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12-19-2022 HRA Resolutuion No. 1446HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. 1446 PROVIDING PRELIMINARY APPROVAL FOR THE ISSUANCE OF REVENUE OBLIGATIONS FOR THE BENEFIT OF FORT SNELLING LEASED HOUSING ASSOCIATES I, LLLP AND TAKING OTHER ACTIONS RELATED THERETO Section 1. Background. 1.01. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Housing Act”), the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) is authorized to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds to provide funds to finance multifamily housing developments. 1.02. Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the obligations are issued under a joint powers agreement between the municipality issuing the obligations and the municipality in which the property to be acquired or improved is located. 1.03. Pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of a joint powers agreement entered into through action of their governing bodies, two or more municipalities may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised and the joint powers agreement may provide for the exercise of such powers by one or more of the participating governmental units on behalf of the other participating units. 1.04. Fort Snelling Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership, or an affiliate, successor, or assign (collectively, the “Borrower”), has proposed that the Authority issue one or more series of tax-exempt revenue obligations in the approximate maximum principal amount of $10,000,000 and one or more series of taxable revenue obligations in the approximate maximum principal amount to be determined (collectively, the “Bonds”) for the benefit of the Borrower for the purposes of financing all or a portion of (i) the costs of the leasehold acquisition, rehabilitation and/or construction, and equipping of an approximately 191-unit multifamily housing rental facility and facilities functionally related and subordinate thereto located at 58 Taylor Avenue, Unorganized Territory of Fort Snelling, Minnesota 55111 known as the Fort Snelling Upper Post Project for occupancy by individuals and families of low and moderate income (the “Project”); (ii) any required reserves; (iii) capitalized interest during the construction of the Project, if necessary; and (iv) the costs of issuing the Bonds. 1.05. Pursuant to Section 146 of the Code, any Bonds issued on a tax-exempt basis (the “Tax-Exempt Bonds”) must receive an allocation of 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”). The Board of Commissioners of the Authority (the “Board”) must grant preliminary approval to the issuance of the Bonds to finance the costs of the Project and authorize the submission of an application to the office of Minnesota Management and Budget for an allocation of bonding authority with respect to the Tax-Exempt Bonds to finance the costs of the Project. 1.06. As a condition to the issuance of the Bonds, the Authority must adopt a housing program providing the information required by Section 462C.03, subdivision 1a of the Housing Act (the “Housing Program”). 1.07. Under Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), prior to the issuance of the Bonds, the Board must conduct a public hearing after one publication of notice in a newspaper circulating generally in the City of Richfield, Minnesota (the “City”) at least seven (7) days before the hearing. Under Section 462C.04, subdivision 2 of the Housing 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 fifteen (15) days before the hearing. Section 2. Preliminary Findings. 2.01. Based on representations made by the Borrower to the Authority to date, the Board 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 thereof, along with other available funds, will be used to finance all or a portion of the costs of the Project, any required reserve funds, capitalized interest during the construction of the Project, and costs of issuance of the Bonds. The Authority will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan of the proceeds of the Bonds 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 costs of the Project and related costs, the Authority’s purpose is to further the policies of the Housing Act. (d) The Bonds will be special, limited obligations of the Authority payable solely from the revenues pledged to the payment thereof, will not be general or moral obligations of the Authority or the City, and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the Authority or the City. Section 3. Application for Allocation. The Board hereby authorizes the submission of an application for allocation of bonding authority for the Tax-Exempt Bonds pursuant to Section 146 of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. Authority staff and Kennedy & Graven, Chartered, as bond counsel to the Authority (“Bond Counsel”), shall 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 and Budget. Section 4. Housing Program. Bond Counsel shall prepare and submit to the Authority a draft Housing Program to authorize the issuance by the Authority of the Bonds to finance all or portion of the costs of the Project by the Borrower. Bond Counsel is authorized and directed to submit, on behalf of the Authority, the Housing Program to Metropolitan Council for review and comment pursuant to Section 462C.04, subdivision 2 of the Housing Act. Section 5. Public Hearing. The Board shall meet at a future date to be determined by Authority staff to conduct a public hearing on the Housing Program, the Project, and the issuance of the Bonds by the Authority. Notice of such hearing (the “Public Notice”) will be published as required by Section 462C.04, subdivision 2 of the Housing Act and Section 147(f) of the Code. Bond Counsel is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A, in the Sun Current, a newspaper of general circulation in the City. 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 6. Preliminary Approval. 6.01. The Board hereby provides preliminary approval to the issuance of the Bonds, subject to: (i) a public hearing by the Board as required by the Housing Act and Section 147(f) of the Code; (ii) a public hearing by the City Council of the City as required by Section 147(f) of the Code; (iii) host approval by Hennepin County, Minnesota, or another political subdivision of the State of Minnesota authorized to provide such host approval, in accordance with Minnesota Statutes, Sections 471.59 and 471.656, as amended; (iv) final approval of the issuance of the Bonds in the total principal amount to be determined following the preparation of bond documents, provided, however, that the approximate principal amount of the Tax-Exempt Bonds may not exceed $10,000,000; (v) receipt of an allocation of bonding authority for the Tax-Exempt Bonds from the office of Minnesota Management and Budget; and (vi) final determination by the Board that the financing of the costs of the Project and the issuance of the Bonds are in the best interests of the City. 6.02. In addition to the conditions set forth in Section 6.01 hereof, final approval of the Bonds by the Board is contingent upon the following conditions being met or agreed to by the Borrower: (i) for a period of at least twenty-five (25) years, at least 80 to 100 units of the Project being available to individuals or families with incomes at or below fifty percent (50%) of the area median income or at least 40 to 55 units of the Project being available to individuals or families with incomes at or below forty percent (40%) of the area median income; (ii) preference for rental being given to Section 8 voucher holders from the City if the area of the Project is classified as a Richfield service area; (iii) acceptance of Kids @ Home families; and (iv) payment by the Borrower of an upfront fee of one and one-half percent (1.5%) plus consultant fees, along with the Authority’s administrative fee for the issuance of the Bonds. Section 7. Reimbursement of Costs under the Code. 7.01. 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 Authority 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 Authority adopt a statement of official intent to reimburse an original expenditure not later than sixty (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 eighteen (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 three (3) years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the Bonds. 7.02. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the costs of the Project, the Authority reasonably expects to reimburse the Borrower for the expenditures made for the 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 Housing 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) 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 sixty (60) days before the date of adoption of this resolution of the Authority. 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 remaining costs of 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 Authority and pay, or, upon demand, reimburse the Authority for payment of, any and all costs incurred by the Authority 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 Authority will issue the Bonds as requested by the Borrower. If, as a result of information made available to or obtained by the Authority during its review of the Project, it appears that the Project or the issuance of Bonds to finance the remaining costs thereof is not in the public interest or is inconsistent with the purposes of the Housing Act, the Authority reserves the right to decline to give final approval to the issuance of the Bonds. The Authority also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the Board, at any time prior to the issuance thereof, determine that it is in the best interests of the Authority 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 10. Effective Date. This resolution shall be in full force and effect from and after its passage. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of December, 2022. Mary B. Supple, Chair ATTEST: Maria Regan Gonzalez, Secretary EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF RICHFIELD, MINNESOTA NOTICE OF PUBLIC HEARING ON THE APPROVAL OF A HOUSING PROGRAM FOR A MULTIFAMILY HOUSING DEVELOPMENT AND THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS UNDER MINNESOTA STATUTES, CHAPTERS 462C AND 474A, AS AMENDED, FOR THE BENEFIT OF FORT SNELLING LEASED HOUSING ASSOCIATES I, LLLP NOTICE IS HEREBY GIVEN that the Board of Commissioners (the “Board”) of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), will hold a public hearing on __________________, _________________, 2023, at or after __________ p.m. at the Richfield Municipal Center, located at 6700 Portland Avenue, Richfield, Minnesota, to consider a proposal that the Authority approve and authorize the issuance of one or more series of taxable or tax-exempt revenue bonds (the “Bonds”) in the approximate principal amount not to exceed $10,000,000, pursuant to Minnesota Statutes, Chapters 462C and 474A, as amended (the “Act”), and Minnesota Statutes, Sections 471.59 and 471.656, as amended, for the purposes of financing all or a portion of (i) the costs of the [leasehold] acquisition, rehabilitation and/or construction, and equipping of an approximately _______-unit multifamily housing rental facility and facilities functionally related and subordinate thereto located at 58 Taylor Avenue, Unorganized Territory of Fort Snelling, Minnesota 55111 known as the Fort Snelling Upper Post Project, for occupancy by individuals and families of low and moderate income (the “Project”); (ii) any required reserves; (iii) capitalized interest during the construction of the Project, if necessary; and (iv) the costs of issuing the Bonds. Fort Snelling Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership, or an affiliate, successor, or assign (collectively, the “Borrower”), will own and operate the Project. Following the public hearing, the Board 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 Authority, 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 Authority or the City of Richfield, Minnesota (the “City”) to pay the Bonds or the interest thereon, nor to enforce payment against any property of the Authority or the City except money payable by the Borrower to the Authority and pledged to the payment of the Bonds. Before issuing the Bonds, the Authority 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 Board 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 Executive Director of the Authority, at or prior to said public hearing. [PLEASE NOTE, due to COVID-19, the public hearing may be conducted via telephone or other electronic means as allowed under Minnesota Statutes, Section 13D.021. Please refer to the City’s website at www.richfieldmn.gov or call City Hall at 612-861-9700 to learn how to attend the public hearing via telephone or electronically.] Dated: [Date of Publication] BY ORDER OF THE BOARD OF COMMISSIONERS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA /s/ Melissa Poehlman Executive Director Housing and Redevelopment Authority in and for the City of Richfield, Minnesota RC125-394 (JAE) 841124v2