HomeMy WebLinkAboutCity Council Resolution 1996-215•
CITY OF PLYMOUTH, MINNESOTA
RESOLUTION NO. 96- 215
AUTHORIZING THE ISSUANCE, SALE AND
DELIVERY OF MULTIFAMILY HOUSING REVENUE
REFUNDING BONDS (GNMA COLLATERALIZED
MORTGAGE LOAN - FOX FOREST APARTMENTS
PROJECT) SERIES 1996A; TAXABLE MULTIFAMILY
HOUSING REVENUE BONDS (FOX FOREST
APARTMENTS PROJECT) SERIES 1996B, AND
SUBORDINATE MULTIFAMILY HOUSING REVENUE
REFUNDING BONDS (FOX FOREST APARTMENTS
PROJECT) SERIES 1996C M AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $11,500,000
(THE "BONDS"); AUTHORIZING THE EXECUTION
AND DELIVERY OF AN INDENTURE OF TRUST, A
BOND PURCHASE AGREEMENT, A LOAN
AGREEMENT, A SUBORDINATE LOAN
AGREEMENT, AN ESCROW AGREEMENT, A
REGULATORY AGREEMENT AND PRELIMINARY
AND FINAL OFFICIAL STATEMENTS;
AUTHORIZING THE EXECUTION AND DELIVERY
OF THE BONDS; AND PROVIDING FOR THE
SECURITY, RIGHTS AND REMEDIES OF THE
HOLDERS OF SAID BONDS
WHEREAS, the City of Plymouth, Minnesota (the "Issuer") is authorized•by the
laws of the State of Minnesota, particularly Minnesota Statutes, Chapters 462A and
462C, as amended (the "Act"), to carry out the public purposes described therein and
contemplated thereby by issuing its revenue bonds to defray, in whole or in part, the
development costs of a multifamily rental housing development, or to retund any such
revenue bonds, and by entering into any agreements made in connection therewith and
pledging them as security for the payment of the principal of and interest on any such
revenue bonds; and
WHEREAS, the Issuer has heretofore issued its Multifamily Housing
Development Revenue Refunding Bonds (Fox Forest Apartments Project) Series 1989 in
the aggregate principal amount of $8,600,000 (the "Prior Bonds") and used the proceeds
of the Prior Bonds to provide for the financing of P. 160 -unit multifamily rental housing
development located within the jurisdictional boundaries of the Issuer (the "Project") for
the benefit of Cheyenne Land Company, a Minnesota general partnership ("Cheyenne
Land Company"); and
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WHEREAS, on or prior to the date hereof, Cheyenne Land Company has
transferred all interest in the Project to Fox Forest Limited Partnership, a Minnesota
limited partnership (the "Owner"); and
WHEREAS, it has been represented to the Issuer by the Owner and Miller &
Schroeder Financial, Inc. (the "Underwriter") that adequate arrangements have been or
will be made with all holders of the Prior Bonds to permit redemption and prepayment of
the Prior Bonds; and
WHEREAS, the Issuer, by passage of Resolution No. 96 -UL on February 21,
1996, adopted an amended and restated housing program with respect to the Project (the
"Program") pursuant to and in conformity with the Act after public hearing thereon and
after publication of notice in a newspaper circulating generally within the jurisdictional
boundaries of the Issuer, at least fifteen (15) day before the date of the hearing, as
required by the Act; and
WHEREAS, on or prior to the date of publication of such notice, the Program was
submitted to the Metropolitan Council, and the Metropolitan Council presented its
favorable comments to the Issuer, by letter dated February 6, 1996; and no material
changes or changes inconsistent with the Metropolitan Council's comments were made to
the Program; and
WHEREAS, the Issuer proposes to refinance the Project by the issuance of (i)
Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized Mortgage Loan -
Fox Forest Apartments Project) Series 1996A (the "Series A Bonds"); (ii) Taxable
Multifamily Housing Revenue Bonds (GNMA Collateralized Mortgage Loan - Fox
Forest Apartments Project) Series 19968 (the "Series B Bonds"); and (iii) Subordinate
Multifamily Housing Revenue Refunding Bonds (Fox Forest Apartments Project) Series
1996C (the "Series C Bonds") (together the Series A, B and C Bonds are hereinafter
referred to as the "Bonds") under the Act pursuant to this Resolution; and
WHEREAS, the Bonds will be issued under an Indenture of Trust, as hereinafter
defined, and the Series A Bonds and Series B Bonds will be secured by a fully modified
mortgage-backed security (the "GNMA Security") issued by the lender referenced in the
Loan Agreement, as hereinafter defined (the "Lender"), and guaranteed as to timely
payment of principal and interest by the Government National Mortgage Association
("GNMA") and payment of the Series C Bonds will be secured by the issuance of a note
(the "Series C Borrower Note") by the Owner pursuant to the Subordinate Loan
Agreement, as hereinafter defined, and a second mortgage on the Project pursuant to a
Subordinate Mortgage, as hereinafter defined; and
WHEREAS, it is intended that interest or. the Series A Bonds and the Series C
Bonds (the "Tax -Exempt Bonds") be excluded from gross income of the holders thereof
for federal income tax purposes; and
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WHEREAS, the Bonds and the interest on said Bonds shall be payable solely
from the revenue pledged therefor and the Bonds shall not constitute a debt of the Issuer
within the meaning of any constitutional or statutory limitation, nor shall the Bonds
constitute nor give rise to a pecuniary liability of the Issuer or a charge against its general
credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or
equitable, upon any property of the Issuer other than the Issuer's interest in said Projxt;
and
WHEREAS, the GNMA Security will be backed by a mortgage loan insured by
the Federal Housing Administration (the "Mortgage Loan") made by the Lender to the
Owner; and
WHEREAS, the owners of the Series C Bonds shall have no right, title or interest
in the security provided by the GNMA Security; and
WHEREAS, in order to comply with the requirements of Section 147(f) of the
Internal Revenue Code of 1986, as amended, on December 19, 1995, the City Council
held a public hearing, after publication of notice thereof in a newspaper of general
circulation in the Issuer at least fourteen (14) days before the hearing and adopted its
Resolution No. 95-782, providing preliminary approval of the issuance of the Bonds;
NOW, 'THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PLYMOUTH, MINNESOTA, AS FOLLOWS:
1. For the purpose of refunding the Prior Bonds and for paying certain costs
of issuance in connection with the issuance of the Bonds and thereby refinancing the
Project, and in order to provide funds to finance the payment of interest on the
obligations of the Issuer with respect to the Project, the establishment of reserves to
secure such obligations, and the payment of all other expenditures incident to and
necessary or convenient to carry out the purposes of the Project, there is hereby
authorized the issuance, sale and delivery of: the Series A Bonds, the Series B Bonds and
the Series C Bonds, the proceeds of which, together with funds provided by the Owner
and held under the indenture for the Prior Bonds, shall be applied to redemption of the
outstanding Prior Bonds and payment of costs of issuance in connection therewith. The
Bonds shall be in such principal amounts, shall bear interest at rates, shall be numbered,
shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be
in such form and have such other details and provisions as may be prescribed in the
Indenture of Trust, to be dated as of April 1, 1996 (the "Indenture"), between the Issuer
and First 'frust National Association, as trustee (the "Trustee"), substantially in the form
now on file with the Issuer; provided that (i) the aggregate principal amount of the Tax -
Exempt Bands (together with any proceeds from a sales premium on any series of Tax -
Exempt Bonds) shall not exceed the lesser of $8,200,000 or the outstanding principal
amount of the Prior Bonds, the aggregate principal amount of the Series A Bonds shall
not exceed $7,400,000, the aggregate principal amount of tltc Series A Fonds and the
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Series B Bonds shall not exceed $10,700,000, the aggregate principal amount of the
Series C Bonds shall not exceed $800,000 and the aggregate principal amount of all
Series of Bonds shall not exceed $11,500,000; (ii) the maximum interest rate on the
Series A Bonds shall not exceed 8.50% per annum, the maximum interest rate on the
Series B Bonds shall not exceed 10.00% ;ser annum, and the maximum interest rate on
the Series C Bonds shall not exceed 9.00% per annum; and (iii) the final maturity of the
Tax Exempt Bonds shall not be later than 35 years from the date of issuance and in no
event shall the average maturity of the Tax Exempt Bonds exceed 120% of the remaining
average reasonably expected economic life of the Project; and (v) there shall be maturities
or mandatory sinking fund redemptions of the Bonds so as to result in approximate level
debt service throughout the term of the Bonds. The Mayor and the City Manager are
hereby authorized and directed to confirm the principal amount of the Bonds, the final
interest rates and maturities thereof and the premium or discount on the Bonds in
connection with the issuance thereof. The Bonds shall be special obligations of the Issuer
payable solely from the revenues provided by the GNMA Security and other funds
pledged pursuant to the Indenture. The Bonds are not to be payable from nor charged
upon any funds of the Issuer other than the revenues pledged to their payment, nor is the
Issuer subject to any liability thereon; no holders of the Bonds shall ever have the right to
compel any exercise of the taxing power of the Issuer to pay any of the principal of
premium, if any, or interest on the Bonds; the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable, upon any property of the Issuer, and each Bond shall
recite that the Bonds, including interest thereon, are payable solely from the revenues
pledged to the payment thereof and that no Bond shall constitute a debt of the Issuer
within the meaning of any constitutional or statutory limitation. The Bonds shall contain
a recital that they are issued pursuant to the Act and such-ecital shall be conclusive
evidence of the validity and regularity of the issuance thereof. The Mayor and City
Manager are authorized and directed to prepare and execute by manual or facsimile
signature the Bonds as prescribed in the Indenture, to affix the seal of the Issuer manually
or by facsimile and to deliver them to the Trustee, together with a certified copy of this
resolution and other documents required by the Indenture. fei authentication and delivery
to the Underwriter.
2. The City Council of the Issuer hereby authorizes and directs the Mayor
and City Manager of the Issuer (the "Mayor' and "Manager" respectively) to execute and
deliver the Indenture, affix the seal of the Issuer thereto, and to deliver the Indenture to
the Trustee.
All of the provisions of the Indenture, 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 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,
which is hereby approved, with such necessary or desirable and appropriate variations,
omissions and insertions as do not materially change the substance thereof, or as the
Mayor, in his discretion, shall determine, nrtd the execution thereof by (lie Mayor shall be
conclusive evidence of such determination.
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3. The Mayor and the Manager are hereby authorized and directed to execute
and deliver the Loan Agreement (the "Loan Agreement') to be dated as of April 1, 1996
by and among the Issuer, the Trustee, the Lender and the Owner providing for the loan of
*he proceeds of the Series A Bonds and the Series B Bonds. All of the provisions of the
Loan Agreement, when executed and delivered as authorized herein 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 which is hereby approved, with such
variations, omissions and insertions as to not materially change the substance thereof, or
as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor
shall be conclusive evidence of such determination.
4. The Mayor and the Manager are hereby authorized and directed to execute
the Subordinate Loan Agreement (the "Subordinate Loan Agreement") to be dated as of
April I, 1996 by and among the Issuer, the Trustee and the Owner, providing for the loan
of proceeds of the Series C Bonds. All of the provisions of the Subordinate Loan
Agreement, when executed and delivered as authorized herein shall be in full force and
effect from the date of execution and delivery thereof. The Subordinate Loan Agreement
shall be substantially in the form on file with the Issuer, which is hereby approved, with
such necessary or desirable and appropriate variations, omissions and insertions as are not
materially inconsistent with the form on file with the Issuer or as the Mayor, in his
discretion, shall determine and execution thereof by the Mayor shall be conclusive
evidence of such determination. The form of the Series C Borrower Note (as defined in
the Indenture) and the Subordinate Multifamily Mortgage, Assignment of Rents and
Security Agreement (the "Subordinate Mortgage"), each executed by the Owner in favor
the Issuer are hereby approved and shall be in the form on file with the Issuer, with such
variations as shall be permissible in connection with any modifications to the Subordinate
Loan Agreement as approved in accordance with the preceding sentence.
5. The Mayor and the Manager are hereby authorized and directed to execute
the Escrow Agreement (the "Escrow Agreement"), by and among the Issuer, the Owner
and the Escrow Agent (as defined therein), to be dated as of April 1, 1996 relating to the
application of the proceeds of the Tax -Exempt Bonds to the redemption and prepayment
of the Prior Bonds. All of the provisions of the Escrow Agreement, when executed and
delivered as authorized herein shall be in full force and effect from the date of execution
and delivery thereof. The Escrow Agreement shall be substantially in the form on file
with the Issuer, which is hereby approved, with such necessary or desirable and
appropriate variations, omissions and insertions as are not materially inconsistent with the
form on file with the Issuer or as the Mayor, in his discretion, shall determine and
execution thereof by the Mayor shall be conclusive evidence of such determination.
6. The Mayor and the Manager are hereby authorized and directed to execute
and deliver the Regulatory Agreement (the "Regulatory Agreement") to be dated as of
April 1, 1996 by and between the Issuer and the Owner. All of the provisions of the
Regulatory Agreement, when executed and delivered as authorized herein shall be in full
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force and effect from the date of execution and delivery thereof. The Regulatory
Agreement shall be substantially in the form on file with the Issuer which is hereby
approved, with such variations, omissions and insertions as do not materially change the
substance thereof, or as the Mayor, in his discretion, shall determine, and the execution
thereof by the Mayor shall be conclusive evidence of such determination.
7. The Mayor and the Manager are hereby authorized and directed to execute
the Bond Purchase Agreement among the Issuer, the Owner and the Underwriter relating
to the Bonds (the "Bond Purchase Agreement"). All of the provisions of the Bond
Purchase Agreement, when executed and delivered as authorized 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 Purchase Agreement shall be substantially in the form on file with the Issuer,
which is hereby approved, with such necessary or desirable and appropriate variations,
omissions and insertions as are not materially inconsistent with the form on file with the
Issuer or as the Mayor, in his discretion, shall determine and execution thereof by the
Mayor shall be conclusive evidence of such determination.
8. The Trustee is hereby appointed as Paying Agent and Bond Registrar for
the Bonds.
9. The Mayor, the Manager and the Clerk of the Issuer (the "Clerk") are
hereby authorized to execute and deliver, on belialf of the Issuer, such other documents
and certificates as are necessary or appropriate in connection with the issuance, sale and
delivery of the Bonds, including without limitation, assignment of the Borrower Notes,
Subordinate Loan Agreement and Subordinate Mortgage to the Trustee and/or the
Lender, request and authorization to the Trustee to authenticate and deliver the Bonds, a
Tax Certificate and a Letter of Representations to The Depository Trust Company
("DTC") for appointment of DTC as securities depository for all Bonds or any separate
series of Bonds as provided in the Indenture; and such other certificates, instruments, and
other documents as are necessary, customary, appropriate or necessary to establish the
validity or enforceability of the Bonds, or are required by Bond Counsel to establish the
validity or enforceability of the Bonds or the exclusion from gross income of interest on
the Tax -Exempt Bonds for purposes of Federal and State of Minnesota income taxation.
10. The Mayor and the Manager of the Issuer or either of thein are hereby
authorized to execute and deliver, on behalf of the Issuer, such instruments as may be
necessary and appropriate to effect the funding of the Mortgage Loan and the purchase of
the GNMA Security by the Trustee.
11. The Issuer hereby consents to the distribution of the Preliminary Official
Statement relating to the Series A Bonds and the Series B Bonds and the Preliminary
Official Statement relating to the Series C Bonds (together, the "Preliminary Official
Statement"), substantially in the forms on file with the Issuer. The Issuer hereby consents
to the use by the Underwriter in connection with the sale of the Bonds of a final Official
Statement relating to the Series A Bonds and the Series B Bonds and a final Official
Statement relating to the Series C Bonds (together, the "Official Statement'),
substantially in the form of the Preliminary Oficial Statement described above. The
Preliminary Official Statement and the Official Statement are the sole materials
consented to by the Issuer for use in connection with the offer and sale of the Bonds. The
Issuer has not participated in the preparation thereof, has not made any independent
investigation of the information contained therein and shall have no liability in
connection with the contents of or use of such offering materials. The Trustee is hereby
authorized to enter into the Continuing Disclosure Agreement, to be dated as of April 1,
1996, between the Owner and the Trustee, substantially in the form on file with the
Issuer.
12. All covenants, stipulations, obligations and agreements of the Issuer
contained in this resolution and the aforementioned documents shall be deemed to be the
covenants, stipulations, obligations and agreements of the Issuer to the full extent
authorized or permitted by law, and all such covenants, stipulations, obligations 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 or the City Council, or such officers, board, body or agency thereof as
may be required or authorized by law to exercise such powers and to perform such duties.
No covenant, stipulation, obligation or agreement herein contained or contained in
the aforementioned documents shall be deemed to be a covenant, stipulation, obligation
or agreement of any member of the City Council of the Issuer, or any officer, agent or
employee of the Issuer in that person's individual capacity, and neither the City Council '
of the Issuer nor any officer 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.
No provision, covenant or agreement contained in the aforementioned documents,
the Bonds or in any other document related to the Bonds, and no obligation therein or
herein imposed upon the Issuer or the breach thereof, shall constitute or give rise to any
pecuniary liability of the Issuer or any charge upon its general credit or taxing powers. In
making the agreements, provisions, covenants and representations set forth in such
documents, the Issuer has not obligated itself to pay or remit any funds or revenues, other
than funds and revenues derived from the Loan Agreement and Subordinate Loan
Agreement and related security instruments which are to be applied to the payment of the
Bonds, as provided therein and in the Indenture.
Except as herein otherwise expressly provided, nothing in this resolution or in the
aforementioned documents expressed or implied, is intended or shall be construed to
confer upon any person or firm or corporation, other than the Issuer or any holder of the
Bonds issued under the provisions of this resolution, any right, remedy or claim, legal or
equitable, under and by reason of this resolution or any provision hereof, this resolution,
the aforementioned documents and all of their provisions being intended to be and being
for the sole and exclusive benefit of the Issuer and any holder from time to time of the
Bonds issued under the provisions of this resolution.
13. In cage any one or more of the provisions of this resolution, or of the
aforementioned documents, or of the Bonds issued hereunder shall for any reason be held
to be legal or invalid, such illegality or invalidity shall no, affect any other provision of
this resolution, or of the aforementioned documents, or of the Bonds, but this resolution,
the aforementioned documents, and the Bonds shall be construed and endorsed as if such
illegal or invalid provision had not been contained therein.
14. The Bonds, when executed and delivered, shall contain a recital and such
recital shall be conclusive evidence of the validity of the Bonds and the regularity of the
issuance thereof, that 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 aforementioned documents to happen, exist and be performed
precedent to and in the enactment of this resolution, and precedent to issuance of the
Bonds and precedent to the execution of the aforementioned documents have happened,
exist and have been performed as so required by law:
15. The officers of the Issuer and its attorneys, agents and employees are
hereby authorized to do all acts and things required of them by or in connection with this
resolution, the aforementioned documents, and the Bonds for the full, punctual and
complete performance of all the terms, covenants and agreements contained in the Bonds,
the aforementioned documents and this resolution. In the event that for any reason the
Mayor of the Issuer is unable to carry out the execution of any of the documentri or other
acts provided herein, any other member of the City Council of the Issuer shall be
authorized to act in his capacity and undertake such execution or acts on bet.alf of the
Issuer with full force and effect, which execution shall be valid and binding on the Issuer.
If for any reason the Manager or Clerk of the Issuer are unable to execute and delver the
documents referred to in this resolution, such documents may be executed by the any
member of the City Council, the Assistant City Manager or the Deputy Clerk with the
same force and effect as if such documents were executed and delivered by the Manager
or Clerk of the Issuer. If the person whose signature appears on any of the foregoing
certificates, instruments, or documents as the Mayor, Manager, or Clerk shall cease to be
the Mayor, Manager, or Clerk, respectively, before the date of issuance of the Bonds,
such signature shall, nevertheless, be valid and sufficient for all purposes.
16. On February 21, 1996, the Issuer adopted its resolution providing for the
issuance of bonds, the proceeds of which were intended to refund the Prior Bonds. To the
extent provisions or actions provided in such prior resolution conflict with provisions
contained in this resolution, the provisions under this resolution supersede those
provisions contained in the prior resolution.
17. This resolution shall be in full force and effect from and after its passage.
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