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99-091 RESRESOLUTION 99 - 91 A RESOLUTION OF THE CITY OF ELK RIVER A RESOLUTION RECITING A PROPOSAL FOR A MULTIFAMILY HOUSING DEVELOPMENT PROJECT, TAKING OFFICIAL ACTION WITH RESPECT THERETO, AND INDICATING PRELIMINARY INTENT TO ASSIST THE FINANCING OF THE PROJECT PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C WHEREAS, 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"); and, WHEREAS, neither the full faith and credit of the City or the Authority will be pledged to the payment of the principal of, premium, if any, and interest on the Revenue Bonds; and, WHEREAS, the City has received a proposal from West Suburban Housing Partners II Limited Partnership, 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 $4,000,000 (hereinafter referred to in this resolution as "Revenue Bonds") pursuant to the Act and in accordance with a housing finance program prepared with respect to the Project (the "Housing Program"); and, WHEREAS, the undertaking of the proposed Housing Program 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 existing multifamily housing operations of the Company in the City; and, WHEREAS, the Project to be financed by the Revenue Bonds is the acquisition and renovation of an 18 unit housing facility (Elk Ridge Estates Facility) located at 11755 191½ Avenue Northwest in the City and a 54 unit housing facility (Oak Crest Apartments Facility) located at 300, 340, and 380 Third Street Northwest in the City (collectively, the "Project"). WHEREAS, 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 costs of borrowing that the economic feasibility of operating the Project would be significantly reduced; and, WHEREAS, 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. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: The Council hereby indicates its preliminary intent to undertake the Project pursuant to the Act and the Housing Program and to issue the Revenue Bonds in the maximum aggregate principal amount of $4,000,000 pursuant to the Act to finance the Project. 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. o The City hereby gives preliminary approval of the Housing Program and the issuance of the Revenue Bonds. The City staff is hereby authorized, upon receipt of the City from the Company of the application deposit, to submit an application to the Minnesota Department of Financing for an allocation of tax exempt bonding authority for the Project from the housing pool. The issuance of the Revenue Bonds by the City is subject to, among other things, receipt of an allocation of tax exempt bonding authority from the Minnesota Department of Finance, final approval by this Council, the Company, and the purchaser of the Revenue Bonds as to the ultimate details of the financing of the Project. 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. o Nothing is 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. 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 action" within the meaning of the Internal Revenue Code of 1986, as amended, to allow for the issuance of multifamily revenue bonds (including, if deemed appropriate, any interim note or notes to provide temporary financing thereof) to finance the entire cost of the Project upon agreement being reached as to the ultimate details of the Project and its financing. In anticipation of the final approval by the City of the issuance of the Revenue Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Company is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Revenue Bonds as Company considers necessary, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Revenue Bonds if and when delivered but otherwise without liability on the part of the City. Passed and adopted by the City Council of the City of Elk River this 22nd day of November, 1999. S~eph~nie Klinzing, ~ ATTzEgST: ~: ~ ~ ~andra ~i Peine, Cit~ Clerk'