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CR 2003-069 Public Hearing Revenue Bond/Joint Powers Agreement ( CITY OF '\ . April 21, 2003 - .~ HOPKINS Council Report 2003-069 PUBLIC HEARING REVENUE BOND/JOINT POWERS AGREEMENT, AUGUST ANA CHAPEL VIEW HOMES, INC. Proposed Action Staff recommends approval of the following motion: adopt Resolution 2003-038. approving the issuance of a revenue bond to finance a lJroiect owned by Augustana Chapel View Homes. Inc.. and located in part in the City of Hopkins. under Minnesota Statues. Section 469.152 through 469.1651. and aplJroving a ioint powers agreement. With this action the City will execute a joint powers agreement with the Minneapolis Community Development Agency. Overview . Augustana Chapel View Homes, Inc., is proposing to undertake energy improvements at both their Hopkins and Minneapolis nursing care and senior housing facilities (they will also be undertaking some telephone system improvements at their Minneapolis facility). To finance the cost of these improvements, Chapel View has made application to the Minneapolis Community Development Agency (MCDA) to issue a revenue bond in the amount of approximately $1,600,000. Even though Hopkins would not be the issuing agent for the subject bond, in order to facilitate this transaction the City needs to undertake the following action: · Hold a public hearing and authorize the MCDA to issue the revenue bond · Enter into a joint powers agreement with the MCDA, authorizing the bond issue The above actions need to be completed by the City because a portion ofthe bond proceeds would be used for the Hopkins facility. Supportin2: Documents '.,..-- { . JIm ~e gan Planhing & Eco omic Development Director , Financial Impact: $ 0 N/ A _ Budgeted: Y IN _ Source: Related Documents (CIP, ERP, etc.): Notes: ( . . . CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2003-038 RESOLUTION GIVING HOST APPROVAL TO THE ISSUANCE OF A REVENUE BOND TO FINANCE A PROJECT OWNED BY AUGUSTANA CHAPEL VIEW HOMES, INn AND LOCATED IN PART IN THE CITY OF HOPKINS, UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1651, AND APPROVAL OF A JOINT POWERS AGREEMENT BE IT RESOLVED, by the City Council (the "Council") of the City of Hopkins, Minnesota (the "City") as follows: 1. Description of the Proiect. a. Augustana Chapel View Homes, Inc., a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Corporation"), has proposed the issuance of a revenue bond under Minnesota Statutes Sections 469.152 to 469:1651, as amended (the "Act"), in an amount of approximately $1,600,000 (the "Bond"), to finance energy improvements to its facility located at 615 Minnetonka Mills Road in the City, and to finance energy and telephone system Improvements to its facility located at 1007 East Fourteenth Street in the City of Minneapolis (the "Project"). b. The Project is owned and operated by the Corporation. c. The Corporation has proposed that the Minneapolis Community Development Agency (the "Issuer") issue the Bond. 2. Recitals Relating to Joint Exercise of Powers. a. Under the Act, the City and the Issuer are each authorized and empowered to issue revenue obligations to finance the Project. b. The Corporation has requested that the City and the Issuer cooperate (as permitted by Minnesota Statutes, Section 471.59) through a joint powers agreement in authorizing the financing of the Project through the issuance of the Bond by the Issuer pursuant to the Act. c. A draft copy of the Joint Powers Agreement atnong the City and the Issuer (the "Joint Powers Agreement") has been submitted to the Council and is on file with the staff of the City. 3. Costs of the City. The Corporation has agreed to pay any and all costs incurred by the City in connection with the issuance of the Bond, whether or not such issuance is carried to completion. Bond counsel has sent a letter to the City to such effect. 4. Public Hearing. a. As required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), a Notice of Public Hearing was published on April 17, 2003 in the City's official newspaper, calling a public hearing on the proposed issuance of the Bond and the proposal to finance the Project. . . . b. The Council has on the date hereof, held a public hearing on the issuance of the Bond and the proposal to finance the Project, at which all those appearing who desired to speak were heard and written comments were accepted. 5. Approval. a. The proposal to finance the Project as described above, and the issuance of the Bond, are hereby given approval by the City subject to the approval of the Project by the Department of Trade and Economic Development of the State ("DTED"). b. In !lccordance with Subdivision 3 of Section 469.154 of the Act, the officers of the City or their designees, are authorized and directed to cooperate with the Issuer in submitting the proposal for the financing of the Project to DTED requesting approval, and other officers, employees and agents of the City are hereby authorized to provide DTED with such information as it may require. 6. Limited Obligations. The Bond, when and if issued for the Project, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Issuer. The Bond, when and if issued, shall recite in substance that the Bond and the interest thereon, are payable solely from revenues received from the Project and property pledged for payment thereof, and shall not constitute a debt of the Issuer, the City, the State of Minnesota or any political subdivision thereof. 7. Approval and Execution of Joint Powers Agreement. a. The Joint Powers Agreement is hereby made a part of this Resolution as though fully set forth herein and is hereby approved in substantially the form presented to the Council. The Mayor and the City Manager (collectively, the "Officials") are authorized and directed to execute, acknowledge, and deliver the Joint Powers Agreement on behalf of the City with such changes, insertions, and omissions therein as the City Attorney may hereafter deem appropriate, such execution to be conclusive evidence of approval of such document in accordance with the terms hereof. b. The Officials are authorized and directed to execute and deliver such other documents or certificates needed from the City for the sale of the Bond. c. The approvals in this Section are specifically subject to approval of the Joint Powers Agreement by the Issuer and approval of the Project by DTED. Adopted by the City Council of the City of Hopkins, Minnesota, this 6th day of May, 2003. Eugene J. Maxwell, Mayor ATTEST: Terry Obermaier, City Clerk GP: 1449820 v2 >~ . . . JOINT POWERS AGREEMENT This Joint Powers Agreement ("Agreement"), dated as of May _,2003, is by and between the Minneapolis Community Development Agency ("the Issuer"), and the City of Hopkins, Minnesota (the "City"). RECITALS WHEREAS, pursuant to the Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act"), the Issuer and the City are authorized to issue revenue bonds to finance property for a revenue producing enterprise; and WHEREAS, Minnesota Statutes, Section 471.59 as amended (the "Joint Powers Act"), provides that two or more governmental units, by agreement entered into through action of their governing bodies, may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, and that the 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; and WHEREAS, the parties hereto are "governmental units" as such term is defined in the Joint Powers Act; and WHEREAS, it has been proposed that the Issuer issue its revenue bond pursuant to the Act, on behalf of itself and the City, pursuant to the Joint Powers Act, in order to provide for the improvement of facilities located in the City and in the City of Minneapolis (the "Project") and owned by Augustana Chapel View Homes, Inc., a Minnesota nonprofit corporation (the "Company"); and WHEREAS, the City Council of the City and the Board of Commissioners of the Issuer have authorized the execution and delivery of this Agreement; NOW, THEREFORE, the Issuer and the City hereby agree as follows: 1. The purpose of this Agreement is to provide for the financing of the Project by the Issuer. In order to finance the Project, the Issuer shall issue, on behalf of itself and the City, its Revenue Bond (Augustana Chapel View Homes, Inc. Project) Series 2003 (the "Bond"), in a principal amount of approximately $1,600,000, pursuant to the Act. Approximately $460,000 of the proceeds of the Bond will be expended with respect to the Company's facility in the City. The Project shall be owned by the Company and the proceeds of the Bond shall be loaned to the Company \ . pursuant to the terms of a Loan Agreement, dated as of the date hereof (the "Loan Agreement"), by and between the Issuer and the Company. Pursuant to the Loan Agreement, the Company shall be responsible for paying the debt service with respect to the Bond. 2. The City shall have no liability with respect to the Bond, and the liability of the Issuer with respect to the Bond shall be limited as provided in .the Act and in the Bond. The Bond shall be the special, limited obligation of the Issuer payable solely from the revenues received from the Project and the property pledged for payment thereof, and shall not constitute a debt of the City. The City and the Issuer shall not incur any obligations or liabilities to each other as a result of the use of the Project by the Company. 3. All costs incurred by the City and the Issuer in the authorization, execution, delivery and performance of this Agreement shall be paid by the Company. 4. Any property acquired as a result of this Agreement shall be and remain the property of the Company, to be disposed of pursuant to the terms of the Loan Agreement. Any surplus moneys remaining after the purpose of this Agreement has been completed shall belong to the Company. 5. This Agreement shall terminate upon the retirement or defeasance of the Bond and the payment of all amounts required to be paid under the Loan Agreement. This Agreement may not be terminated by either party so long as the Bond is outstanding. IN WITNESS WHEREOF, duly authorized officers of the Issuer and the CITY have executed this Agreement as of the day first above written. . MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY By Deputy Executive Director By Finance Officer CITY OF HOPKINS, MINNESOTA By Mayor By City Manager GP:1449827 vI 2 . FAEGRE &: BENSON LLP 2200 WELLS FARGO CENTER., 90 SmITH SEVENTH STREET M1NN1=.APOLlS, MINNESOTA 55402-3901 TELEPHONE 612.766.7000 FACSIMILI; 612.766.1600 STEFAN IE N. GALEY sgaley@faegre.com 612 766.7661 April 22, 2003 City of Hopkins Attn: Jim Kerrigan I 0 10 South First Street Hopkins, l\tfN 55343 Re: Augustana Chapel View Homes, Inc. The City of Hopkins (the "City") has been requested to (i) give its approval to the issuance by the Minneapolis Community Development Agency (the "MCDA") of an approximately $1,600,000 revenue bond on behalf of Augustana Chapel View Homes, Inc. (the "Borrower") for the purpose of financing energy improvements to the Borrower's facility located at 615 Minnetonka Mills Road in the City, and to finance energy and telephone system improvements to the Borrower's facility located in the City of Minneapolis, (ii) enter into a joint powers agreement with the MCDA in connection with the issuance of the revenue bond, and (iii) hold a public hearing as required by state and federallaw At your request, I have reviewed the form of resolution and joint powers agreement, and such documents clearly establish that the revenue bond will be payable solely from amounts paid by the Borrower and that no City funds, revenues or taxes will be pledged or made available to pay the bond. The City will incur no liability to the Borrower, the MCDA, the revenue bond purchaser, or any other party in connection with the requested actionst nor will any amount of the bond issue be chargeable against the City's $10,000,000 limit for bank deductability of tax-exempt obligations. If you or any member of the Council have any questions regarding this matter, please feel free to call me. Stefanie N. Galey SNG:galsn cc: Jerre Miller Minnesota Colorado Iowa London Frank(t4rt Shanghai