CC PACKET 05282013 - Laserfiche WebLink

Home Browse Search

Memo To: Mark Casey -- City Manager From: Stacie Kvilvang Date: May 28, 2013 Subject: Proposed Multifamily Rental Housing Revenue Bonds -- The Senior Landings at Silver Lake Village The City has received a request from St. Anthony Leased Housing Associates II Limited Partnership (the "Borrower") that the City issue revenue bonds under Minnesota Statutes, Chapter 4620. The proceeds will be loaned by the City to Borrower and used to finance a senior rental housing development containing approximately 170 units as part of the Silver Lake Village Redevelopment. The Borrower is a single purpose entity limited partnership formed by Dominium Development in connection with the proposed development. The City Council will hold a public hearing on the issuance of the revenue bonds and the attached housing program at its May 28th meeting. The bonds are proposed to be issued in one or more series in the aggregate principal amount of up to $18,750,000. The debt service on the bonds will be payable solely from payments to be made by the Borrower and the City will have no liability with respect to payment on the bonds. However, the City will have limited liability with respect to how the proceeds are spent, timing of expenditures and arbitrage calculations and reporting. Since arbitrage calculations were not completed by the borrower on their prior conduit bonds for another project, Ehlers was required to complete them for audit purposes. We recommend that the City require that the Borrower retain the City's financial advisory firm to complete the arbitrage calculations for the bonds as needed to assure they are completed and to lessen any liability for the City with regards to the bonds, if they are ever audited by the IRS. The Borrower will pay all City expenses with respect to the bonds (legal and financial advisor), and upon issuance of the bonds will pay the City a fee equal to 1% of the principal amount of the bonds in accordance with the City's policy for issuance of revenue bonds. Based upon the proposed amount, this fee would be approximately $187,500. These funds would be unrestricted and can be utilized by the City for any purposes. The Council should have a discussion on the appropriate use for these funds at a work session to provide staff with direction accordingly. Representatives of the Borrower will attend the May 28th City Council meeting to respond to any questions concerning the proposed bonds. To proceed with the proposed bond issue following the public hearing, the Council should adopt the attached resolution approving the issuance of the bonds and approving the housing program for the ,proposed development and its financing prepared in accordance with Minnesota Statutes, Chapter 462C. Please contact me at 651-697-8506 with any questions. cc: Jerry Gilligan -- Dorsey and Whitney EHLERS LEADERS IN PUBLIC FINANCE Minnesota phone 651-697-8500 3060 Centre Pointe ©rive Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22 toll free 800-552-1171