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HomeMy WebLinkAboutResolution No. 184A-17 (b) - RiverGlenApartments.PhaseIIProject.MultifamilyHousingDevelopement RESOLUTION NO. _____ CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION GRANTING PRELIMINARY APPROVAL TO THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF (RIVER GLEN APARTMENTS PHASE II PROJECT) REGARDING A MULTIFAMILY HOUSING DEVELOPMENT Section 1. Recitals. 1.01. Ta home rule charter city and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota. 1.02. Pu authorized to issue revenue bonds to provide funds to finance multifamily rental housing developments located within the City. 1.03. River Glen Apartments Phase II, L.P., an Indiana limited partnership to be formed (or Village Capital Corporation, an Indiana corporation, or one or more affiliated entities, collectively, the , has proposed that the City issue its revenue bonds or other obligations in the approximate aggregate principal amount of up to $22,000,000, in one or more series, bearing interest at fixed and/or . 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 80-unit multifamily rental housing development consisting of 5 two-story garden style apartment buildings and functionally related facilities (including without limitation a clubhouse with a fitness center, community room, full kitchen, leasing offices, a playground, and a pool) to be located on a portion of an th approximately 23.55 parcel of land located at the southwest quadrant of the intersection of 37 Street NE and East River Road in the City adjacent to an approximately 128-unit rental housing development to be known as the River Glen Apartments ; (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. On this same date, the Common Council adopted a housing program providing the information required by Section 462C.03, subdivision 1a . 1.06. In accordance with Section 147(f) of the Internal Revenue Code of 1986, as amended (the the Common Council conducted a public hearing on this same date, 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 497312v3 JSB RC110-71 Prior to the submission of an application to the office of Minnesota Management & Budget for an allocation of 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 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 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 3. 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 , are hereby authorized and directed to take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority to the office of Minnesota Management & Budget. Section 4. Preliminary Approval. The Common Council hereby provides preliminary approval to the issuance of the Bonds in the approximate principal amount of up to $22,000,000 to finance costs of the Project pursuant to the Housing Program of the City, subject to: (i) receipt of allocation of bonding authority from the office of Minnesota Management & Budget; (ii) final approval by the Common Council following the preparation of bond documents; and (iii) 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. 497312v3 JSB RC110-71 2 Section 5. Reimbursement of Costs under the Code. 5.01. 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-hat 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. 5.02. 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 1.150-2(j)(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) -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. 7.03. 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 8. 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. Section 9. 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. 497312v3 JSB RC110-71 3 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, TH MINNESOTA, THIS 17 DAY OF APRIL, 2017. _________________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: _________________________ CITY CLERK Approved this 17th day of April, 2017. (Seal of the City of Rochester, Minnesota) MAYOR OF SAID CITY 497312v3 JSB RC110-71 4 C E R T I F I C A T I O N 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 granting preliminary approval regarding a multifamily housing development and 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, 2017. _________________________________________ City Clerk City of Rochester, Minnesota 497312v3 JSB RC110-71