ITEM 7.2 Riverview LandingOtsezo
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Administration
City Administrator/ Finance Director
Flaherty
September 11, 2017
PRESENTER(s)
REVIEWED BY:
ITEM #:
City Administrator/ Finance
Director Flaherty
Briggs and Morgan, P.A.
City Attorney MacArthur
7.2
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council approve a resolution authorizing and providing for the
issuance and sale of revenue bonds for the Riverview Landing senior housing project.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
Yes — Was held on July 24, 2017.
BACKG RO U N D/J U STI FI CATI O N :
The City received an application for conduit revenue bond project financing from Riverview Landing, Inc.,
for financing a senior housing project in the Waterfront East development area. The requested financing is
eligible under the City's Conduit Bond Policy. Riverview Landing, Inc. submitted the required application
fee along with the application and by such has agreed to the terms of the City's Conduit Bond Policy.
On July 24, 2017, a public hearing was held by the City Council with respect to the financing request from
Riverview Landing, Inc. Following the public hearing, the City Council adopted a resolution giving
preliminary approval to the issuance of its revenue bonds to provide financing for the project.
Since the last City Council action on July 24, 2017, the borrower has changed from Riverview Landing, Inc.,
to Evans Park, Inc. Both of these affiliates are support corporations to Guardian Angels of Elk River, Inc. This
change in borrower was made to streamline complications with sales tax exemptions on the construction
of the senior housing project.
By adoption of the attached resolution, the City is:
1) Authorizing and providing for the issuance and sale of revenue bonds, that in no event shall the
aggregate principal amount of the bonds be greater than $30,000,000, nor shall the net interest
cost of the bonds be greater than 5.50% per annum.
2) Approving the forms of the documents relating to the project and issuance of the bonds.
3) Authorizing one or more officers of the City to execute and issue the bonds.
The issuance of such bonds does not constitute a financial obligation of the City and does not affect the
City's bond rating and debt limit. All costs for issuance of the bonds are the obligation of the applicant.
The City's bond counsel at Briggs and Morgan has reviewed all bond documents on the City's behalf.
SUPPORTING DOCUMENTS ATTACHED:
• Resolution 2017-77
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THEM IN UTES:
Motion to approve Resolution 2017-77 authorizing and providing for the issuance and sale of revenue
bonds at the request of Evans Park, Inc., and approving the forms of documents required in connection
therewith.
BUDGET INFORMATION
FUNDING:
BUDGETED:
The applicant has deposited escrow funds with the City
No
to cover any costs incurred by the City during the
issuance of the respective revenue bonds.
CERTIFICATE
CITY OF OTSEGO
I, the undersigned being a duly qualified and acting officer of the City of Otsego,
Minnesota, hereby attest and certify that:
1. As such officer, I have the legal custody of the original record from which the
attached resolution was transcribed.
2. I have carefully compared the attached resolution with the original record of the
meeting at which the resolution was acted upon.
3. I find the attached resolution to be a true, correct and complete copy of the
original:
A RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND SALE OF REVENUE BONDS, AT THE REQUEST OF EVANS PARK,
INC., AND APPROVING THE FORMS OF DOCUMENTS REQUIRED IN
CONNECTION THEREWITH
4. I further certify that the affirmative vote on said resolution was ayes,
nays, and absent/abstention.
5. Said meeting was duly held, pursuant to call and notice thereof, as required by
law, and a quorum was present.
WITNESS my hand officially as such officer this day of
City Clerk
2017.
Resolution No. 2017-77
A RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND SALE OF REVENUE BONDS, AT THE REQUEST OF EVANS PARK,
INC., AND APPROVING THE FORMS OF DOCUMENTS REQUIRED IN
CONNECTION THEREWITH
BE IT RESOLVED by the City Council of the City of Otsego, Minnesota (the "City" or
the "Issuer"), as follows:
1. Authori . Pursuant to Minnesota Statutes, Chapter 462C, as amended (the
"Act"), the Issuer is authorized to issue revenue bonds and refunding revenue bonds and sell
such bonds at public or private sale as may be determined by the governing body to be most
advantageous; and to loan the proceeds of such bonds to provide financing and refinancing for
projects and multifamily housing developments, all as further provided in the Act, and to refund
bonds previously issued therefor under the Act. Such bonds are authorized to be secured by a
pledge of the revenues to be derived from a loan agreement with the borrower of such proceeds,
and by such other security devices as may be deemed advantageous. Under the provisions of the
Act, such bonds shall be special, limited obligations, and shall not constitute an indebtedness of
the issuer thereof, within the meaning of any state constitutional provision or statutory limitation,
nor give rise to a pecuniary liability of the issuer or a charge against its general credit or taxing
powers.
2. Public Hearin. On July 24, 2017, a public hearing was held by the City Council
of the Issuer (the "Public Hearing") with respect to a proposal by Riverview Landing, Inc., a
Minnesota nonprofit corporation, that it or an affiliate undertake a project consisting of the
acquisition, construction and equipping of a new 142 -unit senior rental housing development,
including 126 independent and assisted living apartments and 16 memory care units, all to be
located on a site of approximately five acres in Otsego, Minnesota (the "Project"), and the
issuance of the revenue bonds by the Issuer to provide financing therefor. The Public Hearing
was called and held as required by the Act and the provisions of section 147(f) of the Internal
Revenue Code of 1986, as amended (the "Code"), and regulations thereunder. Following the
Public Hearing, all persons present had an opportunity to express their views with respect to the
Project and the issuance of the Bonds.
3. Prior Preliminary Approval of Project and Revenue Bonds. On July 24, 2017,
following the Public Hearing, the City Council adopted a resolution (the "Preliminary
Resolution") giving preliminary approval to the issuance of its revenue bonds (as further
described below, the "Bonds") to provide financing for the Project.
4. Documents Presented. Forms of the following documents relating to the Project
and the issuance of the Bonds have been submitted to the Issuer and are now on file in the offices
of the City Clerk:
(a) A Trust Indenture (the "Indenture") by and between the Issuer and U.S.
Bank national Association, as trustee;
(b) A Loan Agreement (the "Loan Agreement") by and between the Issuer
and Evans Park, Inc., a Minnesota nonprofit corporation (the `Borrower"), and an
affiliate of Riverview Landing, Inc.;
(c) A Bond Purchase Agreement (the `Bond Purchase Agreement") by and
between the Issuer, the Borrower and Northland Securities, Inc. (the "Underwriter"); and
(d) Preliminary Official Statement and form of final Official Statement, the
form of the Preliminary Official Statement, together with the insertion of the final
underwriting details of the Bonds, including the interest rates thereon, and any other
changes deemed necessary or desirable, intended to constitute the form of the final
Official Statement, and including all Appendices thereto (together the "Official
Statement"), describing the offering of the Bonds, and certain terms and provisions of the
foregoing documents.
5. Findings. It is hereby found, determined and declared that:
a. The Project will further the purposes contemplated by and described in the
Act and promotes the public welfare by providing necessary multifamily rental housing
for seniors, so that adequate multifamily rental housing are available to elderly residents
of the City at a reasonable cost.
b. There is no litigation pending or, to the knowledge of the Issuer,
threatened against the Issuer relating to the Project or the Bonds, or the Indenture, the
Loan Agreement or the Bond Purchase Agreement (collectively referred to as the "Bond
Documents") or questioning the organization, powers or authority of the Issuer to issue
the Bonds or to execute or deliver any of the Bond Documents.
C. The execution and delivery of and the performance of the Issuer's
obligations under the Bonds and the Bond Documents do not and will not violate any
order of any court or any agency of government of which the Issuer is aware or in any
proceeding to which the Issuer is a party, or any indenture, agreement or other instrument
to which the Issuer is a party or by which it or any of its property is bound, or be in
conflict with, result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any such indenture, agreement or other instrument.
d. The Loan Agreement provides for payments by the Borrower to the Issuer
of such amounts as will be sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due.
e. Under the provisions of the Act, the Bonds are not and shall not be payable
from or charged upon any funds other than amounts payable pursuant to the Loan
Agreement and related documents; the Issuer is not subject to any liability thereon; no
owner of the Bonds shall ever have the right to compel the exercise of the taxing power of
the Issuer to pay the Bonds or the interest thereon, nor to enforce payment thereof against
any property of the Issuer; neither the Bonds nor any document executed or approved in
connection with the issuance thereof shall constitute a pecuniary liability, general or moral
obligation, charge, lien or encumbrance, legal or equitable, upon any property of the Issuer;
2
and the Bonds shall not constitute or give rise to a charge against the general credit or taxing
powers of the Issuer.
6. Approval and Execution of Documents. The forms of the Indenture, the Loan
Agreement and the Bond Purchase Agreement currently on file with the City are approved. The
Issuer shall enter into the Indenture, the Loan Agreement, and the Bond Purchase Agreement,
substantially in the forms on file, but with all such changes therein as may be approved by the
officers executing the same, which approval shall be conclusively evidenced by the execution
thereof, and each of such documents shall be executed and delivered in the name and on behalf
of the Issuer by the officers identified in paragraph 11.
7. Approval, Execution and Delivery of the Bonds. One or more officers of the
Issuer, as provided further herein, are hereby authorized and directed to execute and issue the
Bonds, and the Bonds shall be issued in such series and shall be substantially in such forms,
mature, bear interest, and be payable according to such terms, and shall otherwise contain such
terms and provisions, as are set forth in the Indenture, which terms are for this purpose
incorporated in this Resolution and made a part hereof; provided, however, that the aggregate
principal amount of the Bonds, the interest rates thereon, the amount and dates of the principal
payments required to be made with respect thereto, and the rights of optional and mandatory
redemption with respect thereto shall all be set forth in the Indenture as executed and shall all be
subject to the final approval of the officers of the Issuer who execute and deliver the Indenture in
accordance with the provisions of this Resolution, such approval to be conclusively evidenced by
the execution thereof; but provided, further, however, that in no event shall the aggregate
principal amount of the Bonds be greater than $31,000,000, nor shall the net interest cost of the
Bonds be greater than 5.50% per annum. Each of the Bonds may recite that it is issued pursuant
to the Act and such recital shall, to the fullest extent permitted by law, conclusively establish the
legality and validity thereof.
The Bonds shall be sold to the Underwriter in accordance with and upon the terms and
conditions set forth in the Bond Purchase Agreement. The proposal of the Underwriter to
purchase the Bonds, as further provided in the Bond Purchase Agreement, at the purchase price
set forth therein, is hereby accepted.
8. Certificates, etc. The officers and employees of the Issuer are authorized to
prepare and furnish to Dorsey & Whitney LLP, Minneapolis, Minnesota, as Bond Counsel to the
Underwriter, and to the Underwriter, certified copies of all proceedings and records of the Issuer
relating to the Bonds, and such other affidavits and certificates as may be required to show the
facts appearing 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 of fact
contained therein.
9. Official Statement. The Issuer hereby consents to the preparation and distribution
of a Preliminary Official Statement and a final Official Statement for the Bonds; provided that it
is understood that the Issuer has relied upon the Borrower to assure the accuracy and
completeness of the information set forth in the Official Statement and therefore the Issuer has
not made, and will not make, any representations or warranties with respect to the information
contained therein, except for the information under the heading "The Issuer."
10. Nature of Issuer's Obligations. All covenants, stipulations, obligations,
representations, and agreements of the Issuer contained in this Resolution or contained in the
aforementioned documents shall be deemed to be the covenants, stipulations, obligations,
representations, 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 aforementioned documents shall be exercised or performed by such officers
or agents as may be required or authorized by law to exercise such powers and to perform such
duties. No covenant, stipulation, obligation, representation, or agreement herein contained or
contained in the documents referred to above shall be deemed to be a covenant, stipulation,
obligation, representation, or agreement of any member of the City Council, or any officer,
agent, or employee of the Issuer in that person's individual capacity, and neither shall any
member of the City Council nor any officer or employee executing the Bonds or such documents
be liable personally on the Bonds or be subject to any representation, personal liability or
accountability by reason of the issuance thereof. No provision, representation, covenant or
agreement contained in the Bonds, this Resolution 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 a general or moral obligation, or indebtedness or 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 the Bonds or in any other document related to the
Bonds, the Issuer is not obligated to pay or remit any funds or revenues, except for revenues
derived from the Loan Agreement that are pledged to the payment of the Bonds.
11. Authorized Officers. The Bonds and the Bond Documents referred to herein are
authorized to be executed on behalf of the Issuer by either or both of the Mayor and the City
Administrator/Finance Director; provided, however, that in the event that either the Mayor or the
City Administrator/Finance Director shall be unavailable or for any reason be unable to execute
the Bonds or any other document to be entered into by the Issuer in connection therewith, any
other officer of the Issuer is hereby authorized to act in that capacity and undertake such
execution or acts on behalf of the Issuer.
12. Definitions and Interpretation. Terms not otherwise defined in this Resolution but
defined in the form of Loan Agreement or Indenture now on file shall have the same meanings in
this Resolution and shall be interpreted herein as provided therein. Notices may be given as
provided in the Loan Agreement. In case any provision of this Resolution is for any reason
illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the
remaining provisions of this Resolution, which shall be construed or enforced as if such illegal or
invalid or inoperable provision were not contained herein.
El
Adopted by the City Council of the City of Otsego this day of September, 2017.
Mayor
Attest:
City Administrator/Finance Director
4844-5382-9962\2