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HomeMy WebLinkAbout2016-041 CCRMember April Graves introduced the following resolution and moved its adoption: RESOLUTION NO. 2016-41 RESOLUTION RELATING TO THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS OF A MULTIFAMILY HOUSING DEVELOPMENT UNDER MINNESOTA STATUTES, CHAPTER 462C; GRANTING PRELIMINARY APPROVAL THERETO; ESTABLISHING COMPLIANCE WITH CERTAIN REIMBURSEMENT REGULATIONS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT THERETO (THE SANCTUARY OF BROOKLYN CENTER PROJECT) WHEREAS, the City is a Home Rule charter city duly organized and existing under the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue bonds to provide funds to finance or refinance multifamily housing developments located within the City; and WHEREAS, as a condition to the issuance of such revenue bonds, the City must adopt a housing program providing the information required by Section 462C.03, subdivision la, of the Act (the "Housing Program"). Under Section 462C.04, subdivision 2, of the Act, a public hearing must be held on the Housing Program after one publication of notice in a newspaper circulating generally in the City, at least 15 days before the hearing; and WHEREAS, the Sanctuary at Brooklyn Center, LP, a Minnesota limited partnership (the "Borrower"), has proposed that the City, pursuant to the Act, issue its revenue bonds in an aggregate principal amount not to exceed $27,000,000, in one or more series at one time or from time to time (the "Bonds"), the proceeds of which will be loaned by the City to the Borrower to be applied by the Borrower to finance the acquisition, construction, and equipping of an approximately 158-unit affordable senior assisted living rental housing facility, to be located at 6121 Brooklyn Boulevard in the City (the "Project"). The Borrower will apply the proceeds of the loan to: (i) finance the acquisition, construction and equipping of the Project; (ii) fund one or more reserve funds to secure the timely payment of the Bonds; and (iii) pay certain costs of issuing the Bonds; and WHEREAS, under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), prior to the issuance of the Bonds a public hearing duly noticed must be held by the City Council; and WHEREAS, under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act"). NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota (the "City"), as follows: Section 1. Preliminary Findings. Based on representations made by the Borrower to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: RESOLUTION NO. 2016-43 (a)The Project consists of the acquisition, construction and equipping of a multifamily senior rental housing development designed and intended to be used for rental occupancy. (b)The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan will be applied to: (i) the acquisition, construction, and equipping of the Project; (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; and (iii) the payment of the costs of issuing the Bonds. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (c)In preliminarily authorizing the issuance of the Bonds and the financing of the acquisition, construction, and equipping of the Project and related costs, the City's purpose is to further the policies of the Act. (d)The Bonds will be limited obligations of the City payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 2. Public Hearing. The City will conduct a public hearing on Monday, April 25, 2016, or such other date as determined by the City Manager in order to meet publication requirements in accordance with applicable law, on the Housing Program, the Project, and the issuance of revenue Bonds by the City, notice of which hearing in substantially attached as Exhibit A (the "Public Notice") will be published as required by Minnesota Statutes, Section 462C.04, subdivision 2, of the Act, and Section 147(f) of the Internal Revenue Code of 1986, as amended. City staff is hereby authorized to cause the publication of the Public Notice in accordance with applicable law. The Public Notice will provide a general, functional description of the Project, as well as the maximum aggregate face amount of the obligations to be issued for the purposes referenced above, the identity of the initial owner, operator, or manager of the Project, and the location of the Project. The Public Notice is authorized to be published in a newspaper circulating generally in the City on a date at least 15 days before the meeting of the City Council at which the public hearing will take place. At the public hearing reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the Project and the proposed issuance of such revenue obligations. Section 3. Housing Program. Bond counsel, as described below, shall prepare and submit to the City a draft Housing Program to authorize the issuance by the City of up to $27,000,000 in revenue Bonds to finance the acquisition, construction, and equipping of the Project by the Borrower. City staff is hereby authorized to review, approve and submit the Housing Program to the Metropolitan Council for its review on or before the date of publication of the Public Notice. Section 4. Preliminary Approval. The City Council hereby provides preliminary approval to the issuance of the Bonds in the approximate aggregate principal amount of $27,000,000 to finance all or a portion of the costs of the Project pursuant to the Housing Program of the City, subject to: (i) review of the Housing Program by the Metropolitan Council; (ii) receipt of an allocation of the bonding authority from the State of Minnesota; (iii) a public hearing as required by the Act and Section 147(1) of the Code; (iv) final approval following the preparation of bond documents; and (v) final RESOLUTION NO. 2016-41 determination by the City Council that the financing of the Project and the issuance of the Bonds are in the best interests of the City. Section 5. Submission of an Application for an Allocation of Bonding Authority. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of the Act. The City Council hereby authorizes the submission of an application for allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. The Mayor of the City, the City Clerk, and Kennedy & Graven, Chartered, acting as bond counsel with respect to the Project and the Bonds, are hereby authorized and directed to take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority to Minnesota Management & Budget. Section 6. Reimbursement of Costs under the Code. (a)The United States Department of the Treasury has promulgated regulations governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the "Regulations") require that the City adopt a statement of official intent to reimburse an original expenditure not later than 60 days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within 18 months after the later of: (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than 3 years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. (b)To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act (c) Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.1 50-20)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150- 2 (0(2 ) of the Regulations, or (iv) expenditures in a "de minimus" amount (as defined in Section 1.150-2(0(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than 60 days before the date of adoption of this resolution of the City. RESOLUTION NO. 2016-41 (d) Based on representations by the Borrower, as of the date hereof, there are no funds of the Borrower reserved, allocated on a long term-basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. Section 7. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Bonds, whether or not the Bonds are issued. Section 8. Commitment Conditional. The adoption of this resolution does not constitute • guarantee or a firm commitment that the City will issue the Bonds as requested by the Borrower. If, as • result of information made available to or obtained by the City during its review of the Project, it appears that the Project or the issuance of Bonds to finance or refinance the costs thereof is not in the public interest or is inconsistent with the purposes of the Act, the City reserves the right to decline to give final approval to the issuance of the Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the City Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. Section 9. Effective Date. This Resolution shall be in full force and effect from and after its passage. March 28, 2016 Date Mayor ATTEST: dlw4ot 11ÜI1'/L City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member Dan Ryan and upon vote being taken thereon, the following voted in favor thereof: Tim Willson, April Craves, Kris Lawrence-Anderson, Dan Ryanand the following voted against the same: whereupon said resolution was declared duly passed and adopted. RESOLUTION NO. 2016-41 NOTICE OF PUBLIC HEARING ON A HOUSING PROGRAM FOR A MULTIFAMILY SENIOR HOUSING PROJECT (THE SANCTUARY OF BROOKLYN CENTER PROJECT) NOTICE IS HEREBY GIVEN that the City Council of the City of Brooklyn Center, Minnesota (the "City") will meet on Monday, April 25, 2016 at 7:00 p.m. in the City Hall at 6301 Shingle Creek Parkway in the City for the purpose of conducting a public hearing on (i) a proposal of The Sanctuary at Brooklyn Center, LP, a Minnesota limited partnership (or an affiliated entity, the "Borrower"), that the City finance a multifamily housing development hereinafter described, pursuant to Minnesota Statutes, Chapter 462C, by the issuance of revenue bonds, in one or more series, and (ii) the adoption of a housing program for such bonds. The proceeds of such bonds will be used to (i) finance the acquisition, construction and equipping of an approximately 158-unit affordable multifamily senior assisted living rental housing facility to be located at 6121 Brooklyn Boulevard in the City; (ii) pay costs of issuance and other costs related to the issuance of the bonds; and (iii) fund capitalized interest and certain reserves (collectively, the "Project"). The Project will be owned and operated by the Borrower. The maximum aggregate estimated principal amount of bonds or other obligations to be issued to finance the Project is $27,000,000. The bonds or other obligations if and when issued will not constitute a charge, lien or encumbrance upon any property of the City, and will be payable solely from revenues of the project, and will not be backed by the full faith and credit of the City but will be payable solely from sums paid by the Borrower pursuant to a revenue agreement. A copy of the housing program will be on file at City Hall, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430, Monday through Friday until the date of the Public Hearing. At the time and place fixed for the Public Hearing, the City Council will give all persons who appear or submit comments in writing to the City Council prior to the hearing, an opportunity to express their views with respect to the proposal. In addition, interested persons may file written comments respecting the proposal with the City to the attention of Nate Reinhardt, at (763) 569-3300 at or prior to said public hearing. Publish April 4, 2016.