13-10777r RESOLUTION NO. 10777
APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION
AND DELIVERY OF A HUD AMENDMENT TO REGULATORY
AGREEMENT WITH RESPECT TO THE LYNWOOD PARTNERS, LLC
PROJECT; AND GRANTING APPROVAL FOR CERTAIN OTHER
ACTIONS WITH RESPECT THERETO
WHEREAS, under the terms of Resolution No. 9931 adopted on May 8, 2007,
the City Council of the City of Richfield (the "City") authorized the issuance of its
Variable Rate Demand Multifamily Housing Revenue Bonds (Lynwood Partners, LLC
Project), Series 2007 (the "Prior Bonds"), in the original aggregate principal amount of
$15,445,000, pursuant to the terms of an Indenture of Trust, dated as of May 1, 2007
(the "Prior Indenture"), between the City and U.S. Bank National Association, as trustee
(the "Prior Trustee"); and
WHEREAS, the proceeds derived from the sale of the Prior Bonds were applied
to make a loan (the "Prior Loan") by the City to Lynwood Partners, LLC, a Minnesota
limited liability company (the "Borrower") in accordance with the terms of a Loan
Agreement, dated as of May 1, 2007 (the "Prior Loan Agreement"), between the City
and the Borrower; and
WHEREAS, the Borrower applied the proceeds of the Prior Loan to finance the
following: (i) the acquisition and renovation of a 306-unit residential rental multifamily
housing development, comprised of nine buildings located at 7437 Lyndale Avenue
South in the City (the "Project"); and (ii) the payment of certain costs related to the
issuance of the Prior Bonds; and
WHEREAS, the Project was designed and intended to be used primarily for
rental to and occupancy by persons and families of low and moderate income; and
WHEREAS, under the terms of Resolution No. 10352 adopted on
March 23, 2010, the City Council of the City issued its: (i) Variable Rate Demand
Multifamily Housing Refunding Revenue Bonds (Lynwood Partners, LLC Project),
Series 2010 (the "Bonds"), in the original aggregate principal amount of $11,385,000;
and (ii) Subordinate Multifamily Housing Refunding Revenue Notes (Lynwood Partners,
LLC Project), Series 2010 (the "Subordinate Notes"), in the original aggregate principal
amount of$2,645,000; and
WHEREAS, the proceeds derived from the sale of the Bonds were applied to
make a loan (the "Loan") by the City to the Borrower pursuant to the terms of a Loan
Agreement, dated as of May 1, 2010 (the "Loan Agreement"), between the City and the
Borrower, and the proceeds of the Loan were applied to the redemption and
prepayment of a portion of the Prior Bonds; and
WHEREAS, the Bonds were issued in accordance with the terms of an Indenture
of Trust, dated as of May 1, 2010 (the "Indenture"), between the City and Wells Fargo
Bank, National Association, as trustee (the "Trustee"); and
WHEREAS, the proceeds derived from the sale of the Subordinate Notes were
loaned to the Borrower pursuant to the terms of a Subordinate Note Agreement, dated
as of May 1, 2010 (the "Note Agreement"), between the City and the Borrower, and the
proceeds derived from the sale of the Subordinate Notes were applied to the
redemption and prepayment of a portion of the Prior Bonds; and
WHEREAS, in accordance with the requirements of Section 142(d) of the Internal
Revenue Code of 1986, as amended, and Minnesota Statutes, Chapter 462, as
amended, and Minnesota Statutes, Chapter 474A, as amended, a Regulatory
Agreement, dated as of May 1, 2007 (the "Original Regulatory Agreement"), between
the City, the Borrower, and the Trustee, imposing certain rental and occupancy
restrictions with respect to the Project was filed with the County Recorder of Hennepin
County on May 23, 2007, and a First Amendment to Regulatory Agreement, dated May
1, 2010 (the "First Amendment to Regulatory Agreement"), between the City, the
Borrower, and the Trustee, was filed with the County Recorder of Hennepin County on
May 21, 2010; and
WHEREAS, the Borrower has obtained mortgage loan financing from Dougherty
Mortgage LLC, a Delaware limited liability company (the "Lender"), the proceeds of
which are to be applied to the redemption and prepayment of all outstanding Bonds and
all outstanding Subordinate Notes; and
WHEREAS, the mortgage loan from the Lender to the Borrower will be insured
by the United States Department of Housing and Urban Development ("HUD") and, as a
condition to providing such insurance, HUD requires that the Original Regulatory
Agreement, as amended by the First Amendment to Regulatory Agreement, be
subordinated to the lien, covenants, and enforcement of the mortgage from the
Borrower in favor of the Lender;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF RICHFIELD, MINNESOTA, AS FOLLOWS:
1. The Mayor and the City Manager are hereby authorized and directed to
execute and deliver the HUD Amendment to Regulatory Agreement, dated on or after
March 1, 2013 (the "HUD Amendment"), between the City, the Borrower, and the
Trustee. All of the provisions of the HUD Amendment, when executed and delivered as
authorized herein, shall be deemed to be a part of this resolution as fully and to the
same extent as if incorporated verbatim herein and shall be in full force and effect from
the date of execution and delivery thereof. The HUD Amendment shall be substantially
in the form on file with the City which is hereby approved, with such omissions and
insertions as do not materially change the substance thereof, and as the Mayor and the
City Manager, in their discretion, shall determine, and the execution thereof by the
Mayor and the City Manager shall be conclusive evidence of such determinations.
2. The Mayor and the City Manager are hereby authorized to execute and
deliver, on behalf of the City, such other documents and certificates as are necessary or
appropriate in connection with the execution, delivery, and recording of the HUD
Amendment. The City hereby approves the execution and delivery by the Trustee of,
the HUD Amendment and all other instruments, certificates, notices, and other
documents to be prepared in conjunction with the redemption and prepayment of the
Bonds and the Subordinate Notes. The City hereby authorizes Kennedy & Graven,
Chartered, as bond counsel to prepare, execute, and deliver any requested legal
opinions with respect to the HUD Amendment and any related matters.
3. On any date subsequent to the date of adoption of this resolution, the
Mayor and the City Manager are hereby authorized to execute and deliver any
amendments or supplements to any of the documents referred to in this resolution if,
after review by bond counsel, the Mayor and the City Manager determine that the
execution and delivery of such amendment or supplement is in the interests of the City.
The Mayor and the City Manager may impose any terms or conditions on their
execution and delivery of any such amendment or supplement as the Mayor and the
City Manager deem appropriate.
4. This Resolution shall be in full force and effect from and after its approval
and publication.
Adopted by the City Council of the City of Richfield, Minnesota, on this March 12,
2013.
CITY OF RICHFIELD, MINNESOTA
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Suza M. Sandahl, Mayor Pro Tempore
Attest:
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Th r sa Schyma, Deputy'City Clerk