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RES 10-44RESOLUTION NO. [~[ A resolution of the City Council of the City of Elk River, Minnesota, authorizing the issuance, sale, and delivery of Multifamily Housing Revenue Bonds (Dove Tree Apartments Project), Series 2010, in the original aggregate principal amount of up to $4,000,000 (the "Bonds"), as well as the Subordinate Multifamily Housing Revenue Note (Dove Tree Apartments Project) Series 2010, in the original principal amount of up to $3,000,000 (the "Note"); and approving the form of and authorizing the execution and delivery of documents relating to the Bonds and Note WHEREAS, the City of Elk River, Minnesota (the "Issuer"), is a municipal corporation duly organized and existing under the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Chapter 462C, as amended (the "Act"), the Issuer is authorized to issue its revenue bonds or obligations in such principal amount as, in the opinion of the Issuer, is necessary to provide sufficient funds for financing a "development" as defined in the Act; and WHEREAS, Elk River Leased Housing Associates III, Limited Partnership, a Minnesota . limited liability partnership (the "Borrower"), intends to acquire, renovate and equip a 68-unit multifamily rental housing facility located at 1105 Lions Park Drive in the City of Elk River (the "Project"); and WHEREAS, the Issuer proposes to finance the Project pursuant to the Act and this Resolution by the issuance of the Bonds and Note; and WHEREAS, the Bonds will be issued under the Indenture, as hereinafter defined, and the Note will be issued in a direct placement to Elk River Leased Housing Associates Limited Partnership (the "Subordinate Lender"), and the Bonds and the Note and the interest thereon shall be payable solely from the revenues pledged therefor and the Bonds and Note shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation, nor shall the Bonds or Note constitute or give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers and the Bonds and Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the Issuer; and WHEREAS, the Issuer on June 28, 2010 held a public hearing relating to the issuance of the Bonds and Note with respect to the Project and the housing program therefor in accordance with the requirements of the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended; • NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF . ELK RIVER, MINNESOTA, AS FOLLOWS: 1. For the purpose of financing the Project, as well as the establishment of a reserve to secure the Bonds and the payment of all other expenditures of the Issuer incident to and necessary or convenient to carry out the purposes of the Project, there is hereby authorized the issuance, sale and delivery of the Bonds in the original aggregate principal amount not to exceed $4,000,000, and the Note in the original principal amount not to exceed $3,000,000. The Bonds shall be in such principal amounts, shall be numbered, shall be dated, shall mature within thirty- five years of the date of issuance thereof, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as are prescribed in the Indenture of Trust (the "Indenture"), between the Issuer and U.S. Bank National Association, as trustee (the "Trustee"), substantially in the form now on file with the Issuer. The Bonds shall bear interest at the rates established by the marketing of the Bonds, provided that the average weighted interest rate on the Bonds shall not exceed 7.00% per annum. Notwithstanding the preceding, the Mayor may establish or change the maturity dates for the Bonds, the. principal amount of the Bonds maturing on any date of maturity, the principal amounts of the Bonds subject to redemption, and the dates of redemption of the Bonds. The form of the Bonds included in the Indenture is approved, subject to such changes not inconsistent with this resolution and applicable law, and subject to such changes that are approved by the Mayor. The issuance and delivery of the Bonds shall be conclusive evidence that the Mayor has approved all provisions of the Bonds as issued and any changes to the form of the Bonds on file with the Issuer on the date hereof. 2. The Note shall be in substantially the form submitted to the Council on the date • hereof, and shall mature at the times and amounts, be subject to redemption, and provide interest at the rate(s) as therein specified as such may be modified by agreement of the Subordinate Lender, the Borrower and the Issuer. The Note shall mature within 40 years of the date of issuance, and carry an initial interest rate not to exceed 5.00% per annum. 3. The Bonds and Note shall be special obligations of the Issuer payable solely from the revenues pledged thereto. The Issuer hereby authorizes and directs the Mayor and the City Administrator of the Issuer to execute and deliver the Indenture, and hereby authorizes and directs the execution and delivery of the Bonds in accordance with the Indenture. The Issuer hereby authorizes and directs the Mayor and the City Administrator to execute and deliver the Note to the Subordinate Lender. 4. The Trustee is hereby appointed the custodian of the funds and accounts created under the Indenture and the paying agent and bond registrar with respect to the Bonds. All the provisions of the Indenture, 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 of the Indenture. The Indenture shall be substantially in the form now on file with the Issuer, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor, in the Mayor's discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. . 2 • 5. The Mayor and City Administrator of the Issuer are hereby authorized and directed to execute and deliver the Loan Agreement among the Issuer and the Borrower, providing for the loan of the proceeds of the Bonds to the Borrower. The Mayor and City Administrator of Issuer are hereby authorized and directed to execute and deliver the Subordinate Loan Agreement among the Issuer and the Borrower, providing for the financing of a portion of the acquisition costs of the Project. All of the provisions of such Loan Agreements, 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 of the Loan Agreements. The Loan Agreements shall be substantially in the form now on file with the Issuer with such variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor, in the Mayor's discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 6. The Mayor and City Administrator are hereby authorized and directed to execute the Bond Purchase Agreement, among the Issuer, Dougherty & Company LLC (the "Underwriter"), and the Borrower (the "Bond Purchase Agreement"), relating to the Bonds. All of the provisions of the Bond Purchase Agreement, 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 of the Bond Purchase Agreement. The Bond Purchase Agreement shall be substantially in the form now on file with the Issuer, with such necessary and appropriate variations, • omissions, and insertions as do not materially change the substance thereof, or as the Mayor, in the Mayor's discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 7. The Mayor and City Administrator are hereby authorized and directed to execute the Assignment and Pledge Agreement between the Issuer and the Subordinate Lender (the "Assignment and Pledge Agreement"), relating to the Note. All of the provisions of the Assignment and Pledge Agreement, 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 of the Assignment and Pledge Agreement. The Assignment and Pledge Agreement shall be substantially in the form now on file with the Issuer, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor, in the Mayor's discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 8. The Mayor and City Administrator of the Issuer are hereby authorized and directed to execute and deliver the Regulatory Agreement among the Issuer, the Trustee and the Borrower, relating to the Bonds. The Mayor and City Administrator of Issuer are hereby authorized and directed to execute and deliver the Subordinate Regulatory Agreement among the Issuer, the Subordinate Lender or its designee and the Borrower, relating to the Note. All of the provisions of such Regulatory Agreements, 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 of the 3 Regulatory Agreements. The Regulatory Agreements shall be substantially in the form now on • file with the Issuer with such variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor, in the Mayor's discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 9. The Mayor and City Administrator are hereby authorized to execute and deliver, on behalf of the Issuer such other certificates, instruments, and other documents as are necessary, customary, or appropriate in connection with the issuance, sale, and delivery of the Bonds and Note, or are necessary to establish the validity or enforceability of the Bonds and Note, or are required by Bond Counsel to establish the validity or enforceability of the Bonds and Note or the exclusion from gross income of interest on the Bonds and Note for purposes of Federal and State of Minnesota income taxation. The authorization in this paragraph specifically includes the Assignment of Mortgage from the Issuer to the Trustee, and the Assignment of Subordinate Mortgage from the Issuer to the Subordinate Lender. 10. The Issuer hereby consents to the distribution of the Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"). The Issuer hereby consents to the use by the Underwriter of the final Official Statement substantially in the form of the Preliminary Official Statement described above (the "Official Statement") in connection with the offer and sale of the Bonds. The Preliminary Official Statement and the Official Statement are the sole materials consented to by the Issuer for use in connection with the offer and sale of the Bonds. The Issuer has not participated in the preparation of the Preliminary Official Statement or the Official Statement and takes no responsibility for and makes no representation or warranty as to the accuracy or completeness of such information. 11. All covenants, stipulations, obligations, and agreements of the Issuer contained in this resolution and the aforementioned certificates, instruments, and documents shall be deemed to be the covenants, stipulations, obligations, and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations, and agreements shall be binding upon the Issuer. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned certificates, instruments, or documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the City Council of the Issuer, or any officer, agent, or employee of the Issuer in that person's individual capacity, and neither the City Council of the Issuer nor any officer or employee executing the Bonds or Note shall be liable personally on the Bonds or Note or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant, or agreement contained in the aforementioned certificates, instruments, or documents, or in the Bonds or Note, or in any other document related to the Bonds or Note, and no obligation therein or herein imposed upon the Issuer or the breach thereof, shall constitute or give rise to any pecuniary liability of the Issuer or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the Issuer has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreements which are to be applied to the payment of the Bonds and Note, respectively, as provided therein and in the • Indenture and Assignment and Pledge Agreement. 4 • 12. 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 Issuer or any holder of the Bonds or Note issued under the provisions of this resolution any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision 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 Issuer and any holders from time to time of the Bonds and Note issued under the provisions of this resolution. 13. In case any one or more of the provisions of this resolution, or of the aforementioned documents, or of the Bonds or Note 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 or Note, but this resolution, the aforementioned documents, and the Bonds and Note shall be construed and endorsed as if such illegal or invalid provision had not been contained. therein. 14. The Bonds and Note, 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 Note 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 Note, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to and in the enactment of this resolution, and • precedent to issuance of the Bonds and Note, and precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. 15. The officers of the Issuer and its attorneys, agents and employees are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned certificates, instruments, or documents, and the Bonds and Note for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds and Note, the aforementioned certificates, instruments, and documents, and this resolution. In the event that for any reason the Mayor is unable to carry out the execution of any of the documents or other acts provided herein, the Acting Mayor shall be authorized to act in the capacity of the Mayor and undertake such execution or acts on behalf of the Issuer with full force and effect, which executions or acts shall be valid and binding on the Issuer. If for any reason the City Administrator of the Issuer is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any other officer of the Issuer, with the same force and effect as if such documents were executed and delivered by the City Administrator. If the person whose signature appears on any of the foregoing certificates, instruments, or documents as the Mayor or City Administrator shall cease to be the Mayor or City Administrator, respectively, before the date of issuance of the Bonds and Note such signature shall, nevertheless, be valid and sufficient for all purposes. 16. This resolution shall be in full force and effect from and after its passage. 5 Adopted by the City Council of the Issuer this 16th day of August, 2010. • Stephanie Kli , Ma or Attest: -~ ,~ Tina Allard, City Clerk • GP:2824601 vl •