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HomeMy WebLinkAbout2016-063 CCRMember Lin Myszkowski introduced the following resolution and moved its adoption: RESOLUTION NO. 2016-63 AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF ITS MULTIFAMILY HOUSING REVENUE BONDS (SANCTUARY AT BROOKLYN CENTER PROJECT), SERIES 2016; ADOPTING A HOUSING PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED DOCUMENTS; PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE BONDS; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO WHEREAS, the City of Brooklyn Center, Minnesota (the "City"), is a political subdivision 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 issuing revenue bonds to finance or refinance multifamily housing developments located within the City, and as a condition to the issuance of such revenue bonds, adopt a housing program providing the information required by Section 462C.03, subdivision la, of the Act; and WHEREAS, in the issuance of the City's revenue bonds and in the making of a loan to finance a multifamily housing development the City may exercise, within its corporate limits, any of the powers that the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended; and WHEREAS, The Sanctuary at Brooklyn Center, LP, a Minnesota limited partnership (the "Borrower"), has requested that the City issue its revenue bonds under the Act and lend the proceeds thereof to the Borrower to finance the following: (i) 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 (the "Project"); (ii) the payment of costs of issuance and other costs related to the issuance of the bonds; and (iii) the funding of capitalized interest and certain reserves; and WHEREAS, the Project is designed and intended to be used primarily for seniors for rental occupancy and is restricted to persons age 55 and older; and WHEREAS, the City has prepared a housing program (the "Housing Program" or "Program") to authorize the issuance by the City of revenue bonds in the maximum principal amount of $27,000,000 to finance the acquisition, construction, and equipping of the Project; and WHEREAS, a notice of public hearing (the "Public Notice") was published in the Sun Post, the official newspaper and a newspaper of general circulation in the City, with respect RESOLUTION NO. 2016-63 to: (i) the required public hearing under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) the required public hearing under Section 462C.04, subdivision 2, of the Act; (iii) the Housing Program; and (iv) approval of the issuance of the Bonds, as hereinafter defined; and WHEREAS, the Public Notice was published at least 15 days before the regularly scheduled meeting of the City Council of the City (the "City Council"), and on this date, the City Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing; and WHEREAS, the Borrower has requested that the City issue, sell, and deliver its Multifamily Housing Revenue Bonds (Sanctuary at Brooklyn Center Project), Series 2016 (the "Bonds"), in an original aggregate principal amount not to exceed $27,000,000; and WHEREAS, on March 28, 2016, the City Council adopted a resolution, authorizing the submission of an application to the office of Minnesota Management & Budget for an allocation of bonding authority with respect to the Bonds to finance the Project in accordance with the requirements of Minnesota Statutes, Chapter 474A, as amended; and WHEREAS, the proceeds derived from the sale of the Bonds will be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, dated on or after June 1, 2016 (the "Loan Agreement"), between the City and the Borrower, whereby the City will apply the proceeds derived from the sale of the Bonds to fund a loan to the Borrower; and WHEREAS, as further security for the repayment of principal and interest on the Bonds, among other things, the Borrower will execute a Combination Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated on or after June 1, 2016 (the "Mortgage") for the benefit of the City and assigned to the Trustee and a Collateral Assignment of TIF Development Agreement and TIF Note, dated on or after June 1, 2016 (the "TIF Assignment") for the benefit of the Trustee; and WHEREAS, the Bonds will be issued pursuant to this resolution and a Trust Indenture, dated on or after June 1, 2016 (the "Indenture"), between the City and a bond trustee (the "Trustee"), and the Bonds and the interest on the Bonds: (i) shall be payable solely from the revenues pledged therefor under the Loan Agreement; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan Agreement; and (v) shall not constitute a general or moral obligation of the City. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, as follows: 1. The City acknowledges, finds, determines, and declares that the issuance of the Bonds is authorized by the Act and is consistent with the purposes of the 2 RESOLUTION NO. 2016-63 Act and that the issuance of the Bonds, and the other actions of the City under the Indenture, the Loan Agreement, and this resolution constitute a public purpose and are in the interests of the City. In authorizing the issuance of the Bonds for the financing of the Project and the related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by providing multifamily housing developments for low or moderate income senior residents of the City and otherwise furthering the purposes and policies of the Act. 2.The Housing Program is hereby adopted, ratified, and approved in all respects without amendment. The preparation of the Housing Program is hereby ratified, confirmed, and approved. The City Manager is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Housing Program in accordance with the Act and any other applicable laws and regulations. 3.For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Bonds in one or more series in a maximum aggregate principal amount not to exceed $27,000,000. The Bonds shall bear interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Bonds to be issued, in whole or in part, as "tax-exempt bonds," the interest on which is excludable from gross income for federal and State of Minnesota income tax purposes or as taxable bonds. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel, to prepare, execute, and deliver its approving legal opinions with respect to the Bonds. All of the provisions of the Bonds, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bonds shall be substantially in the form in the Indenture on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds and the terms of redemption of the Bonds) as the Mayor and the City Manager, in their discretion, shall determine. The execution of the Bonds with the manual or facsimile signature of the Mayor and the City Manager (the "City Officials") and the delivery of the Bonds by the City shall be conclusive evidence of such determination. 4. The Bonds shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement and other funds pledged pursuant to the Indenture; however, the City does not pledge its general credit or taxing powers or any funds of the City to the payment of the 3 RESOLUTION NO. 2016-63 Bonds. The City Council hereby authorizes and directs the City Officials to execute the Indenture, and to deliver the Indenture to said Trustee, and hereby authorizes and directs the execution of the Bonds in accordance with the terms of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the Bonds, the City, and the Trustee as set forth therein. 5.The Trustee is hereby appointed as Paying Agent and Bond Registrar for the Bonds as further provided in the Indenture. 6.The proceeds of Bonds will be disbursed pursuant to the terms of the Indenture, the Loan Agreement and a Disbursing Agreement, dated on or after June 1, 2016, between the Borrower, the Trustee and a disbursing agent (the "Disbursing Agreement"). 7.To ensure compliance with certain rental and occupancy restrictions imposed by the Act and Section 142(d) of the Code and to ensure compliance with certain restrictions imposed by the City, the City Officials are also hereby authorized and directed to execute and deliver a Land Use Restriction Agreement, dated on or after June 1, 2016 (the "Regulatory Agreement"), among the City, the Borrower, and the Trustee. 8.The City Officials are hereby authorized and directed to execute and deliver the Loan Agreement, the Indenture, the Bonds, a consent and acknowledgement to the TIF Assignment, the Regulatory Agreement, an Assignment of Mortgage, dated on or after June 1, 2016 (the "Assignment of Mortgage"), from the City to the Trustee, a Bond Purchase Agreement, between Dougherty & Company LLC (the "Underwriter"), the City, and the Borrower (the "Bond Purchase Agreement") and such other documents and certificates as are necessary or appropriate in connection with the issuance, sale, and delivery of the Bonds, including, various certificates of the City, an Information Return for Tax- Exempt Private Activity Bond Issues, Form 8038, with respect to the Bonds, a certificate as to arbitrage and rebate, and similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Bonds (collectively, the "Financing Documents") All of the provisions of the Financing Documents, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Financing Documents shall be substantially in the forms on file with the City which are hereby approved, with such necessary and appropriate variations, omissions, and insertions as are approved by bond counsel to the City, as do not materially adversely change the substance thereof with respect to the City, and as the City Officials, in their discretion, shall determine, and the execution thereof by the City Officials shall be conclusive evidence of such determinations. RESOLUTION NO. 2o16-6 3 9.The City has not participated in the preparation of the Official Statement relating to the offer and sale of the Bonds (the "Official Statement"), and has made no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of such information. Subject to the foregoing, the City hereby consents to the distribution and the use by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Bonds. 10.Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council nor any officer or employee executing the Bonds shall be personally liable on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant or agreement contained in the aforementioned documents, the Bonds, or in any other document relating to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to a general or moral obligation of the City or any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Bonds, as provided therein. 11. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City, any holder of the Bonds issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, and any holder from time to time of the Bonds issued under the provisions of this resolution. 5 RESOLUTION NO. 2016-63 12.In case any one or more of the provisions of this resolution, other than the provisions contained in the first sentence of Section 4, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. 13.The Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 14.The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Bonds, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the aforementioned documents, and this resolution. If for any reason the Mayor or the City Manager is unable to execute and deliver the documents referred to in this Resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of the Mayor or the City Manager with the same force and effect as if such documents were executed and delivered by the Mayor or the City Manager. 15.The Borrower shall pay the administrative fee of the City on the date of issuance of the Bonds. The Borrower will also 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, including any costs for attorneys' fees. 16. This Resolution shall be in full force and effect from and after its approval. RESOLUTION NO. 2016-63 April 25, 2016 Date Mayor ATTEST: 1W kMJ5^q - 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 Graves, Lin Myszkowski, Dan Ryan and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 7