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10-10352rRESOLUTION NO. 10352 AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS VARIABLE RATE DEMAND MULTIFAMILY HOUSING REFUNDING REVENUE BONDS (LYNWOOD PARTNERS, LLC PROJECT), SERIES 2010, AND ITS SUBORDINATE MULTIFAMILY HOUSING REFUNDING REVENUE NOTES (LYNWOOD .PARTNERS, LLC PROJECT), SERIES 2010; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS, THE SUBORDINATE NOTES, AND RELATED- DOCUMENTS; PROVIDING FOR THE SECURITY, RIGHTS,. AND REMEDIES WITH RESPECT TO THE BONDS AND THE SUBORDINATE NOTES; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of Richfield, Minnesota (the "City"), is a home rule city and political subdivision of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to carry out the public purposes described in the Act by issuing revenue bonds or other revenue obligations to finance or refinance multifamily housing developments located within the City, and as a condition to the issuance of such revenue bonds or other revenue obligations, adopt a housing program providing the information required by Section 46X.03, subdivision 1 a, of the Act; and WHEREAS, in the issuance of the City's revenue bonds and other revenue obligations and in the making of a loan to finance a multifamily housing development the City may exercise, within its corporate limits, any of the powers that the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended, including the power to issue refunding obligations and to apply the proceeds derived from the sale of the refunding obligations to redeem and prepay the bonds or other obligations to be refunded; and WHEREAS, the City prepared a housing program (the "Housing Program" or "Program") to authorize the issuance by the City of revenue bonds in the principal amount of approximately $16,000,000 to finance the acquisition and renovation by Lynwood Partners, LLC, a Minnesota limited liability company (the "Borrower"), of a multifamily housing development in the City; and WHEREAS, the Housing Program was prepared and submitted to the Metropolitan Council for its review and on March 19, 2007, the City received correspondence from the Metropolitan Council aclrnowledging receipt of the Housing Program and providing its comments with respect to the Housing Program and the Project; and WHEREAS, a notice of public hearing (the "Public Notice") was published in the Richfield Sun Current, the official newspaper of the City and a newspaper of general circulation in the City, with respect to: (i) the required public hearing under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) the required public hearing under Section 46X.04, subdivision 2, of the Act; (iii) the Housing Program; and (iv) approval of the issuance of the Prior Bonds, as hereinafter defined; and WHEREAS, the Public Notice was published at least fifteen (15) days before the regularly- scheduled meeting of the City Council of the City and on April 24, 2007, the City Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on (i) the Housing Program, (ii) the proposed issuance of the Prior Bonds, in the approximate aggregate principal amount of $16,000,000, and (iii) the location and nature of the Project (as hereinafter defined); and WHEREAS, pursuant to Resolution No. 9922, adopted on Apri124, 2007, the City Council of the City approved the Housing Program and provided preliminary approval for the sale and issuance of the Bonds, in the approximate aggregate principal amount of $16,000,004; and WHEREAS, pursuant to Resolution No. 9931 adopted on May 8; 2007, the City Council of 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 "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 the Borrower pursuant to 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, the Borrower has requested that the City issue, sell, and deliver its: {i) Variable Rate Demand Multifamily Housing Refunding Revenue Bonds (Lynwood Partners, LLC Project), Series 2010 (the "Bonds"), in the original aggregate principal amount not to exceed $12,800,000; and (ii) Subordinate Multifamily Housing Refunding Revenue Notes (Lynwood Partners, LLC Project), Series 2010 (the "Subordinate Notes"), in the original aggregate principal amount not to exceed $4,000,000; and WHEREAS, the proceeds derived from the sale of the Bonds will be applied to make a loan (the "Loan") by the City to the Borrower pursuant to the terms of a Loan Agreement, dated on or after April 1, 2010 (the "Loan Agreement"), between the City and the Borrower, whereby the City will apply the proceeds derived from the Loan to the redemption and prepayment of a portion of the Prior Bonds; and WHEREAS, the Bonds will be issued pursuant to this resolution and an Indenture of Trust, dated on or after April 1, 2010 (the "Indenture"), between the City and the Trustee, and the Bonds and the interest on the Bonds: (i) shall be payable solely from the revenues pledged therefor under the Loan Agreement; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan Agreement; and (v) shall not constitute a general or moral obligation of the City; and 2 WHEREAS, the Borrower has requested that the Subordinate Notes be issued by the City as obligations subordinate in priority, payment, and security to the Bonds; and WHEREAS, the proceeds derived from the sale of the Subordinate Notes will be loaned to the Borrower pursuant to the terms of a Subordinate Note Agreement, dated on or after April 1, 2010 (the "Note Agreement"), between the City and the Bozxower, whereby the City will apply the proceeds derived from the sale of the Subordinate Notes to the redemption and prepayment of a portion of the Prior Bonds; and WHEREAS, the Subordinate Notes will be issued pursuant to this resolution and the Subordinate Notes and the interest on the Subordinate Notes: (i) shall be payable solely from the revenues pledged therefor under the Note Agreement; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the -City or a charge against its general credit or taxing powers; (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Note Agreement; and (v) shall not constitute a general or moral obligation of the City; NOW,- THEREFORE, BE IT RESOLVED BY THE CITY COUNCIh OF THE CITY OF RICHFIELD, MINNESOTA, AS FOLLOWS: 1. The City acknowledges, finds, determines, and declares that the issuance of the Bonds and the Subordinate Notes is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Bonds and the Subordinate Notes, and the other actions of the City under the Indenture, the Loan Agreement, the Note Agreement, and this resolution constitute a public purpose and are in the interests of the City. In authorizing the issuance of the Bonds and the Subordinate Notes for the refmancing of the Project and related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by providing multifamily housing developments for low or moderate income residents of the City and otherwise furthering the purposes and policies of the Act. 2. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Bonds in one or more series in the maximum aggregate principal amount not to exceed $12,800,000. The Bonds shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Bonds to be issued, in whole or in part, as "tax-exempt bonds," the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Bonds, when executed 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 Bonds shall be substantially in the form in the Indenture on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds and the terms of redemption of the Bonds) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Bonds with the manual or facsimile signature of the Mayor and the City Manager and the delivery of the Bonds by the City shall be conclusive evidence of such determination. 3. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Subordinate Notes in one or more series in the maximum aggregate principal amount not to exceed $4,000,000. -The Subordinate Notes shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the .Subordinate Notes, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Subordinate Notes to be issued, in whole or in part, as "tax-exempt bonds," the interest on which is not includable in gross income fox federal and State of Minnesota income tax purposes. All of the provisions of the Subordinate Notes, when executed 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 form of the Subordinate Notes now on file with the City is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Subordinate Notes, the stated maturities of the Subordinate Notes, the interest rates on the Subordinate Notes and the terms of redemption of the Subordinate Notes) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Subordinate Notes with the manual or facsimile signature of the Mayor and the City Manager and the delivery of the Subordinate Notes by the City shall be conclusive evidence of such determination. 4. The Bonds shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement and other funds pledged pursuant to the Indenture and from payments made pursuant to an Irrevocable Letter of Credit, dated on or after April 1, 2010 (the "Letter of Credit"), issued by Wells Fargo Bank, National Association, a national banking association (the "Bank"), pursuant to the terms of a Reimbursement Agreement, dated on or after April 1, 2010 (the "Reimbursement Agreement"), between the Borrower and the Bank. The City Council of the City hereby authorizes and directs the Mayor and the City Manager to execute the Indenture, and to deliver the Indenture to said Trustee, and hereby authorizes and directs the execution of the Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Bonds, the City and the Trustee as set forth therein. All of the provisions of the Indenture, when executed as authorized herein, shall be deemed to be apart 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 Indenture shall be substantially in the form on file with the City, which is hereby approved, with such necessary and appropriate variations, 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 determination. 5. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Loan Agreement and the Bond Purchase Agreement, dated on or after April 1, 2010 (the "Bond Purchase Agreement"), between Dougherty & Company LLC (the "Underwriter"), the City, and the Borrower. All of the provisions of the Loan Agreement and Bond Purchase Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this xesolution 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 Loan Agreement and Bond Purchase Agreement shall be substantially in the forms on file with the City which are 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. 4 6. The Subordinate Notes shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Note Agreement. The City Council of the City hereby authorizes and directs the Mayor and the City Manager to execute the Subordinate. Notes and hereby provides that the .Subordinate Notes shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Subordinate Notes and the City as set forth therein. 7. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Note Agreement. All of the provisions of the Note Agreement, 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 Note Agreement 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. 8. To ensure compliance with certain rental and occupancy restrictions imposed by the Act and Section 142(d) of the Internal Revenue Code of 1986, as amended (the "Code"), and to ensure compliance with certain restrictions imposed by the City, a Regulatory Agreement, dated as of May 1, 2007 (the "Original Regulatory Agreement"}, was executed by the City, the Borrower, and the Trustee, and delivered in conjunction with the issuance of the Prior Bonds. To ensure continuing compliance with such restrictions, the Mayor and City Manager are hereby authorized and directed to execute and deliver a First Amendment to Regulatory Agreement, dated on or after April 1, 2010 (the "First Amendment to Regulatory Agreement"), between the City, the Borrower, and the Trustee. All of the provisions of the First Amendment to Regulatory Agreement, 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 First Amendment to Regulatory Agreement 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, or 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 determination. 9. The Bonds shall be special, limited revenue obligations of the City, the proceeds of which shall be disbursed pursuant to the terms of the Indenture and the Loan Agreement, and the principal, premium, and interest on the Bonds shall be payable solely from the revenues derived from the Loan Agreement and the other sources set forth in the Indenture. The Subordinate Notes shall be special, limited revenue obligations of the City, the proceeds of which shall be disbursed pursuant to the terms of the Note Agreement, and the principal, premium, and interest on the Subordinate Notes shall be payable solely from the revenues derived from the Note Agreement. 10. The Trustee is hereby appointed as Paying Agent and Bond Registrar for the Bonds. 11. 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 issuance, sale, and delivery of the Bonds and the Subordinate Notes, including an assignment to the Bank of the mortgage granted by the Borrower to the City to secure the Bonds, various certificates of the City, an Information Return for .Tax-Exempt Private Activity Bond Issues, Form 8038, with respect to the Bonds and the Subordinate Notes, a certificate as to arbitrage and rebate, and similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Bonds and the Subordinate Notes. The City hereby approves the execution and delivery by the Trustee of the Indenture and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Bonds that require execution by the Trustee. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel to prepare, execute, and deliver its approving legal opinions with respect to the Bonds and the Subordinate Notes. 12. The City will not participate in the preparation of an Official Statement relating to the offer and sale of the Bonds (the "Official Statement"), and will make no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information (except for the limited information with regard to the City that may be included therein). Subject to the foregoing, the City hereby consents to the distribution and the use by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Bonds. 13. On any date subsequent to the date of issuance of the Bonds and the Subordinate Notes, 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. 14. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the City Council of the City, or any officer, agent, or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Bonds or the Subordinate Notes shall be personally liable on the Bonds or the Subordinate Notes or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant, or agreement contained in the aforementioned documents, the Bonds, the Subordinate Notes, or in any other document relating to the Bonds or the Subordinate Notes, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to a general or moral obligation of the City or any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement and the Note Agreement which are to be applied to the payment of the Bonds and the Subordinate Notes, as provided therein. 15. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City, and any holders of the Bonds and the Subordinate Notes issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, and any holders from time to time of the Bonds and the Subordinate Notes issued under the provisions of this resolution. 6 16. In case any one or more of the provisions of this resolution, other than the provisions contained in Sections 4, 6, and 9 hereof, or of the aforementioned documents; or of the Bonds and the Subordinate Notes issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds and the Subordinate Notes, but this resolution, the aforementioned documents, and the Bonds and the Subordinate Notes shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 17. The Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 18. The Subordinate Notes, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Subordinate Notes and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Subordinate Notes, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 19. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things. required of them by or in connection with this resolution, the aforementioned documents, and the Bonds and the Subordinate Notes, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the Subordinate Notes, the aforementioned documents, and this resolution. If for any reason the Mayor or the City Manager is unable to execute and deliver the documents referred to in this Resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of the Mayor or the City Manager with the same force and effect as if such documents were executed and delivered by the Mayor or the City Manager. 20. The Borrower shall pay the administrative fee of the City on the date of issuance of the Bonds and the Subordinate Notes and on each anniversary of the date of issuance of the Bonds and the Subordinate Notes, in the amount of one-eighth of one percent (0.125%) of the outstanding principal amount of the Bonds and the Subordinate Notes as of each such payment date. The Borrower will also 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 and the Subordinate Notes, whether or not the Bonds and the Subordinate Notes are issued, including any costs for attorneys' fees. 21. This Resolution shall be in full force and effect from and after its approval and publication. (The remainder of this page is intentionally left blank.) 7 Adopted by the City Council of the City. of Richfield, Minnesota, on this March 23, 201 Q. CITY OF RICHFIELD, MINNESOTA Attest: City Clerk RC145-612 (JU) 365141v.3