Lender and shall be transferable, subject to the provisions herein and in the Series B Note, upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Series B Note together with a written instrument of transfer satisfactory to the City Finance Director, duly executed by the Lender or its duly authorized agent. The City may require, as a precondition to any transfer, that the transferee provide to the City an investor letter or certification in a form satisfactory to the City and other evidence satisfactory to the City that the transferee is a financial institution or other accredited investor under the securities laws. The following form of assignment shall be sufficient for said purpose. 3 4933-6580-5482.2 For value received hereby sells, assigns and transfers unto the attached Note of the City of Mounds View, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 4(d) of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the City Finance Director shall note the date of registration and the name and address of the new holder thereof in the Note Register, and in the registration blank appearing on the Series B Note. (b) Mutilated, Lost or Destroyed Series B Note. In case a Series B Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Series B Note, of like outstanding principal amount, number and tenor in exchange and substitution for and upon cancellation of such mutilated Series B Note, or in lieu of and in substitution for such Series B Note destroyed or lost, upon the Lender paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Series B Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, destroyed or lost Series B Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Series B Note, prior to payment. (c) Ownership of Series B Note. The City may deem and treat the person in whose name the Series B Note is last registered in the Note Register and by notation on the Series B Note, whether or not such Series B Note shall be overdue, as the absolute owner of such Series B Note, for the purpose of receiving payment of or on account of the principal thereof, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. (d) Limitation on Series B Note Transfers. The Series B Note will be issued to either (i) a "qualified institutional buyer" as defined in Rule 144A promulgated under the 1933 Act, that purchases for its own account or for the account of a qualified institutional buyer, or (ii) an "accredited investor" as defined in Regulation D promulgated under the 1933 Act, that purchases for its own account and without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Series B Note may not be assigned or transferred in whole or part, nor may a participation interest in the Series B Note be given pursuant to any participation agreement, except to another "qualified institutional buyer" or "accredited investor" in accordance with an applicable exemption from such registration requirements and with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s) and the Series B Note shall remain in a single denomination equal to the entire outstanding principal balance thereof and in accordance with Section 4(a) hereof. (e) Issuance of Replacement Series B Note. Subject to the provisions of Section 4(d), the City shall, at the request and expense of the Lender, issue a new Series B Note, in aggregate outstanding principal amount equal to that of such Series B Note, and of like tenor except as to number, principal amount, and the amount of the periodic installments payable thereunder, and 4 4933-6580-5482.2 registered in the name of the Lender, or such transferee as may be designated by the Lender, as applicable. 5. Authorization of Obligations. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Obligations (including the Series A Bonds and the Series B Bonds) in one or more series, at one time or from time to time, in an aggregate principal amount not to exceed $7,000,000. The City hereby authorizes the Obligations 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 Obligations may be issued as taxable obligations. The Council hereby authorizes and directs the execution of the Series A Bonds in accordance with the terms of the Indenture and authorizes and directs the execution of the Series B Note. All of the provisions of the Obligations, 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 Series A Bonds shall be substantially in the form in the Indenture on file with the City and the Series B Note shall be substantially in the form on file with the City, which forms are hereby approved, with such necessary and appropriate variations, omissions, and insertions as the Mayor and the City Administrator (the "City Officials"), in their discretion, shall determine. The execution of the Obligations with the manual or facsimile signatures of the City Officials and the delivery of the Obligations by the City shall be conclusive evidence of such determination. 6. Limitation of Liability. The Obligations shall be special, limited revenue obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreements and other funds pledged pursuant to the applicable Financing Documents; the City does not pledge its general credit or taxing powers or any funds of the City to the payment of the Obligations. No provision, covenant or agreement contained in the aforementioned documents, the Obligations, or in any other document relating to the Obligations, 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 Agreements which are to be applied to the payment of the Obligations, as provided therein and as assigned to the Trustee, under the Indenture, or the Lender, under the Loan Assignment Agreement. 7. Approval of Housing Program; Compliance with Certain Rental and Occupancy Restrictions as to the Project. The Housing Program is hereby adopted, ratified, and approved in all respects without amendment. The City staff 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 June 1, 2026 (the "Regulatory Agreement"), among the City, the Borrower, and the Trustee. 8. Approval of Forms, Execution. The City Officials are hereby authorized and directed to execute and deliver the Indenture, the Loan Agreements, the Loan Assignment Agreement, the Obligations, the Bond Purchase Agreement, the Regulatory Agreement, the Mortgage Assignment, a Subordination Agreement between the Subordinate Lender, Colliers Mortgage LLC, the City and the Borrower, and any consents or such other documents and certificates as are necessary or appropriate in connection with the 5 4933-6580-5482.2 issuance, sale, and delivery of the Obligations, including without limitation documents attached to the foregoing, various certificates of the City, 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 Obligations, 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 (collectively, 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 may execute the Financing Documents, and any other documents, certificates, and instruments relating to the issuance of the Bonds and the Project by electronic signature. For purposes hereof: (i) "electronic signature" means a manually signed original signature that is then transmitted by electronic means; and (ii) "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a portable document format ("pdf') or other replicating image attached to an electronic mail or internet message; or (iii) a digital signature of an authorized representative of any party provided by AdobeSign or DocuSign (or such other digital signature provider as specified by such party). 9. Bond Opinion. The City hereby authorizes Kutak Rock LLP, as bond counsel, to prepare, execute, and deliver its approving legal opinions with respect to the Obligations. 10. Official Statement. The City has not participated in the preparation of the Official Statement relating to the offer and sale of the Series A 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. 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 Series A Bonds. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Series A Bonds. 11. 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 Obligations shall be personally liable on the Obligations 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 6 4933-6580-5482.2 corporation, other than the City, or any holder of the Obligations 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 Obligations issued under the provisions of this Resolution. 12. Severability. In case any one or more of the provisions of this Resolution, other than the provisions contained in Section 6, or of the aforementioned documents, or of the Obligations 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 Obligations, but this Resolution, the aforementioned documents, and the Obligations shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 13. Validity. The Obligations, 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 Obligations 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 Obligations, 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. 14. Authorization; Direction. 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 Obligations, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Obligations, 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. 15. City Costs. The Borrower shall pay the City's administrative fee in connection with the issuance of the Obligations, as provided in the Loan Agreements, 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 Obligations, whether or not the Obligations 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 Obligations, as provided for and agreed to by the Borrower in the Loan Agreements. 16. Future Amendments and Consents. 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 Obligations and any consents required under the Financing Documents 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 Obligations or such consent has been obtained; (b) such amendments or consents do 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 7 4933-6580-5482.2 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 officer authorized to act in his/her place and stead. 17. Governmental Pro rg am. 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; (d) the program documents prohibit any obligor on a purpose investment financed by the program or any related party to that obligor from purchasing Obligations 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. 18. Effective Date. This Resolution shall be in full force and effect from and after its approval. June 8, 2026 ' Date Mayor ATTEST: A'�' /Ci;eXc6inistrator The motion/ for the adoption of the foregoing resolution was duly seconded by member �YYC. L�Y 8 4933-6580-5482.2