CR 96-64 Renaissance Prodject Housing BondMay 15, 1996
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Council Report 96 -64
O P N
HOPKINS RENAISSANCE PROJECT HOUSING REVENUE BOND
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Proposed Action
Staff recommends adoption of the following motion: Approval of Resolution 96 -31. authorizing the
issuance of multi - family revenue refunding bonds for the Hopkins Renaissance Project. su 'ject to the
following conditions:
o Approval and execution of administrative payment
o Approval and execution of any agreements and documents determined necessary and appropriate
by the City Attorney concerning maintenance and use of the City Community Center space
With approval of this action, the applicant will proceed forward to complete the sale of the bond.
The applicant will not be required to return to the City Council at a future date for action on this
item. It is understood with this action that staff is authorized to execute any documents determined
necessary regarding the Community Center.
Overview
Hopkins Renaissance Apartments, 14th and Mainstreet, is a 101 -unit, multi - family residential housing
project, rented to persons and families of low income. Community Housing Development
Corporation (CIIDC), a Minnesota nonprofit corporation, is requesting approval from the City for
the issuance of tax exempt housing revenue bonds to finance the purchase of this project from the
existing owner. The total amount of the issue is proposed to not exceed $5,600,000.
The applicant, as part of the purchase, is proposing to establish a lease cooperative with the tenants
of the project. Attached is a letter detailing a description of the cooperative and its benefits.
A public hearing has been previously held as part of the overall review process on this matter, and
the Council has given preliminary approval of the sale.
Primary Issues to Consider
o What is the purpose of this financing?
o Does the project meet the requirements of the City policy regarding taxable/tax exempt
financing?
o How does the lease cooperative operate?
o What are the implications to the City regarding payment of bonds?
o Has legal counsel reviewed this matter?
o What impact will this action have on the Community Center space?
o Other issues.
o What is the basis for the staff recommendation?
Supporting Documents
o Letters from Community Housing Development Corporation, dated February 6, 1996, April 2,
1996, and April 3, 1996
• o Resolution 96 -31
o Letters , . - Ehlers & Associates dated March 13, 1996, and May 15, 1996
D. Kerrigan, Diree(or Planning & Economic Development
• Primary Issues to Consider
Council Report 96 -64 - Page 2
o What is the purpose of this financing?
Local units of government are authorized to issue tax exempt and taxable revenue bonds to
facilitate projects that are felt will be beneficial to the community. For bonds that are tax exempt,
the issue is able to secure a lower interest rate, therefore, making the project more "financially
feasible."
o Does the project meet the requirements of the City policy regarding taxable/tax exempt
financing?
The City adopted a policy regarding revenue bond financing in 1991. Approval criteria within this
policy, for the most part, relate to new construction projects.
At the time that the subject project was renovated into housing, there was financial assistance
provided by the City, which would indicate it was felt that the project met certain housing goals
and objectives important to the Council. Also, as noted above, presently this project does provide
for the housing needs of low income families, and it is the intent of CHDC to own and operate the
project for low and moderate income families for the life of the development.
• How does the lease cooperative operate?
The members of the cooperative association would be the tenants of the project. CHDC will
enter into a master lease with the cooperative association to lease the entire project. The
cooperative association will then lease the individual units to the residents. As a result of this
structure, tenants will participate in establishing budgets, supervising maintenance and operation,
selecting the management agent, setting house rules, and participating in tenant selection and
eviction.
o What are the implications to the City regarding payment of bonds?
These bonds and all such bonds are hereby pledge of repayment strictly from the proposed
project. The City is not liable to make any payments should there be a default. The City is acting
only as a facilitator in this process.
Publicorp/Ehlers has reviewed the financial feasibility of the project, based on the proposed sale.
They have concluded that there will be sufficient cash flow to make required debt service
payments.
o Has legal counsel reviewed this matter?
Stefanie Galey of Holmes & Galey, Ltd., is acting as bond counsel on this transaction and also
representing the City interests on this matter. Jerre Miller has also reviewed the bond document.
Council Report 96 -64 - Page 3
ilk What impact will this action have on the Community Center space?
The transfer of ownership should have no impact as relates to this matter; however, the City
Attorney is presently working with the applicant to determine if any other agreements or
documents need to be in place to ensure this is the situation. Mr. Miler can update the Council
on May 21 as relates to this matter. If there are any outstanding issues that still need to be
addressed, the approval is subject to these being resolved.
o Other issues.
There are three items the Council needs to consider regarding this matter.
• The City provided three loans of $50,000 each in 1979 and 1980 to help facilitate the
conversion of the subject property to housing units. This $150,000 (along with simple interest
of 5 percent) is due in 2010 or upon sale of the project by the present owner, National Housing
Partnership. As the subject transaction would facilitate a sale, this loan would now be due and
payable.
With approval of the subject action, following closing on the new financing, the applicant
would repay the entire $150,000 outstanding loan principal plus accrued interest (interest is
approximately $150,000).
• The total taxes payable in 1996 for the subject project for both the apartments and townhouses
is $99,139. If the property is converted to a cooperative, the current tax rates of 3.4 percent
on the land and 2.3 on the structures would be reduced to a total rate of 1 percent for both the
land and structures (assuming all units are homesteaded). The total tax for a cooperative
would drop to $41,110. This would amount to a tax loss per year for the City of Hopkins of
$11,629, and a loss for the Hopkins School District of $28,360.
The applicant is proposing to address the matter by paying the City an annual payment equal to
the City's share of the difference between a Title II real estate classification and a homestead
classification. Approval of an agreement for such payment is being recommended by staff as a
condition for approval of the subject action.
The loss to the School District under the proposed structure of property tax dollars would be
made up to the District by the State, except for those tax dollars generated through an excess
levy referendum.
• The City presently owns and operates the activity center at the northwest comer of the subject
property. This operation will not be affected by the change in ownership. The City Attorney's
office has determined that all easements regarding parking and access are recorded against the
property and, therefore, will remain in force with the transfer.
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Council Report 96-64 - Page 4
0 What is the basis for the staff recommendation?
• Staff feels that Community Housing Development Corporation is a good organization, and
they will bring professional, local ownership to the subject property. Staff has researched the
background of CHDC and feels they are a respectable firm in the area of providing subsidized
housing.
• There is the concern that if this project were sold on the open market, the Section 8 contract
could be terminated. This would eliminate needed low income housing within the community.
• With the present proposal, staff also feels that CHDC is adequately addressing the property tax
and repayment of the outstanding City loan.
• The lease cooperative structure will allow tenants to be more involved in the daily operation of
this project.
• The financing structure has been reviewed by Publicorp/Ehlers, as representatives of the City,
and they have made a determination that there should be sufficient project revenue to pay
bondholders.
Alternatives
The City Council has the following alternatives regarding this item:
1. Approve the actions recommended by staff. This will allow the applicant to proceed forward
and prepare the necessary documents and complete the sale of the bonds.
2. Deny approval of the sale of the bonds.
3. Continue for additional information. If the Council wishes to undertake this alternative, there
needs to be discussion with the applicant concerning the impact on the sale.
Community
Housing
Development
Corporation
408 Butler North 510 First Avenue North Minneapolis, Minnesota 55403
COMMUNITY HOUSING DEVELOPMENT CORPORATION
OVERVIEW
(612) 332 -6264
Community Housing Development Corporation (CHDC) is a non - profit corporation and is
qualified as a tax- exempt organization pursuant to Section 501(c)(3) of the Internal Revenue
Code.
Community Housing Develonment Corporation is an official Community Housing Development
Organization (CHODO) as authorized by the Cranston - Gonzales National Affordable Housing
Act of 1990. It complies with the federal requirements and is eligible for Home Fund CHODO
set asides. This means that CHDC involves low- and moderate - income tenants in its
management and corporate decisions in a substantial manner.
CHDC plans, develops, owns, and operates housing for low- and moderate - income persons.
Since the 1960's it has been the public policy of the federal, state, and local levels of
government to encourage the development of housing by non - profit housing development
corporations. The primary way they have encouraged this participation is by providing financial
assistance to be used to reduce the debt and operating costs of housing developments. These
lower annual operating costs, combined with government regulation and restriction of cash flow,
allow the savings to be passed on to low and moderate income tenants in the form of affordable
rents.
At the federal level, these programs are administered by the Department of Housing and Urban
Development (HUD). In Minnesota, the programs are overseen by the Minnesota Housing
Finance Agency (MHFA). Often local units of government, such as a housing and
redevelopment authority, combine their resources with the federal and state programs to provide
assistance to a project.
The plan of the Board of Directors of CHDC is to initiate and carry out low- and moderate -
income housing projects using these resources.
Set forth below is information on CHDC:
Equal Housing Opportunity
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A. PROGRAMS
The HOME Program
The Cranston - Gonzales National Housing Act was passed by the U.S. Congress in the
fall of 1990. Title II of this act that HUD is beginning to implement is the HOME
Program. The federal government, under Title II, will provide housing block grants to
state and local governments to provide housing with affordable rents primarily to
households whose incomes are 60 percent or Less of the median income for the area in
which they reside. Under this federal law, a substantial portion of these funds are set
aside exclusively for non - profit corporations.
CHDC has been structured to comply with the eligibility requirements for a non -profit
corporation in accordance with regulations published by HUD.
Low - Income Housing Tax Credits
The Tax Reform Act of 1986 created a new program to provide financing for low- and
moderate - income housing developments. This program is called Low- Income Housing
Tax Credits. Under this program, an individual or corporation who invests in a low- and
moderate - income housing development, receives a direct income tax credit in accordance
with Internal Revenue Service regulations.
CHDC will join with community based non - profit development corporations in limited
partnerships to use these credits in the development of affordable housing.
Neighborhood Revitalization Program
The City of Minneapolis adopted the Neighborhood Revitalization Program (NRP) in
1989 and is in the process of implementing the program at this time. The NRP has
extremely ambitious goals. The City of Minneapolis has concluded that it is going to
completely rehabilitate the entire city over a twenty year period beginning this year. It
has pledged close to a billion dollars in public and private financing for the effort.
The way the program will work, is that neighborhoods within the city will be asked to
prepare a plan to completely change and upgrade their area. All the various City
agencies and departments will then be required to reprogram their financing and
operations to comply with this plan. This will include police, fire, public schools, parks,
housing, health services, employment, etc.
City of Minneapolis officials believe there is a strong need for non - profit housing
corporations to assist neighborhoods in these local housing programs They have asked
CHDC to begin work with these neighborhoods to implement these efforts.
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Acquisition and Preservation of Low- Income Housing
There are a large number of existing low- income housing developments in Minnesota that
were constructed in the 1970's and early 1980's with subsidy from HUD under the
Section 8 Rental Assistance Program and with below market financing provided by
MHFA.
The continued existence of these developments as low - income projects has become
threatened, because the existing owners, in many cases, want to sell the properties and /or
discontinue the low- income subsidy. In most cases, this need for change is a
consequence of the Federal Tax Reform Act of 1986 that changed the economic
incentives for continued ownership.
The U.S. Congress recognized the seriousness of this problem by including Title VI in
the Cranston - Gonzales National Housing Act of 1990, which provides for a system to
attempt to protect these low- and moderate - income projects and provide for their
continued viability. Most of the solutions revolve around the purchase, refinancing, and
rehabilitation of the property by a non - profit housing corporation.
There are also Low- Income Tax Credit projects that require stabilization or restructuring.
Several projects in the Minneapolis -St. Paul area have developed operating difficulties;
either because they have experienced operating losses, or the original sponsor /owner
wanted to transfer ownership.
CHDC has been asked to pursue the long term ownership and management of a number
of these projects.
The Minneapolis Community Development Agency (MCDA), St. Paul Planning and
Economic Development, MHFA, HUD, and the St. Paul /Minneapolis Family Housing
Fund have created an organization called the Inter Agency Stabilization Committee to
coordinate the stabilization work on these projects. CHDC will play a role in this effort
through acquisition and management.
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B. HOUSING DEVELOPMENT WORKLOAD
Prairie Meadows
Eden Prairie, Minnesota
- Section 8 Family Housing
Unity Place
Brooklyn Center, Minnesota
- Section 8 Family Housing
Olson Townhomes
Minneapolis, Minnesota
- Section 8 Family Housing
Glenwood Project
Minneapolis, Minnesota
Low - Income Tax Credit Housing for
Chronic Alcoholics
LaSalle Commons
Minneapolis, Minnesota
- Low- Income Tax Credit
Single Room Occupancy (SRO)
E Flats
Minneapolis, Minnesota
- Low- Income Tax Credit
Family Housing
Zinsmaster Apartments
Minneapolis, Minnesota
Low- Income Tax Credit
Family Housing
Willows Apartments
Little Falls, Minnesota
- Farmers Home Administration
General Occupancy
Alden Apartments
Minneapolis, Minnesota
Low- Income General
Occupancy
168 Dwelling Units
112 Dwelling Units
92 Dwelling Units
80 Dwelling Units
64 Dwelling Units
20 Dwelling Units
36 Dwelling Units
28 Dwelling Units
68 Dwelling Units
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Hamline Park Townhomes
St. Paul, Minnesota
Low Income Tax Credit
Family Housing 24 Dwelling Units
Greenbrier Glen
St. Paul, Minnesota
Low Income Tax Credit
Family Housing 16 Dwelling Units
Garden Court Apartments
St. Paul, Minnesota
Low Income Tax Credit
Family Housing 18 Dwelling Units
Total 726 Dwelling Units
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CHDC BOARD OF DIRECTORS
CHDC is governed by a board of directors. Each of the six directors serves a three year
term and is appointed by the existing board directors.
Richard Jefferson, President
1314 Washburn Avenue North
Minneapolis, Minnesota 55411
Mr. Jefferson is a member of the Minnesota House of Representatives representing
District 58B and has been a member since 1986. Mr. Jefferson serves on the Legislative
Commission of Children, Youth, and Their Families. This Commission has emphasized
the provision of affordable housing in its review. Mr. Jefferson served as Chair of the
Health and Human Services Subcommittee on Social and Family Services, and as Vice
Chair of the Government Operations Committee.
Mr. Jefferson is a graduate of Xavier University in New Orleans. As a chemist, he
worked for over 30 years with the U.S. Bureau of Mines. Upon retirement in 1986, he
was a Supervisor of Research Services, Twin Cities Research Center, U.S. Bureau of
Mines.
Mr. Jefferson is a Board Member of Catholic Charities and the Northside Child
Development Center. He has served on the Board of Directors of the Phyllis Wheatly
Community Center, and as Chair of Ascension Catholic School Board.
Mr. Jefferson was a Commissioner of the Minneapolis Housing and Redevelopment
Authority and its successor agency, the Minneapolis Community Development Agency
from 1974 to 1986. He served as Chair from 1975 to 1981.
Mr. Jefferson also served on the Board of Directors and Executive Committee of Greater
Minneapolis Metropolitan Housing Corporation.
Kent Robbins, Vice President
222 East Sixth Avenue
Shakopee, Minnesota 55379
Mr. Robbins leads the administrative staff of the Minneapolis City Council. He authored
the 1987 Housing and Tax Reform Advisory Committee's report to the Minneapolis City
Council regarding the impact of the 1986 Tax Reform Act on Minneapolis housing. In
1989, Mr. Robbins chaired a special task force which made recommendations concerning
national housing and tax policy. Mr. Robbins has served on numerous committees and
task forces charged with development and implementation of the Minneapolis
Neighborhood Revitalization Program.
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Mr. Robbins has also been Director of Housing Development for Whittier Alliance, a
non -profit neighborhood associatidti and development corporation. He has served for 15
years as a member of the Hennepin County Capital Budgeting Task Force. He has
provided consultant and financial services to the Community Development Corporation
for the Archdiocese of St. Paul and Minneapolis, and for Seward West Redesign, Inc.,
a neighborhood non - profit development corporation. Mr. Robbins has also served as
Vice President of the Episcopal Corporation for the Elderly and Chairperson of Common
Space Mutual Housing Association.
Currently, Mr. Robbins serves on the Becketwood Housing Cooperative Board of
Directors, is a member of the Seward Project Review Committee, and serves on the
Seward Towers Corporation Board. He represents the Minneapolis City Council on the
Metropolitan Council's Regional Housing Task Force, Minneapolis Common Project
Policy Committee, the Downtown Marketing Committee, and the Neighborhood
Revitalization Implementation Committee.
Carolyn Olson, Vice President /Secretary- Treasurer
604 Third Avenue N.E.
Minneapolis, Minnesota 55413
Carolyn Olson is President of the Greater Minneapolis Metropolitan Housing
Corporation. Ms. Olson's professional experience began with the Minneapolis Chamber
of Commerce where she held various duties including arranging trade missions to the
Soviet Union, Norway, and the People's Republic of China. She was also a member of
the Minneapolis Business Community team that was instrumental in the construction of
the Hubert H. Humphrey Metrodome.
Ms. Olson was a staff person and corporate officer of Industry Square Development
Corporation, a corporation created by the Minneapolis business community to redevelop
a Large area adjacent to downtown Minneapolis.
Since 1981 Ms. Olson has been employed at Greater Minneapolis Metropolitan Housing
Corporation and was named its President effective January 1, 1992. GMMHC is a non-
profit corporation created by a number of large Minneapolis corporations in 1970 to
assist community -based efforts to house low- and moderate - income persons. Since that
time, GMMHC has assisted 109 non - profit organizations that have developed over
10,100 low- and moderate- income dwelling units with a value of approximately $433
million dollars.
At various times Ms. Olson has served on the boards of directors of 33 non -profit
corporations in the Minneapolis area.
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Richard Brustad, Vice President
1123 St. Paul Avenue
St. Paul, Minnesota 55116
Mr. Brustad is the President of Brighton Development Corporation. He is a graduate of
the University of Minnesota in Economics and Local Government. Mr. Brustad was
formerly employed by the Chicago Regional Office of the Department of Housing and
Urban Development. He has served as the Assistant Executive Director of the Greater
Minneapolis Housing Corporation, which is a non - profit corporation established by the
Minneapolis business community for low- and moderate - income housing.
Mr. Brustad was the Executive Director of the Minneapolis Housing and Redevelopment
Authority. In that capacity he was responsible for the management of approximately
8,000 public housing units, the City's neighborhood revitalization and urban renewal
programs, and the City's economic development program.
Mr. Brustad is currently Chair of the Minneapolis Public Housing Authority.
Dianna Nelson
11345 Westwind Drive
Eden Prairie, Minnesota 55344
Dianna Nelson is Board Member /Treasurer of the Prairie Meadows Cooperative
Association.
Ms. Nelson was a charter member of the Prairie Meadows Interim Board and has been
elected twice to the Prairie Meadows Cooperative Association Board.
Ms. Nelson is Chair of the Neighborhood Outreach, Windslope. This is an association
of Prairie Meadows residents that has developed empowerment programs through
education and crime prevention.
Ms. Nelson is a parent of two young children and is a student.
Community
flp Housing
Development
Corporation
408 Butler North 510 First Avenue North
Community Housing Development Corporation has
projects:
PRAIRIE MEADOWS
11345 Westwind Drive
Eden Prairie, Minnesota 55344
Section 8 Project Based Family Housing
Acquired 1991
$6,320,000 Mortgage, Norwest Bank, Trustee
(612) 332 -6264
Minneapolis, Minnesota 55403
an ownership interest in the following
The project is a 168 unit multi - family housing project which is rented to low- income families.
The project is located on approximately 10.9 acres of land located in Eden Prairie, Minnesota.
Eden Prairie is a third -ring suburb of Minneapolis, Minnesota and has approximately 35,500
residents. Eden Prairie is located approximately 15 miles southwest of downtown Minneapolis.
The project is located in a 120 acre planned development that is commonly known as "The
Preserve ". The Preserve encompasses a wide range of middle and upper - middle income single
family homes, townhouses, and condominiums. The residential areas of The Preserve, including
the project, have access to community facilities such as tennis courts, swimming pools, golf
courses, horseback riding, lakes, and a wildlife preserve. The project is located approximately
one -half mile west of Hennepin County Road 18, a major arterial highway, which provides easy
access to the Minneapolis /St. Paul metropolitan area freeway system.
The project consists of 28 three -story residential townhouse buildings, which were constructed
in 1978. The buildings are of wood frame construction with stucco and prefinished hardboard
siding exteriors. Heat is provided to the buildings by a natural gas /hot water system. The owner
is responsible for ongoing maintenance, repair, and replacement of the project.
The buildings comprising the project vary in size and each contain six units. The total aggregate
square footage of the project buildings is approximately 131,410 square feet, with approximately
1,500 square feet of common area.
Equal Housing Opportunity
1
Unit Type Number of Units
One Bedroom 11
Two Bedroom 136
Three Bedroom 21
Each unit is provided with a separate detached garage. There are also 168 uncovered parking
spaces on the project site Eight units are designed for rental by handicapped persons, consisting
of 7 two bedroom units and 1 three bedroom unit. Amenities include a community room,
laundry facilities, on -site management office and playground facilities.
The project is operated as a leased cooperative under Minnesota law.
The MHFA administers the Section 8 Housing Assistance Payments Contract (HAP Contract)
in accordance with an Annual Contribution Contract (ACC) with HUD.
UNITY PLACE
5446 Ponds Drive
Brooklyn Center, Minnesota
Section 8 Project Based Family Housing
Acquired 1993
$5,330,000 Mortgage, Norwest Bank, Trustee
The project is located on approximately 17.44 acres of land located in Brooklyn Center,
Minnesota, at the southeast corner of 73rd Avenue North and Toledo Avenue North. Brooklyn
Boulevard, which is three blocks east of Toledo Avenue, is one of the primary north -south
thoroughfares through Brooklyn Center. Some of the best shopping, recreational, and
employment facilities in the northern Twin Cities are located along or near this major axis route.
The project consists of 112 townhomes. The low density, approximately 6.42 units per acre,
provides spacious open areas, ample parking, and room enough for four playgrounds. There
is also extensive landscaping with a pond. The 112 townhomes are contained in 11 separate
structures, and each individual townhome has its own private outside entrance and front yard
area. There are 61 two bedroom townhome units; five of which are designed to meet
handicapped accessibility requirements, with approximately 900 square feet of space per unit.
There are also 51 three bedroom townhome units with approximately 1,050 square feet of space
per unit. The living areas are on the ground floor, and the bedrooms are on the second floor.
All units have a full bath including tub and shower, except for the five handicapped units, which
have wheelchair showers. In addition to the full bath, the three bedroom units have a half bath
on the main floor.
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Each townhome unit within the project is equipped with a gas - fired, forced -air furnace and
central air conditioning. Other amenitites include a gas range (electric in handicapped units),
range hood, two door refrigerator, garbage disposal, drapery rods, and carpeting throughout,
except for vinyl flooring in the kitchen, bathroom, and entryway.
Unit Type Number of Units
Two Bedroom
Three Bedroom
61
51
The project has 32 enclosed parking stalls, in which two garages are maintained for maintenance
and storage. In addition, there are 190 open parking spaces providing ample parking for
residents and their guests. The garages, which are individually partitioned with separate doors,
also provide additional secure tenant storage space.
The project has nine partitioned structures for trash removal containers located throughout the
complex. Adjacent to the office, which is in the center of the development, is a complete
laundry facility.
The project is operated as a leased cooperative under Minnesota law.
The MHFA administers the Section 8 HAP Contracts in accordance with an ACC with HUD.
• OLSON TOWNHOMES
501 Girard Terrace
Minneapolis, Minnesota
Section 8 Project Based Family Housing
Acquired 1993
$3,780,000 Mortgage, Norwest Bank, Trustee
The project is a 92 unit multi - family housing project which is rented to low income families.
The project is located on approximately 3.5 acres of land in the Harrison Neighborhood of
Minneapolis, Minnesota.
The project consists of six residential, two -story with basement townhouse buildings and one
community building, which were constructed in December of 1979. The project buildings are
of wood frame and concrete block construction with partial brick exteriors. Heat is provided
to the buildings by a natural gas /forced air system in each unit. The owner is responsible for
ongoing maintenance, repair, and replacement of the project.
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Five of the buildings comprising the project each contain 16 units, while the remaining building
contains 12 units. The total aggregate gross square footage of the project buildings is
approximately 123,502 square feet, with approximately 2,000 square feet consisting of common
area.
Unit Type Number of Units
One Bedroom Townhouse 2
Two Bedroom Townhouse 77
Three Bedroom Townhouse 13
There are 112 uncovered parking spaces on the project site. Amenities include a community
room, laundry facilities, on -site management office, and playground facilities.
The project is operated as a leased cooperative under Minnesota law.
The MHFA administers the Section 8 HAP Contracts in accordance with an ACC with HUD.
LA SALLE COMMONS
1517 LaSalle Avenue
Minneapolis, Minnesota
Low- Income Housing Tax Credit Housing for Very Low - Income Single Residents
Developed in 1988
$2,472,900 Mortgage
This is a 64 unit rehabilitation project located in the Loring Neighborhood in the downtown
Minneapolis, Minnesota area. The project was developed to house very low- income individuals,
some that have been homeless,
CHDC became involved in this project in 1992 to replace a neighborhood based non - profit.
E FLATS
2612 -16 Third Avenue South
315 -319 West 25th Street
Minneapolis, Minnesota
Low- Income Housing Tax Credit Family Housing
Developed in 1993
$1,067,587 Mortgage
This is a 20 unit family housing project located in the Whittier Neighborhood of Minneapolis,
Minnesota. The project consists of two and three bedroom units in older rehabilitated buildings.
•
The project is operated as a leased cooperative under Minnesota law.
GLENWOOD PROJECT
173 Glenwood Avenue
Minneapolis, Minnesota
SRO Housing for Chronic Alcoholics
Developed in 1994 -1995
$3,913,874 Total Project Cost
Operated by Catholic Charities, Inc.
The project is the rehabilitation of a building located at 173 Glenwood Avenue in Minneapolis
to house 80 persons who are chronic alcoholics.
The project site is located on the southeast corner of Glenwood and Lyndale Avenues North.
It is a four story, 43,000 square foot building on 1.22 acres of land. The property is bounded
by Lyndale Avenue and Interstate 94 on the west, Glenwood Avenue on the north, Burlington
Northern Railway right -of -way on the south, and a Minneapolis Public Works parking lot on the
east. The site is approximately one block south of the Minneapolis Farmer's Market.
The project is an SRO facility with shared baths and a community kitchen to provide three meals
a day to the tenants
Catholic Charities, Inc. will be the property and program manager with a funding commitment
from Hennepin County for the operating subsidy.
A wet /dry house provides permanent housing for chronic alcoholics who are unable to maintain
continuous sobriety. Residents occupy single rooms and are provided meals. No drinking is
allowed on site. Sobriety is encouraged and referrals to treatment programs are made when
requested by residents.
Because the residents will have virtually no income, the Capital Costs are provided by a number
of agencies as follows:
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Minnesota Housing Finance Agency
Hennepin County
City of Minneapolis
Federal Home Loan Bank Board
The Family Housing Fund of St. Paul /Minneapolis
Norwest Bank
First Bank
Minneapolis Community Development Agency
Twin City Federal
ZINSMASTER APARTMENTS
2900 -2916 Park Avenue
Minneapolis, Minnesota
Low- Income Housing Tax Credit Housing for Low- and Moderate - Income Families
Constructed in 1987 -1988
Acquired by CHDC in 1994
$698,420 Mortgage, Minnesota Housing Finance Agency
The project is a 36 unit multi - family project which is rented to low income families.
Unit Type Number of Units
One Bedroom 5
Two Bedroom 18
Three Bedroom 13
The units in this project are located in the old Zinsmaster Bakery Building that was rehabilitated
for housing reuse in 1987.
This project deteriorated over the last several years due to management and operating problems.
In April of 1994 the MHFA began foreclosure proceedings against the property. A workout
arrangement with MHFA and Boston Capital, the limited partner, permitted CHDC to become
the new managing General Partner.
The Zinsmaster Apartments will be operated as a leased cooperative under Minnesota law with
an emphasis on the housing of larger low income families.
This development was well designed to house large families. There are two outdoor play areas
for children. There is also a large recreation/community room on the premises.
WILLOWS APARTMENTS
201 -301 11th Street N.E.
Little Falls, Minnesota
Low- Income Farmers Home Administration Housing for Low - Income Families and
Elderly
Constructed in 1972
Acquired by CHDC in 1995
$680,600 Low Interest Loan, Farmers Home Administration
This project is a 28 unit multi - family project which is rented to low- income households.
Unit Type
One Bedroom
Two Bedroom
Number of Units
26
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CHDC was invited to participate in this project by the Legal Aid Society of Minnesota on behalf
of the residents of The Willows. In 1992 the Legal Aid Society commenced a lawsuit in federal
district court in Duluth to prevent the previous property owner and the federal government
(Farmers Home Administration) from converting the development to market rate occupancy.
The Legal Aid Society lawsuit was successful and a condition of the federal court ruling was that
the development be sold to a Section 501(c)(3) non - profit corporation and remain as a low -
income housing resource.
When approached by the Legal Aid Society of Minnesota, the CHDC Board of Directors agreed
to purchase and operate the housing development.
To further complicate the long acquisition process, CHDC was forced to sue in Minnesota
district court in St. Cloud to enforce the terms of the purchase agreement with the previous
owner.
The project is located on the east side of Little Falls close to shopping, a clinic, and other
services. It is a series of one story buildings with adjacent off - street parking.
CHDC has established a close relationship with the residents of The Willows. As part of the
court settlement, the project received two FmHA grants of $10,000 and $140,000 to work with
residents on substantial rehabilitation of The Willows development.
JOHN ALDEN APARTMENTS
1205 Hawthorne Avenue
Minneapolis, Minnesota
Low- Income General Occupancy, Tax Increment Funding
Constructed in 1929. Rehabilitated in 1986.
CHDC became the Substitute Managing General Partner in 1995
$2,970,000 Mortgage, City of Minneapolis Common Bond Fund
The development is a three -story, 68 unit multi - family project for low - income general
occupancy. It also contains 8,900 square feet of commercial space.
Unit Type Number of Units
Efficiency 14
Studio 38
One Bedroom 16
The project is part of the larger Laurel Village development located on the southern boundary
of downtown Minneapolis.
The previous owner defaulted on the mortgage in 1994, and the MCDA recommended that
CHDC become the substitute General Partner under restructured financing.
Occupancy is limited to 50 percent of median income. To assure the rents at affordable levels,
the MCDA will provide Tax Increment Funds from the Laurel Village Tax Increment District
through the year 2016.
HAMLINE PARK APARTMENTS
1525 Charles Avenue
St. Paul, Minnesota
GREENBRIER GLEN
931 Birmingham Street
St. Paul, Minnesota
GARDEN COURT APARTMENTS
420 East Magnolia
St. Paul, Minnesota
Low Income Housing Tax Credit Housing for Low and Moderate Income Families
Constructed in 1989, 1990
8
Acquired by CHDC in 1995
A total of $1,117,529 in mortgages, Minnesota Housing Finance Agency
CHDC will operate these three developments as one property for purposes of management and
the leased cooperatives. The developments contain the following:
Unit Type Number of Units
Two Bedroom 25
Three Bedroom 31
Four Bedroom 2
The owner of these three properties defaulted on their mortgage with MHFA in early 1995,
citing its inability to oprate on a break -even basis.
First Bank Minneapolis, representing the limited partner; and the Minnesota Housing Finance
Agency then requested that CHDC become the substitute general partner under a work -out
arrangement to avoid a foreclosure.
The three developments will be operated by a federation cooperative under the Minnesota Leased
Cooperative law. Each development will select representatives to serve on the federation board.
The developments are well designed to serve low and moderate income families and this action
• by CHDC preserves an important family housing resource.
9
Community
Housing
Development
Corporation
408 Butler North 510 First Avenue North
April 2, 1996
Mr. James Kerrigan
Director of Planning and Development
City of Hopkins
1010 South First Street
Hopkins, Minnesota 55343
Re: Hopkins Renaissance
Dear Mr. Kerrigan:
Enclosed with this letter is a list of the properties owned by Community Housing
Development Corporation. Also enclosed is a recent copy of a CHDC brochure.
Sincerely,
COMMUNITY_ HOUSING
n DEEVELOPMENT CORPORATION
Richard Brustad
RB:Ib
Enclosures
Equal Housing Opportunity
(612) 332 -6264
Minneapolis, Minnesota 55403
co
cm
o
V
0
I
co
cm
o
V
0
Community •
Housing
Development
Corporation
408 Butler North 510 First Avenue North Minneapolis, Minnesota 55403
April 3, 1996
Ms. Susan Newville
Hopkins Activity Center
33 14th Avenue North
Hopkins, Minnesota 55343
Dear Ms. Newville:
I'm sending you the enclosed background information on Community Housing Development
Corporation (CHDC) in advance of our meeting on Thursday. CHDC will be the new owner
• of Hopkins Renaissance in place of NHP. However, there will be no change in the program
for the housing, and NHP Management will continue to operate the facility. Chris Janning
and her employees will remain as the on -site management team. I will be the owner's
representative that you can always call if something comes up. My work number is 332-
6264, and my home number is 698 -7961.
We want to emphasize that we see the value of your work at the Hopkins Activity Center.
We have reviewed the Agreement and the Indenture that govern the relationship between
Hopkins Renaissance and the Hopkins Activity Center. We would like to continue to operate
under these agreements in exactly the same way as NHP has in the past. So unless there is
something the City of Hopkins would like to change, we should continue on in exactly the
same way.
Sincerely,
COMMUNITY HOUSING DEVELOPMENT CORPORATION
-�- �- e`t..o
Richard Brustad
RB:lb
Enclosure
(612) 332 -6264
• Community
Housing
Development
Corporation
•
408 Butler North 510 First Avenue North Minneapolis, Minnesota 55403
April 2, 1996
Mr. James Kerrigan
Director of Planning and Development
City of Hopkins
1010 South First Street
Hopkins, Minnesota 55343
Re: Hopkins Renaissance Project
Dear Mr. Kerrigan:
Listed below are bank and business references for Community Housing Development
Corporation:
Equal Housing Oppmanily
Mr. Arlen Nissen
Vice President, Commercial Real Estate
Norwest Bank
425 East Hennepin
Minneapolis, Minnesota 55414
(612) 667 -1333
Mr. Demme Welle
Vice President
First Bank
2383 University Avenue
Saint Paul, Minnesota 55114
(612) 647 -3579
Ms. Kate Barr
Senior Vice President
Riverside Bank
800 LaSalle Avenue South
Minneapolis, Minnesota 55402
(612) 349 -5102
(612) 332.6264
Mr. James Kerrigan
April 2, 1996
Page Two
Mr. Robert Odman
Director, Multi - Family
Minnesota Housing Finance Agency
400 Sibley Street
Suite 300
Saint Paul, Minnesota 55101
(612) 296 -7608
Ms. A.L. Reichow
Branch Manager
Commonwealth Land Title Insurance Company
255 Park Square Court
400 Sibley Street
Saint Paul, Minnesota 55101
Sincerely,
• COMMUNITY HOUSING DEVELOPMENT CORPORATION
1 l
Richard Brustad
RB:Ib
D:\HPK100 \004\RES \SGAUTH.DOC
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 96 -31
AUTHORIZING THE FINANCING OF A HOUSING PROGRAM UNDER MINNESOTA
STATUTES, CHAPTER 462C, AUTHORIZING THE ISSUANCE OF MULTIFAMILY
HOUSING REVENUE BONDS (HOPKINS RENAISSANCE PROJECT), SERIES 1996, IN
THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $5,600,000 TO FINANCE
THE PROGRAM, APPROVING AND AUTHORIZING THE EXECUTION OF VARIOUS
DOCUMENTS IN CONNECTION THEREWITH.
WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes Chapter
462C (the "Act ") a city is authorized to carry out programs for the financing of
multifamily housing for persons of low and moderate income, and to authorize its
housing and redevelopment authority to act on its behalf; and
WHEREAS, by Resolution No. 96 -22, adopted on March 19, 1996, the City has adopted a
multifamily mortgage program (the "Program ") as described herein pursuant to the Act
and resolutions of the City to provide a means of financing the cost of rental housing
development that will provide decent, safe and sanitary housing for low and moderate
income residents of the City of Hopkins at rents they can afford, which constitutes a valid
public purposes for the issuance of revenue bonds under the Act; and
WHEREAS, the Program is to be financed from the proceeds of Multifamily Housing Revenue
Bonds (Hopkins Renaissance Project), Series 1996 in the aggregate principal amount not
to exceed $5,600,000 (the "Bonds "), to be issued by the City, and the revenues from the
Project (as defined below) shall be pledged for the security of and payment for the Bonds
(except as may be otherwise set forth in the Indenture hereinafter referred to); and
WHEREAS, the Bond proceeds will be used by City to provide for funding of a loan (the
"Loan") to Community Housing Development Corporation, a Minnesota nonprofit
corporation (the "Owner "), to finance the acquisition and rehabilitation of a 101 -unit
multifamily rental housing development (the "Project "); and
WHEREAS, the Bonds will be issued under a Loan Agreement and Indenture of Trust (the
"Indenture "), and will be secured by a pledge and assignment of the revenues of the
Project, including the housing assistance payments to be derived from the Housing
Assistance Payments Contract (the "HAP Contract ") between Minnesota Housing
Finance Agency ( "MHFA ") and the Owner, all in accordance with the terms of the
Indenture, and said Bonds and the interest on said Bonds shall be payable solely from the
revenue pledged therefor and the Bonds shall not constitute a debt of the City within the
meaning of any constitutional or statutory limitation nor give rise to a pecuniary liability
of the City or a charge against its general credit or assets and shall not constitute a charge,
lien, or encumbrance, legal or equitable, upon any property of the City other than the -
City's interest in said Project; and
1 AUTHORIZING RESIDUUM,
WHEREAS, forms of the following documents (including the exhibits referred to therein) have
been submitted to the City:
a. The Indenture to be made and entered into among the City, the Owner and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee "),
providing for the issuance of the Bonds, prescribing the form thereof, pledging the
trust estate described therein for the security of the Bonds, and setting forth
proposed recitals, covenants and agreements by the parties with respect thereto;
b. The Regulatory Agreement to be executed by the City and the Owner, setting forth
certain covenants of the Owner;
c. A Bond Purchase Agreement, to be dated as of the date of execution thereof (the
"Bond Purchase Agreement "), by and among the City, the Owner and Norwest
Investment Services, Inc. (the "Underwriter ") providing for the purchase of the
Bonds by the Underwriter;
d. A Combination Mortgage, Security Agreement and Fixture Financing Statement
from the Owner to the City and assigned to the Trustee;
e. An Assignment of HAP Contract, from the Owner to the Trustee and approved by
MHFA and the United States Department of Housing and Urban Development,
and
f. A Preliminary Official Statement (the "Preliminary Official Statement "); and
The agreements described and referred to in paragraphs a through e above, shall hereinafter
sometimes be referred to collectively as the "Agreements."
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
HOPKINS:
1. That it is hereby found, determined and declared that:
a. The preservation of the quality of life in the City is dependent upon the
maintenance, provision, and preservation of an adequate housing stock
which is affordable to persons and families of low or moderate income,
that accomplishing this is a public purpose, and that many would -be
providers of housing units in the City are either unable to afford mortgage
credit at present market rates of interest or are unable to obtain mortgage
credit because the mortgage credit market is severely restricted;
b. The development and implementation of the Program, and the issuance
and sale of the Bonds by the City, and the execution and delivery of the
Agreements and the performance of all covenants and agreements of the
City contained therein and of all other acts and things required under the
Constitution and Laws of the State of Minnesota to make the Agreement
D:UHPKI00 \004\RES \SGAUTH.DOC 2
AUTHORIZING RESOLUTION
and the Bonds valid and binding obligations of the City in accordance with
their terms, are authorized by the Act;
1
D:\HPK I00 \004\RES\SGAUTH.DOC
c. The implementation of the Program for the purposes and in the manner
contemplated by the Agreements conforms or will conform to all pertinent
statutes, regulations and ordinances of the State of Minnesota, and the
City;
d. It is desirable that the Bonds in the principal amount not to exceed
$5,600,000 be issued by the City, on the terms set forth in the Indenture
and the Bond Purchase Agreement;
e. The payments required or provided for by the Agreements are intended to
produce income and revenues sufficient to provide for the payment when
due of principal of, and interest on all Bonds issued under the Indenture,
and payments are required to be made for such expenses of, among other
things, administration of the Program, as will be necessary to protect the
interests of the City and the Trustee; and
f. Pursuant to the provisions of the Act, and as provided in the Agreements,
the Bonds shall be retired solely from the revenues of the Project, and a
separate sinking fund shall be established for the accounting of the
revenues and retirement of the Bonds.
2. That the Agreements in substantially the forms submitted to the City at this
meeting, are hereby approved. Such of the documents as require the execution of
the City are hereby authorized and directed to be executed or accepted, as the case
may be, and delivered in the name and on behalf of the City by its Mayor and City
Manager upon execution thereof by the parties thereto as appropriate and upon
satisfaction of the following conditions: (i) execution by the Owner of an
Additional Payment Agreement acceptable to the City, and (ii) receipt by the City
of such assurances and agreements as the City Attorney deems necessary or
desirable from the Owner and others, concerning maintenance and use of the
Community Center and shared facilities. The Bonds and the Agreements shall be
executed and delivered as provided therein. Copies of all the documents necessary
for the consummation of the transactions described herein and in the Agreements
shall be delivered, filed and recorded as provided herein and in the Agreements.
3. That the form and terms of the Agreements may be varied prior to execution and
delivery by the parties thereto, provided that any such variance shall not be, in the
opinion of the City's legal counsel and the Mayor, materially adverse to the
interests of the City. The execution arid delivery of the Agreements as provided
above shall be conclusive evidence of the determination that any such variance
was not materially adverse to the interests of the City.
4. That in anticipation of the collection of revenues of the Project, there shall be -
issued forthwith the Bonds, in the principal amount not to exceed $5,600,0
3
AUTHORIZING RESOLUTION
5. That all actions of the members, employees and staff of the City heretofore taken
in furtherance of the Program are hereby approved, ratified and confirmed.
6. That the sale of said Bonds to the Original Purchaser to be determined is hereby
approved, and the Bonds are hereby directed to be sold to the Underwriter, upon
the terms and conditions set forth in the Bond Purchase Agreement. The Mayor
and City Manager of the City are hereby authorized and directed to prepare and
execute by manual or facsimile signature the Bonds as described in the Indenture
and to deliver them to the Trustee (which is herein designated as the
authenticating agent under Minnesota Statutes, Section 475.55) for authentication
and delivery to the Original Purchaser, together with a certified copy of this
resolution, and the other documents required by the Indenture.
7. That the Mayor, City Manager and other officers of the City are authorized and
directed to prepare and furnish when the Bonds are issued, certified copies of all
proceedings and records of the City relating to the Bonds and such other affidavits
and certificates (including but not limited to those required by bond counsel) as
may be required to show the facts relating to the legality, tax exemption and
marketability of the Bonds as such facts appear from the books and records in said
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 made by the
City and contained therein. The Mayor, City Manager and said officers are further
authorized to execute such additional documents as shall be determined by the
Mayor to be necessary and desirable to provide for the issuance of the Bonds.
8. That the Mayor, City Manager and other officers of the Issuer consent to the
distribution of the Preliminary Official Statement relating to the Bonds,
substantially in the form on file with the Issuer. The Mayor, City Manager and
said officers further consent to the use by the Underwriter in connection with the
sale of the Bonds of a final Official Statement, substantially in the form of the
Preliminary Official Statement described above. The Preliminary Official
Statement and the Official Statement are the sole materials consented to by the
Mayor, City Manager and said officers for use in connection with the offer and
sale of the Bonds. The Mayor, City Manager and said officers have not
D:\IWK100 \004\RES \SGAUTH.DOC
which issuance is approved, substantially in the forms and upon the terms set forth
in the Indenture, the terms of which are for this purpose incorporated in this
resolution and made a part hereof as if fully set forth herein. The Bonds shall be
dated as of the date and shall mature on the dates (subject to redemption on such
earlier dates as provided in the Indenture), bear interest and be payable at the
rates, all determined as set forth in the Indenture, provided that such rates shall
result in an average coupon not greater than 6.5 %. The City may at its option
issue additional bonds at a later date to be used to pay or reimburse costs of the
Project not paid from the proceeds of the Bonds, in a principal amount not to
exceed the amount set forth in the Program.
4 AUTHORIZING RESOLUTION
•
participated in the preparation thereof, has not made any independent
investigation of the information contained therein and shall have no liability in
connection with the contents of or use of such offering materials.
9. That all covenants, stipulations, obligations and agreements of the City contained
in this resolution and the aforementioned documents shall be deemed to be the
covenants, stipulations, obligations and agreements of the City to the full extent
authorized or permitted by law, and all such covenants, stipulations, obligations
and agreements shall be binding upon the City. Except as otherwise provided in
this resolution, all rights, powers and privileges conferred and duties and
liabilities imposed upon the City 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, 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, or any officer, agent or
employee of the City in that person's individual capacity, and neither the City
Council nor any officer or employee executing the Bonds shall be liable
personally on the Bonds 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 or in any other document related to the Bonds, and no obligation
therein or herein imposed upon the City or the breach thereof, shall constitute or
give rise to 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
Project or the proceeds of the Bonds which are to be applied to the payment of the
Bonds, as provided therein and in the Indenture. The Bonds shall not constitute a
charge, lien or encumbrance, legal or equitable, upon any property or funds of the
City except that revenue and proceeds pledged to the payment thereof, nor shall
the City be subject to any liability thereon. The Holders of the Bonds shall never
have the right to compel any exercise of the taxing power of the City to pay the
outstanding principal on the Bonds or the interest thereon, or to enforce payment
hereon against any property of the City. The Bonds shall recite in substance that
the Bonds, including the interest thereon, are payable solely from the revenues and
proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of
the City within the meaning of any constitutional or statutory limitation.
10. That 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 or
any holder of the Bonds issued under the provisions of this resolution, any right,
D:\HPK I00 \004\RE S \SGAUTH. DOC
5
AUTHORIZING RESOLUTION
ATTEST:
11. That in case any one or more of the provisions of this resolution, or of the
aforementioned documents, or of the Bonds 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, but this resolution, the aforementioned documents, and the Bonds shall be
construed and endorsed as if such illegal or invalid provision had not been
contained therein.
12. That 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
and in the enactment of this resolution, and precedent to issuance of the Bonds
and precedent to the execution of the aforementioned documents have happened,
exist and have been performed as so required by law.
13. That in the event any of the officers of the City authorized to execute documents
on behalf of the City under this resolution shall have resigned or shall for any
reason be unable to do so, any member of the City, or officer of the City, is hereby
directed and authorized to do so on behalf of the City, with the same effect as if
executed by the officer authorized to do so in this resolution.
14. That this Resolution shall take effect immediately.
Adopted by the City Council of the City of Hopkins this 21st day of May, 1996.
James A. Genellie, City Clerk
D:\HPK1001004\RES \SGAUTH DOC
remedy or claim, legal or equitable, under and by reason of this resolution or any
provision 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 holder from time to time of the Bonds issued under the provisions of
this resolution
6
BY:
Charles D. Redepenning, Mayor
AUTHORIZING RESOLUTION
Ehlers and Associates, Inc.
a l LEADERS IN PUBLIC FINANCE
•
Mr. Jim Kerrigan
City of Hopkins
1010 South First Street
Hopkins, MN 55343
Dear Jim:
Ehlers/Publicorp has reviewed the preliminary financing plan for the purchase of the Hopkins Renaissance
Apartments by Community Housing Development Corporation (CHDC).
In general, our preliminary review has indicated that the project will be financially feasible after the sale of
the units. Based solely upon the cash flows of the project, the tax - exempt bonds are expected to receive an
investment grade rating from Standard & Poors which will be higher than many Minnesota cities' general
obligation bond ratings. Standard & Poors will require significant assurance from CHDC that the property
will be managed and maintained over the 20 to 25 year duration of the bonds.
The debt service coverage on the bonds is expected to be at least 111% with a net cash flow of $3 5,000 to
$50,000 per year. The City will receive its administrative payment to compensate for the loss of property
taxes out of the net cash flow. We are working with CHDC to ensurc that the City payment is as secured
as possible given the financing parameters.
Many of the details of the financing are not yet finalized. We will provide a more complete report to the City
Council prior to the final approval of the bonds.
Please contact as with questions or comments.
Sincerely,
Mark Ruff
Financial Advisor
March 13, 1996
OFFICES IN MINNEAPOLIS, MN AND BROOKFIELD, WI
2950 Norwest Center. 90 South Seventh Street, Minneapolis, MN 55402 -4100
Telephone 612-3394291 ,. FAX 612- 339 -08SM
Ehlers and Associates/Inc.
LEADERS Ip PUBLIC FINANCE
May 15, 1996
TO: Tim Kerrigan, City of Hopkins
FR: Mark Ruff
RE: Renaissance Apartments Purchase
We are not aware of any material changes to the financing structure proposed for the Renaissance Apartments
by Community Housing Development Corporation which would alter our findings in the March 13,1996 letter
directed to you. We believe that the City is reasonably secured in the corporate guarantee by C1-IDC to meet
current property tax payments to the City. We also believe that the Standard and Poors rating on the bonds
indicates a confidence by a national rating agency that the project is financial feasible.
Please contact me with any questions or comments.
OFFICES IN MINNEAPOLIS, MN AND BROOKFIELD, WI
2950 Norwest Center . 90 South Seventh Street . Minneapolis, MN 55402-4100
Telephone 612439 -8291 .:FAX 612- 339-0854