Loading...
CR 90-127 Housing Revenue Bond - Augustana Home , . ?'. ( ~:'. k;~.'" .,' ~"::"-'" ~', :-"::::.-:~--'-J',.., ,~,'.~" ..-, "_'0": . c .,0.-":_'",_- ~:F':" i~;.;~:': . tt~~:):-, ~ ,:,~'_: ';~ ".-. \;..... - ....... I I I I I I I I i I I ! i Y o June 11, 1990 :ca: OPKI" Council Report: 90-127 HOUSING REVENUE BOND - AUGUSTANA HOME OF MINNEAPOLIS (Chapel View) ~osed Action. staff recommends adoption of the following: Adopt R~~olutiQn No: ~Q=]~ Providinq for the Issuance and Sale of HOusin9-.facilities Ref.undj,ng Revenue Bonds pursuant to Minnesota statutes 462C. as al1l.i?:l)9J!d, on behalf of the Augustana Home of Minneapolis. staff recommends approval be contingent upon a final r€\port being submitted to the City in a form acceptable to staff with approval by the City'S financial consultant. With approval of this action Augustana Homes will be able to undertake the sale of the bonds to finance the purchase of Chapel View project. Qy~rvie". In 1984 the city of Hopkins authorized the sale of housing revenl1e bonds to facilitate construction of an elderly apartment facility directly adjacent to the nursing home. There were a variety of problems which subsequently developed which forced Chapel View in a position to default on their bond payment. Recently Augustana Home of Minneapolis approached the City about the possibility of issuing tax exempt refunding revenue bonda to facilitate their purchase of this project. 'lha City Council has passed a resolution giving prelimi,nary approva,l to the sale. rrhe final action required to facilitate the sale of the bor.ds is the resolutio~ presently being proposed. primary o v Issues ~o Consider. What will the bond proceeds be used for? What are the legal :Aplications of such a bond sale to the City? What has occurred since the last action on this item? o ,u~DOr~iD9 IDformatioDL o Letter from Jerre Miller o Resolution No: 90-70 ~-.; n, PlannJ.ng & opment Director .::'::{~ .' .:..~~; . ^ '~r'('.~ ':-";;ct:; . :-.~', .';",' ~>. .' .:.------ . . -~----~.~'----"""';';'-~-';'-..~........._.....-.-~':""~"';"'- . -,,,. ,;;:',~;_,_,-,:"-~:~~',~,{A~ ~ .,-, . .,' , ._-:-~:':~;%~ '. ~,~~;-}f~~j1 ..:-;~~.:i'-::~-'~:if~~~~ . . ,=' ~'[. r::",". ,.;,- ~ ,~.; .,'-. ~""~M!l'-- CR: 90-127 Page 2 Analysis" Based on the proposed action, the City Council has the following issues to consider: o What will the bond proceeds be used for? The bond proceeds will be used to provide a source of funds to payoff the previous bond and warrant holders. It is staffs unde,rstanding that their has now been a court decision detailing' how both of these parties would get paid off should Augustana complete the purchase of this property. o wtlat are the legal implications of s~ch a sale to the City? In the past the City has financed oth~r housing projects with revenue bonds. The purpose of this type of financing is to provide a lower interest rate to facilitate the feasibility of the project. The City, by placing its name. on the bonds.; provides a tax exempt :.tatus and therefore a lower interest rate. Repayment of the bonds is strictly from the revenue of the project. 'l'he city is under no financial obligation should there be a default. o What has occurred since the last action en this item? At the time that the preliminary resolution was considered, a number of parties representing the warrant holders stated that they were concerned about this transaction. Their concerns relat~d to the fact that the warrant holders would not be paid 100% of what they had been charged originally when they entered the project" At that meeting they stated that they would be bringing legal action try either prevent or slow down the process of the sale of Chapel View to Augustana Home. There has now been action by the court on this temporary restraining order. In this action the jv.dqe has ruled against the request for restraining order. ~nerei~~e unless other action is approvedi Auqustana Home is now legally ~uthorized to complete the purchase of this project. '1~8r_tlv..L 1. Approve the action as requesteu. With this action the bond sale will be able to be completed in conjunction with this project. , ",;..:. "-- c,'-."";; ; ':':,/,1(1 ,/j'ji).~,:E~L :'~:.:j-~~f@, ~ - -- -~-1Il ..... AiIliW - ~fIWIif .. _ ~ _~ . CR: 90-127 Page 3 2. Deny the request. Under this action any further action on this item will be terminated. The city Council needs to be aware that sho'....1 there be a denial of this resolution there is the possibility that the applicant may try to bring legal action against the City to force approval. 3. Continue for further information. Augustana Home needs to complete the sale in the very near future in accordance with the purchase agreement and therefore any continuation could potentially jeopardize the sale. . '),; ,,:')1 : ,'.-,-', ~ ~~ ".1 ' ':~-"i-~i? " J~c c<,', . - '.'__-J'- . . c Date: June 12, 1990 To: Steve Mielke From: Jerre Miller Re: Chapel View ~]7----.;r & - .... -- -- -~ - - T Y o F HOPKINS MEMO I have discussed the outcome of a Motion for a Temporary Restraining Order brought by the Chapel View warrant holders which was hearo in Federal Court last week. The presiding Judge denied the Motion so no obstacle exists for adoption by the COuncil of the final resolution approving the refunding bond issuan~ I am unaware of any eXisting",al ternatives other than adoption of this resolution. /l UG/ , c ., 1010 First Street South, Hopkins, Minnesota 55343 612/935-8474 An Equal OpPOrtunity Employer I . . . ...': .:},.......,t. c T Y o F HOP K N S t-lEMO Date: May 21, 1990 To: Steve Mielke From: Jerre Miller Re: Chapel View This is confirmation of our discussion at the Council meeting concerning the issue of whether the Council action in adopting the initial resolution would give rise to a damage claim on the basis of relian~e if the Council for some reason chose not to adopt a final resolution for ~ssuing ~he bonds. In the first issuance is a procedure. place, the City's discretionary act involvement in the bond ~ith regard to the entire All intereg~ed p~rt!es or their. legal representatives were present and afforded full opportunity to present their points of v.iew.. Additionally~ the attorney representing the warrant holders had slready commenced a Federal C:)U.ei.': action seeking compensation for his clients as well as injunctive relief. Thus all parties will apparently have their day in Cou~t. If the Counctl had continued the issue in the face of the obvious merits to the bond issuance, it would have involved itself in ft dispute between bond holders and warrant holders and possibly entered an arena where the City definitely does not belong. For that reason, I think adoption of the resolut:f.on was proper and unless furnther action is halted by Court order, the final resolution I e I would be adopted as well and I would recommend it. ciN 1/ "" , , /"/ 1010 First StreA~llth, Hopkins, Minnesota 55343 612/935-8474 // .' An E.Qual Opportunity Employer --'~~~ .:~~,;&i.-.-- .~'. ~ :'. - : . - - -~ --~ ] _._JJmI'~ . RESOLUTION NO..-30-70_________ A RESOLUTION PROVIDI~G FOR THE ISSUANCE AND SALE OF HOUSING FACILITIES R~FUNDING REVENUE BONDS PURSUANT TO MINNESOT~ STATUTES, CHAPTER 462C, ASAMENDEDt ON BEHALF OF THE AUGUSTANA HOME OF MINNEAPOLIS . .. .. BE IT RESOLVED by t.he City COUC" II of the Ci ty of Hopkins t Minnesota (the "City"), as f;:. ~,OJ..,s: 1. :A.uthority. The City is, by the Constitution and laws of the state of Minnesota, including Minnesota Statutes, Chapter 462C, as amended (the "Act")t authorized to issue and sell its revenue bonds for the purpose of financing and refinancing the cost of housing development projects and to enter into agreements necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of Refunding: Documents P~esented. The Augustana Home of Minneapolis, a Minnesota nonprofit corporation (the .Corporation"), has proposed to this Council that the City issue and sell its City of Hopkins Housing Facilities Refunding Revenue Bonds (The Augustana Home of Minneapolis Project), Series 1990, in substantially the form set forth in the hereinafter-mentioned Indenture (the "Bonds") pursuant to the Act and loan the proceeds thereof to tho Corporation in order to refinance costs of constructing a facility in the City to provide rental housing to the elderly and handicapped (the "Project"), The address of the elderly housing facility is 605 Minnetonka Mills Road in the City. The proceeds of issuance of the Bonds are to be used for the specific authorized purpose of ref.unding in full the City's outstanding Housing Mortgage Revenue Bonds (Chapel View, Inc. Project), Series 1984 (the hRefunded Bondsff), together with funding required reserves and providing for the payment of certain costs of issuance of the Bonds. The Refunded Bonds comprised the original financing for the costs of acquisition and construction of the Project. Forms of the following documents relating to the Bonds have been submitted to the City and are now on file in the office of the City C;erk: (a) Loan Agreement (the "Loan Agreement") dated a~ of July 1, 199U between the City and the Corporation, whereby the City agrees to make a loan to the Corporation of the grass proceeds of sale of the Bonds and the Corporation agrees to complete the refunding (as further provided in the ~scrow Agreement referred to below), and to pay amount5 in repayment of the loan sufficient to provide for the full and prompt p~yment Gf the principal ofl premlun), if any, ~nd interest on the Bonds; and ~:~.~~-- i..............-Bll..liI__ -- , "."t ~ . ",-y 0 ...,.....' . (b) Trust Indenture (the "Indenture") dated as of July 1, 1990, between the City and American National and Trust Company, St, Paul, Minnesota, as trustee (the "Trustee"), authorizing the issuance of, and pledging certain revenues, including those to be derived fLom the Loan Agreement, as security for the Bonds, and setting forth proposed recitals, covellants and agreements relating thereto; and (c) Escrow Agreement (the "Escrow Agreement~) dated as of July 1, 1990, between the City, the Corporstion and the indenture trustee for the Refunded Bonds, providing for the establishment, investment and application of an escrow fund thereunder, to be administered by the indenture trustee for the Refunded Bonds, as escr0W agent (the wEscrow Agent"), in order to cause the Refundsd Bonds to be refunded in full; and (d) Combination Mortgage, Security Agreement and Fixture Financing statement (the "Mortgage"), dated as of July 1, 1990, from the Corporation to the Trustee, by which the Corporation grants to the Trustee a mortgage lien on and security interest in the Mortgaged Property, as defined therein, as further security for the payment of the Bonds (this document not to be executed by the City); and . (e) Assignment of Leases and Rents (the "Assignment"f) dated as of July I, 1990, from the Corporation to the Trustee, by which the Corporation assigns to the Trustee its interests in all leases and rents with respect to the Mortgaged Property (this document not to be executed by the City); and I I I .1 j 1 (f) Bond Purchase Agreement (the ~Bond Pur.chase Ag:reem~'.mt "') I by and between Norwest Investment Sen..;ices, Inc. (the MUndecwriter"), the Corporation and the City, providing for the purchase of the Bonds from the City by the Und6rwriter and setting the terms and conditions of purchase; and -2- (g) Preliminary Official Statement and form of final Official Statement, the form of the Preliminary Official Statement, together with the insertion of the final underwriting details of the Bonds. inCluding the interest rates thereon, and any other changes deemed necessary or deairable, intended to constitute the form of the final Official Statement, inclUding all Appendices thaI'ste> (together the "Official statement~), describing the offering of the Bonds, and certain terms and provisions of the foregoing documents. .. . . . 3. ~inqs. It is hereby found, determined and declared tht't-,: (a) The Project constitutes a housing project authorized by and described in the Act. (b) The issuance of the Bonds will caLry out a public purpose and benefit to the citizens of the community in that the purpose thereof is and the effect thereof is and will be to promote the public welfare by enhancing th€ provision of housing facilities to members of the community, particUlarly the elderly and handicapped, at the most reasonably affordable costs. (c) The housing plan and program adopted by the City in connection with the issuance of the Refunded Bonds have been approved by the Minnesota Housing Finance Agency. (d) There is no litigation pending or, to the best of its knowledge, threatened against the City relating to the Bonds, the Loan Agreement, the Escrow Agreement, the Bond Purchase Agreement or the Indenture or questioning the organization, powers or authority of the City, (e) The execution, delivery and performance of the City's obligations under the Bonds, the Indenture, the Escrow Agreement, the Bond Purchase Agreement and the Loan Agreement do not and will not violate any charter provision or any order of any court or other agency of government of which the City is aware or in which the City is a party) or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture~ agreement or other instrument. (f) It is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City'S interest in the Lo~n Agreement will be pledged to the Trustee as security for the pa}~ent of principal of, premium, if ~ny~ and interest on the Bonds. (g) The Loan Agreement provides for. paym~nta by th~ Corporation to the Trustee for the account of the City af such amounts as will be sufficient to p~y tho pKinC1~51 off premium, if any.. and interest on the 8rJ7,\\j3 ".dl.t~n (hh~. Tbe Loan Agreement obligates the Corpor~tt,)D to p~'1y fo~' till costs of operation and maintenance of the Project -3- ~, ,,- . . ~. "..,--- ~ilfI~ I i JliRII .a 1illr'""~-- -, - - Facilities, including adequate insurance, taxes and special assessments. A reasonably required reserve fund has been established under the provisions of the Indenture in connection with the issuance of the Bonds. (h) Under the provisiu:.lS of the Act, and as provided in the Loan Agreement and Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement and moneys in the funds and accounts held by the Trustee which are pledged to the payment thereof; the City is not subject to any liability thereon; no holders of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds or the interest thereon, nor to enfoJ:ce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City (other than the interest of the City in the LOdn Repayments to be made by the Corporation under the Loan Agreement); and each Bond issued under the Indenture shall recite that such Bond, including interest thereon. shall not constitute or give rise to a charge against the general credit or taxing pow~rs of the City. 4. APproval and Execution of~. The forms of Loan Agreement, Indenture, Escrow Agreement, Bond Purchase Agreement, Mortgage and Assignment, referred to in paragr.aph 2, are approved. The Loan Agreement, Escrow Agreement and Indenture shall be executed in the name and on behalf of the City by the Mayor and the City Manager, or by other officers of the City, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evid€~ced by the execution thereof, and then shall be delivered to the Trustee. The Bond Purchase Agreement shall be executed by one or more officers of the City. a~ provided therein. Copies of all documents shall be ~elivereu and filed as provided therein. 5. M!llQYll..t-Execut:iQn ~nQ Deli.Y!uy Of 13onds.. The City shall proceed forthwith to issue the Bonds, in an aggregate principal amount of not to exceed $3,500,000, in the form and upon the terms set forth in the Indenture, which terms are for this purpose incorporated in this resolution Bnd made a part hereof; provided, howeverf that the maturities of the Bonds, the interest rates thereon, and the rights of optional Ot mandatory redemption with respect thereto shall all be as set forth in the final form of Indenture to be approved, executed and delivered by the officers of the City authQrized to do 50 by the provisions of this Resolution, which approval -4- I . . .. , ...... 4( .~....,. ~ . -~..... "\." shall b~ conclusively evidenced by such execution and delivery; and provided further that; in no event, shall such maturities exceed 30 years or such rates of interest produce a net interest cost in excess of 9.00% per annum. The Underwriter has agreed pursuant to the provis:ons of the Bond Purchase Agreement, and subject to the conditions therein set forth, to purchase the Bonds at the purchase price set forth in the Bond PurchaGB Agreement, and said purchase pric€ is hereby found to be favorable and is hereby accepted. The Mayor, City Manager and City Clerk are authorized and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee, together with a certified copy of this Resolution and the other documents required by Section 2.08 of the Indenture, for authentication, registration and delivery to the Underwriter. As provided in the Indenture, each Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Qfficial Statement. The City hereby approves the form of and consents to the circulation by the Underw~iter of the Official statement in offering the 80nds for sale; provided, however, that the City has not participated in the preparation of the Official Statement or independently verified the information in the Official Statement and takes no responsibility for, and makes no representations or warranties as to, the accuracy or completeness of such inform~tion. Baseo on the representations of the Corporation, the City, pursuant to Regulation 15c-12, promUlgated by the Securities and Exchange Commission (the "Regulation"), hereby certifies that the Preliminary Official Statement prepared with respect to the Bonds is or is to be in final form as of its date, within the meaning of the Regulation, except fo~ the omission of any of the following information: the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such mattec;, The City Manager, City Clerk and other officers of the City are hereby authori~ed, at the req.est of the Underwriter, to deliver to the Underwriter, an officer's certificate to the effect hereinabove provided, all as may be necessary or desirable to demonstrate complia~ce with the Regulation. I 7. Certificates, etc. The Mayor, City Manager, City Clerk, and other officers of the City are author.ized and directed to prepare and furnish to bond couns~l and the purchaser of the Bonds, when issued, certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the f ar.'cs appea ring f rom the books and records in the officers' custody and control or as otherwise known to them; -5- .~:~ :':. \',', '~,,":~"" ":~:'. ~...~r>'....::!.',.. ", "~"~,."'_',"'._' ,......'(.':-.'..-;~:t:f~:~K~:....it:~\.~. . . . . .., ", .--" . . ;...: '. '. ~ . '"n. i:. . . ?t\."' ;.,n _ shall b~ conclusively evidenced by such execution and delivery; and provided further that, in no event, shall such maturities exceed 30 years or such rates of interest produce a net interest cost in excess of 9.00% per annum. The Underwriter has agreed pursuant to the provisions of the Bond Purchase Agreement, ana subject to the conditions therein set forth, t.o purchase the Bonds at the purchase price set forth in the Bond Pur-chase Agreement, and said purchase price is hereby found to be favorable and is hereby accepted. The Mayor, City Manager and City Clerk are authorized and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee, together with a certified copy of this Resolution and the other documents required by Section 2.08 of the Indenture, for authentication, registration and delivery to the Underwriter. As provided in the Indenture, each BOlid shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Official Stat.e....lli~Jlt. The City p.ereby approves the form of and consents to the circulation by the Underwriter of the Official Statement in offering the Bonds for 5alB; provided, however, that the City has not participated in the prepar2tion of the Official Statement or independently ve~ifieo the information in the Official Statement and takes nc responsibility for, and makes no representstions or war:i:ant:ies as to. the accuracy or completeness of such information. Based on the representations of the Corporation, the City, pursuant to Reyulation 15c-12, promulgated by the Securities and Exchang€ Commission (the "Regulation"), hereby certifies thi:tt the Preliminary Off icial Stat.ement prepared with I'espect to the aauds is or is to be in final form as of its date, within the meanin; of the Regulation, except for the omission or an]?, of the following information: the offering price(s), interest :rate{$), selling compB!1sation, aggregate principal amount, principt'll Dlmount pel' mi:.>;hu:i ty, delivery dates, ratir:lgs an,j other terms of the Bonds depending on such matters. The City Manager, City Clerk and other officers of the City are hereby Buthorized~ at the request of the Underwriter, to deliver to the Underwriter, an officer's certificate to the effect hereinabov,e provided. all as may be necessary or desirable to demon-st.:rate compliance with the Regulation. I 7. Cert~ficates,~, The Mayo!, City Manager, City Cle~k, and other officers of the City are authorized and directed to prepare and furnisb to bond counsel anO the purc.haser of the Bonds, when issued. certified copies of all pr.oceedil!gs and records of the City relating tc t"'€! Bonds, ;a,nd sucnother: affidavits and certificates as may be required to show tbe facts appearing from the books and records in the officers' custody and control or as otherwise known to them; -5- ~'c$lf' . . ,'. :.. ~""""f ~_..-.. ... - - v-~-. -__ - - 'T 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 contained therein. 9. Authori~atiQll. The City Clerk is authorized and directed to deliver a certified copy of this Bond Resolution to the County Auditor of Hennepin County, together with such other information as such County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bonds on his bond register as required by the Act and Section 475.63, Minnesota Statutes. 10. Q~Qlified Tax~mpt Oblig~tions. The Bonds are hereby designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Bonds are to be issued on behalf of an organization described in Section 501(c)(3) of the Code and are to be issued as "qualified 501(c)(3) bonds" under Section 145 of the Code. The City, together with all subordinate entities thereof, does not reasonably expect to issue tax-exempt obligations, including the Bonds (other than private activity bonds not constituting "qualified SDl(c)(3) bonds"), which, when added together with all such obligations heretofore issued by the City, or such subordinate entities, in calendar year 1990, will be in an aggregate amount exceeding $10,000,000 in calendar year 1990. I 4168f -6- M"T ...........". "17""" '1 ~~ . STATE OF MINNESOTA ) ) SS. ) COUNTY OF HENNEPIN I, the undersigned, being the duly qualified and acting City Clerk of the City of Hopkins, Minnesota (the "City"), do hereby certify that attached hereto is fi compared, true and correct copy of a resolution giving final approval to an issuance of housing facilities refunding revenue bonds by the city on behalf of The Augustana Home of Minneapolis, duly adopted by the City Council of the City on I 1990, at a meeting thereof duly called and held, as on file and of record in my office, which resolution has not been amended, modified or rescinded since the date thereof and which resolution is in full force and effect as of the date heraoEf 4It and that the attached Extract of Minutes as to the adoption of the resolution is a true and accurate account of the proceedings taken in passage thereof. WITNESS My hand and the official seal of the City this _day of , 1990. -7- city Clerk (Seal) 4168f . ;,. ~'.'.".. ,.,.,:~..,_:...,' . i'\-:, .!-.::-,';- ~';"'-;_~\'I_;,.._.:,- ~'::.." ;F',-::...';'~,_ - "';':,~'~;-r':-. . ~- -_.~.: " . > . 9::':/.:"'-- - - :'~\:~~':o,~'-'::~:' ; DRWl ~- 1'W~ ~i~ ,.. .~.<Iw-- . . - Extract of Minutes of Meeting of the City Council of the City of Hopkins, Minnesota Pursuant to due call and notice thereof, a meeting of the City Council of the City of Hopkins, Minnesota was duly held at city Hall in said City of Hopkinst on __"_, the day of , 1990t at o'clock P.M. The following Councj.l members were present: and the following were absent: It It It It * II 11: I\' " Council member then introduced the follo~ing '! ;j written ~esolution and moved its adoptiont the reading in full thereof having been dispensed with by unanimous consent: A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF HOUSING FACILITIES REFUNDING REVENUE BONDS PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED, ON BEHALF OF THE ~UGUSTANA HOME OF MINNEAPOLIS . ',. 'Y. r~;r\ > ~~Y}-r~~\;; . ~J~~),,;if'-,>,' ,:.: ~.~~8:;~:,~~ ':::;':~f.~,',:c The motion for the adoption of the foregoing resolution was duly seconded by Council member I and upon vote being taken thereon the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 4163f