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85-7073R17 ARK: Draft 8/21/85; 9/4/85; 9/6/85; 9/18/85 516X RESOLUTION NO. 7073 RESOLUTION AUTHORIZING A PROJECT AND HOUSING PROGRAM UNDER MINNESOTA STATUTES, CHAPTER 462C (MUNICIPAL HOUSING PROGRAMS) AND AUTHORIZING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS TO FINANCE THE PROJECT AND PROGRAM AND AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS IN CONNECTION THEREWITH BE IT RESOLVED by the Council of the City of Richfield, Minnesota, as follows: 1. The Council has received a proposal from Market Plaza Housing Limited Partnership, a Minnesota limited partner- ship, (the "Company") that the City undertake to finance a certain Project and multifamily rental housing program for such Project as herein described, pursuant to Chapter 462C, ` Minnesota Statutes (the "Act"), through the issuance by the City of its $8,250,000 Multifamily Housing Revenue Bonds, Series 1985 (Market Plaza Housing Project) (the "Bonds"), and in accordance with a Bond Purchase Agreement (the "Bond Purchase Agreement") between the City, the Company, E. J. Plesko, sole general partner of the Company, and Miller & Schroeder Financial, Inc. (the "Bond Purchaser"). 2. The Company desires to acquire and construct a multifamily housing development consisting of an approximately 176,000 square foot building containing 166 units and related improvements including parking facilities (hereinafter referred to as the "Project") in the City. The Project as described above will. facilitate the development of rental housing within the community; encourage the development of affordable housing opportunities for residents of the City, encourage the develop- ment of housing facilities I'Idesigned for occupancy by persons of low or moderate income and ~'~assist such persons in obtaining decent, safe and sanitary housing at rentals they can afford; encourage the development o'~f blighted or underutilized land and structures within the boundaries of the City; and will otherwise further the polidies and purposes of the Act; and the findings made in the Preliminary Resolution adopted by this Council on December 19, 198,3 with respect to the Project are hereby ratified, affirmed a';nd approved. 3. It is proposed that, pursuant to a Loan Agreement dated as of September 1, 1985, between the City as Lender and the Company as Borrower (the "Loan Agreement"), the City loan the proceeds of the Bonds to the Company to partially finance the costs of the Project. The Loan Repayments to be made by the Company under the LoanAgreement are fixed so as to produce revenue sufficient to pay tie principal of, premium, if any, and interest on the Bonds when due. It is further proposed that the City assign its rights to the Loan Repayments and certain other rights under the Loan Agreement to First Trust Cor~pa:~y, Inc., in St. Paul,''Minnesota (the "Trustee") as security for payment of the Bonds under an Indenture of Trust dated as of September 1, 1985 (the "Indenture") between the City and the Trustee. To further secure the payment of the Bonds and the interest thereon and of the purchase price of any Bonds required to be purchased under the provisions of the Indenture, the Company will provide for a Letter of Credit (the "Letter of Credit") to be issued by Midwest Federal Savings and. Loan Association of Minneapolis (the "Bank") and in connection therewith, enter into a Letter of Credit Reimbursement Agreement dated as of September 1, 1985 (the "Reimbursement Agreement") with the Bank. Payments under the Letter of Credit and payments on the Bonds will be further secured by collateral pledged to the Trustee by the Bank pursuant to a Collateral Agreement dated as of September 1, 1985 by and between the Bank and the Trustee. Payment of principal and interest on the Bonds is -also secured by a Trustee Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Financing Statement (the "Trustee Mortgage") dated as of September 1, 1985 executed by the Company in favor of the Trustee and by a Trustee Guaranty Agreement (the "Trustee Guaranty") dated as of September 1, 1985 executed by E. J. Plesko in favor of the Trustee. The Company will enter into a Remarketing Agreement, dated as of September 1, 1985, with Miller & Schroeder Financial, Inc. (the "Remarketing Agreement"). The acquisi- tion, construction, operation and occupancy of the Project will conform to the terms and colnditions of a Regulatory Agreement (the "Regulatory Agreement") dated as of September 1, 1985 between the City, the Compal,ny, the Bank and the Trustee and a Declaration of Restrictive (Covenants (the "Declaration") dated as of September 1, 1985 exe'~cuted by the Company and recorded as a covenant and restriction '~irunning with the land on which the Project is located. ', 4. This Council,', by action taken on December 19, 1983, adopted a resolutiongiving preliminary approval to a proposal to finance a project substantially the same as the Project; and on or about October 25, 1984 the Minnesota Housing Finance Agency gave approval to the proposed financing program for the Project. An additional public hearing on the Project to approve a change in ownership entities of the Project was held on September 9, 1985,'lafter notice was duly published all as required by Section 103(I,k) of the Internal Revenue Code of 1954, as amended, and the Regulations promulgated thereunder, at which public hearing ally those appearing who so desired to speak were heard. 5. Pursuant to the preliminary approval of the Council, forms of the following documents have been submitted to the Council for approval: (a) The Loan Agreement. (b) The Indenture. (c) The Bond Purchase Agreement. (d) The Regulatory Agreement. (e) The Declaration (not executed by the City). 6. It is hereby found, determined and declared that: (a) the Project described in the Loan Agreement and Indenture referred to above constitutes. a Project authorized by the Act and the financing program for the Project is authorized by the Act; (b) the purpose of the Project and the program for the Project is, and the effect thereof will be, to promote the public welfare by the acquisition, construction and equipping of rental housing facilities for assisting persons of low and moderate income within the City to obtain decent, safe and sanitary housing at rentals they can afford; (c) the acquisition, construction and installation of the Project, the issuance and sale of the Bonds, the execution and delivery by the City of the Loan Agreement, the Indenture, the Bond Purchase Agreement and the Regulatory Agree- ment (collectively the "Agreements"), and the performance of all covenants and agreements of the City contained in the Agreements, and of all other acts and things required under the constitution and laws of the State Charter to make the obligations of the Ci terms, are authorized f Minnesota and City reements valid and binding in accordance with their the Act; (d) it is desirable that the Company be authorized, in accordance with the provisions of the Act and subject td the terms and conditions set forth 'in the Loan '',Agreement, Regulatory Agree- ment and Declaration which terms and conditions. the City determines td, be necessary, desirable and proper, to acquire and install the Project by such means as shall be avai~,lable to the Company and in the manner determined by the Company, subject to the terms of the aforesaid agreements; (e) it is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture; (f) the loan repayments under the Loan Agreement are fixed tol produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and ilnterest on the Bonds issued under the Indenture when due, and the Loan Agreement, Indenture a'nd Regulatory Agreement also provide that the Compai,ny is required to pay all expenses of the operation and maintenance of the Project, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project Premises and payable during the term of the Loan Agreement, Indenture and Regulatory Agreement; (g) as provided in the Loan Agreement and Indenture, the Bonds are not to be payable from or charged upon any funds other than the revenues pledged to the payment thereof; the City is not subject to any liability thereon; no holder of any Bonds shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Bonds or the interest or premium, if any, thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement which have been assigned to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the interests of the City in the Loan Agreement which have been assigned to the Trustee under the Indenture; the Bonds shall recite that the Bonds are issued without moral obligatipn on the part of the state or its political subdi?~isions, and that the Bonds, including interest the from the revenues pl are payable solely to the payment thereof and that the Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; and. (h) a public hewing on the Project was duly held by the City Council on December 19, 1983; on September 9, 1985, a subsequent public hearing was duly held by the City Council in order to consider a change in the entity~lowning and operating the Project. 6. Subject to the approval of the City Attorney and the provisions of Section 9I of this Resolution, the forms of the Agreements and exhibits thereto are approved substantially in the form submitted and on file in the office of the City Clerk. The Agreements, in substantially the form submitted, are directed to be executed~in the name and on behalf of the City by the Mayor and the City Manager. Any other documents and certificates necessary to the transaction described above shall be execu~•ed by the appropriate City officers. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in said Loan Agreement and Indenture. 7. The City shall proceed forthwith to issue its Bonds, in the form and upon the terms set forth in the Indenture and this Resolution. The Bonds shall initially bear interest at a rate of seven and seventy-five one hundredths per- cent (7.75$) per annum. The Bond Purchaser shall purchase the Bonds for an amount not less than 97.75$ of the principal amount of the Bonds. The offer of the Bond Purchaser to so purchase the Bonds is hereby accepted. The Mayor and City Manager are authorized. and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee for authentication and delivery to the Bond Purchaser. 8. The Mayor and City Manager and other officers of the City are authorized and directed to prepare and furnish to the Bond Purchaser certified copies of all proceedings and records of the City relating to the bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 9. The .approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be~~~necessary and appropriate and approved by the City Attorney and the City officials authorized herein to execute said documents prior to their execution; and said City Attorney and City officials are hereby authorized to approve said changes on behalf of the City. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the absence (or inability) of the officials auth- orized herein to execute any of the documents herein referred to, the documents may be executed by any officer or member of the City acting in their behalf. Passed: September 23, 1985 Attest/ ~j' (~!/~~/yl/JJ y y Clerk (SEAL)