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HomeMy WebLinkAboutResolution No. 503-15 F4-Rochester approval resolutionCITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. RESOLUTION APPROVING A PROJECT BY MADONNA TOWERS OF ROCHESTER, INC. AND MADONNA MEADOWS OF ROCHESTER AND CONSENTING TO THE ISSUANCE OF OBLIGATIONS BY THE CITIES OF PRESTON AND SPRING VALLEY, MINNESOTA BE IT RESOLVED, by the Common Council of the City of Rochester, Olmsted County, Minnesota (the "City"), as follows: 1. Authority. Fryberger, Buchanan, Smith & Frederick, P.A., bond counsel ("Bond Counsel"), has advised the City that Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "Act"), authorize the issuance of revenue obligations to refinance indebtedness incurred by an organization engaged in providing health care services, health care related activities, activities for mentally or physically disabled persons and social services (together, the "Qualified Services and Activities"). 2. Description of the Project. a. Representatives of Madonna Towers of Rochester, Inc. ("MTR") and Madonna Meadows of Rochester ("MMR," and together with the MTR, the "Borrowers") have represented to the City that the Borrowers are each a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, engaged directly or through one or more of its affiliated organizations in providing Qualified Services and Activities. b. Representatives of the Borrowers have further advised the City that the Borrowers desire to refinance, on a tax-exempt basis, the acquisition, equipping and improvement of certain healthcare and assisted living facilities of the Borrowers. The refinancing consists of 24 units of assisted living located at 4001 — 19th Avenue NW in Rochester owned by MTR and MMR's 66-unit assisted living facility located at 3035 Salem Meadows Drive in Rochester; MTR's 62-bed skilled nursing facility located at 4001 — 19th Avenue NW in Rochester; and MTR's 30 units (32 beds) of memory care located at 4001 — 19th Avenue NW in Rochester. In addition, MMR and MTR desire to make capital improvements to their facilities listed above (collectively, the "Project"). All of the mentioned facilities are jointly operated by MMR and MTR under the name "Madonna Living Community." 3. Refinancing; Conditions. a. At the request of the Borrowers, the governing bodies of the City of Preston, Minnesota and the City of Spring Valley, Minnesota (together, the "Issuers"), have expressed their intent to refinance the Project and other capital projects of the Borrowers and finance certain costs associated with the refinancing through the issuance of tax-exempt revenue obligations in an amount not to exceed $17,000,000 (the "Obligations"). b. Bond Counsel has informed the City that in order for the Obligations to be issued on a tax-exempt basis, and in order to comply with Minnesota laws restricting the issuance of obligations by one municipality for a project in another municipality, the City must (i) conduct a public hearing on the proposal of the Borrowers to undertake and refinance the Project and (ii) consent to the issuance of the Obligations by the Issuers. C. The Obligations, when, as and if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the Obligations, when, as and if issued, shall recite in substance that the Obligations, including interest thereon, are payable solely from the revenues received from the Borrowers and the property pledged to the payment thereof, and shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 4. Recital of Representations Made by the Borrowers. The City has been advised by representatives of the Borrowers that: (i) conventional refinancing 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; (ii) on the basis of information submitted to this Common Council by the Borrowers and their discussions with representatives of area financial institutions and potential buyers of tax-exempt bonds, the Obligations can be issued and sold upon favorable rates and terms to refinance the Project; (iii) the Borrowers will experience a significant debt service cost savings as a result of the Project; and (iv) the Project would not be undertaken in its present form but for the availability of refinancing under the Act. 5. Public Hearing. a. A Notice of Public Hearing was published in the Rochester Post Bulletin, the City's official newspaper and a newspaper of general circulation, calling a public hearing on the proposed issuance of the Obligations and the proposal to undertake and refinance the Project. b. The Common Council has, on October 5, 2015, held a public hearing on the proposal to undertake and refinance the Project, through the issuance of the Obligations by the Issuers, at which all those appearing who desired to speak were heard and written comments were accepted, if submitted. 6. Refunding. The City consents to the refunding and redemption of the City's $6,815,000 Healthcare Housing Revenue Refunding Bonds, Series 2007B (Madonna Meadows of Rochester Project), dated May 9, 2007, and the $8,660,000 Housing and Healthcare Revenue Refunding Bonds (Madonna Towers of Rochester, Inc. Project), Series 2007A, 2 dated November 9, 2007 (the "Prior Obligations"), on the earliest possible date. The City authorizes the Borrowers to give such notices and take such actions as are or may be required to provide for the refunding and redemption of the Prior Obligations in accordance with their terms and the terms of the Amended and Restated Loan Agreement dated April 1, 2007, between the City and MMR, and the Amended and Restated Loan Agreement dated November 1, 2007, between the City and MTR. 7. Approvals; Preconditions. a. The proposal of the Borrowers to refund the Prior Obligations and refinance the Project and the issuance of the Obligations by the Issuers are approved. b. The Mayor and the City Clerk (the "Authorized Officers"), or the designee of any of the Authorized Officers, are authorized and directed to execute and deliver such documents or certificates needed from the City for the issuance of the Obligations. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS 5fh DAY OF OCTOBER, 2015. CITY CLERK Approved this 5' day of October, 2015 (Seal of the City of Rochester, Minnesota) M. I DOCS 11953810000001 R OL 113R 039802. DOCX PRESIDENT OF SAID COMMON COUNCIL MAYOR OF SAID CITY 3