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00-923council File # QQ � 9�3 ORI�INAL Resolution # Green Sheet # ���3�5 RESOLUTION Presented By Referred To � SAINT PAUL, MINNESOTA ay Committee: Date RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL 2 3 4 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2? 28 29 30 31 HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAT, TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CIIAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE ELDERLY HOUSING REVENUE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUNfENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PROC�RAM (FRANCISCAN HEALTH AND HOUSING,INC. PROJECT) (a) Minnesota Statutes, Chapter 462C (The "Act") confers upon cities, or housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing project developments within the boundaries of the city; (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "CiTy") the powers confened by Minnesota Statutes, Section 462CA1 to 462C.081; (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA"), has received a proposal from Franciscan Health and Housing, Inc., a nonprofit corporation organized under the laws of Minnesota (the "Borrower"), that the HI2A undertake a program (the "Housing Program") to fmance a Project hereinafter described, through the issuance of revenue bonds or obligarions in one or more series (collectively, the "Bonds") pursuant to the Act; and 32 (d) The Project to be fmanced by the Bonds is the acquisition, consuucfion and 33 equipping of an approximately 71 unit elderly multifamily rental housing facility located at 34 Graham Street and Prior Avenue in the City (the "Project"); and 35 (e) The proposal calls for the HRA to loan the proceeds realized upon the sale of the 36 Bonds to the Bonower pursuant to a revenue agreement or agreements wherein the Company 37 will be obligated to make payments at the times and in amounts sufficient to provide for the ao -9a3 38 prompt payxnent of principle of, premium, if any, and interest on the Bonds and all costs and 39 expenses of the III2A and the City incident to the issuance and sale of the Bonds; and 40 ( fl The City desires to facilitate the acquisition and construction of an elderly 41 multifamily rental housing facility within the City; and the Project will assist the City in 42 achieving these objectives; and 43 44 45 46 47 (g) A public hearing on the Housing Prograui and the Project was held on this date following duly published notice, at which tune ail persons that desired to speak were heazd. (h) No public officiai of the City has either a direct oz indirect fmancial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project 48 (i) The Company has submitted to the HRA a form of Memorandum of 49 Understanding executed by the Company, expressing certain understandings by and between the 50 FIRA and the Company pertaining to the Project, and the fmancing therefor. 51 52 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota, as follows: 53 L The City hereby gives preliminary approval to the proposal of the 54 Borrower that the City undertake the Project, described above, and the program of financing 55 therefor, pursuant to Minnesota Statutes, Chapter 462C, consisting of the acquisition and 56 construction of an elderly multi-family rental housing faciliry within the City pursuant to the 57 Borrower's specifications and to a revenue agreement between the HRA and the Borrower on 58 such terms and conditions with provisions far revision from time to tune as necessary so as to 59 produce income and revenues sufficient to pay, when due, the principal amount of interest on the 6C Bonds in the totai principal amount of approximately $10,000,000 to be issued pursuant to the 61 Act to finance the acquisition and construction of the Project; and said agreement may also 62 provide for the entire interest of the Company therein to be mortgaged to the purchasers of the 63 Bonds, ar a trustee for the holder(s) of the Bonds; and the City, acting by and through the IIRA 64 hereby undertakes preluninarily to issue its revenue bonds in accordance with such terms and 65 conditions; 66 67 68 69 70 71 72 73 2. On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes an elderly multi-family housing development within the meaning of subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the willingness of the City to furnish such financing will be substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of multi-family rental housing opportunities to residents of the City, and to promote more intensive development and use of land within the City; 74 3. The Project, and the program to finance the Project by the issuance of ao �qa3 75 76 77 78 79 80 81 82 83 84 revenue bonds, is hereby given preliminary approval by the City subject to fmal approval by the I�2A, the Company and the purchasers of the Bonds as to ultimate details of the financing of the Project; 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City hereby authorizes and directs the Housing and redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA") to issue housing revenue bonds to finance the Project and to take all actions necessary or desirable in connection therewith, and no fiu approval or authorization of the City shall be required; provided that the HRA may, in its discretion, authorize the Board to issue the Bonds and to implement the program approved hereby, and the City hereby consents thereto; 85 5. The Bonower has agreed and it is hereby determined that any and all costs 86 incurred by the City or the HRA in connection with the financing of the Project whether or not 8'I the Project is carried to completion and whether or not approved by the HRA will be paid by the 88 Borrower; 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 6. Briggs and Morgan, Professional Association, acting as bond counsel, and such investment bankers as may be selected by Borrower, with the consent of the HRA, are authorized to assist in the prepazation and review of necessaxy documents relating to the project and the financing program therefor, to consult with the City Attorney, Bonower and purchasers of the Bonds (or trustee for the purchasers of the Bonds) as to Yhe maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary docuxnents and submit such documents to the HRA for fmal approval; 7. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise �anted to the City or the HRA. The Bonds sha11 not constitute a charge, lien or encuxnbrance, legal ar equitable, upon any proper[y or funds of the City or the HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the IIRA be subject to any liability thereon. Tl�e holder of the Bonds shall never have the right to compel any exercise of the taxing power of the City or HRA to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereon against any properry of the City or the HRA. The Bonds shall recite in substance that Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereo£ The Bonds shall not constitute a debt of the City oz HRA within the meaning of any constitutional or statutory limitation. 108 8. In anticipation of the issuance of the Bonds to fmance all or a portion of l OS the Project, and in order that Completion of the Project will not be unduly delayed when 110 approved, the Borrower is hereby authorized to make such expenditures and advances toward 111 payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, 112 as the Borrower considers necessary, including the use of interim, short-term financing, subject 113 to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without 114 liability on the part of the City or the IIRA . ORIGINAL ao -qa3 115 9. The Executive Director of the HRA is hereby authorized to execute a ll 6 Memorandum of Understanding with respect to the Project in substantially the form on file with 117 118 119 Reguested by Department of: Plannin4 & ECOnomiC DeveloDment ' � By: Form Approved Adoption Certifie by Council Secretary BY� By: !�� .` �� - i' �_ Adopted by the City Council of the City of Saint Paul, Minnesota this 27th day of September, 2000. by Ci ttorn Approved by Mayor for Submission to Council Approved by Mayor: Date ���t/ /_,�}SSC,a � g � By: / � ✓ Adopted by Council: Date ��p0 DEPARTMENT/OFFICE/COUNCII.: DATE INITfATED GREEN SHEET No.:101375 QO ��� PED 9/26/00 CONTACi' PERSON & PHONE: WtifAi-mA1'E itvPt7nuDAie Patty Lilledahl6-65$2 � DEPAR"I'MFiN'1' D ? CITYCOUNCIL NNSf BE ON COUNCII, AGENDA BY (DATE) �IGN = CITY ATTORNEY _ CITY CLERK FINANCIAL. SERV DIIi. FINANCL4I. SERV/ACCTG October 4 � 2,��� gpg� �MAYOR (OR ASST.) _ CIVSI. SERVICE COM[vIISSIOId ROL7TING � ORDER TOTAL # OF SIGNAI'ORE PAGES _(CLIP ALL LOCATIONS FOR SIGNAT[JRE) ncnoN �QZJFS•►•en: Public hearing and granting preliminary approval of up to $10,000,000 in 501(c)(3) elderly Housing Revenue Bonds for the St_ Mary's project sponsored by the Franciscan Health and Housing Inc. RECOIvIIv1ENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CON7'RACI'S MUST ANSWER THE FOLLOWING QUESTIONS: PLANNING COMMISSION 1. Has [his person/finn ever worked under a contract for this departnent? CIB COMIvII1"I'EE Yes No CIVIL SERVICE WMbIISSION 2. Has th�s person/firm ever beea a ciry employee? Yes No 3 Does this pe�son/SIm possess a skill not nocmally possessed by any cucrent ciTy employee? Yes No Explain alI yes answers on separate sheet and attach to green sheet INITdATING PROBLEM, ISSUE, OPPORTONTTY (Who, Whay When, Where, Why): See attached report ADVANTAGESIFAPPROVED. See attached report. DISADVANTAGESIFAPPROVED: None DISADVANTAGES IF NOT APPROVED: Lost oppporttuiity of 71 new construction rental units for senioxs. TOTALAMOUNT OF'i'RANSACI'ION: $10,000,000 COST/REVENUE BUDGEI'ED: No FUNDING S�URCE: 501(c)(3) Housing Revenue Bonds ACTIVTPY NUMBER: FINANCIAL INFORMATION: (F.XPLAIl� There will be no liabiliry or obliga[ion on behalf of the HItA or the City of Saint Paul to repay the bonds which are considered conduit financing. \�ed�sy 2�Shared�ICAY1-ANL�geennmary wpd 00 -1a� October 4, 2000 MEMO TO: City Council Members FROM: Brian Sweeney, Director REGARDING PUBLIC HEARING AND PRELIMINARY APPROVAL OF UP TO 510,000,000 OF ELDERLY HOUSING REVENUE BONDS FOR THE FRANCISCAN HEALTH AND HOUSING, iNC. PROJECT Purpose The purpose of this report is to request the City Council to consider adoption of the attached resolution authorizing staff to issue on the behalf of the HRA up to 510,000,000 of 501(c)(3} tax exempt elderly housing revenue bonds which will be repaid from revenues generated from the St. Mary's Apartment Project. There will be no liability or obligation on behalf of the HRA or the City of Saint Pau{ to repay the bonds. The Bond Loan Agreement will be secured by a first mortgage and the mortgage will be endorsed by FHA and a GNMA pass through certificate will be issued which provides additional security for the Bond holders. The Bonds will be rated AAA and carry a 40 year term and amortization. Background/Proposal The Franciscan Health Community has been located in the Highland/West Seventh Neighborhood for over 60 years. The campus has and continues to provide religious, social, healthcare and housing needs for area seniors, along with many employment opportunities within those programs. The exisiting facility also houses the corporate headquarters for the Franciscan Health Community. The organization and its mission of caring for the neighborhood's senior population was founded in 1936 by the Franciscan Sisters of St. Paul. The current 2.7 acre site is bound by Graham Avenue, Norfork Avenue, and Prior Avenue. Currently located on the site is the nursing home with 140 beds, an adult daycare program, a chapel and the Fransiscan Health Commuities corporate offices. On Norfolk Avenue is an original neighborhood single family home that has been converted into a Group Home. On the corner of Prior and Graham Avenues is a rental home which would be demolished. Also, two maintenance garages/storage buildings will be demolished. 00 -ga3 The St. Mary's Apartment Project will consist of the new construction of 2 three-story senior congregate buildings attached to the existing nursing home structure on the north side of the site. Each building will have an underground parking garage for the use of both tenants and staff. Within the buildings and in a remodefed portion of the nursing home, amentities for the residents would include an arts and crafts room, library, billiards room, lounges, common laundries, congregate dining room, and a chapel. The buildings are designed to reflect the character of the exising residential neighborhood. Proposed Financing Structure Balow is the proposed Sources and Uses: Sources of Funds HRB Other TOTAL Uses of Funds Land Construction Arch/Engineer Fees Capitalized Interest Builders Risk Insurance HUD/GNMA Fees Cost of Issuance Title and Recording Legal/Other V��orking Capital/Reserves TOTAL Project Benefits 59,995,000 358 59,995,358 S 110,000 7,686,000 479,730 381,892 24, 000 379,811 347,925 36,000 70,000 480,000 59,995,358 The new construction of 71 independent congregate housing units will further the following objectives of the Housing Plan: • Encourage the production of housing units to smaller households. • Encourage a diversity of building and unit types to meet the diversity of the market. Particular attention should be paid to assessing and meeting the needs of a growing number of older persons who are looking for alternative housing in their own neighborhoods. aa -9a� Recommendation Request that the City Council adopt the attached Resolution approving a Housing Program and granting preliminary approval of up to $10,000,000 in 501(c)(3) tax exempt Elderly Housing Revenue Bonds for the St. Mary's Project. Further, the City Council authorizes the HRA Board to grant final approval of the Bonds. Sponsored by Commissioner Harris Curt Mi11er, West Team and Patricia Lilledahl, Downtown Team council File # QQ � 9�3 ORI�INAL Resolution # Green Sheet # ���3�5 RESOLUTION Presented By Referred To � SAINT PAUL, MINNESOTA ay Committee: Date RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL 2 3 4 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2? 28 29 30 31 HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAT, TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CIIAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE ELDERLY HOUSING REVENUE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUNfENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PROC�RAM (FRANCISCAN HEALTH AND HOUSING,INC. PROJECT) (a) Minnesota Statutes, Chapter 462C (The "Act") confers upon cities, or housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing project developments within the boundaries of the city; (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "CiTy") the powers confened by Minnesota Statutes, Section 462CA1 to 462C.081; (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA"), has received a proposal from Franciscan Health and Housing, Inc., a nonprofit corporation organized under the laws of Minnesota (the "Borrower"), that the HI2A undertake a program (the "Housing Program") to fmance a Project hereinafter described, through the issuance of revenue bonds or obligarions in one or more series (collectively, the "Bonds") pursuant to the Act; and 32 (d) The Project to be fmanced by the Bonds is the acquisition, consuucfion and 33 equipping of an approximately 71 unit elderly multifamily rental housing facility located at 34 Graham Street and Prior Avenue in the City (the "Project"); and 35 (e) The proposal calls for the HRA to loan the proceeds realized upon the sale of the 36 Bonds to the Bonower pursuant to a revenue agreement or agreements wherein the Company 37 will be obligated to make payments at the times and in amounts sufficient to provide for the ao -9a3 38 prompt payxnent of principle of, premium, if any, and interest on the Bonds and all costs and 39 expenses of the III2A and the City incident to the issuance and sale of the Bonds; and 40 ( fl The City desires to facilitate the acquisition and construction of an elderly 41 multifamily rental housing facility within the City; and the Project will assist the City in 42 achieving these objectives; and 43 44 45 46 47 (g) A public hearing on the Housing Prograui and the Project was held on this date following duly published notice, at which tune ail persons that desired to speak were heazd. (h) No public officiai of the City has either a direct oz indirect fmancial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project 48 (i) The Company has submitted to the HRA a form of Memorandum of 49 Understanding executed by the Company, expressing certain understandings by and between the 50 FIRA and the Company pertaining to the Project, and the fmancing therefor. 51 52 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota, as follows: 53 L The City hereby gives preliminary approval to the proposal of the 54 Borrower that the City undertake the Project, described above, and the program of financing 55 therefor, pursuant to Minnesota Statutes, Chapter 462C, consisting of the acquisition and 56 construction of an elderly multi-family rental housing faciliry within the City pursuant to the 57 Borrower's specifications and to a revenue agreement between the HRA and the Borrower on 58 such terms and conditions with provisions far revision from time to tune as necessary so as to 59 produce income and revenues sufficient to pay, when due, the principal amount of interest on the 6C Bonds in the totai principal amount of approximately $10,000,000 to be issued pursuant to the 61 Act to finance the acquisition and construction of the Project; and said agreement may also 62 provide for the entire interest of the Company therein to be mortgaged to the purchasers of the 63 Bonds, ar a trustee for the holder(s) of the Bonds; and the City, acting by and through the IIRA 64 hereby undertakes preluninarily to issue its revenue bonds in accordance with such terms and 65 conditions; 66 67 68 69 70 71 72 73 2. On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes an elderly multi-family housing development within the meaning of subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the willingness of the City to furnish such financing will be substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of multi-family rental housing opportunities to residents of the City, and to promote more intensive development and use of land within the City; 74 3. The Project, and the program to finance the Project by the issuance of ao �qa3 75 76 77 78 79 80 81 82 83 84 revenue bonds, is hereby given preliminary approval by the City subject to fmal approval by the I�2A, the Company and the purchasers of the Bonds as to ultimate details of the financing of the Project; 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City hereby authorizes and directs the Housing and redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA") to issue housing revenue bonds to finance the Project and to take all actions necessary or desirable in connection therewith, and no fiu approval or authorization of the City shall be required; provided that the HRA may, in its discretion, authorize the Board to issue the Bonds and to implement the program approved hereby, and the City hereby consents thereto; 85 5. The Bonower has agreed and it is hereby determined that any and all costs 86 incurred by the City or the HRA in connection with the financing of the Project whether or not 8'I the Project is carried to completion and whether or not approved by the HRA will be paid by the 88 Borrower; 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 6. Briggs and Morgan, Professional Association, acting as bond counsel, and such investment bankers as may be selected by Borrower, with the consent of the HRA, are authorized to assist in the prepazation and review of necessaxy documents relating to the project and the financing program therefor, to consult with the City Attorney, Bonower and purchasers of the Bonds (or trustee for the purchasers of the Bonds) as to Yhe maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary docuxnents and submit such documents to the HRA for fmal approval; 7. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise �anted to the City or the HRA. The Bonds sha11 not constitute a charge, lien or encuxnbrance, legal ar equitable, upon any proper[y or funds of the City or the HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the IIRA be subject to any liability thereon. Tl�e holder of the Bonds shall never have the right to compel any exercise of the taxing power of the City or HRA to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereon against any properry of the City or the HRA. The Bonds shall recite in substance that Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereo£ The Bonds shall not constitute a debt of the City oz HRA within the meaning of any constitutional or statutory limitation. 108 8. In anticipation of the issuance of the Bonds to fmance all or a portion of l OS the Project, and in order that Completion of the Project will not be unduly delayed when 110 approved, the Borrower is hereby authorized to make such expenditures and advances toward 111 payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, 112 as the Borrower considers necessary, including the use of interim, short-term financing, subject 113 to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without 114 liability on the part of the City or the IIRA . ORIGINAL ao -qa3 115 9. The Executive Director of the HRA is hereby authorized to execute a ll 6 Memorandum of Understanding with respect to the Project in substantially the form on file with 117 118 119 Reguested by Department of: Plannin4 & ECOnomiC DeveloDment ' � By: Form Approved Adoption Certifie by Council Secretary BY� By: !�� .` �� - i' �_ Adopted by the City Council of the City of Saint Paul, Minnesota this 27th day of September, 2000. by Ci ttorn Approved by Mayor for Submission to Council Approved by Mayor: Date ���t/ /_,�}SSC,a � g � By: / � ✓ Adopted by Council: Date ��p0 DEPARTMENT/OFFICE/COUNCII.: DATE INITfATED GREEN SHEET No.:101375 QO ��� PED 9/26/00 CONTACi' PERSON & PHONE: WtifAi-mA1'E itvPt7nuDAie Patty Lilledahl6-65$2 � DEPAR"I'MFiN'1' D ? CITYCOUNCIL NNSf BE ON COUNCII, AGENDA BY (DATE) �IGN = CITY ATTORNEY _ CITY CLERK FINANCIAL. SERV DIIi. FINANCL4I. SERV/ACCTG October 4 � 2,��� gpg� �MAYOR (OR ASST.) _ CIVSI. SERVICE COM[vIISSIOId ROL7TING � ORDER TOTAL # OF SIGNAI'ORE PAGES _(CLIP ALL LOCATIONS FOR SIGNAT[JRE) ncnoN �QZJFS•►•en: Public hearing and granting preliminary approval of up to $10,000,000 in 501(c)(3) elderly Housing Revenue Bonds for the St_ Mary's project sponsored by the Franciscan Health and Housing Inc. RECOIvIIv1ENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CON7'RACI'S MUST ANSWER THE FOLLOWING QUESTIONS: PLANNING COMMISSION 1. Has [his person/finn ever worked under a contract for this departnent? CIB COMIvII1"I'EE Yes No CIVIL SERVICE WMbIISSION 2. Has th�s person/firm ever beea a ciry employee? Yes No 3 Does this pe�son/SIm possess a skill not nocmally possessed by any cucrent ciTy employee? Yes No Explain alI yes answers on separate sheet and attach to green sheet INITdATING PROBLEM, ISSUE, OPPORTONTTY (Who, Whay When, Where, Why): See attached report ADVANTAGESIFAPPROVED. See attached report. DISADVANTAGESIFAPPROVED: None DISADVANTAGES IF NOT APPROVED: Lost oppporttuiity of 71 new construction rental units for senioxs. TOTALAMOUNT OF'i'RANSACI'ION: $10,000,000 COST/REVENUE BUDGEI'ED: No FUNDING S�URCE: 501(c)(3) Housing Revenue Bonds ACTIVTPY NUMBER: FINANCIAL INFORMATION: (F.XPLAIl� There will be no liabiliry or obliga[ion on behalf of the HItA or the City of Saint Paul to repay the bonds which are considered conduit financing. \�ed�sy 2�Shared�ICAY1-ANL�geennmary wpd 00 -1a� October 4, 2000 MEMO TO: City Council Members FROM: Brian Sweeney, Director REGARDING PUBLIC HEARING AND PRELIMINARY APPROVAL OF UP TO 510,000,000 OF ELDERLY HOUSING REVENUE BONDS FOR THE FRANCISCAN HEALTH AND HOUSING, iNC. PROJECT Purpose The purpose of this report is to request the City Council to consider adoption of the attached resolution authorizing staff to issue on the behalf of the HRA up to 510,000,000 of 501(c)(3} tax exempt elderly housing revenue bonds which will be repaid from revenues generated from the St. Mary's Apartment Project. There will be no liability or obligation on behalf of the HRA or the City of Saint Pau{ to repay the bonds. The Bond Loan Agreement will be secured by a first mortgage and the mortgage will be endorsed by FHA and a GNMA pass through certificate will be issued which provides additional security for the Bond holders. The Bonds will be rated AAA and carry a 40 year term and amortization. Background/Proposal The Franciscan Health Community has been located in the Highland/West Seventh Neighborhood for over 60 years. The campus has and continues to provide religious, social, healthcare and housing needs for area seniors, along with many employment opportunities within those programs. The exisiting facility also houses the corporate headquarters for the Franciscan Health Community. The organization and its mission of caring for the neighborhood's senior population was founded in 1936 by the Franciscan Sisters of St. Paul. The current 2.7 acre site is bound by Graham Avenue, Norfork Avenue, and Prior Avenue. Currently located on the site is the nursing home with 140 beds, an adult daycare program, a chapel and the Fransiscan Health Commuities corporate offices. On Norfolk Avenue is an original neighborhood single family home that has been converted into a Group Home. On the corner of Prior and Graham Avenues is a rental home which would be demolished. Also, two maintenance garages/storage buildings will be demolished. 00 -ga3 The St. Mary's Apartment Project will consist of the new construction of 2 three-story senior congregate buildings attached to the existing nursing home structure on the north side of the site. Each building will have an underground parking garage for the use of both tenants and staff. Within the buildings and in a remodefed portion of the nursing home, amentities for the residents would include an arts and crafts room, library, billiards room, lounges, common laundries, congregate dining room, and a chapel. The buildings are designed to reflect the character of the exising residential neighborhood. Proposed Financing Structure Balow is the proposed Sources and Uses: Sources of Funds HRB Other TOTAL Uses of Funds Land Construction Arch/Engineer Fees Capitalized Interest Builders Risk Insurance HUD/GNMA Fees Cost of Issuance Title and Recording Legal/Other V��orking Capital/Reserves TOTAL Project Benefits 59,995,000 358 59,995,358 S 110,000 7,686,000 479,730 381,892 24, 000 379,811 347,925 36,000 70,000 480,000 59,995,358 The new construction of 71 independent congregate housing units will further the following objectives of the Housing Plan: • Encourage the production of housing units to smaller households. • Encourage a diversity of building and unit types to meet the diversity of the market. Particular attention should be paid to assessing and meeting the needs of a growing number of older persons who are looking for alternative housing in their own neighborhoods. aa -9a� Recommendation Request that the City Council adopt the attached Resolution approving a Housing Program and granting preliminary approval of up to $10,000,000 in 501(c)(3) tax exempt Elderly Housing Revenue Bonds for the St. Mary's Project. Further, the City Council authorizes the HRA Board to grant final approval of the Bonds. Sponsored by Commissioner Harris Curt Mi11er, West Team and Patricia Lilledahl, Downtown Team council File # QQ � 9�3 ORI�INAL Resolution # Green Sheet # ���3�5 RESOLUTION Presented By Referred To � SAINT PAUL, MINNESOTA ay Committee: Date RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL 2 3 4 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2? 28 29 30 31 HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAT, TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CIIAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE ELDERLY HOUSING REVENUE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUNfENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PROC�RAM (FRANCISCAN HEALTH AND HOUSING,INC. PROJECT) (a) Minnesota Statutes, Chapter 462C (The "Act") confers upon cities, or housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing project developments within the boundaries of the city; (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "CiTy") the powers confened by Minnesota Statutes, Section 462CA1 to 462C.081; (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA"), has received a proposal from Franciscan Health and Housing, Inc., a nonprofit corporation organized under the laws of Minnesota (the "Borrower"), that the HI2A undertake a program (the "Housing Program") to fmance a Project hereinafter described, through the issuance of revenue bonds or obligarions in one or more series (collectively, the "Bonds") pursuant to the Act; and 32 (d) The Project to be fmanced by the Bonds is the acquisition, consuucfion and 33 equipping of an approximately 71 unit elderly multifamily rental housing facility located at 34 Graham Street and Prior Avenue in the City (the "Project"); and 35 (e) The proposal calls for the HRA to loan the proceeds realized upon the sale of the 36 Bonds to the Bonower pursuant to a revenue agreement or agreements wherein the Company 37 will be obligated to make payments at the times and in amounts sufficient to provide for the ao -9a3 38 prompt payxnent of principle of, premium, if any, and interest on the Bonds and all costs and 39 expenses of the III2A and the City incident to the issuance and sale of the Bonds; and 40 ( fl The City desires to facilitate the acquisition and construction of an elderly 41 multifamily rental housing facility within the City; and the Project will assist the City in 42 achieving these objectives; and 43 44 45 46 47 (g) A public hearing on the Housing Prograui and the Project was held on this date following duly published notice, at which tune ail persons that desired to speak were heazd. (h) No public officiai of the City has either a direct oz indirect fmancial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project 48 (i) The Company has submitted to the HRA a form of Memorandum of 49 Understanding executed by the Company, expressing certain understandings by and between the 50 FIRA and the Company pertaining to the Project, and the fmancing therefor. 51 52 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota, as follows: 53 L The City hereby gives preliminary approval to the proposal of the 54 Borrower that the City undertake the Project, described above, and the program of financing 55 therefor, pursuant to Minnesota Statutes, Chapter 462C, consisting of the acquisition and 56 construction of an elderly multi-family rental housing faciliry within the City pursuant to the 57 Borrower's specifications and to a revenue agreement between the HRA and the Borrower on 58 such terms and conditions with provisions far revision from time to tune as necessary so as to 59 produce income and revenues sufficient to pay, when due, the principal amount of interest on the 6C Bonds in the totai principal amount of approximately $10,000,000 to be issued pursuant to the 61 Act to finance the acquisition and construction of the Project; and said agreement may also 62 provide for the entire interest of the Company therein to be mortgaged to the purchasers of the 63 Bonds, ar a trustee for the holder(s) of the Bonds; and the City, acting by and through the IIRA 64 hereby undertakes preluninarily to issue its revenue bonds in accordance with such terms and 65 conditions; 66 67 68 69 70 71 72 73 2. On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes an elderly multi-family housing development within the meaning of subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the willingness of the City to furnish such financing will be substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of multi-family rental housing opportunities to residents of the City, and to promote more intensive development and use of land within the City; 74 3. The Project, and the program to finance the Project by the issuance of ao �qa3 75 76 77 78 79 80 81 82 83 84 revenue bonds, is hereby given preliminary approval by the City subject to fmal approval by the I�2A, the Company and the purchasers of the Bonds as to ultimate details of the financing of the Project; 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City hereby authorizes and directs the Housing and redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA") to issue housing revenue bonds to finance the Project and to take all actions necessary or desirable in connection therewith, and no fiu approval or authorization of the City shall be required; provided that the HRA may, in its discretion, authorize the Board to issue the Bonds and to implement the program approved hereby, and the City hereby consents thereto; 85 5. The Bonower has agreed and it is hereby determined that any and all costs 86 incurred by the City or the HRA in connection with the financing of the Project whether or not 8'I the Project is carried to completion and whether or not approved by the HRA will be paid by the 88 Borrower; 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 6. Briggs and Morgan, Professional Association, acting as bond counsel, and such investment bankers as may be selected by Borrower, with the consent of the HRA, are authorized to assist in the prepazation and review of necessaxy documents relating to the project and the financing program therefor, to consult with the City Attorney, Bonower and purchasers of the Bonds (or trustee for the purchasers of the Bonds) as to Yhe maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary docuxnents and submit such documents to the HRA for fmal approval; 7. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise �anted to the City or the HRA. The Bonds sha11 not constitute a charge, lien or encuxnbrance, legal ar equitable, upon any proper[y or funds of the City or the HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the IIRA be subject to any liability thereon. Tl�e holder of the Bonds shall never have the right to compel any exercise of the taxing power of the City or HRA to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereon against any properry of the City or the HRA. The Bonds shall recite in substance that Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereo£ The Bonds shall not constitute a debt of the City oz HRA within the meaning of any constitutional or statutory limitation. 108 8. In anticipation of the issuance of the Bonds to fmance all or a portion of l OS the Project, and in order that Completion of the Project will not be unduly delayed when 110 approved, the Borrower is hereby authorized to make such expenditures and advances toward 111 payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, 112 as the Borrower considers necessary, including the use of interim, short-term financing, subject 113 to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without 114 liability on the part of the City or the IIRA . ORIGINAL ao -qa3 115 9. The Executive Director of the HRA is hereby authorized to execute a ll 6 Memorandum of Understanding with respect to the Project in substantially the form on file with 117 118 119 Reguested by Department of: Plannin4 & ECOnomiC DeveloDment ' � By: Form Approved Adoption Certifie by Council Secretary BY� By: !�� .` �� - i' �_ Adopted by the City Council of the City of Saint Paul, Minnesota this 27th day of September, 2000. by Ci ttorn Approved by Mayor for Submission to Council Approved by Mayor: Date ���t/ /_,�}SSC,a � g � By: / � ✓ Adopted by Council: Date ��p0 DEPARTMENT/OFFICE/COUNCII.: DATE INITfATED GREEN SHEET No.:101375 QO ��� PED 9/26/00 CONTACi' PERSON & PHONE: WtifAi-mA1'E itvPt7nuDAie Patty Lilledahl6-65$2 � DEPAR"I'MFiN'1' D ? CITYCOUNCIL NNSf BE ON COUNCII, AGENDA BY (DATE) �IGN = CITY ATTORNEY _ CITY CLERK FINANCIAL. SERV DIIi. FINANCL4I. SERV/ACCTG October 4 � 2,��� gpg� �MAYOR (OR ASST.) _ CIVSI. SERVICE COM[vIISSIOId ROL7TING � ORDER TOTAL # OF SIGNAI'ORE PAGES _(CLIP ALL LOCATIONS FOR SIGNAT[JRE) ncnoN �QZJFS•►•en: Public hearing and granting preliminary approval of up to $10,000,000 in 501(c)(3) elderly Housing Revenue Bonds for the St_ Mary's project sponsored by the Franciscan Health and Housing Inc. RECOIvIIv1ENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CON7'RACI'S MUST ANSWER THE FOLLOWING QUESTIONS: PLANNING COMMISSION 1. Has [his person/finn ever worked under a contract for this departnent? CIB COMIvII1"I'EE Yes No CIVIL SERVICE WMbIISSION 2. Has th�s person/firm ever beea a ciry employee? Yes No 3 Does this pe�son/SIm possess a skill not nocmally possessed by any cucrent ciTy employee? Yes No Explain alI yes answers on separate sheet and attach to green sheet INITdATING PROBLEM, ISSUE, OPPORTONTTY (Who, Whay When, Where, Why): See attached report ADVANTAGESIFAPPROVED. See attached report. DISADVANTAGESIFAPPROVED: None DISADVANTAGES IF NOT APPROVED: Lost oppporttuiity of 71 new construction rental units for senioxs. TOTALAMOUNT OF'i'RANSACI'ION: $10,000,000 COST/REVENUE BUDGEI'ED: No FUNDING S�URCE: 501(c)(3) Housing Revenue Bonds ACTIVTPY NUMBER: FINANCIAL INFORMATION: (F.XPLAIl� There will be no liabiliry or obliga[ion on behalf of the HItA or the City of Saint Paul to repay the bonds which are considered conduit financing. \�ed�sy 2�Shared�ICAY1-ANL�geennmary wpd 00 -1a� October 4, 2000 MEMO TO: City Council Members FROM: Brian Sweeney, Director REGARDING PUBLIC HEARING AND PRELIMINARY APPROVAL OF UP TO 510,000,000 OF ELDERLY HOUSING REVENUE BONDS FOR THE FRANCISCAN HEALTH AND HOUSING, iNC. PROJECT Purpose The purpose of this report is to request the City Council to consider adoption of the attached resolution authorizing staff to issue on the behalf of the HRA up to 510,000,000 of 501(c)(3} tax exempt elderly housing revenue bonds which will be repaid from revenues generated from the St. Mary's Apartment Project. There will be no liability or obligation on behalf of the HRA or the City of Saint Pau{ to repay the bonds. The Bond Loan Agreement will be secured by a first mortgage and the mortgage will be endorsed by FHA and a GNMA pass through certificate will be issued which provides additional security for the Bond holders. The Bonds will be rated AAA and carry a 40 year term and amortization. Background/Proposal The Franciscan Health Community has been located in the Highland/West Seventh Neighborhood for over 60 years. The campus has and continues to provide religious, social, healthcare and housing needs for area seniors, along with many employment opportunities within those programs. The exisiting facility also houses the corporate headquarters for the Franciscan Health Community. The organization and its mission of caring for the neighborhood's senior population was founded in 1936 by the Franciscan Sisters of St. Paul. The current 2.7 acre site is bound by Graham Avenue, Norfork Avenue, and Prior Avenue. Currently located on the site is the nursing home with 140 beds, an adult daycare program, a chapel and the Fransiscan Health Commuities corporate offices. On Norfolk Avenue is an original neighborhood single family home that has been converted into a Group Home. On the corner of Prior and Graham Avenues is a rental home which would be demolished. Also, two maintenance garages/storage buildings will be demolished. 00 -ga3 The St. Mary's Apartment Project will consist of the new construction of 2 three-story senior congregate buildings attached to the existing nursing home structure on the north side of the site. Each building will have an underground parking garage for the use of both tenants and staff. Within the buildings and in a remodefed portion of the nursing home, amentities for the residents would include an arts and crafts room, library, billiards room, lounges, common laundries, congregate dining room, and a chapel. The buildings are designed to reflect the character of the exising residential neighborhood. Proposed Financing Structure Balow is the proposed Sources and Uses: Sources of Funds HRB Other TOTAL Uses of Funds Land Construction Arch/Engineer Fees Capitalized Interest Builders Risk Insurance HUD/GNMA Fees Cost of Issuance Title and Recording Legal/Other V��orking Capital/Reserves TOTAL Project Benefits 59,995,000 358 59,995,358 S 110,000 7,686,000 479,730 381,892 24, 000 379,811 347,925 36,000 70,000 480,000 59,995,358 The new construction of 71 independent congregate housing units will further the following objectives of the Housing Plan: • Encourage the production of housing units to smaller households. • Encourage a diversity of building and unit types to meet the diversity of the market. Particular attention should be paid to assessing and meeting the needs of a growing number of older persons who are looking for alternative housing in their own neighborhoods. aa -9a� Recommendation Request that the City Council adopt the attached Resolution approving a Housing Program and granting preliminary approval of up to $10,000,000 in 501(c)(3) tax exempt Elderly Housing Revenue Bonds for the St. Mary's Project. Further, the City Council authorizes the HRA Board to grant final approval of the Bonds. Sponsored by Commissioner Harris Curt Mi11er, West Team and Patricia Lilledahl, Downtown Team