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2.5 Multi-Housing Revenue BondsC] SEN 7700 Market Boulevard PO Box 147 Cl~ha~n. MN 55317 Mmlnlstratlon Phone: 952.227.1100 Fax:. 952.227.1110 Bulldlflg Inspections Phone: 952.227.1180 Fax: 952.227.1190 Englneedng Phone: 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & RecreaUon Phone: 952.227.1120 Fax: 952.227.1110 Recreation Ceater 2310 Coulter Boulevard Phone: 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site ~w,'w. ci.chanhassen.mn.us TO: FROM: DATE: Mayor City Council Bruce M. Degong, Finance Directo~ April 23, 2003 SUB J: Multifamily Housing Revenue Bonds The City of Chanhassen is being asked by VOP L T ~IC to approve a resolution authorizing the issuance of revenue bonds. This process was started last August when you approved the application by VOP I to the State of Minnesota to participate in this housing prograrm The development group was organiz~l for the purpose of building a 54-unit apartment in Villages on the Ponds. The project will require bonding in the amount of $5,530,000. The City of Chanhassen actually issues the bonds and lends the ~ to VOP L We then contract with Wells Fargo Bank Minne.~ota to act as lxustee on our behalf. This resolution does not obligate the City to any tax levy or repayment because these bonds only commit the revenue stream of the project for repayment. This allows the developer access to favorable interest rotes because of our tax-exempt status to reduce the overall cost of financing the project. This resolution was prepared by Stefanie Galey from Faegre & Benson, who represents the VOP I corporation. I have not included the loan agreement, trust agreement or regulatory agreement because of their size, but wifl e-mail them to the City Council for your review. Recommendation Staff recommends that the City Council adopt the resolution as presented. The City of Chanhassen, A growing community with clean lakes, quality schools, a channing downtowo, thriving businesses, winding trails, and beautiful parks. A grot pl~ to live, work, and play. CITY OF CHANIIASSEN RESOLUTION A RESOLUTION AUTHORIZING ~ ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS (VILLAGE ON ~ PONDS PROJECT), SERIES 2003 IN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $6,000,000, WlqlCH BONDS AND Tm*~ INTEREST AND PREMIUM TI:IEREON, IF ANY, SHALL BE PAYABLE SOLELY FROM Tm*~ REVENUES OF Tmr~ PROJECT; PRESCRIltING ~ FORM OF AND AUTHORIZING THE EXECUTION OF AN INDENTURE OF TRUST, A LOAN AGREEMENT, REGULATORY AGREEMENT AND CERTAIN RELATED DOCUMENTS; AUTHORIZING ~ EXECUTION AND SALE OF TlqE BONDS AND DIRECTING DELIVERY TI~REOF; AUTHORIZING ACCEPTANCE OF TlqE BOND PURCHASE AGREEMENT IN CONNECTION WITH BONDS; AND PROVIDING FOR ~ SECURITY, RIGHTS, AND REMEDIES OF ~ HOLDERS OF S?,ID REVENUE BONDS. WttEREAS, the City of Chanhassen (the "Issuer") is a municipal corporation and political subdivision organized and existing under the laws and the Constitution of the State of Minnesota; and WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Chapter 462C, as mended (the "Act"), the Issuer is authorized to carry out the public purposes described therein and contemplated thereby in the financing of housing within its boundaries, by issuing revenue bonds to defray, in whole or in part, the development costs of a rental housing development, and by entering into any agreements made in connection therewith and by pledging any such agreements as security for the payment of the principal of and interest on any such revenue bonds; and WHEREAS, on the date hereof, the Issuer has held a public hearing regarding a Program for Multifamily Housing Development (the "Program") pursuant to and in conformance with the Act and Section 147(0 of the Internal Revenue Code of 1986, as mended, at~ publication of notice of such hearing in a newspaper of general circulation in the City of Chanlmssen at least 15 days before the hearing; and WHEREAS, pursuant to the Act, the Issuer proposes to undertake the Program providing for the acquisition and consmacfion of a multifamily rental apartment project misting of 54 units (the '~oject"), to be located at the northeast quadrant of the intemecedon of Lake Drive and Main Street in the City of Chaahass~ by VOP I, LLC (the "Company), as developer of the Project and, for the financ~ thereof, to author, issue and sell its Multifamily Housing M1:981635.0 i 1 AUTHORIZING ~N Revenue Bonds (Village on the Ponds Project) Series 2003 in an aggregate principal amount not to exceed $6,000,000 (the "Bonds'~) payable solely from the amounts pledged therefor under the Indenture of Trust (the "Indenture") between the Issuer and Wells Fargo Bank Minnesota, National Association (the "Trustee"); and WHEREAS, neither the Issuer nor the State of Minnesota nor any political subdivision thereof (other than the Issuer and then only to the extent of the trust estate pledged in the Indenture) shall be liable on the Bonds, and the Bonds shall not be a debt of the Issuer or the State of Minnesota or any political subdivision thereof (other than the Issuer and then only to the extent of the trust estate pledged in the Indent), and in any event shall not give rise to a charge against the credit or taxing power of the Issuer, the State of Minnesota, or any political subdivision thereof; NOW, THEREFORE, BE IT RESOLVED by the City of Chanhassen: 1. The Issuer acknowledges, finds, determines, and declares that the preservation of the quality of life in the City of Chanhassen is depend~t upon the maintenance, provision, and preservation of an adequate housing stock, which is affordable to pemons and families of low or moderate income, that accomplishing this is a public purpose. The Issuer hereby adopts the 2. For the purpose of financing the Project there is hereby authorized the issuance of the Bonds. The Bonds shall bear interest at such rates, shall be in such denomination, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other details and provisions as are prescribed by the Indenture hereinafter referred to. 3. The Bonds shall be special obligations of the Issuer payable solely from the revenues of the Project, in the manner provided in the Indenakre. The Bonds do not constitute an indebtedness, liability, general or moral obligation (except to the extent of the trust estate pledged under the Indenture) or a pledge of the faith and credit or any taxing power of the Issuer, the State of Minnesota, or any political subdivision thereof. The Issuer hereby authorizes and directs the Mayor of the Issuer (the "Mayo~) and the City Manager of the Issuer (the "City Manager") to execute the Indenture, and to deliver to said Trustee the Indenture, and hereby authorizes and directs the execution of the Bonds in accordance with the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, fights, obligations, duties, and agreements of the bondholders, the Issuer, and the Trustee as set forth therein. The City Manager is hereby authorized to approve changes to the maturity schedules and mandatory sinking fund payment schedules for the Bonds set forth in the Indenture and the Bond Purchase Agreement, provided that the maturity date for any Bond shall not be later than the date set forth in the form of the Indenture. The City Manager is hereby autho~ to approve the final interest rate for the Bonds at a variable interest rate detm-mined by Dougherty & Company LLC (the "Underwriter") as set forth in the Indenture and the Bond Pamhase Agreement. All of the provisions of the Indent, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim MI :981635.01 2 AIJTHORIZlNG RBgOIiHION herein and shall be in full force and effect from the date of execution and delivery thereof. The Indenture shall be substantially in the form on file with the Issuer on the date hereof, and is hereby approved, with such changes as shall be approved by the City Manager; provided that the execution thereof by the City Manager shall be conclusive evidence of such determination. 4. The Mayor and the City Manager are hereby designated as the representatives of the Issuer with respect to the issmmce of the Bonds and the lmnsacfions related thereto and are hereby authorized and directed to accept and execute the Bond Pttmhn~ Agreement (the "Bond Purchase Agreement") from the Underwriter. All of the provisions of the Bond Pmchase Agreement, when executed and delivered as nutho~ herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bond Purc~ Al~,.ement shall be substantially in the form on file with the Issuer on the date hereof, and is hereby approved, with such changes as shall be approved by the City Manager, provided that the execution thereof by the City Manager shall be conclusive evidence of such determination_ 5. The Mayor and the City Mamtger are hereby autho~ and directed to execute the Loan Agreement (the "Loan Agreement") with the Company, and when executed and delivered as authorized herein, the Loan Agreement shall be deemed to be a part of thi.q resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement shall be substantially in the form on file with the Issuer on the date hereof, which are hereby approved, with such changes as shall be approved by the City Manager, provided that the execution thereof by the City Manager shall be conclusive evidence of such determination. 6. The Mayor and the City Manager are hereby authorized and directed to accept and execute the Regulatory Agreement (the "Regulatory Agreement") with the Company and the Trustee and, when executed and delivered as authorized herein, the Regulatory Agreement shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Issuer shall have no obligation to enforce or monitor the Company's obligations under the Regulatory Agreement, and all such enforcement and monitoring shall be delegated to thc Trustee. The Regulatory Agreement shall be substantially in thc form on file with the Issuer on the date hereof, which is hereby approved, with such changes as shall be approved by thc City Manager; provided that thc execution thereof by thc City Manager shall be conclusive evidence of such determination. 7. All covenants, stipulations, obligations, representation.q, and agreements of the Issuer contained in thi.q resolution or oont ed the or other docme ts to above shall be deemed to be the covenants, stipulations, obligations, representatives, and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations, representations, and agreements shall be binding upon the Issuer. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred, and duties and liabilities imposed, upon the Issuer by the provisions of this resolution or of the Indenture or other documents referred to above shall be exercised or performed by the Issuer, or by such officers, board, body, or agency as may be required or authorized by law to exercise such M1:981635.01 3 A~ RESOLI/IION powers and to perform such duties. No covenant, stipulation, obligation, representation, or agreement herein contained or contained in thc Indenture or other documents referred to above shall be deemed to be a covenant, stipulation, obligation, representation, or agreement of any officer, agent, or employee of the Issuer in that person's individual capacity, and neither the Issuer, members of the Issuer nor any offic~ or employee executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. 8. Except as herein otherwise expressly provided, nothing in this resolution or in the Indenture, expressed or implied, is intended or shall be construed to confer upon any person, firm, or corporation other than the Issuer, and the Trustee, as fiduciary for owners of the Bonds, any fight, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision hereof or of the Indenture or any provision thereof; this resolution, the Indenture and all of their provisions being intended to be and being for the sole and exclusive benefit of the Issuer and the Trustee as fiduciary for owners of the Bonds issued under the provisions of this resolution and the Indenture, and the Company to the extent expressly provided in the Indenture. 9. In case any one or more of the provisions of this resolution or of the Indenture or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution or of the Indenture or of the Bonds, but this resolution, the Indenture, and the Bonds shall be construed as if such illegal or invalid provision had not been contained therein. The terms and conditions set forth in the Indenture, the pledge of revenues derived from the Project referred to in the Indenture, the pledge of collateral derived from the Project referred to in the Indenture, the cre~on of the funds provided for in the Indenture, the provisions relating to the application of the proceeds derived from the sale of the Bonds pursuant to and under the Indenture, and the application of said revenues, collateral, and other monies are all commitments, obligations, and agreements on the part of the Issuer contained in the Indenture, and the invalidity of the Indenture shall not affect the commitments, obligations, and agreements on the part of the Issuer to create such funds and to apply said revenues, other monies, and proceeds of the Bonds for the purposes, in the manner, and accord~ to the terms and conditions fixed in the Indenture, it being the intention hereof that such commitments on the part of the Issuer are as binding as if contained in this resolution separate and apart from the Indenture. 10. All acts, conditions, and things required by the laws of the State of Minnesota, relating to the adoption of this resolution, to the issuance of the Bonds, and to the execution of the Indenture and the other documents referred to above to happen, exist, and be performed precx~nt to and in the enactment of this resolution, and precxx~ to the issuance of the Bonds, and prec~ent to the execution of the Indenture and the other documents referred to above have happened, exist, and have been performed as so required by law. 11. The Issuer, members of the Issuer, officers of the Issuer, and attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required by them by or in connection with this resolution and the Indenture and the other documents referred to above for the full, punctual, and complete performance of all the terms, covenants, and M1:981635.01 4 AIII'HORIZING ~~ON agreements contained in the Bonds, the Indenture and the other documents referred to above, and this resolution. 12. The City Manager is hereby desi~mat~l and authorized to take such administrative action as is permitted or required in connection with the issuance of the Bonds by the Indenture, the Loan Agreement, the Regulatory Agreement and the Bond Purchase Agreement. 13. The Mayor and the City Manager of the Issuer are autho~ and directed to execute and deliver any and all certificates, agreements or other documents which are required by the Indenture, the Loan Agreement, the Bond Purc~ Agreement, the Regulatory Agreement or any other agreements, certificates or documents which are deemed necessm~ by bond counsel to evidence the validity or enforceability of the Bonds, the Indenture or the other documents referred to in this Resolution, or to evidence compliance with Section 142(d) of the Internal Revenue Code of 1986, as mended; and all such agreements or representatiom when made shall be deemed to be agreements or representations, as the case may be, of the Issuer. 14. If for any reason the Mayor of the Issuer is unable to execute and deliver those documents referred to in this Resolution, any member of thi~ City Council may execute and deliver such documents with the same force and effect as if such documents were executed by the Mayor. If for any reason the City Manager of the Issuer is tmable to execute and deliver the documents referred to in this Resolution, such documents may be exectmxt and delivered by the Assistant City Manager of the Issuer with the same force and effect as if such documents were executed and delivered by the City Manager. 15. This resolution shall be in full force and effect from and atter its passage. Adopted thia~ day of April, 2003. Attest: Mayor City Manager M1:981635.01 5 AIJTItORIZING RESOII/IION