CR 08-077 Community Involvement Programs - Host Approval for Bond RefinancingAugust 13, 2008
Supporting Inform - tion
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Directo• of Planning & bevelopment
0 TY OF
H O P K IN S
Council Report 2008 -077
COMMUNITY INVOLVEMENT PROGRAMS — HOST APPROVAL FOR BOND
REFINANCING
Proposed Action
Staff recommends adoption of the following motion: Following the public hearing, move
to approve Resolution No. 2008 -048 giving host approval to the issuance of a housing
and care facility revenue note.
Overview
Community Involvement Programs (CIP) intends to refinance several of their
properties, located in nine different cities including one in Hopkins. The source of
financing will be through a $2.1 million tax - exempt note refinancing proposed to be
issued by the City of Hinckley.
In order for the City of Hinckley to have authority to issue a note that affects property in
Hopkins, the City of Hopkins must hold a public hearing on the proposed refinancing.
CIP's intention is to reduce its annual interest expense. The bond counsel for the
transaction is Jenny Boulton, Briggs & Morgan. The City of Hopkins is not tied to the
bond issue and has no liability in the transaction. As a result, we have not had bond
counsel involved. CIP will reimburse the City for out of pocket expenses.
The property in Hopkins, 300 18 Avenue North, has been owned by CIP since 1997.
They will continue to own and operate the property as a care facility regardless of the
Council's action. The property has not experienced any significant police calls during
the past year and appears to be well- managed by CIP. Representatives from CIP will
be at the meeting to address any questions you may have.
Primary Issues to Consider
The purpose of the public hearing is to give the community an opportunity to comment
on the proposed refinancing. CIP does need the City's approval but the City is not
responsible for any part of the financial transaction. If the Council would like to
continue this item, it is recommended that the public hearing be held and the resolution
carried over to a future meeting.
Financial Impact: $0 Budgeted: Y/N Source:
Related Documents (CIP, ERP, etc.):
Notes:
RESOLUTION GIVING HOST APPROVAL TO THE
ISSUANCE OF A HOUSING AND CARE FACILITY REVENUE NOTE FOR A
PROJECT BY COMMUNITY INVOLVEMENT PROGRAMS
LOCATED IN HOPKINS, MINNESOTA UNDER
MINNESOTA STATUTES, CHAPTER 462C AND MINNESOTA
STATUTES SECTIONS 469.152 THROUGH 469.1651
BE IT RESOLVED, by the City Council (the "Council ") of the City of Hopkins, Hennepin
County, Minnesota (the "City ") as follows:
Section 1. General Recitals.
Section 2. Description of the Project.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2008 -048
(a) The purpose of Minnesota Statutes, Chapter 462C (the "Housing Program Act "), is,
among other things, to confer upon cities the power to issue revenue bonds to finance multifamily
housing development; and
(b) The purpose of Minnesota Statutes, Sections 469.152 through 469.1651 as amended,
(the "Industrial Development Act "), is, among other things, to promote the welfare of the State of
Minnesota (the "State ") by the active attraction and encouragement and development of economically
sound industry and commerce to prevent so far as possible the emergence of blighted and marginal
lands and areas of chronic unemployment and by providing necessary care facilities so that adequate
care services are available to residents of the State at reasonable cost.
(a) Community Involvement Programs (the "Borrower "), a Minnesota nonprofit
corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the "Code ") has proposed the issuance of a revenue note under the Housing Program Act
and the Industrial Development Act, in one or more series, in an amount not to exceed $2,500,000 (the
"Note ") by the City of Hinckley, Minnesota (the "Issuer ") to finance the costs of a project (the
"Project ") consisting of the (i) refinancing the acquisition of an approximately 8 unit housing facility
for the developmentally disabled known as the North Court Apartments which is located at 403 North
Court Avenue, Sandstone, MN, (ii) refinancing the acquisition of group residential facilities for the
developmentally disabled which are located at 300 18th Avenue North in the City (the "Hopkins
Facility "); 4303 North Colorado Street, Crystal, MN; 6427 Westchester Circle, Golden Valley, MN;
501 First Street SW, Hinckley, MN; 4731 Clear Spring Road and 4725 Clear Spring Road,
Minnetonka, MN; 7600 48th Circle North, New Hope, MN; 7044 Columbus Avenue, Richfield, MN;
9011 34th Street West, St. Louis Park, MN; and 618 South Pine Street and 112 Division Street,
Sandstone, MN, (iii) financing renovations to the group residential facilities located at 4725 Clear
Spring Road in Minnetonka and at 112 Division Street in Sandstone, and (iv) financing renovations to
the corporate headquarters of the Borrower located at 1600 Broadway Street NE, Minneapolis, MN.
(b) The facility located at 403 North Court Avenue in Sandstone will be owned by North
Court Apartments, the facility located at 4731 Clear Spring Road in Minnetonka will be owned by
Clear Spring Road Residences, Inc., and all of the remaining facilities comprising the Project will be
owned by the Borrower and the entire Project will be operated by the Borrower.
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(c) As more fully described above, portions of the Project are located in the City, Hinckley
and the Cities of Crystal, Golden Valley, Minneapolis, Minnetonka, New Hope, Richfield, St. Louis
Park and Sandstone (collectively, the "Host Cities ").
(d) The total amount of the obligations to be issued is presently estimated to not exceed
$2,500,000, approximately $102,800 of which will be used for the refinancing of the Hopkins Facility.
(e) The City has been advised that the Note or other obligations, as and when issued, will
not constitute a charge, lien or encumbrance upon any property of the City, the Host Cities or the
Issuer, except the Project and the revenues to be derived from the Project. Such Note or obligations
will not be a charge against the general credit or taxing powers of the City, the Host Cities or the
Issuer, but is payable from sums to be paid by the Borrower pursuant to a revenue agreement.
Section 3. Recital of Representations Made by the Borrower.
(a) The Borrower has agreed to pay any and all costs incurred by the City in connection
with the issuance of the Note, whether or not such issuance is carried to completion.
(b) The Borrower has represented to the City that no public official of the City has either a
direct or indirect financial interest in the Project nor will any public official either directly or indirectly
benefit financially from the Project.
Section 4. Public Hearing.
(a) As required by Section 147(f) of the Code a Notice of Public Hearing was published in
the Hopkins Sun - Sailor, the City's official newspaper and newspaper of general circulation, for a
public hearing on the proposed issuance of the Note and the proposal to undertake and finance the
Project.
(b) As required by Section 147(0 of the Code the City Council has on this same date held a
public hearing on the issuance of the Note and the proposal to undertake and finance the portion of the
Project located within the jurisdictional limits of the City, at which all those appearing who desired to
speak were heard and written comments were accepted.
Section 5. Host Approval. The City hereby gives the host approval required under the Internal
Revenue Code to the issuance of the Note and, pursuant to Minnesota Statutes, Section 471.656, Subd.
2(2), the City Council hereby consents to the issuance of the Note.
Adopted this 19th day of August, 2008.
Attest:
Terry Obermaier, City Clerk.
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By
Eugene J. Maxwell, Mayor