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HomeMy WebLinkAboutResolution No. 141-16 - ValleyhighVillasPrjct.HouseRevenueBond.PublicHrngRequestCITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. RESOLUTION CALLING A PUBLIC HEARING REGARDING A MULTIFAMILY SENIOR HOUSING DEVELOPMENT AND GRANTING PRELIMINARY APPROVAL TO THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF (VALLEYHIGH VILLAS PROJECT) Section 1. Recitals. 1.01. The City of Rochester, Minnesota (the "City") is a home rule charter city and political subdivision duly organized and existing under the Constitution and laws of the State of Minnesota. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to issue revenue bonds to provide funds to finance multifamily rental housing developments located within the City. 1.03. Valleyhigh Villas, Limited Partnership, a Minnesota limited partnership (the "Borrower"), has proposed that the City issue its revenue bonds or other obligations in the approximate aggregate principal amount of up to $14,500,000, in one or more series, bearing interest at fixed and/or variable rates, to be offered publicly and/or privately placed (the "Bonds"). 1.04. The proceeds of the Bonds are proposed to be loaned by the City to the Borrower to be applied by the Borrower to (i) finance the acquisition, construction, and equipping of an approximately 139-unit multifamily rental senior housing development and functionally related facilities to be located at the northeast corner of the intersection of Valleyhigh Road NW and Kenosha Drive NW in the City (the "Project"); (ii) fund one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) pay interest on the Bonds during the construction of the Project, if necessary; and (iv) pay the costs of issuing the Bonds. 1.05. As a condition to the issuance of the Bonds, the City must adopt a housing program providing the information required by Section 462C.03, subdivision la of the Act (the "Housing Program"). 1.06. Under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), prior to the issuance of the Bonds, the Common Council must conduct a public hearing after one publication of notice in a newspaper circulating generally in the City at least 14 days before the hearing. Under Section 462C.04, subdivision 2 of the Act, a public hearing must be held on the housing program after one publication of notice in a newspaper circulating generally in the City at least 15 days before the hearing. 1.07. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act"). Prior to the submission of an application to the office of Minnesota Management & Budget for an allocation of 477932v1 JSB RC110-69 bonding authority with respect to the Bonds to finance the Project, the City must grant preliminary approval to the issuance of the Bonds to finance the Project. Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the Common Council hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of a multifamily rental senior housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan will be applied to: (i) the acquisition, construction, and equipping of the Project; (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) the payment of interest on the Bonds during the construction of the Project, if necessary; and (iv) the payment of the costs of issuing the Bonds. The City will enter into one or more loan agreements (or other revenue agreements) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (c) In preliminarily authorizing the issuance of the Bonds and the financing of the acquisition, construction, and equipping of the Project and related costs, the City's purpose is to further the policies of the Act. (d) The Bonds will be special, limited obligations of the City payable solely from the revenues pledged to the payment thereof, will not be a general or moral obligation of the City, and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 4. Public Hearing. The Common Council shall meet at 7:00 p.m. on Monday, May 16, 2016, or such other date as determined by the City Clerk for which proper notice may be given as provided below, to conduct a public hearing on the Housing Program, the Project, and the issuance of the Bonds by the City. Notice of such hearing (the "Public Notice") will be published as required by Section 462C.04, subdivision 2 of the Act and Section 147(f) of the Code. The City Clerk of the City is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Post Bulletin, a newspaper of general circulation in the City, at least 15 days before the meeting of the Common Council at which the public hearing will take place. At the public hearing reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the Project, the Housing Program, and the proposed issuance of the Bonds. Section 5. Housing Program. Bond Counsel, as described below, shall prepare and submit to the City a draft Housing Program to authorize the issuance by the City of up to approximately $14,500,000 in revenue bonds in one or more series to finance the acquisition, construction, and equipping of the Project by the Borrower. Section 6. Submission of an Application for an Allocation of Bonding Authority. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. The Common Council hereby authorizes the submission of an application for allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. The Mayor of the City, the City Administrator, the Finance Director of the City, and Kennedy & Graven, Chartered, acting as bond counsel with respect to the Project and the Bonds ("Bond Counsel"), are hereby authorized and directed to take all actions, in cooperation with the 477932v1 JSB RC110-69 Borrower, as are necessary to submit an application for an allocation of bonding authority to the office of Minnesota Management & Budget. Section 7. Preliminary Approval. The Common Council hereby provides preliminary approval to the issuance of the Bonds in the approximate principal amount of up to $14,500,000 to finance costs of the Project pursuant to the Housing Program of the City, subject to: (i) a public hearing as required by the Act and Section 147(f) of the Code; (ii) receipt of allocation of bonding authority from the office of Minnesota Management & Budget; (iii) final approval by the Common Council following the preparation of bond documents; and (iv) final determination by the Common Council that the financing of the Project and the issuance of the Bonds are in the best interests of the City. Section 8. Reimbursement of Costs under the Code. 8.01. The United States Department of the Treasury has promulgated regulations governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the "Regulations") require that the City adopt a statement of official intent to reimburse an original expenditure not later than 60 days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within 18 months after the later of. (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than 3 years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the Bonds. 8.02. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, costs of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.150-20)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iv) expenditures in a "de minimis" amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than 60 days before the date of adoption of this resolution of the City. 8.03. Based on representations by the Borrower, as of the date hereof, there are no funds of the Borrower reserved, allocated on a long term -basis, or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside) to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. Section 9. Costs. The Borrower will pay the administrative fees of the City 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 Bonds, whether or not the Bonds are issued. 477932v1 JSB RC110-69 Section 10. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Borrower. If, as a result of information made available to or obtained by the City during its review of the Project, it appears that the Project or the issuance of Bonds to finance the costs thereof is not in the public interest or is inconsistent with the purposes of the Act, the City reserves the right to decline to give final approval to the issuance of the Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the Common Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. Section 11. Effective Date. This resolution shall be in full force and effect from and after its passage. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS 18TH DAY OF APRIL, 2016. ATTEST: CITY CLERK Approved this 18th day of April, 2016. (Seal of the City of Rochester, Minnesota) PRESIDENT OF SAID COMMON COUNCIL MAYOR OF SAID CITY 477932v1 JSB RC110-69 CERTIFICATION I, the undersigned City Clerk of the City of Rochester, Minnesota, do hereby certify the following: The foregoing is true and correct and a copy of the Resolution is on file and of record in the offices of the City, which Resolution relates to calling a public hearing regarding a multifamily senior housing development and granting preliminary approval to the issuance of revenue bonds to finance the costs thereof, and said Resolution was duly adopted by the Rochester Common Council at a regular or special meeting of the Council held on the date therein indicated. Said meeting was duly called and regularly held and was open to the public and was held at the place at which meetings of the Council are regularly held, a quorum of the Council being present and acting throughout. Councilmember moved the adoption of the Resolution, which motion was seconded by Councilmember . A vote being taken on the motion, the following members of the Council voted in favor of the Resolution: and the following voted against the same: Whereupon said Resolution was declared duly passed and adopted. The Resolution is in full force and effect and no action has been taken by the Council which would in any way alter or amend the Resolution. WITNESS MY HAND officially as the City Clerk of the City of Rochester, Minnesota, this day of April, 2016. City Clerk City of Rochester, Minnesota 477932v1 JSB RC110-69 EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA NOTICE OF A PUBLIC HEARING TO BE CONDUCTED BY THE CITY OF ROCHESTER TO CONSIDER THE ISSUANCE OF REVENUE BONDS TO FINANCE THE ACQUISITION, CONSTRUCTION, AND EQUIPPING OF A MULTIFAMILY RENTAL SENIOR HOUSING DEVELOPMENT IN THE CITY (VALLEYHIGH VILLAS PROJECT) NOTICE IS HEREBY GIVEN that the Common Council (the "Council") of the City of Rochester, Minnesota (the "City") will hold a public hearing meet on Monday, May 16, 2016, at or after 7:00 p.m. in the Common Council Chambers in the City Hall at 201 Fourth Street SE in the City, to consider a proposal that the City approve and authorize the issuance of its revenue bonds or other obligations (the `Bonds"), in one or more series, bearing interest at fixed or variable rates, to be offered publicly and/or privately, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), for the purposes of (i) financing the acquisition, construction, and equipping of an approximately 139-unit multifamily rental senior housing development and functionally related facilities with underground parking to be located at the northeast corner of the intersection of Valleyhigh Road NW and Kenosha Drive NW in the City (the "Project"); (ii) funding one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) paying interest on the Bonds during the construction of the Project, if necessary; and (iv) paying the costs of issuing the Bonds. Valleyhigh Villas, Limited Partnership, a Minnesota limited partnership (the "Borrower"), or an affiliated entity, will own the Project. The estimated aggregate principal amount of the proposed Bonds is $14,500,000. Following the public hearing, the Council will consider a resolution approving a housing program prepared in accordance with the requirements of the Act and granting approval to the issuance of the Bonds. The Bonds will be special, limited obligations of the City, and the Bonds and interest thereon will be payable solely from the revenues and assets pledged to the payment thereof. No holder of any Bond will have the right to compel any exercise of the taxing power of the City to pay the Bonds or the interest thereon, nor to enforce payment against any property of the City except money payable by the Borrower to the City and pledged to the payment of the Bonds. Before issuing the Bonds, the City will enter into an agreement with the Borrower, whereby the Borrower will be obligated to make payments at least sufficient at all times to pay the principal of and interest on the Bonds when due. At the time and place fixed for the public hearing, the Council will give all persons who appear at the hearing an opportunity to express their views with respect to the proposal. In addition, interested persons may direct any questions or file written comments respecting the proposal with the City Clerk, at or prior to said public hearing. A copy of the housing program will be on file at City Hall, 201 Fourth Street SE, Rochester, MN 55904, Monday through Friday until the date of the public hearing. At the time and place fixed for the public hearing the Council will give all persons who appear or submit comments in writing to the Council A- I 477932v1 JSB RC110-69 prior to the hearing, an opportunity to express their views with respect to the proposal. In addition, interested persons may file written comments respecting the proposal with the City to the attention of Dale Martinson, at (507) 328-2861 at or prior to said public hearing. Dated: [Date of Publication] BY ORDER OF THE CITY COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA /s/ Aaron Reeves City Clerk City of Rochester, Minnesota A-2 477932v1 JSB RC110-69