1998-014~~
CITY OF HOPKINS, MINNESOTA
Hennepin County, Minnesota
RESOLUTION N0.98-014
A RESOLUTION APPROVING CERTAIN MODIFICATIONS TO
THE LOAN AGREEMENT BETWEEN THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
HOPKINS, THE CITY OF HOPKINS, AND OAKS OF
MAINSTREET, LLC, ENTERED INTO IN CONNECTION WITH
THE ISSUANCE OF THE BONDS TO FINANCE THE
DEVELOPMENT OF THE OAKS OF MAINSTREET PROJECT
WHEREAS, the Housing and Redevelopment Authority In and For the City of Hopkins,
Minnesota (the "Authority") and the City of Hopkins, Minnesota (the "City")
issued the $3,975,000 Housing Development Gross Revenue Bonds (Oaks of
Mainstreet Project) Taxable Series 1996A of HRA and $3,975,000 Unlimited Tax
General Obligation Bonds (Oaks of Mainstreet Project) Taxable Series 1996B of
City, respectively (collectively, the "Bonds") to finance the development by Oaks
of Mainstreet, LLC, (the "Developer") of a townhouse development (the
"Project"} within the City; and
WHEREAS, Section 5.7 of the Loan Agreement (the "Loan Agreement") entered into by the
City, the Authority and the Developer in connection with the issuance of the
Bonds requires that on February 1, 1998, First Trust National Association, as
trustee for the Bonds (the "Trustee"), calculate in the manner prescribed in the
Loan Agreement an amount of money to be deposited by the Developer with the
Trustee for use in paying debt service on the Bonds; and
WHEREAS, the calculation of the amount required to be deposited by the Developer with the
Trustee under section 5.7 of the Loan Agreement was based on projections as to
the revenues that would be generated from the rental of townhouse units in the
Project prior to the sale of such units; and
WHEREAS, contrary to the expectations of the parties at the time of the issuance of the Bonds,
no units in the Project have been rented and the units have sold at a rate that
exceeded expectations; and
WHEREAS, the Developer has requested that the Authority and the City consent to a change in
the manner of calculating the amount to be deposited by the Developer with the
Trustee to take into account the changes in the actual marketing of the Project;
and
Rjd/agrtnt/hopkinspmes hra resolution
v ~
WHEREAS, the City believes that the Developer's request is reasonable and that the granting
of such request would be in the best interest of the City.
NOW, TI~EREFORE, be it hereby resolved by the City Council (the "Council's of the
City as follows:
1. The Council hereby authorizes the following modifications to Section 5.7 of the
1,oan Agreement regarding the rental revenue guaranty payments to be made by the Developer:
(a) Notwithstanding Section 5.7, on or before March 17, 1998, the Developer shall
deposit with the Trustee the amount of $107,401.75, which is the Bond interest
payment due on August 1, 1998, calculated as of March 1, 1998. The deposit of
such amount shall satisfy the Developer's obligations with respect to the February
1, 1998, rental revenue guaranty payment under the Loan Agreement. Such
amount shall be held by the Trustee in an interest bearing reserve fund to be used
to pay the August 1,1998, interest payment due with respect to the Bonds.
(b) On a monthly basis commencing in April, 1998, the Trustee shall calculate the
amount of the Bond interest payment that will be due on August 1, ] 998, in light
of the redemption by the Trustee of any bonds ptusuant to Article IIl of the
Indenture of Trust executed in connection with the issuance of the Bonds. In the
event that the amount on deposit with the Trustee exceeds the amount necessary
to make the August 1, 1998, Bond interest payment, the trustee shall return such
excess to the Developer.
(c) The Developer's rental revenue guarantee obligation on each subsequent August
1 and February 1 shall be satisfied by the Developer's depositing with the Trustee
a sum of money, within ten (10) days alter demand by the Trustee, equal to the
amount calculated by the Trustee on such August 1 or February 1 as necessary to
make the next interest payment on the Bonds. Each such deposit shall be subject
to return to the Developer on a monthly basis as the Trustee recalculates the
amount of interest that will be payable on the next Bond interest payment date in
the same manner as is described in (b) above with respect to the February 1,1998,
rental revenue guaranty payment.
2. Staff of the City is authorized to cause the preparation and execution of an
amendment to the Loan Agrcement to incorporate the modifications described in this resolution.
Adopted by the City Council of the
1998.
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erk