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Res 2020-72 Approving Housing Program 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 23rd day of November, 2020, at 7:00 p.m. The following members were present: Scott J. Lund, Mayor; David Ostwald, Councilmember-at-Large; Tom Tillberry, Councilmember; Steve Eggert, Councilmember; Ann Bolkcom, Councilmember. and the following were absent: None. Member Bolkcom introduced the following resolution and moved its adoption: RESOLUTION NO. 20–72 APPROVING A HOUSING PROGRAM TO FINANCE A MULTIFAMILY HOUSING PROJECT AND APPROVING ISSUANCE AND SALE OF MULTIFAMILY HOUSING REVENUE NOTE (FRIDLEY STATION VILLAGE–URSA PROJECT), SERIES 2020 PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C The motion for the adoption of the foregoing resolution was duly seconded by member Ostwald, and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: Scott J. Lund, Mayor; David Ostwald, Councilmember-at-Large; Tom Tillberry, Councilmember; Steve Eggert, Councilmember; Ann Bolkcom, Councilmember. and the following voted against the same: None. whereupon said resolution was declared duly passed and adopted. 12935155v5 RESOLUTION NO. 20–72 APPROVING A HOUSING PROGRAM TO FINANCE A MULTIFAMILY HOUSING PROJECT AND APPROVING ISSUANCE AND SALE OF MULTIFAMILY HOUSING REVENUE NOTE (FRIDLEY STATION VILLAGE–URSA PROJECT), SERIES 2020 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"), and Chapter 7 of the Issuer's Charter, 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 Note (as defined below); C. The Issuer has received a proposal from Fridley City Apartments Limited Partnership, a Minnesota 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 $10,680,175 to finance the acquisition and construction of an approximately 73-unit multifamily housing facility and st related facilities for low- and moderate-income households, located on the corner of 61 Avenue and Main Street immediately east of Fridley Station, 6050 Main Street, in the City of Fridley, Minnesota (the "City"), with an anticipated address of 6030 Main Street (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 no 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. 2 12935155v5 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 Note (Fridley Station Village–Ursa Project), Series 2020 (the "Note") in an amount not to exceed $10,680,175 to finance the costs of the Project, in accordance with this Resolution and a Loan Agreement (the "Loan Agreement") between the Issuer and the Borrower, which will be assigned to Cedar Rapids Bank and Trust Company (the "Lender") pursuant to an Assignment of Loan Agreement (the "Loan Agreement Assignment"). 2. Pursuant to the terms of the Loan Agreement, anticipated to be dated as of a date in December, 2020, the Issuer will loan the proceeds of the Note (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 a date in December, 2020, by and between the Issuer, the Borrower, and the Lender (the "Regulatory Agreement"), to operate the Project as a "residential rental project" under Section 142(d) of the Internal Revenue Code of 1986, as amended. 3. The Note will be secured by, among other things, a Combination Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents, anticipated to be dated as of a date in December, 2020 (the "Mortgage"), 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 a date in December, 2020 (the "Assignment of Mortgage"). The Borrower and related parties will also provide additional collateral and guaranties to secure the Note. 4. The Note will be purchased pursuant to the terms and conditions of a Loan Purchase Agreement between the Lender and the Borrower (the "Loan Purchase Agreement"). 5. Forms of the following documents have been submitted to the City Council: (a) Loan Agreement; (b) Loan Agreement Assignment; (c) Regulatory Agreement; (d) Note; (e) Assignment of Mortgage; (f) Loan Purchase Agreement; and (g) Mortgage The documents listed in (a) through (e) are hereafter referred to as the "Loan Documents." 6. It is hereby found, determined, and declared that: 3 12935155v5 (a) the issuance and sale of the Note, the execution and delivery by the Issuer of the Loan Documents and the performance of all covenants and agreements of the Issuer contained in the Loan Documents and of all other acts and things required under the constitution and laws of the State of Minnesota to make the Loan Documents and the Note valid and binding obligations of the Issuer in accordance with their terms, are authorized by the Act; (b) it is desirable that the Note be issued by the Issuer upon the terms set forth in this Resolution and the Loan Purchase Agreement; (c) the basic payments under the Loan Agreement are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Note issued hereunder when due, and the Mortgage and Loan 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 Loan Agreement; (d) under the provisions of Minnesota Statutes, Chapter 462C and as provided in the Loan Agreement, the Note is 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 Note shall ever have the right to compel any exercise by the Issuer of its taxing powers to pay the Note 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 Loan Agreement which have been assigned to the Lender under the Loan Agreement Assignment; the Note 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 Loan Agreement which have been assigned to the Lender under the Loan Agreement Assignment; the Note shall recite that the Note is issued without moral obligation on the part of the state or its political subdivisions, and that the Note, including interest thereon, is payable solely from the revenues pledged to the payment thereof; and, the Note shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation. 7. The forms of the Loan Documents and exhibits thereto are approved substantially in the form submitted. The Loan Documents, in substantially the forms submitted, are directed to be executed in the name and 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 Loan Documents. 8. The Issuer shall proceed forthwith to issue the Note, in the form and upon the terms set forth in the Loan Purchase Agreement and at a variable rate. The Note will be purchased on substantially the terms set forth in the Loan Purchase Agreement, this Resolution, and the Loan Agreement which have been submitted to the Issuer in connection with this Resolution. The Mayor and City Manager are authorized and directed to prepare and execute the Note as prescribed herein and to deliver it to the Lender. 4 12935155v5 9. The Mayor and City Manager and other officers of the Issuer are authorized and directed to prepare and furnish to the Lender certified copies of all proceedings and records of the Issuer relating to the Note, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Note 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. 10. 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. 11. The approval hereby given to the Loan 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 Loan Documents and with the issuance and sale of the Note 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, in accordance with Chapters 2 and 6 of the Issuer's Charter. 12. 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 23rd day of November, 2020. _______________________________________ Scott J. Lund - Mayor ATTEST: Daniel Tienter – Clerk/Treasurer/Finance Director 5 12935155v5 EXHIBIT A MULTI-FAMILY RENTAL HOUSING PROGRAM OF THE CITY OF FRIDLEY, MINNESOTA FOR FRIDLEY STATION VILLAGE–URSA PROJECT November 23, 2020 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 construction 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 in a timely fashion additional affordable rental housing to and for the benefit of persons of low and moderate income and their families 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 and families, 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 construction of an approximately 73-unit multi-family housing development known as Fridley Station Village–Ursa (the "Project"). The owner of the Project pursuant to the financing will be Fridley City Apartments Limited Partnership, a Minnesota limited partnership A-1 12935155v5 (the "Borrower"), with Fridley Apartments GP LLC, a Minnesota limited liability company, as general partner. Location. This Program is limited to the Project. The Project is located on the corner of st 61 Avenue and Main Street immediately to the east of Fridley Station, 6050 Main Street, in Fridley, Minnesota, with an anticipated address of 6030 Main Street. Units. The Project is currently anticipated to consist of the following units: Estimated Initial Units Square Footage Gross Rents 14 – 1–bedroom/1 bath 803 $1,164 40 – 2-bedroom/2 bath 996 $1,396 19 – 3-bedroom/2 bath 1,284 $1,613 Revenue Bonds. The amount of revenue bonds required to finance this Program will not exceed $11,000,000. 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 2020, subject to final City 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 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, Subdivision 2, for units affordable to persons and families of low and moderate income. 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 November 23, 2020, by the City Council of the City of Fridley, Minnesota. A-2 12935155v5 STATE OF MINNESOTA ) ) COUNTY OF ANOKA ) I, the undersigned, being the duly qualified and acting Clerk-Treasurer-Finance Director 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 note issue. WITNESS my hand this 24th day of November, 2020. _______________________________________ Daniel Tienter, Clerk-Treasurer-Finance Director 12935155v5