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HomeMy WebLinkAboutResolution No. 475-03 -1 -4175-65 • RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM, AUTHORIZING AN APPLICATION FOR BONDING AUTHORITY AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS (EASTRIDGE ESTATES PROJECT) WHEREAS, Minnesota Statutes, Chapter 462C (the "Act"), grants cities the power to issue revenue bonds to finance a program for the purpose of planning, administering, making or purchasing loans with respect to one or more multi-family housing developments; and WHEREAS, the City of Rochester, Minnesota (the "City"), has received from Affordable Housing Associates, LLC, the members of which have indicated that they will form a limited partnership, which will be a member of the general partner of the to be forined limited partnership (the "Developer"), a proposal that it undertake a program to finance the Project hereinafter described, through the Issuance of approximately 015,0100,000 ofrevenue bonds or other obligations (which may be issued in one or more series) (the "Bonds") pursuant to the Act; and WHEREAS, the City desires to facilitate the development of rental housing • within the community; encourage the development, and preservation of affordable housing opportunities for residents of the City; encourage the development of housing facilities designed for occupancy by persons of low or moderate income; and prevent the emergence of blighted or underutilized land and structures within the boundaries of the City; and the Project will assist the City in achieving one or more of these objectives; and WHEREAS, the Developer has advised the City that in order to bear tax-exempt interest as bonds for a qualified residential rental project,the Bonds require an allocation of federal volume limit to issue tax-exempt private activity bonds ("bonding authority"), and Minnesota Statutes, Chapter 474A, requires submission of a preliminary resolution in connection with an application for bonding authority; and WHEREAS,the Developer has advised the City that the Developer is currently engaged in the business of real estate development; and the Project to be financed by the Bonds will consist of the acquisition and renovation of a residential rental project for low and moderate income tenants; and WHEREAS, the City has been advised by representatives of the Developer that conventional, commercial financing to pay the capital costs of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but the Developer has also advised the City that with the aid of municipal financing, and resulting low borrowing costs, the Project is economically more feasible; and 1561689v2 2 • WHEREAS, this resolution is adopted prior to preparation for the Project of a program meeting the requirements of the Act, and prior to a public hearing on the Project and program; and WHEREAS, the Developer has advised the City that 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: NOW THEREFORE, BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota, as follows: 1. PreliminaryApproval. The City hereby gives preliminary approval to the proposal of the Developer that the City undertake the Project, and the program of financing therefor, pursuant to Minnesota Statutes, Chapter 462C, consisting of the acquisition and renovation of an approximately 126-unit multi-family rental housing facility and functionally related facilities, located at 2009 17"' Street Southeast (the "Project"). The Project will be undertaken pursuant to a revenue agreement between the City and Developer. The Bonds would be issued in one or more series pursuant to the Act to finance the acquisition and renovation of the Project. Said agreement may also provide for the entire interest of the D;veioper therein to be mortgaged to the purchasers of the Bonds, or to a trustee or trustees for the purchasers of the Bonds or to a financial institution or government agency which provides credit enhancement for the Bonds. The City hereby gives preliminary, non-binding approval to the issuance of the Bonds. • 2. Findings. On the basis of information provided by the Developer to the City it appears, and the Common Council hereby finds, that: (1) the Project constitutes a multi-family housing development within the meaning of Subdivision 5 of Section 462C.02 of the Act and will be occupied, in part, by persons of low income; (2)the availability of financing under the Act and the willingness of the City to furnish such financing will be a substantial inducement to the Developer to undertake the Project; and(3) the effect of the Project, if undertaken, will be to encourage the provision of additional multi-family rental housing opportunities to residents of the City, to assist in the prevention of the emergence of blighted and marginal land and to promote more intensive development and use of land within the City. 3. Subject to Final Approval. The Project, and the program to finance the Project by the issuance of revenue bonds, are hereby given preliminary approval by the City, subject to final approval by the City in its absolute discretion, by the Developer and by the purchasers of the Bonds as to ultimate details of the financing for the Project. 4. Costs Paid by Developer. The Developer has agreed, and it is hereby determined, that any and all costs incurred by the City in connection with the financing for the Project, whether or not the Project is carried to completion and whether or not the Bonds are issued, will be paid by the Developer. 5. Revenue Bonds. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal fiends on the Project other than • the revenues derived from the Project or otherwise granted to the City for this purpose. The 1561689v2 3 • Bonds shall not constitute an indebtedness, pecuniary liability, a moral or general obligation, a loan of the credit of the City or a charge, lien or encumbrance, legal or equitable, upon any property or fields or upon the general credit or taxing power of the City except the revenues and proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon. The holders and owners of the Bonds shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereof against any property of the City. The Bonds shall recite in substance that the Bonds, including the interest thereon, are payable solely from the revenues and proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation of indebtedness. 6. Project Costs and Reimbursements. In anticipation of final approval of the issuance of the Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Developer, at its sole risk and expense, is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds as the Developer considers necessary, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds, if any, when delivered, but otherwise without liability on the part of the City. 7. Application for Bonding Authority. The Council Administrator, or his designee, and other City officers and staff are authorized to coordinate with the Developer upon request to apply to the Minnesota Department of Finance for an allocation of bonding authority • pursuant to Minnesota Statutes, Chapter 474A, in an amount that is sufficient to finance the Project, now estimated at $5,800,000, for a qualified residential rental project. The fees and deposits for the application shall be supplied by the Developer. The application for bonding authority shall not be submitted until the Developer has paid the fee required by the Department of Finance in connection with an application for an allocation of bonding authority. • 1561689v2 4 • PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS 3"DAY OF SEPTEMBER, 2003. t SIDENT OF SAID COMMON COUNCIL ATTEST: CITY ftE16C Approved this 3rd day of September, 2003. (Seal of the City of Rochester, Minnesota) MAYOR OF SAID CITY • • 1561689v2 5 • Extract of Minutes of a Meeting of the Common Council of the City of Rochester, Minnesota Pursuant to due call and notice thereof, a regular meeting of the Common Council of the City of Rochester, Minnesota, was duly held in the Council/Board Chambers located in the Government Center on Monday, the 3rd day of September, 2003, commencing at 7:00 P.M. The following members were present: President John Hunziker, Councilmembers Dennis Hanson, Marcia Marcoux, Jean McConnell , Sandra Means, Bob Nowicki , Walter Stobaugh. and the following were absent: None Member Marcoux introduced the following resolution and moved its adoption: RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM, AUTHORIZING AN APPLICATION FOR BONDING AUTHORITY • AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS (EASTRIDGE ESTATES PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by member Nowicki , and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: President Hunziker, Councilmembers Hanson, Marcoux, McConnell , Means, Nowicki , Stobaugh and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. • 1561689v2