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CR 05-014 Revenue Bonds for Chapel View f '\ CITY OF January 12,2005 ~'! Council Report 2005-014 HOPKINS PUBLIC HEARING - REVENUE BONDS/JOINT POWERS AGREEMENT, AUGUST ANA CHAPEL VIEW HOMES, INC. Proposed Action Staff recommends approval of the following motion: adopt Resolution 2005-009, giving host approval to the issuance of revenue bonds and authorizin,g execution of a ioint powers a,greement (AuRUstana Chapel View Homes, Inc., Proiect), subiect to the following: Reimbursement of allle~al and consultant fees incurred as a result of this action Payment of $5,000 application fee · Waiver of annual administrative fee Overview Augustana Chapel View Homes, Inc., is proposing to undertake various improvement projects at both their Hopkins and Minneapolis nursing care/senior housing facilities. To facilitate financing of these improvements, they are asking the City of Minneapolis to issue revenue bonds in an amount not to exceed $26 million. The City of Minneapolis would be the actual issuing agent for the subject bonds; however, because a portion of the proceeds will be used for the Hopkins facility, the City needs to hold a public hearing and adopt the subject resolution approving issuance of the revenue bonds by Minneapolis and execution of a joint powers agreement: The improvements to be undertaken at the Hopkins Augustana Chapel View facility are as follows: Renovation of existing care facility Construction of 28-unit addition As part of the proposed action, the applicant would also be refunding two bonds issued by the City on behalf of Chapel View in 1995 and 1999. In 2003 Hopkins undertook a joint powers bond issue with Minneapolis for Chapel View. Supportinl! Documents Resolution 2005-009 Joint Powers Agreement between the City of Minneapolis and City of Hopkins Letter from Stefanie Galey, Faegre & Benson, dated January 11,2005 '1/ / " l Ii' J /. .' '{, ! ~......~.I" "i ~. ...,;. ~.I Z-f/'"1 Jim Kerrigan /,/ Planning & Econhfuic Development Director Financial Impact: $ 0 N/ A _ Budgeted: Y IN _ Source: Related Documents (CIP, ERP, etc.): Notes: CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2005-009 RESOLUTION GIVING HOST APPROV AL TO THE ISSUANCE OF REVENUE BONDS AND AUTHORIZING EXECUTION OF A JOINT POWERS AGREEMENT (AUGUST ANA CHAPEL VIEW HOMES, INC. PROJECT) WHEREAS, Augustana Chapel View Homes, Inc., a Minnesota nonprofit corporation (the "Borrower"), has proposed that it obtain financing for a project (as described further below, the "Project"), in the City of Hopkins (the "Host City") and also to cause certain outstanding bonds to be refunded (as described further below, the "Refunding"), all pursuant to Minnesota Statutes, Sections 469.152 to 469.1651, as amended, Minnesota Statutes, Chapter 462C, as amended, and Minnesota Statutes, Section 471.59, as amended (all collectively referred to as the "Act"); and WHEREAS, the Project consists of the acquisition and construction of improvements to the existing skilled nursing facility of the Borrower located at 615 Minnetonka Mills Road in the City of Hopkins, including the construction of an approximately 22,000 square foot building addition thereto to house approximately 28 new resident rooms (the "Project"); and WHEREAS, the Borrower has proposed that the City of Minneapolis, Minnesota (the "Issuer"), pursuant to a Joint Powers Agreement to be entered into between the Host City and the Issuer (the "Joint Powers Agreement"), issue its revenue bonds, in one or more series, in an original aggregate principal amount not to exceed $26,000,000 (the'''Bonds''), to provide financing for the Project and also to provide financing for improvements to the Borrower's existing skilled nursing facility in the City of Minneapolis, and to provide for the refunding, either in whole or in part, of certain outstanding revenue bonds or notes (all collectively referred to as the "Refunded Bonds"), previously issued by the City of Hopkins and the City of Minneapolis; and WHEREAS, the Refunded Bonds consist, in part, of the outstanding Housing Facilities Refunding Revenue Bonds (Augustana Chapel View Homes, Inc. Chapel View Project), Series 1995, issued by the City of Hopkins in the original principal amount of $3,550,000, and the outstanding Health Care Facility Revenue Bonds (Augustana Chapel View Homes, Inc. Chapel View Project), Series 1999, issued by the City of Hopkins in the original principal amount of $665,000; and WHEREAS, a copy of the proposed form of the Joint Powers Agreement has been placed on file with the City in the offices of the City Clerk and has been presented to the governing body of the City in connection with this Resolution; and WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), requires that each governmental unit in which facilities to be financed or refinanced by the Bonds are located must approve the issuance ofthe Bonds following a public hearing; and - WHEREAS, a public hearing on this matter was held by the governing body of the City on the date hereof; and WHEREAS, the Bonds are payable solely from revenues pledged thereto, and will not be a general or moral obligation ofthe Issuer or the Host City or of any other political subdivision of the State of Minnesota, but will be payable solely from payments required to be made by the Borrower; and WHEREAS, the Borrower will be responsible for the payment of all fees and expenses which may be incurred by the City in connection with the approval of the issuance ofthe Bonds and the execution of the Joint Powers Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hopkins, Minnesota, as follows: 1. For purposes of Section 147(f) of the Code, the Host City hereby approves the issuance of the Bonds by the Issuer. . 2. In no event shall the Bonds ever be payable from or charged upon any funds of the Host City; the Host City is not subject to any liability thereon; no owners of the Bonds shall ever have the right to compel the exercise of the taxing power of the Host City to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the Host City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Host City; and the Bonds do not constitute an indebtedness of the Host City within the meaning of any constitutional, statutory, or charter limitation. 3. The Joint Powers Agreement is hereby approved in substantially the fonn now on file in the offices of the Host City, together with such modifications thereto as may be approved by the officers executing the Joint Powers Agreement, which approval shall be conclusively evidenced by the execution thereof; and the Mayor, the City Manager and the City Clerk, or other officers ofthe City, are authorized to execute the samein the name of and on behalf of the City. In the event of the disability or the resignation or other absence of the Mayor, the City Manager or the City Clerk of the City, such other officers of the City who may act in their behalf shall without further act or authorization of the City do all things and execute all instruments and documents required to be done or to be executed by such absent or disabled officials. The approval hereby given to the Joint Powers' Agreement includes approval of such additional 'details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the officers of the City authorized herein to execute the Joint Powers Agreement, such approval to be conclusively evidenced by the execution thereof. Adopted by the City Council of the City of Hopkins, Minnesota this _ day of ,2005. Mayor ATTEST: City Clerk STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Hopkins, Minnesota, do hereby certify that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of said City duly called and held on the date therein indicated, insofar as such minutes relate to a resolution giving host approval to the issuance of revenue bonds and authorizing execution of a Joint Powers Agreement, and that attached hereto is a true, compared and correct copy of a Resolution duly adopted by said City Council at a regular meeting thereof duly called and held on , 2005, and that said Resolution has not been amended, modified, rescinded or revoked since the date of its adoption . and is in full force and effect on the date hereof. WITNESS My hand this _ day of ,2005. City Clerk FIRST DRAFT: 01/07/05 JOINT POWERS AGREEMENT This JOINT POWERS AGREEMENT (the "Joint Powers Agreement" or the "Agreement"), is entered into as of the 1st day of January, 2005 by and between the City of Minneapolis, Minnesota (the "Issuer"), and the City of Hopkins, Minnesota (the "Participating Jurisdiction"). Each of the Issuer and the Participating Jurisdiction is a municipal corporation duly organized under the laws of the State of Minnesota. 1. Minnesota Statutes, Section 471.59 (the "Joint Powers Act") provides that two or more governmental units, by agreement entered into through action of their governing bodies, may jointly or cooperatively exercise any power common to the contracting parties, and may provide for the exercise of such power by one of the participating governmental units. 2. In connection with the issuance of revenue bonds under Minnesota Statutes, Sections 469.152 to 469.1651, as amended (the "Industrial Development Act"), Section 469.155, Subd. 9, of the Industrial Development Act provides for joint action between municipalities, other political subdivisions, state agencies and authorities (all as defined in the Industrial Development Act) in connection with projects undertaken thereunder, and the financing thereof, . all as further provided therein. ...... . 3. In connection with the issuance of revenue bonds under Minnesota Statutes, Chapter 462C, as amended (the "Housing Programs Act"), Section 462C.14, Subd. 3, of the Housing Programs Act provides for joint action between cities, housing and redevelopment authorities and port authorities (all as defined in the Housing Programs Act) in connection with multifamily housing developments undertaken thereunder, all as further provided in the Housing Programs Act (the Joint Powers Act, the Industrial Development Act and the ~ousing Programs Act all sometimes referred to collectively as the "Acts"). 4. Augustana Chapel View Homes, Inc., a Minnesota nonprofit corporation (the "Borrower") has proposed that the Issuer and the Participating Jurisdiction enter into this . Agreement, pursuant to the Acts, and pursuant to which the Issuer will issue one or more series of revenue bonds, in an aggregate principal amount not to exceed $26,000,000 (referred to, collectively with any refunding revenue bonds authorized pursuant to Section 6 hereof, as the "Bonds"), and loan the proceeds thereof to the Borrower to provide financing for the Minneapolis Project and the Hopkins Project described in Exhibit A (the Minneapolis Project and the Hopkins Project sometimes referred to together as the Projects), and to provide refinancing for facilities of the Borrower in the Cities of Minneapolis and Hopkins through the refunding of certain outstanding revenue bonds or notes issued by'the City of Minneapolis and the City of Hopkins, respectively (such outstanding revenue bonds sometimes referred to collectively as the "Refunded Bonds"), also as further described in Exhibit A (such refunding of outstanding revenue bonds or notes sometimes referred to as the "Refunding"). 5. The governing body of each of the Issuer and the Participating Jurisdiction, respectively, have each adopted a resolution (i) evidencing its approval of its respective portions of the Projects and the Refunding, as the case may be, (ii) evidencing its intent to enter into this Agreement, and (iii) granting host approval (or, in the case of the Issuer, granting approval) to the issuance of the Bonds, all as required under the Acts and the Internal Revenue Code of 1986, as amended (the "Code"). 6. The Issuer shall exercise the powers granted by the Acts by adopting, approving and executing such resolutions, documents, and agreements as shall be necessary or convenient to authorize, issue, and sell the Bonds and such other resolutions, documents, and agreements as shall be necessary or desirable in connection with the issuance of the Bonds and giving effect to or carrying out the provisions of this Agreement and the documents under which the Bonds are issued and/or secured. The Issuer and the Participating Jurisdiction hereby specifically agree that, upon request of the Borrower, the Issuer may at any time during the term hereof issue its refunding revenue bonds for the purpose of refunding, in whole or in part, the Bonds, or anyone or more series thereof. In such event this Agreement shall continue to apply to such refunding revenue bonds and such refunding revenue bonds shall be governed hereby, all without further act by either the Issuer or the Participating Jurisdiction. 7. The Bonds shall be special, limited obligations of the Issuer, payable solely from proceeds, revenues and other amounts pledged thereto. In no event shall the Bonds ever be payab Ie from or charged upon the general credit, taxing powers or any funds of either of the Issuer or the Participating Jurisdiction; neither the Issuer nor the Participating Jurisdiction shall ever be subject to any liability thereon; no owners ofthe Bonds shall ever have the right to compel the exercise of the taxing power of either of the Issuer or the Participating Jurisdiction to pay any of the Bonds or the interest,thereon, nor to enforce payment thereof against any property of either of the Issuer or the Participating Jurisdiction; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of either the Issuer or the Participating Jurisdiction; and the Bonds do not constitute an indebtedness of the Issuer or the Participating Jurisdiction within the meaning of any constitutional, statutory, or charter limitation. No amount ofthe Bonds will be allocated to the Participating Jurisdiction for purposes of Section 265(b )(3) ofthe Internal Revenue Code of 1986, as amended. 8. This Agreement shall terminate upon the retirement or defeasance of the last outstanding Bonds or, if refunding revenue bonds are issued in accordance with the provisions hereof and the provisions of the Acts, upon the retirement or defeasance of the last outstanding refunding revenue bonds, and this Agreement may not be terminated in advance of such retirement or defeasance. 9. This Agreement may be executed in counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. [The balance of this page is intentionally left blank] -2- IN WITNESS WHEREOF, each of the Issuer and the Participating Jurisdiction has caused this Agreement to be executed on its behalfby its duly authorized officers, all as of the day and year first above written. CITY OF MINNEAPOLIS, as Issuer By: Finance Officer [Signature page to Joint Powers Agreement dated as of January 1, 2005, between the City of Minneapolis and the City of Hopkins] -3- A - .. CITY OF HOPKINS By: Mayor By: City Manager Attest: City Clerk [Signature page to Joint Powers Agreement dated as of January 1, 2005, between the City of Minneapolis and the City of Hopkins] -4- - - EXHIBIT A The Proiects Minneapolis Proiect The Minneapolis Project consists of a major renovation of Corporation's skilled nursing facility located at 1007 East Fourteenth Street in the City of Minneapolis, including the acquisition and construction of roof improvements, improvements to common areas and resident rooms, and the acquisition and installation of equipment and furnishings. Hopkins Proiect The Hopkins Project consists of a major renovation of Corporation's skilled nursing facility in Hopkins, including the acquisition and construction of an approximately 22,000 square foot building addition to include 28 new resident rooms, improvements to existing common areas and resident rooms, and the acquisition and installation of equipment and furnishings. The Refunding The Refunding consists of the refunding, either in whole or in part, of the outstanding revenue bonds or notes referred to below as the Series 1995 Bonds, the Series 1997 Bonds, the Series 1999 Bonds and the Series 2003 Bonds (such outstanding revenue bonds or notes all collectively described as the "Refunded Bonds"): Series 1995 Bonds The Series 1995 Bonds consist of the Housing Facilities Refunding Revenue Bonds (Augustana Chapel View Homes, Inc. Chapel View Project), Series 1995, issued by the City of Hopkins in the original aggregate principal amount of $3,550,000.. . Series 1997 Bonds The Series 1997 Bonds consist ofthe Housing and Health Care Facilities Revenue Bonds. (Augustana Chapel View Homes, Inc. Project), Series 1997, issued by the City of Minneapolis in the original aggregate principal amount of $1 0, 1 00,000. Series 1999 Bonds The Series 1999 Bonds consist of the Health Care Facility Revenue Bonds (Augustana Chapel View Homes, Inc. Chapel View Project), Series 1999, issued by the City of Hopkins in the original aggregate principal amount of$665,000. Series 2003 Bonds The Series 2003 Bonds consist of the Revenue Bonds (Augustan a Chapel View Homes, Inc. Project), Series 2003, issued by the Minneapolis Community Development Agency in the original aggregate principal amount of $1 ,600,000. A-I FAEGRE & BENSON LLP 2200 WELLS FARGO CENTER, 90 SOUTH SEVENTH STREET MINNEAPOLIS, MINNESOTA 55402-3901 TELEPHONE 612.766.7000 FACSIMILE 612.766.1600 www.faegre.com STEFANIE N. GALEY sgaley@faegre.com 612.766.7661 January 11,2005 City of Hopkins Attn: Jim Kerrigan 1010 South First Street Hopkins, MN 55343 Re: Augustana Chapel View Homes, Inc. The City of Hopkins (the "City") has been requested to (i) give its approval to the issuance by the City of Minneapolis (the "Issuer") of revenue bonds in an aggregate principal amount not to exceed. $26,000,000 on behalf of Augustana Chapel View Homes, Inc. (the "Borrower") for the purpose of financing improvements to the Borrower's facility located at 615 Minnetonka Mills Road in the City, and financing improvements to the Borrower's facility located in the City of Minneapolis, and refunding certain bonds previously issued by the City and the Issuer on behalf of the Borrower, (ii) enter into a joint powers agreement with the Issuer in connection with the issuance of the revenue bonds, and (iii) hold a public hearing as required by state and federal law At your request, I have reviewed the form of resolution and joint powers agreement, and such documents clearly establish that the revenue bond will be payable solely from amounts paid by the Borrower and that no City funds, revenues or taxes will be pledged or made available to pay the bond. The City will incur no liability to the Borrower, the Issuer, the revenue bonds purchaser, or any other party in connection with the requested actions, nor will any amount of the bond issue be chargeable against the City's $10,000,000 limit for bank deductability of tax-exempt obligations. If you or any member of the Council have any questions regarding this matter, please feel free to call me. Sincerely, .I Stefanie N. Galey SNG:galsn MI:1174794.01 Minnesota Colorado Iowa London Frankfurt Shanghai