Res 2018-44 Village Green ProjectRESOLUTION NO. 2018 — 44
APPROVING A HOUSING PROGRAM TO FINANCE A MULTIFAMILY HOUSING
PROJECT AND APPROVING ISSUANCE AND SALE OF
MULTIFAMILY HOUSING REVENUE BONDS
(VILLAGE GREEN APARTMENTS PROJECT), SERIES 2018
PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C
WHEREAS,
A. The City of Fridley, Minnesota (the "Issuer") is authorized pursuant to Minnesota Statutes,
Chapter 462C, as amended (the "Act") to finance or refinance the making or purchasing of
loans with respect to multifamily housing developments within the boundaries of the City of
Fridley, Minnesota (the "City") through the issuance of revenue obligations;
B. Pursuant to the Act, the full faith and credit of the Issuer will not be pledged to the payment
of the principal of, premium, if any, and interest on the Bonds (as defined below);
C. The Issuer has received a proposal from Fridley Leased Housing Associates I, LLLP, a
Minnesota limited liability limited partnership (the 'Borrower"), that the Issuer undertake a
program to finance the Project hereinafter described through the issuance of its revenue
obligations in the aggregate principal amount of up to $27,000,000 to finance the acquisition
and rehabilitation of an approximately 196 -unit multifamily housing facility and related
facilities for low- and moderate -income households, including a portion that will be restricted
to elderly heads of household, located at 460 Mississippi Street NE in the City of Fridley,
Minnesota (the "City") (the "Project"). The Project will be owned and operated by the
Borrower; and
D. A public hearing on the Project and the housing finance program was held this same date,
after notice was published in the official newspaper of the Issuer not less than 15 days in
advance of said public hearing, and materials were made available for public inspection at
the City Hall, all as required by the Act and Section 147(f) of the Internal Revenue Code of
1986, as amended (the "Code"), at which public hearing all those appearing who desired to
speak were heard and written comments were accepted; and
E. Pursuant to Section 462C.04 of the Act, the Issuer made timely submission of the housing
finance program to the Metropolitan Council for its review and comment, and the Issuer has
heretofore received favorable comment from the Metropolitan Council on such program; and
F. No public official of the Issuer 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 Fridley,
Minnesota as follows:
1. The Borrower has proposed that the Issuer issue and sell its Multifamily Housing
Revenue Bonds (Village Green Apartments Project), Series 2018, which may be in one or more
series and either as Bonds or bonds (the "Bonds") in an amount not to exceed $27,000,000 to
RESOLUTION NO. 2018-44 PAGE 2
finance the costs of the Project, in accordance with an Indenture of Trust (the "Indenture")
between the Issuer and U.S. Bank National Association (the "Trustee").
2. Pursuant to the terms of a Financing Agreement anticipated to be dated as of
September 1, 2018 (the "Financing Agreement"), executed by the Issuer, the Trustee, Dougherty
Mortgage LLC (the "Lender"), and the Borrower, the Issuer will loan the proceeds of the Bonds
(the "Mortgage Loan") to the Borrower to finance the Project. The Borrower has agreed,
pursuant to a Regulatory Agreement anticipated to be dated as of September 1, 2018, by and
between the Issuer, the Borrower, and the Trustee (the "Regulatory Agreement") to operate the
Project as a "residential rental project" under Section 142(4) of the Internal Revenue Code of
1986, as amended.
3. The Borrower's repayment obligations on the Mortgage Loan will be evidenced by a
Multifamily Note (the "Mortgage Note") delivered by the Borrower to the Issuer and endorsed
by the Issuer to the Lender, and a Multifamily Loan and Security Agreement (Non -Recourse)
(the "Loan Agreement") between the Borrower and the Issuer and assigned by the Issuer to the
Lender.
4. The Bonds will be secured by, among other things, a Multifamily Mortgage,
Assignment of Leases and Rents, Security Agreement, and Fixture Filing Statement anticipated
to be dated as of September 1, 2018, executed by the Borrower in favor of the Issuer and
assigned by the Issuer to the Lender pursuant to an Assignment of Mortgage anticipated to be
dated as of September 1, 2018 (the "Assignment of Mortgage"). The Borrower and related
parties will also provide additional collateral and guaranties to secure the Bonds.
5. The Bonds will be purchased pursuant to the terms and conditions of a Bond Purchase
Agreement between the Issuer, Dougherty & Company, LLC (the "Underwriter"), and the
Borrower (the "Bond Purchase Agreement").
6. The Bonds shall be marketed pursuant to a Preliminary Official Statement (the
"Preliminary Official Statement") used by the Underwriter.
7. Forms of the following documents have been submitted to the City Council:
(a)
Indenture;
(b)
Financing Agreement;
(c)
Regulatory Agreement;
(d)
Mortgage Note;
(e)
Loan Agreement;
(f)
Assignment of Mortgage; and
(g)
Bond Purchase Agreement.
The foregoing documents are hereafter referred to as the "Bond Documents."
RESOLUTION NO. 2018-44 PAGE 3
8. It is hereby found, determined, and declared that:
(a) the issuance and sale of the Bonds, the execution and delivery by the
Issuer of the Bond Documents and the performance of all covenants and agreements of the Issuer
contained in the Bond Documents and of all other acts and things required under the constitution
and laws of the State of Minnesota to make the Bond Documents and the Bonds valid and
binding obligations of the Issuer in accordance with their terms, are authorized by the Act;
(b) it is desirable that the Bonds be issued by the Issuer upon the terms set
forth in the Indenture;
(c) the basic payments under the Financing Agreement are fixed to produce
revenue sufficient to provide for the prompt payment of principal of, premium, if any, and
interest on the Bonds issued under the Indenture when due, and the Indenture, Mortgage, and
Financing Agreement also provide that the Borrower is required to pay all expenses of the
operation and maintenance of the Project, including, but without limitation, adequate insurance
thereon and insurance against all liability for injury to persons or property arising from the
operation thereof, and all taxes and special assessments levied upon or with respect to the Project
premises and payable during the term of the Indenture and Financing Agreement;
(d) under the provisions of Minnesota Statutes, Chapter 462C and as provided
in the Indenture and Financing Agreement, the Bonds are not to be payable from or charged
upon any funds other than the revenue pledged to the payment thereof, the Issuer is not subject to
any liability thereon; no holder of the Bonds shall ever have the right to compel any exercise by
the Issuer of its taxing powers to pay the Bonds or the interest or premiums thereon, or to enforce
payment thereof against any property of the Issuer except the interests of the Issuer in the
Financing Agreement which have been assigned to the Trustee under the Indenture; the Bonds
shall not constitute a charge, lien, or encumbrance, legal or equitable upon any property of the
Issuer except the interests of the Issuer in the Financing Agreement which have been assigned to
the Trustee under the Indenture; the Bonds shall recite that the Bonds is issued without moral
obligation on the part of the state or its political subdivisions, and that the Bonds, including
interest thereon, is payable solely from the revenues pledged to the payment thereof, and, the
Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or
statutory limitation.
9. The forms of the Bond Documents and exhibits thereto are approved substantially
in the form submitted. The Bond Documents, in substantially the forms submitted, are directed
to be executed in the name on behalf of the Issuer by the Mayor and City Manager. Any other
documents and certificates necessary to the transaction described above shall be executed by the
appropriate Issuer officers. Copies of all of the documents necessary to the transaction herein
described shall be delivered, filed and recorded as provided herein and in the Bond Documents.
10. The Issuer shall proceed forthwith to issue the Bonds, in the form and upon the
terms set forth in the Indenture and at a net interest rate not to exceed 6.0% per annum. The
Bonds will be purchased on substantially the terms set forth in the Bond Purchase Agreement,
the Indenture, and the Financing Agreement which have been submitted to the Issuer in
connection with this Resolution. The Mayor and City Manager are authorized and directed to
RESOLUTION NO. 2018-44 PAGE 4
prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee
for authentication and delivery to the Underwriter.
11. The Mayor and City Manager and other officers of the Issuer are authorized and
directed to prepare and furnish to the Underwriter certified copies of all proceedings and records
of the Issuer relating to the Bonds, and such other affidavits and certificates as may be required
to show the facts relating to the legality of the Bonds as such facts appear from the books and
records in the officers' custody and control or as otherwise known to them; and all such certified
copies, certificates and affidavits, including any heretofore furnished, shall constitute
representations of the Issuer as to the truth of all statements contained herein.
12. The approval hereby given to the various documents referred to above includes
approval of such additional details therein as may be necessary and appropriate and such
modifications thereof, deletions therefrom and additions thereto as may be necessary and
appropriate and approved by the City Attorney and the Issuer officials authorized herein to
execute said documents prior to their execution; and said Issuer officials are hereby authorized to
approve said changes on behalf of the Issuer. The execution of any instrument by the
appropriate official or officials herein authorized shall be conclusive evidence of the approval of
such documents in accordance with the terms hereof.
13. The approval hereby given to the Bond Documents and the various other
documents referred to in paragraph 7 above includes approval of (a) such additional details
therein as may be necessary and appropriate and such modifications thereof, deletions therefrom
and additions thereto as may be necessary and appropriate and approved by Bond Counsel, the
City Attorney and the Issuer officials authorized herein to execute said documents prior to their
execution and (b) such additional documents, agreements or certificates as may be necessary and
appropriate in connection with the Bond Documents and with the issuance and sale of the Bonds
and approved by Bond Counsel, the City Attorney and Issuer officials authorized herein to
execute said documents prior to their execution; and said City Attorney and Issuer officials are
hereby authorized to approve said changes or additional documents, agreements or certificates on
behalf of the Issuer. The execution of any instrument by the appropriate officer or officers of the
Issuer herein authorized shall be conclusive evidence of the approval of such documents in
accordance with the terms thereof and hereof. In the absence (or inability) of the Mayor or the
City Manager, any of the documents authorized by this resolution to be executed by them may be
executed by the Acting Mayor or the Acting City Manager.
14. The Issuer has been presented with a draft of the Official Statement (in the form
of the Preliminary Official Statement), which is to be completed and dated on or about the date
of the delivery of and payment for the Bonds. The Issuer hereby consents to the presentation of
information relating to the Issuer in the Official Statement under the captions "The Issuer" and
"No Litigation—The Issuer." The Issuer hereby finds that the information regarding the Issuer in
the sections of the Official Statement captioned "The Issuer" and "No Litigation—The Issuer" is
true and correct; and the Issuer hereby ratifies, confirms and consents to the use of such sections
in the Official Statement in connection with the sale of the Bonds. The Issuer has not prepared
nor made any independent investigation of the information contained in the Official Statement
other than information regarding the Issuer in the sections therein captioned "The Issuer" and
"No Litigation—The Issuer" and the Issuer takes no responsibility for such information. Subject
RESOLUTION NO. 2018-44
PAGE 5
to the statements above in this paragraph, the Issuer approves the form of the Official Statement
and authorizes its use in connection with the sale of the Bonds.
15. The housing program in substantially the form attached hereto as Exhibit A is
hereby approved.
Adopted by the City Council of the City of Fridley, Minnesota, this 10th day of
September, 2018.
SCOTT J. LUND - MAYOR
ATTEST:
DEBRA A. SKOGEN — CITY CLERK
RESOLUTION NO. 2018-44
PAGE 6
EXHIBIT A
MULTI -FAMILY RENTAL HOUSING PROGRAM OF THE
CITY OF FRIDLEY, MINNESOTA
FOR
VILLAGE GREEN APARTMENTS PROJECT
September 10, 2018
Proposal; Authority. The City of Fridley, Minnesota (the "City"), at the request of the
Borrower (defined below), proposes to issue revenue bonds, in one or more series, to assist in
financing the acquisition and rehabilitation of a multi -family rental housing project described
herein (this "Program") pursuant to applicable authority conferred upon the City by the laws of
the State of Minnesota, including without limitation Minnesota Statutes, Chapter 462C, as the
same may be amended from time to time (collectively, the "Act").
Purposes. In creating this Program, the City is acting in furtherance of its findings that
the preservation of the quality of life in the City is in part dependent upon the maintenance and
provision of adequate, decent, safe, sanitary, and affordable housing stock; that accomplishing
the goals of this Program is a public purpose and will benefit the residents of the City; that the
need exists within the City to provide for the maintenance of affordable rental housing to and for
the benefit of persons of low and moderate income and their families and senior heads of
household residing and expected to reside within the City; that there exist or are expected to exist
persons and families within the City who are and will be able to benefit from and are in need of
the Program; that the Program is necessary in view of the limited resources that may be available
to such persons relative to the expenses involved in accomplishing the type of objectives outlined
in this Program in the absence of one or more of the forms of assistance described herein or
otherwise available pursuant to the Act; and that the City hereby finds that such forms of
assistance are often necessary for the benefit of such persons, families, and goals and that,
furthermore, the successful implementation of the objectives of the kind described in this
Program has been found to provide impetus for the development of other housing in the City, as
well as the general development of the City, by other persons who are not the beneficiaries of
such governmentally sponsored or assisted activities.
Rental Housing Purposes. More particularly, the City finds that there exists a need for
affordable multi -family rental housing for qualifying individuals, families, and seniors, which
need is not being filled by private enterprise alone due to a variety of factors, including that the
cost of new construction of multi -family rental units may in many cases prove economically
unfeasible, given the high costs of construction and prevailing area rental levels, and that
therefore appropriate levels of public assistance may be helpful and necessary in bridging that
gap.
General Description of the Program. This Program consists of the financing of the
acquisition and rehabilitation of an existing 156,540 square -foot rentable apartment community
that will consist of an approximately 196 -unit multifamily rental housing facility for low- and
moderate -income households, including a portion that will be restricted to elderly heads of
Lm
RESOLUTION NO. 2018-44 PAGE 7
household (the "Project"). The initial owner of the Project pursuant to the financing will be
Fridley Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership,
with Fridley Leased Housing Associates I, LLC, a Minnesota limited liability company as the
general partner (the 'Borrower").
Location. This Program is limited to the Project. The Project is located at 460
Mississippi Street NE in Fridley, Minnesota.
Units. The Project is currently anticipated to consist of the following units:
Units
Number of
Square Footage Per
Estimated Initial
Units
Unit
Rents Per Unit
1 BR /1 BA Senior
101
616
$1,100
2 BR /1 BA Senior
2
957
$1,325
1 BR / 1 BA Family
41
620
$950
2 BR / 1 BA Family
19
1,170
$1,350
2 BR / 1 BA Family
20
1,292
$1,350
3 BR / 2 BA Family
12
1,525
$1,400
1 BR / 1 BA (Non -Section 8)
1
620
$979
Revenue Bonds. The amount of revenue bonds required to finance this Program will not
exceed $27,000,000. The City preliminarily intends to finance the Program by issuing bonds, in
one or more series. The proceeds will finance the acquisition and construction of the Project and
pay costs of issuing the bonds. The revenue bonds are expected to be issued in 2018, subject to
final Council approval in its sole and absolute discretion.
Monitoring. The City expects to enter into suitable agreements with the Borrower, the
purchaser of the bonds and/or others respecting the monitoring or implementation by participants
to ensure that the Project will be consistent with this housing Program and its objectives, which
for this purpose means providing affordable rental housing.
Meeting Needs; Methods. The Program will meet the need for rental housing for persons
and families of low and moderate incomes, including elderly persons, by providing units at an
affordable rent. The City believes that this Program will help meet the identified needs under
this Program. The specific methods anticipated to be used include the issuance of revenue bonds
under the Act to provide feasible financing for various aspects of the Program so undertaken.
Authorization. The Program is undertaken pursuant to Minnesota Statutes, Section
462C.05, for units affordable to persons and families of low and moderate income. A specific
portion of the Program will be restricted to elderly heads of household, pursuant to Minnesota
Statutes, Section 462C.05, Subdivision 4.
A-7
RESOLUTION NO. 2018-44
PAGE 8
Limits on Gross Income. In connection with the issuance of the Bonds, the Borrower
will be required to agree to limit the gross income of occupants of the Project in accordance with
the requirements of Minnesota Statutes, Chapter 462C, and with the requirements relating to tax-
exempt bonds for qualified residential rental projects.
Adopted and approved on September 10, 2018, by the City Council of the City of Fridley,
Minnesota.
RESOLUTION NO. 2018-44
STATE OF MINNESOTA )
COUNTY OF ANOKA )
PAGE 9
I, the undersigned, being the duly qualified and acting City Clerk of the City of Fridley,
Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council of said City duly called and
held on the date therein indicated, insofar as such minutes relate to giving approval on a
proposed multifamily housing revenue bonds issue.
WITNESS my hand this 17th day of September, 2018.
".1120
11005518x2
DEBRA A. SKOGEN — CITY CLERK
RESOLUTION NO. 2018-44 PAGE 10
Extract of Minutes of a Meeting of the
City Council of the
City of Fridley, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Fridley, Minnesota, was duly held at the City Hall in said City on Monday, the 10th day of
September, 2018, at 7:00 p.m.
The following members were present: Mayor Scott Lund, Councilmember-at-Large
Robert Barnette, Councilmember Jim Saefke, Councilmember Dolores Varichak, and
Councilmember Ann Bolkcom.
and the following were absent: None.
Councilmember Saefke introduced the following resolution and moved its adoption:
RESOLUTION NO. 2018-44
APPROVING A HOUSING PROGRAM TO FINANCE A MULTIFAMILY HOUSING
PROJECT AND APPROVING ISSUANCE AND SALE OF
MULTIFAMILY HOUSING REVENUE BONDS
(VILLAGE GREEN APARTMENTS PROJECT), SERIES 2018,
PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C
The motion for the adoption of the foregoing resolution was duly seconded by
Councilmember Ann Bolkcom. After full discussion thereof and upon vote being taken thereon,
the resolution was unanimously passed and adopted.
1
11005518x2
BOND PURCHASE AGREEMENT
$25,910,000
City of Fridley, Minnesota
Multifamily Housing Revenue Bonds
(Village Green Apartments Project) Series 2018
2018
City of Fridley, Minnesota
6431 University Avenue N.E.
Fridley, Minnesota 55432
Fridley Leased Housing Associates I, LLLP
c/o Dominium Development & Acquisition, LLC
2905 Northwest Boulevard, Suite 150
Plymouth, Minnesota 55441-7400
Ladies and Gentlemen:
Dougherty & Company LLC (the "Underwriter"), on its own behalf and not as your fiduciary,
hereby offers to enter into this Bond Purchase Agreement (this "Bond Purchase Agreement") with the
City of Fridley, Minnesota, a municipal corporation and political subdivision pursuant to the laws of the
State of Minnesota (the "Issuer") and Fridley Leased Housing Associates I, LLLP, a Minnesota limited
liability limited partnership (the `Borrower"). This offer is made subject to the Issuer's and the
Borrower's acceptance on or before 10:00 a.m., Eastern Time, of the date hereof, and, upon such
acceptance, this Bond Purchase Agreement shall be in full force and effect in accordance with its terms
and shall be binding upon the Issuer, the Borrower and the Underwriter, all as of 12:30 p.m., Eastern
Time, on the date hereof.
The Issuer is authorized to issue the above -captioned bonds (the "Bonds") pursuant to Minnesota
Statutes, Chapter 462C, as the same may be amended from time to time (the "Act") and pursuant to the
Bond Resolution. The Bonds shall be as described in and shall be issued pursuant to an Indenture of
Trust, dated as of September 1, 2018 (the "Indenture"), by and between the Issuer and U.S. Bank National
Association, as trustee (the "Trustee"). Capitalized terms used herein but not defined herein shall have
the meanings assigned thereto in the Indenture.
The Bonds are being issued for the purpose of funding a mortgage loan (the "Mortgage Loan")
for the benefit of the Borrower pursuant to a Financing Agreement dated as of September 1, 2018, by and
among the Issuer, the Trustee, Dougherty Mortgage LLC, a Delaware limited liability company (the
"Lender") and the Borrower (the "Financing Agreement") to provide for the financing of a portion of the
costs of acquisition, renovation and equipping of a 196 -unit multifamily rental housing development
known as Village Green Apartments, and located in the City of Fridley, Anoka County, Minnesota (the
"Project").
The Project is required to be operated in compliance with a Regulatory Agreement, dated as of
the date of the Indenture (the "Land Use Restriction Agreement"), among the Issuer, the Borrower and the
Trustee.
The Bonds will initially be collateralized by (i) the deposit into the Collateral Security Principal
Account of the Collateral Security Fund under the Indenture of the proceeds received from the assignment
[Issuer's Signature Page to the Village Green Bond Purchase Agreement]
CITY OF FRIDLEY, MINNESOTA
By:
Name:
Scott Lund
Title:
Mayor
By:
Name:
Walter T. Wysopal
Title:
City Manager
[Issuer's Signature Page to the Village Green Bond Purchase Agreement]
CITY OF FRIDLEY, MINNESOTA
By:
Name:
Scott Lund
Title:
Mayor
By:
Name:
Walter T. Wysopal
Title:
City Manager
[Issuer's Signature Page to the Village Green Bond Purchase Agreement]
CITY OF FRIDLEY, MINNESOTA
By:
Name:
Scott Lund
Title:
Mayor
By:
Name:
Walter T. Wysopal
Title:
City Manager
[Issuer's Signature Page to the Village Green Bond Purchase Agreement]
CITY OF FRIDLEY, MINNESOTA
By:
Name:
Scott Lund
Title:
Mayor
By:
Name:
Walter T. Wysopal
Title:
City Manager