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HomeMy WebLinkAbout1995-074 CCR1 1 Member Kristen Mann introduced the following resolution and moved its adoption: RESOLUTION NO. 95 74 RESOLUTION ADOPTING AN AMENDED HOUSING PROGRAM FOR THE ISSUANCE OF RENTAL HOUSING REVENUE BONDS WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes Chapter 462C (the "Act cities are authorized to adopt a housing plan and carry out programs for the financing of multifamily housing which is affordable to persons of low and moderate income; and WHEREAS, the City of Brooklyn Center, Minnesota (the "City") has heretofore adopted a Housing Plan after a public hearing held thereon for which notice was published as required by the Act; and WHEREAS, the City has heretofore adopted a Housing Program after a public hearing held thereon for which notice was published as required by the Act, providing for the issuance of revenue bonds to finance the acquisition and rehabilitation of a 252 -unit qualified residential rental project known as Four Courts Apartments (the "Project to be located at 3936 Northway Drive in the City and owned by Brooklyn Center Leased Housing Associates, Limited Partnership, a limited partnership formed under the laws of the State of Minnesota; and WHEREAS, the City desires to amend the Program to provide for the issuance of additional revenue bonds to finance the Project; and WHEREAS, the City has on this date conducted a public hearing on the amended housing program in the form attached hereto as Exhibit A (the "Amended Program following publication of notice and submission to the Metropolitan Council all in conformance with the requirements of the Act. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota: 1. That the Amended Program is hereby in all respects adopted. 2. That the staff of the City is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Amended Program in accordance with the Act and any other applicable laws and regulations. 3. That the issuance of housing revenue bonds by the City pursuant to the Amended Program is subject to a final determination by the City that such issuance is in the best interest of the City and this resolution shall not be deemed to obligate the City to issue such bonds. RESOLUTION NO. 95 -74 J/ A I/l.c, 4: 41ce.,ril, Date d' Maya ATTEST: jletA45Y/ g Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member Kathleen Carmody and upon vote being taken thereon, the following voted in favor thereof: Myrna Kragness, Kristen Mann, Debra Hilstrom, and Kathleen Carmody; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted. 1 1 1 RESOLUTION NO. 95 -74 Exhibit A AMENDED PROGRAM FOR A MULTIFAMILY HOUSING DEVELOPMENT Pursuant to Minnesota Statutes, Chapter 462C (the "Act the City of Brooklyn Center (the "City is authorized to develop and administer programs to finance the acquisition and rehabilitation of multifamily housing developments under the circumstances and within the limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the City. The City has heretofore adopted a program to provide for the issuance of revenue bonds to finance the acquisition and rehabilitation of the hereinafter defined Project, and has issued $7,500,000 of its revenue bonds to provide such financing. The City now desires to amend its program to provide for the issuance of additional revenue bonds to finance additional rehabilitation expenses of the Project. The Program is therefore amended to provide as follows: The City has received a proposal that it approve a program providing for acquisition and rehabilitation of a 252 -unit qualified residential rental project known as Four Courts Apartments (the "Project located at 3936 Northway Drive in the City by Brooklyn Center Leased Housing Associates, Limited Partnership, a limited partnership formed under the laws of the State of Minnesota (the "Developer the general partner of which is Brooklyn Center Leased Housing Associates, L.L.C., a limited liability company formed under the laws of the State of Minnesota. The acquisition and rehabilitation of the Project is to be funded through the issuance of up to $9,800,000 in revenue bonds to be issued by the City in one or more series (the "Bonds Following acquisition and rehabilitation of the Project, the Developer will own and operate the Project as a multifamily residential rental project. The Project will meet the minimum rehabilitation requirements of Sections 147(d) and 42(e)(2) of the Internal Revenue Code of 1986, as amended (the "Code and will be occupied by individuals or families whose incomes at the time of initial occupancy will meet the requirements of Sections 142(d) and 42(g) of the Code. It is estimated that rents for the Housing Units will range from approximately $365 per month to $630 per month. The City, in establishing this multifamily housing program (the "Amended Program has considered the information contained in the City's 462C Housing Plan (the "Housing Plan"). The Project will be rehabilitated in accordance with the requirements of Subdivisions 1 and 2 of Section 462C.05 of the Act. Section A. Definitions. The following terms used in this Amended Program shall have the following meanings, respectively: "Act" shall mean Minnesota Statutes, Section 462C.01, et seq., as currently in effect and as the same may be from time to time amended. "Bonds" shall mean the revenue bonds to be issued by the City to finance the Amended Program. "City" shall mean the City of Brooklyn Center, Minnesota. "Developer" shall mean Brooklyn Center Leased Associates, Limited Partnership, a 1 1 RESOLUTION NO. 95 -74 limited partnership formed under the laws of the State of Minnesota. "Housing Plan" shall mean the City's 462C Housing Plan, adopted pursuant to the Act, of which this Amended Program is a part. "Housing Unit" shall mean any one of the apartment units, each located in the Project, occupied by one person or family, and containing complete living facilities. "Land" shall mean the real property upon which the Project is situated. "Amended Program" shall mean this program for the financing of a Project pursuant to the Act. "Project" shall mean the residential rental housing development consisting of approximately 252 Housing Units (102 one bedroom and 148 two- bedroom and 2 studio units) to be acquired and rehabilitated by the Developer. Section B. Amended Program For Financing the Project. It is proposed that the City establish this Amended Program to provide financing for the acquisition and rehabilitation of the Project at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the City, the initial purchaser of the Bonds and the Developer. The City expects to issue the Bonds as soon as the terms of the Bonds have been agreed upon by the City, the Developer and the initial purchaser of the Bonds. The proceeds of the Bonds will be loaned to the Developer to finance acquisition and rehabilitation of the Project, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a trustee will be appointed by the City to monitor the rehabilitation of the Project and the payment of principal and interest on the Bonds. It is anticipated that the Bonds shall have a maturity of approximately thirty (30) years and will bear interest at a rate priced to the market at the time of issuance. The City will hire no additional staff for the administration of the Amended Program. Insofar as the City will be contracting with underwriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Amended Program, no administrative costs will be paid from the City's budget with respect to this Amended Program. The Bonds will not be general obligation bonds of the City, but are to be paid only from properties pledged to the payment thereof, which may include additional security such as additional collateral, insurance or a letter of credit. Section C. Local Participation in the Amended Program. The City will participate in the Project financing as necessary to comply with the requirements of Chapter 474A, relating to the allocation of tax- exempt bonding authority. Section D. Standards and Requirements Relating to the Financing of the Project Pursuant to the Amended Program. The following standards and requirements shall apply with respect to the operation of the Project by the Developer pursuant to this Amended Program: 2 1 1 RESOLUTION NO. 95 -74 (1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition and rehabilitation of the Project and to the funding of appropriate reserves. The proceeds will be made available to the Developer pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Developer to the City regarding the use of proceeds and the character and use of the Project. (2) The Developer, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, marital status, or status with regard to public assistance or disability. (3) At least forty percent (40%) of the Housing Units will be held for occupancy by families or individuals with gross income not in excess of sixty percent (60 of median family income, adjusted for family size, in order to comply with federal tax law requirements for the use of tax- exempt financing. This set aside will also satisfy the low income occupancy requirements of Section 462C.05, Subdivision 2 of the Act. (4) Pursuant to Section 462C.05, Subdivision 2 of the Act, the Project is designed to be affordable by persons and families with Adjusted Gross Income not in excess of the greater of (a) 110 percent of the median family income as estimated by the United States Department of Housing and Urban Development for Hennepin County, or (b) 100 percent of the income limits established by the Minnesota Housing Finance Agency for the City and by other persons and families to the extent determined to be necessary by the City in furtherance of the policy of economic integration. Section E. Evidence of Compliance. The City may require from the Developer at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Developer to complete the rehabilitation of the Project, and evidence satisfactory to the City of compliance with the standards and requirements for the making of the financing established by the City, as set forth herein; and in connection therewith, the City or its representatives may inspect the relevant books and records of the Developer in order to confirm such ability, intention and compliance. In addition, the City may periodically require certification from either the Developer or such other person deemed necessary concerning compliance with various aspects of this Amended Program. Section F. Issuance of Bonds. To finance the Amended Program authorized by this Section, the City may by resolution authorize, issue and sell its revenue bonds in more than one series in an aggregate principal amount of approximately $9,800,000. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primarily from the revenues of the Amended Program authorized by this Section. The costs of the Project are presently expected to be as follows: Acquisition and Rehabilitation Reserves Costs of Issuance Total: $8,681,225 783,973 454.188 $9.919.386 3 1 RESOLUTION NO. 95 Costs of the Project in excess of available Bond proceeds will be paid by the Developer from other sources. The costs of the Project may change between the date of preparation of this program and the date of issuance of the Bonds. The Bonds are expected to be issued in March or April of 1995. Section G. Severabilitv. The provisions of this Amended Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. Section H. Amendment. The City shall not amend this Amended Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Section I. State Ceiling. $9,800,000 of the state ceiling for private activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and Chapter 474A of Minnesota Statutes has been obtained with respect to the Bonds. 4