07-013 RES
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RESOLUTION 07-~
A RESOLUTION OF THE CITY OF ELK RIVER
RECITING A PROPOSAL FOR A MULTIFAMILY HOUSING DEVELOPMENT
PROJECT, INDICATING PRELIMINARY INTENT, SUBJECT TO CERTAIN
CONDITIONS, TO ASSIST THE FINANCING OF THE PROJECT PURSUANT TO
MINNESOTA STATUTES, CHAPTER 462C
(BIRCHWOOD COURT APARTMENTS PROJECT)
WHEREAS,
(a) The City is authorized pursuant to Minnesota Statutes, Chapter 462C, as amended
(the "Act") to finance the making or purchasing of loans with respect to multifamily housing
developments within the boundaries of the City of Elk River (the "City") through the issuance of
revenue bonds;
(b) Pursuant to the Act, the full faith and credit of the City will not be pledged to the
payment of the principal of, 'premium, if any, and interest on the revenue bonds;
(c) The City has received a proposal from Elk River Leased Housing Associates II, LP, a
Minnesota limited partnership (the "Company"), that the City assist in financing a Project hereinafter
described, through the issuance of revenue bonds in the maximum aggregate principal amount of
approximately $2,500,000 (the "Revenue Bonds") pursuant to the Act and in accordance with a
housing finance program prepared with respect to the Project;
(d) The undertaking of the proposed Project and the issuance of the Revenue Bonds to
finance the cost thereof will further promote the public purposes and legislative objectives of the
Act by expanding and assisting the multifamily housing facilities available in the City;
(e) The Project to be financed by the Revenue Bonds is the acquisition and renovation
of an existing 51-unit multifamily rental housing facility at 1227 School Street NW in the City
currently known as Birchwood Courts Apartments (the "Project"). The Project will be owned and
operated by the Company;
(f) The City has been advised by representatives of the Company that conventional,
commercial financing to pay the capital cost of the Project is available only on a limited basis and at
such high cosrs of borrowing that the economic feasibility of operating the Project would be
significantly reduced;
(g) No public official of the City has either a direct or indirect financial interest in the
Project nor will any public official either directly or indirectly benefit financially from the Project.
0/-13
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,
Minnesota, as follows:
1. The Council hereby indicates its preliminary intent to undertake the Project pursuant
to the Act and to issue the Revenue Bonds in the maximum aggregate principal amount of
$2,500,000 pursuant to the Act to finance the Project.
2. On the basis of information available to the City it appears, and the City hereby
finds, that the Project constitutes a multifamily housing development within the meaning of Section
462C.05 of the Act; that the availability of financing under the Act and the willingness of the City to
furnish such financing will be a substantial inducement to the Company to undertake the Project,
and that the effect of the Project, if undertaken, will be to encourage the provision of multifamily
rental housing opportunities to residents of the City at a reasonable cost.
3. The City staff is authorized to publish notice of a public hearing with respect to the
Project and issuance of the Revenue Bonds on March 5, 2007.
4. The issuance of the Revenue Bonds by the City is subject to, among other things, (a)
holding a public hearing with and consideration of any public comments at such hearing, (b) receipt
of federal bond allocation for the Revenue Bonds and (c) fmal approval by this Council, the
Company and the purchaser of the Revenue Bonds as to the ultimate details of the financing of the
Project.
5. The Company has agreed and it is hereby determined that any and all costs incurred
by the City in connection with the financing of the Project whether or not the Project is carried to
completion and whether or not approved by the City will be paid by Company.
6. Nothing in this resolution or in the documents prepared pursuant hereto shall
authorize the expenditure of any municipal funds on the Project other than the revenues derived
from the Project or otherwise granted to the City for this purpose. The Revenue Bonds shall not
constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City
except the revenue and proceeds pledged to the payment thereof, nor shall the City be subject to any
liability thereon. The holder of the Revenue Bonds shall never have the right to compel any exercise
of the taxing power of the City to pay the outstanding principal on the Revenue Bonds or the
interest thereon, or to enforce payment thereof against any property of the City. The Revenue
Bonds shall recite in substance that the Revenue Bonds, including interest thereon, is payable solely
from the revenue and proceeds pledged to the payment thereof. The Revenue Bonds shall not
constitute a debt of the City within the meaning of any constitutional or statutory limitation.
7. It is the purpose of this resolution to evidence the commitment of the parties and
their intentions with respect to the proposed Project in order that the Company may proceed
without delay with the commencement of the acquisition and renovation of the Project with the
assurance that there has been sufficient "official intent" within the meaning of Treasury Regulations
Section 1.150-2(d) to permit Project costs incurred within sixty (60) days prior to the date of
adoption of this Resolution to be financed by the issuance of multifamily revenue bonds to finance
the entire cost of the Project upon agreement being reached as to the ultimate details of the Project
and its financing.
S:\Community Development\Scott ClarkIDominium Project\Resolution.doc
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2007.
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Adopted by the City Council of the City of Elk River, Minnesota, this 5th day of February,
I, I' Ifil
~.,! 'Mi,~ ~t'v'
Stephafue Klinzing, Ma
Tina Allard, City Clerk