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HomeMy WebLinkAbout2019-036 (calling for Public Hearing and approving Publication of Notice of Public Hearing - Host City Approval of issuance of Revenue Bonds by City of Bethel ) RESOLUTION NO. 2019-036 CITY OF STILLWATER, MINNESOTA RESOLUTION CALLING FOR A PUBLIC HEARING AND APPROVING PUBLICATION OF A NOTICE OF PUBLIC HEARING WITH RESPECT TO HOST CITY APPROVAL OF THE ISSUANCE OF REVENUE BONDS BY THE CITY OF BETHEL UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED WHEREAS, each home rule and statutory city of the State of Minnesota is authorized and empowered by the provisions of Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), to develop and administer programs for making loans pursuant to the terms of the Housing Act to finance multifamily housing developments, comprised of a building or buildings which include one or more dwelling units, each to be rented by a person or family for use as a residence; and WHEREAS, Birchwood Landing, LLC, a Delaware limited liability company (the "Company"), the sole member of which is ILHC of Stillwater, LLC, a Delaware limited liability company (the "Parent Company"), the current sole member of which is Intergenerational Living & Health Care, Inc., a Minnesota nonprofit corporation, has proposed the issuance of revenue obligations pursuant to the Housing Act in the aggregate principal amount not to exceed $15,000,000 (the "Bonds"), the proceeds of which will be applied to make a loan (the "Loan") to the Company to be applied by the Company to: (i) finance the costs of the acquisition, construction and equipping of a multifamily rental housing development, comprised of 12 buildings including approximately 31 units, with one unit to be used as a clubhouse, for occupancy by persons who are 55 years of age or older to be located at or about Bridgewater Way, south of 75th Street N. and north of 72nd Street N. in the City of Stillwater (the "Project"); (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; (iii) the payment of a portion of the interest on the Bonds; and (iv) the payment of a portion of the costs of issuing the Bonds; and WHEREAS, the Bonds are proposed to be issued as "qualified 501(c)(3) bonds," as defined in Section 145 of the Internal Revenue Code of 1986, as amended (the "Code"), and, if issued by the City of Stillwater (the "City of Stillwater"), the Bonds would be included in determining whether the $10,000,000 limit for bank-qualified bonds would be exceeded by the City of Stillwater in calendar year 2019; and WHEREAS, the City of Stillwater intends to issue general obligation bonds in calendar year 2019 which it wishes to designate as bank-qualified bonds but which could not be designated as bank-qualified bonds if the City of Stillwater also issued the Bonds; and 1 557840v3 SEL BE250-20 WHEREAS, the City of Bethel, a statutory city duly organized and existing under the Constitution and laws of the State of Minnesota (the "City of Bethel"), does not expect to issue general obligation bonds in calendar year 2019 and, therefore, is willing to issue the Bonds; and WHEREAS, in accordance with the requirements of Section 462C.04, subdivision 2, of the Housing Act, a housing program with respect to the Project (the "Housing Program") must be prepared in accordance with the requirements of the Housing Act and submitted to the Metropolitan Council for its review and comment; and WHEREAS, in accordance with Section 462C.14, subdivision 3, of the Housing Act, two or more cities, under the provisions of the Housing Act and Minnesota Statutes, Section 471.59, as amended, by agreement entered into through action of their governing bodies, may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, and may provide for the exercise of such powers by one of the participating governmental units; and WHEREAS, under the provisions of Minnesota Statutes, Section 471.656, as amended, no municipality may issue obligations to finance the acquisition or improvement of real property located outside the corporate boundaries of the issuer unless, for property constituting a single project located in a city, the governing body of the city in which the project is located consents by resolution to the issuance of such obligations; and WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder, require that prior to the issuance of the Bonds as tax-exempt bonds the interest on which is not includable in gross income for federal income tax purposes the City Council of the City of Stillwater must grant host approval to the issuance of the Bonds by the City of Bethel after conducting a public hearing thereon preceded by publication of a notice of public hearing in the form and manner required by Section 147(f) of the Code and applicable regulations); and WHEREAS, Section 462C.04, subdivision 2 of the Housing Act requires a public hearing to be held on the Housing Program after one publication of notice in a newspaper circulating generally in the City, at least fifteen (15) days before the public hearing date; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Stillwater, Minnesota, as follows: 1. The City Council shall conduct a public hearing at its regular meeting on Tuesday, April 16, 2019, on or after 7:00 p.m., with respect to the Housing Program and granting host approval by the City of Stillwater to the issuance of the Bonds by the City of Bethel to finance the Project as requested by the Company. Following the public hearing the City Council will consider a resolution: (i) approving the Housing Program, (ii) approving a Cooperation Agreement between the City and the City of Bethel pursuant to which the City will authorize the City of Bethel to issue the Bonds to finance the Project; and (iii) granting host approval to the issuance of the Bonds. 2 557840v3 SEL BE250-20 2. The form of public hearing notice attached as EXHIBIT A to this resolution is hereby approved and publication of the public hearing notice, not less than fifteen (15) days prior to the date of the public hearing, in the Stillwater Gazette, a newspaper of general circulation in the City of Stillwater, is hereby approved, ratified, and confirmed. 3. Kennedy & Graven, Chartered, acting as bond counsel in connection with the issuance of the Bonds by the City of Bethel ("Bond Counsel"), is hereby authorized and directed to prepare and submit to the City a draft Housing Program to be undertaken by the City and the City of Bethel with respect to the Project and the issuance of the Bonds by the City of Bethel, in an aggregate principal amount not to exceed $15,000,000, to finance the acquisition, construction, and equipping of the Project. Bond Counsel is further hereby authorized and directed to submit the Housing Program on behalf of the City and the City of Bethel to the Metropolitan Council for its review and comment on or before the date of publication of the notice of public hearing. Adopted by the City Council of the City of Stillwater, Minnesota, this March 19, 2019. CITY OF STILLWATER, MINNESOTA Z42' Ted Kozlowski, Mayor ATTEST: 3 557840v3 SEL BE250-20 EXHIBIT A FORM OF NOTICE OF PUBLIC HEARING CITY OF STILLWATER, MINNESOTA NOTICE OF PUBLIC HEARING WITH RESPECT TO GRANTING HOST APPROVAL TO THE ISSUANCE OF REVENUE BONDS BY THE CITY OF BETHEL TO FINANCE A MULTIFAMILY HOUSING DEVELOPMENT LOCATED IN THE CITY OF STILLWATER, IN ACCORDANCE WITH THE PROVISIONS OF MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED; AND APPROVING A HOUSING PROGRAM FOR THE MULTIFAMILY HOUSING DEVELOPMENT NOTICE IS HEREBY GIVEN that the City Council of the City of Stillwater, a home rule city of the State of Minnesota (the "City"), will hold a public hearing on Tuesday, April 16, 2019, on or after 7:00 p.m. at City Hall, 216 4th Street North, in the City on a proposal to approve the issuance by the City of Bethel, a statutory city of the State of Minnesota ("Bethel") of revenue bonds in one or more series (the "Bonds") under the provisions of Minnesota Statutes, Chapter 462C, as amended (the"Housing Act"), to finance a multifamily housing development to be located in the City. The proceeds derived from the sale of the Bonds are proposed to be applied to make a loan (the "Loan") to Birchwood Landing, LLC, a Delaware limited liability company (the "Borrower"), the sole member of which is ILHC of Stillwater, LLC, a Delaware limited liability company (the "Parent Company"). The current member of the Parent Company is Intergenerational Living& Health Care, Inc., a Minnesota nonprofit corporation. (The Goodman Family Operating Foundation, a Minnesota nonprofit corporation may be admitted as an additional member of the Parent Company.) The proceeds of the Loan are proposed to be applied by the Borrower to the following: (i) the acquisition, construction and equipping of a multifamily rental housing development, comprised of 12 buildings including approximately 31 units, with one unit to be used as a clubhouse, for occupancy by persons who are 55 years of age to be located at or about Bridgewater Way, south of 75th Street N. and north of 72nd Street N. in the City (the "Project"); (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; (iii) the payment of a portion of the interest on the Bonds; and (iv) the payment of a portion of the costs of issuing the Bonds. The Project will be owned and operated by the Borrower. The Project will be managed by The Goodman Group, LLC, a Minnesota limited liability company. Following the public hearing, the City Council will consider the adoption of a resolution: (i) approving a Housing Program with respect to the Project prepared in accordance with the requirements of the Housing Act, (ii) approving a Cooperation Agreement between the City and Bethel pursuant to which the City will authorize Bethel to issue the Bonds to finance the Project; and (iii) granting host approval to the issuance of the Bonds. The combined original aggregate principal amount of the Bonds will not exceed $15,000,000. The Bonds will be issued by Bethel and will constitute limited obligations of A-1 Bethel payable solely from the revenues expressly pledged to the payment thereof, and will not constitute general obligations of the City or of Bethel, and will not be secured by any taxing powers of the City or of Bethel, nor any assets or property of the City. A copy of the Housing Program has been submitted to the Metropolitan Council as required by the terms of the Housing Act and is on file in the offices of the Finance Director of the City. Anyone desiring to be heard during this public hearing will be afforded an opportunity to do so. Written comments will be considered if submitted to the attention of the Finance Director on or before the date of the public hearing. Dated [Date of Publication] BY ORDER OF THE CITY OF STILLWATER A-2