98-079 RESRESOLUTION 98-79
RESOLUTION GIVING PRELIMINARY APPROVAL TO AND CALLING A
PUBLIC I-I~EARING ON A PROPOSED HOUSING PROGRAM AND PROPOSED
HOUSING FACILITIES PROJECTS AND THE PROPOSED ISSUANCE OF
REVENUE BONDS THEREFOR BY THE CITY OF ELK RIVER, MINNESOTA'
PURSUANT TO A JOhNT POWERS AGREEMENT TO BE ENTERED INTO IN
CONNECTION THEREWITH
WHEREAS, the City Council of the City of Elk River, Minnesota (the "City")
has received a request from the entities listed in Exhibit A (such entities collectively referred
to as the "Borrowers"), for the City, or one of the other Participating Jurisdictions described
below if so determined by the City and the other Participating Jurisdictions, to issue its
revenue bonds (the "Bonds") in an aggregate principal amount not to exceed $15,000,000
pursuant to the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections
469.152 to 469.1651, as amended (the "Industrial Development Act"), and the Municipal
Housing Programs Act, Minnesota Statutes, Chapter 462C, as amended (the "Housing
Programs Act," and together with the Industrial Development Act, the "Revenue Bond Acts");
and
._WHE~AS, the Borrowers have represented ~o the City that a portion of the
proceeds of the Bonds (the "Evans Park Portion") would b~21'~'~ined to Evans Park, Inc., a
Minnesota nonprofit corporation, to pay costs of the Evans Park Projects described in Exhibit
B (the "Evans Park Projects"), and in accordance with the Housing Program developed
therefor (the "Housing Program"), substantially in the form attached hereto as Exhibit E
Revenue Bond, all pursuant to the provisions of the Housing Programs Act; and
WHEREAS, the Borrowers have represented to the City that proceeds of the
Bonds not constituting a pan of the Evans Park Portion would be applied to finance or
refinance costs of acquiring, constructing, equipping and furnishing certain facilities of the
other Borrowers located in one or more of the Participating Jurisdictions (defined below);
and
WHEREAS, the Borrowers have requested that the City enter into a Joint
Powers Agreement with the jurisdictions listed in Exhibit C (such jurisdictions collectively
referred to with the City as the "Participating Jurisdictions") in connection with the proposed
issuance of the Bonds; and
WHEREAS, the Borrowers have represented to the City that Minnesota
Statutes, Section 471.59 (the "Joint Powers Act" and, taken collectively with the Revenue
Bond Acts, sometimes referred to together as the "Acts"), provides that two or more
governmental units, by agreement entered into through action of their governing bodies, may
jointly or cooperatively exercise any power common to the contracting parties, and may
provide for the exercise of such power by one of the participating governrnental units on
behalf of the other participating units;
WH]EREAS, the Borrowers have represented to the City that in connection
with revenue bonds issued under the Industrial Development Act, Section 469.155, Subd. 9
provides for intergovernmental agreements between municipalities, redevelopment agencies
and political subdivisions relating to the financing of projects under the Industrial
Development Act, and in connection with revenue bonds issued under the Housing Programs
Act, Section 462C.14, Subd. 3 provides for joint action between cities and housing and
redevelopment authorities pursuant to the Joint Powers Act, and contracts for housing
programs and development of financial services for housing between a city and another city
or other political subdivision or state agency;
WHEREAS, the Borrowers have represented to the City that the City and the
Participating Jurisdictions are "governmental units" under the Joint Powers Act and
"municipalities" or "redevelopment agencies" under the Industrial Development Act and
each has the power to issue bonds under the Industrial Development Act;
WHEREAS, the Borrowers have represented to the City that the City is a
"city" under the Housing Programs Act with power to issue bonds under the Housing
Programs Act;
W/t~REAS, the Borrowers have represented i/5 fhe City that pursuant to
Minnesota Statutes, Section 462C.04, and Section 147(0 of the Internal Revenue Code of
1986, as amended, it is necessary for the City to conduct a public hearing before the City
issues the Bonds;
WHEREAS, the Borrowers have agreed to reimburse the City for the cost of
publication of notice of the hearing in the official newspaper of the City, together with any
legal fees to be incurred by the City and any loss or expense of the City for its inability (due
to the issuance of the Bonds) to designate the City's bonds in 1998 as "qualified tax-exempt"
obligations, as well as any other costs incurred by the City related to the Joint Powers
Agreement; and
NOW, THEREFORE, be it resolved by the City Council of the City of Elk
River, Minnesota, that:
1. The City Council shall hold a public hearing on the Housing Program
and the issuance of the Bonds on Monday, July 27, at 7:00 o'clock P.M. at the City Hall,
13065 Orono Parkway, Elk River, Minnesota. The City Clerk or any employee of the City
shall publish or cause to be published a legal notice in connection therewith, substantially in
the form attached hereto as Exhibit D.
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2. The Housing Program is hereby given preliminary approval and the
proposal to finance and refinance the Evans Park Projects is hereby given preliminary
approval, subject to holding a public hearing thereon and the Council's adoption in its sole and
absolute discretion of a definitive Bond Resolution.
3. The issuance of one or more series of revenue bonds (the "Bonds"),
pursuant to a Joint Powers Agreement (the "Joint Powers Agreement") between the City and
the Participating Jurisdictions, in substantially the form now on file in the offices of the City
and presented to this meeting, and all pursuant to the Acts, the Bonds to be in an aggregate
principal amount not to exceed approximately $15,000,000, and to be issued in part to finance
and refinance the Evans Park Projects, is hereby approved, subject to holding a Public hearing
thereon and the Council's approving in its sole and absolute discretion a definitive Bond
Resolution.
4. Evans Park, Inc, the other Borrowers, Faegre & Benson LLP, as bond
counsel, officers of the City, and other City representatives and officials, together with officers
of the other Joint Powers Jurisdictions, are also authorized to initiate the preparation of such
loan agreements, indentures and related documents as may be necessary or appropriate to the
financing and refinancing of the projects to be financed and refinanced from the proceeds of the
Bonds so that, when and if this Council gives its final approval thereto, such financing and
refinancing may be carried out expeditiously.
5): -In no event shall the Bonds ever be' pfi~,~ible from or charged upon any
funds of the City other than amounts payable under the revenue agreements which are to be
pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel the
exercise of the taxing power of the City to pay the Bonds or the interest thereon, nor enforce the
payment thereof against any property of the City other than the City's interest in the Project
facilities; the Bonds shall not constitute a general or moral obligation of the City or a charge,
lien or encumbrance, legal or equitable, upon any property of the City; and the Bonds do not
constitute an indebtedness of the City within the meaning of any constitutional, statutory, or
charter limitation.
Adopted this ~ F~day of
,1998.
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EXHIBIT A
LIST OF BORROWERS
Amherst H. Wilder Foundation, a Minnesota nonprofit corporation.
Guardian Angels Health Services, Inc., a Minnesota nonprofit corporation.
Evans Park, Inc., a Minnesota nonprofit corporation.
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EXHIBIT B
PROJECT DESCRIPTION
The Evans Park Projects consist of the following:
1. The refinancing of existing mortgage indebtedness issued with respect to the
acquisition, construction, equipping and furnishing of a 36-unit elderly housing facility
owned by Evans Park, Inc. and located at 300 Evans Avenue, Elk River, Minnesota (the
"Mortgage Indebtedness Refinancing"), together with the rehabilitation of the facility; and
2. The financing of costs of acquisition, construction, equipping and furnishing of
an approximately 60-unit assisted living facility to be located at Joplin Street and U.S.
Highway 10, in Elk River, Minnesota and to be owned by Evans Park, Inc.(the "1998
Project").
B-1
ExllmlT C
PARTICIPATING JURISDICTIONS
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Housing and Redevelopment Authority of the City of Saint Paul, Minnesota.
Washington County Housing and Redevelopment Authority.
MI :390596.03
C-1
NOTICE OF PUBLIC HEARING ON A PROPOSED HOUSING
PROGRAM AND PROJECT AND THE ISSUANCE OF REVENUE
BONDS BY CITY OF ELK RIVER, MllqNESOTA
NOTICE IS HEREBY GIVEN that a public hearing shall be conducted by the
City Council of the City of Elk River (the "City") on a proposal by Amherst H. Wilder
Foundation, Guardian Angels Health Services, Inc. and Evans Park, Inc., each of which is a
Minnesota nonprofit corporation (collectively, the "Borrowers") that the City, or one of the
Participating Jurisdictions described below, acting pursuant to a joint powers agreement (the
"Joint Powers Agreement") with the Housing and Redevelopment Authority of the City of
Saint Paul, Minnesota and the Washington County Housing and Redevelopment Authority
(collectively with the City the "Participating Jurisdictions"), issue revenue bonds pursuant to
Minnesota Statutes, Sections 469.152 to 469.1651, and Minnesota Statutes, Chapter 462C, as
amended.
Under the proposal, the other Participating Jurisdictions xvill enter into a joint powers
agreement with the City (the "Joint Powers Agreement"), pursuant to which the City, or one
of the other Participating Jurisdictions selected by the City and the other Participating
Jurisdictions, will issue its revenue bonds (the "Bonds") in one or more series, a portion of
the proceeds of'~vhi~h (the "Evans Park Portion") would'~h'loaned to Evans Park, Inc., a
Minnesota nonprofit corporation, to pay costs of financing and refinancing the Evans Park
Projects described below. Proceeds of the Bonds not constituting a part of the Evans Park
Portion would be applied to pay or refinance costs of acquiring, constructing, equipping and
furnishing certain facilities of the other Borrowers located in the City or one or more of the
other Participating Jurisdictions.
The proposed Evans Park Projects are located within Elk River, Minnesota and
consist of the following:
1. The refinancing of existing mortgage indebtedness issued with respect to the
acquisition, construction, equipping and furnishing of a 36-unit elderly housing facility
owned by Evans Park, Inc. and located at 300 Evans Avenue, Elk River, Minnesota (the
"Mortgage Indebtedness Refinancing"), together with the rehabilitation of the facility; and
2. The financing of costs of acquisition, construction, equipping and furnishing of
an approximately 60-unit assisted living facility to be located at Joplin Street and U.S.
Highway 10, in Elk River, Minnesota and to be owned by Evans Park, Inc.(the "1998
Project").
The aggregate face amount of the Bonds will not exceed $15,000,000, with-not more than
$9,000,000 thereof constituting the Evans Park Portion.
D-1
The hearing will be held in the City Hall, located at 13065 Orono Parkway, Elk River,
Minnesota on Monday, July 27, 1998, at o'clock .M. At such time and place the
City shall give all parties who appear or submit written comments an opportunity to express
their views with respect to the proposal.
Dated ,1998.
/si
City Clerk
D-2
EXHIBIT E
HOUSING PROGRAM RELATING TO THE
ISSUANCE OF CITY OF ELK RIVER REVENUE BONDS
UNDER MINNESOTA STATUES, CHAPTER 462C, IN PART
FOR THE FINANCING AND REFINANCING OF ELDERLY HOUSING
DEVELOPMENTS, ON BEHALF OF
EVANS PARK, INC.
1. Local Housing Policy. The City's housing policies are currently set
forth in the City's Comprehensive Plan and in related plans and documents. This Housing
Program has been developed pursuant thereto, all in accordance with and as contemplated by
Minnesota Statutes, Chapter 462C, as amended (sometimes referred to herein as the "Act:').
Under the Act, the City, prior to issuing revenue bonds or other obligations with respect to a
multi-family housing development, as described in Section 462C.05, subd. 4, thereof, or a
combination health care and elderly housing development, as described in Section 462C.05,
subd. 7, is to adopt a program setting forth the information required by the Act,. including but
not limited to Section 462C.05, Subd. 6, of the Act. This Program advances the City's stated
housing goals by enhancing and increasing the City's supply of affordable rental housing
facilities for elderly persons at reasonable rental rates, and through the renovation, upgrading
and improvemen._t of the City's existing housing facilities, ail as authorized, contemplated and
prescribed by th6 AcL '~ ~'- '
2. Program. This Housing Program comprises an effort by the City to
advance its housing and related health care goals by providing financing and refinancing for
the elderly housing developments described in paragraph 4 below (sometimes referred to
herein generally in the aggregate as the "Facilities"). The proposed refinancing of a portion
of the Facilities is anticipated to produce debt service savings that will permit the
maintenance of rates and charges at the most reasonably affordable levels. The proposed
construction, rehabilitation and improvement of the Facilities is expected to increase the
City's supply of affordable rental housing facilities for elderly persons and to maintain and
enhance the quality and livability of the Facilities for residents. The method of financing to
be advanced for this Program shall consist of the issuance of revenue bonds (the "Bonds") by
the City, on behalf of the jurisdictions listed in Exhibit 1 hereto (the "Participating
Jurisdictions"), pursuant to the provisions of the Act and a joint powers agreement to be
entered into between the Issuer and the Participating Jurisdictions under the provisions of
Minnesota Statutes, Section 471.59, as amended (the "Joint Powers Agreement"). The
proceeds of the Bonds will be loaned to the entities named in Exhibit 2 hereto (the
"Borrowers") pursuant to individual loan agreements with the City to provide for the
repayment of each Borrower's loan. A portion of the proceeds of the Bonds (the "Evans
Park Loan") shall be loaned to Evans Park, Inc., a Minnesota nonprofit corporation (referred
to herein as "Evans Park"), to provide permanent financing and refinancing for the Facilities,
E-1
and repayment of the Evans Park Loan shall be provided for by Evans Park entering into a
loan agreement with respect to the Facilities (the "Evans Park Loan Agreement"). Under the
Evans Park Loan Agreement, Evans Park will agree to make or cause to be made payments
sufficient to provide for payment in full of all principal of, premium, if any, and interest on
the Evans Park Loan when due. Additional security may be provided for the Bonds as
determined by the original purchasers of the Bonds, including loan agreements and security
agreements from the other Borrowers. Of the $15,000,000 aggregate principal amount of
Bonds to be issued under the Joint Powers Agreement, the amount of the Evans Park Loan is
to be not in excess of $9,000,000. This Housing Program consists, in part, of the refinancing
of taxable mortgage indebtedness currently outstanding with respect to a portion of the
Facilities and the rehabilitation, renovation, improvement and equipping of such Facilities.
With respect to each aspect of this Program involving the refinancing of taxable indebtedness
of Evans Park, Evans Park will undertake at least the minimum amount of rehabilitation with
respect to such aspect of the Program as is required under Section 462C.05, subd. 1. It is
anticipated that the timetable for the financing will be carried out on an expedited basis and
be concluded by not later than the end of the current calendar year. This Program is
contemplated to be undertaken pursuant to Section 462C.05, subds. 4 and 7, of the Act and,
therefore, it is contemplated that there shall be no specific limitation on the gross income of
the occupants. Program requirements as to the Facilities are to be monitored by the City or
private parties, as will be provided in the applicable agreements to be entered into in
connection with the issuance of the Bonds.
3.-: -Need for the Program. This Program-is'needed as a means of
implementing the City's stated housing goals, as provided in the Act and the City's
Comprehensive Plan. The Comprehensive Plan recognizes and is consistent with a goal of
maintaining and improving the number of units of affordable housing for elderly persons and
families in the City. Finally, the City believes that accomplishment of its housing goals
should occur through private development, supported by government financing programs.
By virtue of issuing the Bonds and providing financing and refinancing for the Facilities, the
City will be assisting in the improvement of and the reduction of the overall costs of
operating the Facilities.
4. Description Of Facilities. The Facilities which are to be the subject of
the proposed financing consist of the existing 36-unit rental housing facility for the elderly
located at 300 Evans Avenue in the City (commonly known as "Evans Park"), together with
an approximately 60-unit assisted living facility to be developed and to be located at Joplin
Street and U.S. Highway 10, in the City (all of such facilities being referred to in the
aggregate as the "Facilities"). The existing Facilities are currently owned by, and the new
Facilities will be owned by, Evans Park, Inc., a Minnesota nonprofit corporation (referred to
herein as the "Borrower"). It is anticipated that the proceeds of the Bonds may also be used,
in part, to pay for certain costs of issuance of the Bonds, to the extent such costs are
reasonable and are within an amount equal to 2.00% of the proceeds of the Bonds, and to
fund necessary reserves, including a debt service reserve fund. Issuance costs in excess of
E-2
available bond proceeds are to be paid for by the Participating Borrowers from funds other
than proceeds of the Bonds.
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EXHIBIT 1
(To the Housing Program)
PARTICIPATING JURISDICTIONS
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Housing and Redevelopment Authority of the City of Saint Paul, Minnesota.
Washington County Housing and Redevelopment Authority.
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EXIIlBIT 2
(To the Housing Program)
PARTICIPATING BORROWERS
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Amherst H. Wilder Foundation, a Minnesota nonprofit corporation.
Guardian Angels Health Services, Inc., a Minnesota nonprofit corporation.
Evans Park, Inc., a Minnesota nonprofit corporation.
M 1:390596.03
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