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HomeMy WebLinkAboutResolution No. 231-19 (38M) Resolution approving Multi-family Housing Revenue Bonds by the City of Brooklyn Center using recycled bonding authority RESOLUTION Approving the issuance of Conduit Multi-family Housing Revenue Bonds by the City of Brooklyn Center on behalf of Brooklyn Center AH I, LLLP using, in part, recycled bonding authority from the Eastgate Apartments Project. WHEREAS, the City of Rochester, Minnesota (the “City”) is a home rule charter city organized and existing under its Charter and the constitution and the laws of the State of Minnesota. WHEREAS, Minnesota Statutes, Chapter 462C, as amended (the “Act”) confers upon cities the power to issue revenue bonds to finance or refinance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multifamily housing developments within the boundaries of the city or under a joint powers agreement with the jurisdiction in which the development is located and 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 cities 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. WHEREAS, Brooklyn Center AH II, LLLP (or a limited partnership or other entity to be formed by Real Estate Equities, Inc. or affiliated therewith, the “Phase II Borrower”), desires to finance the acquisition, construction, and equipping of an approximately 143-unit senior rental housing facility and related amenities to be located on the southern portion of the property at 5801 Xerxes Avenue North in the City of Brooklyn Center, Minnesota (the “Project”). WHEREAS, the Borrower will be the initial owner and operator of the Project. WHEREAS, in order to better leverage public funding by recycling bonding authority as permitted by Section 146(i)(6) of the Internal Revenue Code of 1986, as amended (the “Code”), the Borrower has proposed that the City of Brooklyn Center, Minnesota (the “Issuer”) undertake a housing finance program (the “Housing Program”) to finance the Project pursuant to the Act through the issuance by Issuer of housing revenue bonds in one or more series in an estimated principal amount not to exceed $38,000,000 (the “Bonds”). WHEREAS, Section 146(i)(6) of the Code permits the reuse of bonding authority for affordable housing projects and treats the reuse as a refunding for tax purposes if: (i) the “refunding” occurs within 4 years after the original bonds were issued, (ii) the “refunding” bonds are issued within 6 months after the principal payment of the original bonds, and (iii) the “refunding” bonds mature within 34 years of the original issue date and the Borrower has represented to the City that the Bonds will meet the requirements of Section 146(i)(6) of the Code with respect to the reuse of bonding authority from the City’s Multifamily Housing Revenue Bonds (Eastgate Apartments Project), Series 2017 issued in the aggregate principal amount of $14,135,000 (the “Original Bonds”). WHEREAS, Section 147(f) of the Code requires that an applicable elected representative of each governmental unit in which facilities to be financed by the Bonds are located and the issuer of the Bonds must approve the issuance of the Bonds following a public hearing. 618651v1BR291-395 WHEREAS, pursuant to the Act, Minnesota Statutes, Sections 471.59 and 471.656, as amended, and Section 147(f) of the Code, a public hearing on the Housing Program, the Project and the proposed issuance of the Bonds by the Issuer will be held following duly published notice, at which time all persons who desired to speak were heard. WHEREAS, there has been presented to the Common Council of the City the form of a Joint Powers Agreement anticipated to be executed upon issuance of the Bonds between the City and the Issuer (the “Joint Powers Agreement”). WHEREAS, the Borrower’s proposal calls for the Issuer to loan the proceeds realized upon the issuance and delivery of the Bonds to the Borrower pursuant to a loan agreement wherein the Borrower will be obligated to pay all costs and expenses of the City incident to the issuance of the Bonds. WHEREAS, the City desires to facilitate the preservation, construction, acquisition and rehabilitation of affordable multifamily housing facilities within Minnesota and the efficient use of limited resources available for funding affordable housing; and the Project will assist the City in achieving these objectives. WHEREAS, no public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project. BE IT RESOLVED by the Common Council (the “Council”) of the City of Rochester, Minnesota (the “City”), as follows: 1. Upon payment of any applicable fees charged by the City, the City hereby consents to and approves the issuance of the Bonds by the Issuer to finance the Project using, in part, recycled bonding authority from the Original Bonds in an amount to be determined by the City Clerk of the City and set forth in the Joint Powers Agreement prior to the execution thereof. 2. The Joint Powers Agreement is approved in substantially the form submitted. The City hereby authorizes and directs the Mayor and the Clerk of the City to execute and deliver the Joint Powers Agreement and any other necessary documents, agreements and instruments approved by the City Attorney’s Office in connection with the issuance of the Bonds. 3. In no event shall the Bonds ever be payable from or charged upon any funds of the City; nor shall the City be subject to any liability thereon; no owners of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. The City’s Clerk, staff and legal counsel are authorized and directed to take all necessary action to implement this Resolution. 4. The Borrower has agreed and it is hereby determined that any and all costs incurred by the City in connection with the financing of the Project will be paid by the Borrower, whether or not the Project is carried to completion and whether or not the Issuer issues the Bonds. 2 618651v1BR291-395 5. Kennedy & Graven, Chartered, acting as bond counsel, is authorized to assist in the preparation and review of necessary documents relating to the Project and the financing program therefor. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2019. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2019. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 3 618651v1BR291-395