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HomeMy WebLinkAbout2019-050 (Bethel Revenue Bonds under Minn Stat, Chapter 462C, finance costs of multifamily housing development constructed in Stillwater owned and operated by Birchwood Landing, LLC; approve housing program and other actions) CITY OF STILLWATER,MINNESOTA RESOLUTION 2019-050 APPROVING THE ISSUANCE BY THE CITY OF BETHEL OF REVENUE BONDS UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED, TO FINANCE THE COSTS OF A MULTIFAMILY HOUSING DEVELOPMENT TO BE CONSTRUCTED IN THE CITY OF STILLWATER TO BE OWNED AND OPERATED BY BIRCHWOOD LANDING, LLC; APPROVING A HOUSING PROGRAM WITH RESPECT THERETO;AND TAKING CERTAIN OTHER ACTIONS WHEREAS, the City of Stillwater (the "City") is a home rule city duly organized and existing under the Constitution and laws of the State of Minnesota. WHEREAS, in accordance with the terms of Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), the cities of the State of Minnesota are authorized to issue revenue bonds or other obligations to finance multifamily housing developments. WHEREAS, each city of the State of Minnesota is authorized to issue obligations to finance the acquisition or improvement of real property located outside of the corporate boundaries of the city if the property or properties constituting a single project is located in another city and the governing body of such other city consents,by resolution,to the issuance of obligations by the city. WHEREAS, under the requirements of Section 462.03 of the Housing Act, the City is required to prepare a housing program with respect to each multifamily housing development to be financed under the Housing Act, and a public hearing must be held on each housing program after publication of a notice of public hearing in a newspaper of general circulation in the City at least fifteen (15) days before the date of the public hearing. WHEREAS, Birchwood Landing, LLC, a Delaware limited liability Borrower (the "Borrower"), the sole member of which is ILHC of Stillwater, LLC, a Delaware limited liability company (the "Parent Company"), has proposed the issuance of revenue bonds by the City of Bethel, a statutory city of the State of Minnesota ("City of Bethel"), in the aggregate principal amount not to exceed $15,000,000 (the "Revenue Bonds"), pursuant to the Housing Act, a resolution of the City Council of the City of Bethel, and the terms and conditions of an Indenture of Trust, dated on or after May 1, 2019 (the "Indenture"), between the City of Bethel and U.S. Bank National Association, as trustee. The proceeds of the Revenue Bonds will be applied to make a loan (the "Loan") by the City of Bethel to the Borrower under the terms and conditions of a Loan Agreement, dated on or after May 1, 2019 (the "Loan Agreement"), between the City of Bethel and the Borrower, to be applied by the Borrower to: (i) finance the costs to the Borrower 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 (the "Project"); (ii)the funding of one or more reserve funds to secure the timely payment of the Revenue Bonds; (iii) the payment of a portion of the interest on the Revenue Bonds; and (iv)the payment of a portion of the costs of issuing the Revenue Bonds. 557896v2 SEL BE250-20 1 WHEREAS, the Borrower has requested that the City consent to the issuance of the Revenue Bonds by the City of Bethel. WHEREAS, a Cooperation Agreement to be dated on or after May 1, 2019 (the "Cooperation Agreement"),between the City and the City of Bethel, has been submitted to the City and the City of Bethel for their review and approval. 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") was prepared in accordance with the requirements of the Housing Act and was submitted to the Metropolitan Council for its review and comments on or before the date the notice of public hearing was published. 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 Revenue Bonds as tax-exempt bonds the interest on which is not includable in gross income for federal income tax purposes, this City Council must approve the issuance of the Revenue 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. WHEREAS, pursuant to the Housing Act and the Code, a notice of public hearing in the form required by the Housing Act and Section 147(f) of the Code was published in the Stillwater Gazette, a newspaper of general circulation in the City on Friday, March 22, 2019. WHEREAS, the Revenue Bonds and the interest on the Revenue Bonds: (i) shall not constitute general or moral obligations of the City or the City of Bethel and shall be payable solely from the revenues pledged therefor; (ii) shall not constitute a debt of the City or the City of Bethel within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or the City of Bethel or a charge against their respective general credit or taxing powers; and (iv) shall not constitute a charge, lien,or encumbrance,legal or equitable, upon any property of the City. NOW,THEREFORE, BE IT RESOLVED THAT: 1. On the date hereof, the City Council conducted a public hearing with respect to the proposal that the City grant host approval to the City of Bethel to undertake and finance the Project under the terms of the Housing Program and with respect to the issuance of the Revenue Bonds, as requested by the Borrower, and in accordance with the terms of the Housing Act and Minnesota Statutes, Section 471.565, as amended. A notice of the public hearing, in the form required by the Housing Act and by Section 147(f) of the Code (and applicable regulations promulgated thereunder), was published once in a newspaper of general circulation in the City at least fifteen (15) days prior to the date of the public hearing. 2. The City hereby grants host approval to the issuance of the Revenue Bonds by the City of Bethel for the purposes referenced in this resolution and in an aggregate principal amount not to exceed $15,000,000. The Revenue Bonds shall not constitute a pecuniary liability or charge, lien, or encumbrance, legal or equitable, upon any funds, assets, taxing powers, or any other property of the City. The Revenue Bonds, when, as, and if issued, shall recite in substance that the Revenue Bonds, including interest thereon, are payable solely from the revenues received in accordance with the terms of the Loan Agreement and other property and security pledged to the 557896v2 SEL BE250-20 2 payment thereof under the terms of the Indenture, and shall not constitute a general or moral obligation of the City. The Revenue Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. The purchasers and owners 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 of the Revenue Bonds, or the interest thereon or to enforce payment thereof against any property of the City. 3. It is hereby found and determined that the Project furthers the purposes set forth in the Housing Act and the Project constitutes a "multifamily housing development" within the meaning of Section 462C.02,subdivision 5,of the Act. 4. The Cooperation Agreement is hereby approved and the Mayor and the City Administrator/Treasurer are authorized to execute and deliver the Cooperation Agreement in the form now on file with the City, with such amendments as are approved by the Mayor and the City Administrator/Treasurer. 5. The preparation of the Housing Program and the submission of the Housing Program to the Metropolitan Council for its review and comment are hereby ratified and approved. The Housing Program is hereby approved without amendment. 6. The Borrower shall reimburse the City for costs paid or incurred by the City in connection with this resolution and the Cooperation Agreement whether or not the financing of the Project is carried to completion, and whether or not the Revenue Bonds or operative instruments are executed and delivered. 7. This Resolution shall be in full force and effect from and after its passage. Adopted by the City Council of the City of Stillwater, Minnesota,this April 16,2019. CITY OF ST LWATER,MINNESOTA Ted Kozlowski, Mayor ATTEST: 7L- 4. //7 - Beth Wolf, City Clerk 557896v2 SEL BE250-20 3