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01-1145�' � t 1 �t,� ; \ � L� � f�� e 1._4 Council File # a �T � y.$ Resolution # Green Sheet # � � � �� RESOLUTION MINNESOTA � Presented By Referred To 7S Committee: Date 2 3 4 5 6 7 8 9 10 11 RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE ELDERLY HOUSING REVENUE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PROGRAM (RIVERVIEW ffiGHLANDS PROJECT) 12 (a) Minnesota Statutes, Chapter 462C (the "Act) confers upon cities, or housing and 13 redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the 14 powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of 15 planning, administering, making or purchasing loans with respect to one or more multi-family housing 16 project developments within the boundaries of the city; and 17 (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 18 "HRA") has been designated, by ordinance, to exercise, on behalf of the City of 5aint Paul, Minnesota 19 (the "City") the powers conferred by Minnesota Statutes, Section 462CA1 to 462C.081; and 20 (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 21 "HRA"}, has received a proposal from Riverview Highlands Apartments, LLC, a Minnesota limited 22 liability company (the "Borrower"), that the HRA undertake a program (the "Housing Program") to 23 finance a Project hereinafter described, through the issuance of revenue bonds or obligations in one or 24 more series (collectively, the "Bonds") pursuant to the Act; and 25 26 27 28 29 30 31 (d) The Project to be financed by the Bonds is acquisition by the Borrower of the existing 54-unit elderly rental housing facility located at 1834 Mississippi River Boulevard South in the City of Saint Paul (the "Housing Facility"), and includes the refunding of certain taxable debt incurred by the prior owner in connection with its acquisition of the Housing Facility, and the refunding of a portion of the Nursing Home Revenue Bonds (Franciscan Health Community Project) Series 1996B previously issued by the City of Cannon Falls to fmance the acquisition of a skilled care nursing home facility (collectively, the "ProjecY'); and �,�,ar�i��;� 32'.�% E�a� �' ��Th�proposal calls for the HRA to loan the proceeds realized upon the sale of the Bonds 33 to the Borrower pursuant to a revenue agreement or agreements wherein the Company will be obligated 34 to make payments at the times and in amounts sufficient to provide for the prompt payment of principai 35 of, prexnium, if any, and interest on the Bonds and all costs and expenses of the HRA and the CiTy 36 incident to the issuance and sale of the Bonds; and 37 ( fl The City desires to facilitate the acquisition and construction of an elderly multifaxnily 38 rental housing facility within the City; and the Project will assist the City in achieving these objecrives; 39 and 40 (g) A public hearing on the Housing Program and the Project was held on this date following 41 duly published notice, at which tune all persons that desired to speak were heazd; and 42 (h) No public official of the City has either a direct or indirect financial interest in the Project 43 nor will any public official either directly or indirectly benefit fmancially from the Project; and 44 45 46 (i) The Company has submitted to the HRA a form of Memorandum of Understanding executed by the Company, expressing certain understandings by and between the HRA and the Company pertaining to the Project, and the financing therefor. 47 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint 48 Paul, Minnesota, as follows: 49 1. The City hereby gives preliminary approval to the proposal of the Borrower that 50 the City undertake the Project, described above, and the program of financing therefor, pursuant to S l Minnesota Statutes, Chapter 462C, and to a revenue agreement between the HRA and the Bonower on 52 such terms and conditions with provisions for revision from time to time as necessary so as to produce 53 income and revenues sufficient to pay, when due, the principal and interest on the Bonds in the total 54 principal amount of approximately $4,700,000 to be issued pursuant to the Act to finance the Project; 55 and said agreement may also provide for the entire interest of the Company therein to be mortgaged to 56 the purchasers of the Bonds, or a trustee for the holder(s) of the Bonds; and the City, acting by and 57 through the HRA hereby undertakes preliminarily to issue its revenue bonds in accordance with such 58 terms and conditions. 59 2. On the basis of information available to the City it appears, and the City hereby 60 finds, that the Project constitutes an elderly multi-family housing development within the meaning of 61 subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the 62 witlingness of the City to furnish such financing will be a substantial inducement to the Company to 63 undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the 64 provision of multi-family rental housing opportunities to residents of the City, and to promote more 65 intensive development and use of land within the City. 66 3. The Project, and the program to finance the Project by the issuance of revenue 67 bonds, is hereby given preliminary approval by the City subject to fmal approval by the HIZA, the 6$ Company and the purchasers of the Bonds as to ultimate details of the financing of the Project. 69 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City 7� hexeby authorizes and directs the Housing and Redevelopment Authority of the City of Saint Paul, 71 Minnesota (the "HRA") to issue housing revenue bonds to finance the Project and to take a11 actions 72 necessary or desirable in connecfion therewith, and no furdier approval ar authorization of the City shall 73 be required; provided that the HRA may, in its discretion, authorize the Boazd to issue the Bonds and to 74 implement the program approved hereby, and the City hereby consents thereto. C t —�� 75 � �5[ �� i�� ^ -� The Borrower has agreed and it is hereby determined tbax any and all costs a, � t��( S 76 incurred by the (:rty or the FIFtA in connection with the fmancing of the Project whether or not the 77 Project is carried to complerion and whether or not approved by HRA will be paid by the Borrower. 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 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 IIRA, aze authorized to assist in the prepazation and review of necessary documents relating to the Project and the finaucing program therefor, to consult with the City Attorney, Bonower and purchasers of the Bonds (or trustee for the purchasers of the Bonds) as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval. 7. Nothing in this Resolution or the documents prepazed pursuant hereto shali authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City or the HRA. The Bonds shall not constitute a charge, lien or encuxnbrance, legal or equitable, upon any properiy or funds of the City or the F3RA except the revenue and proceeds pledged to the payment thereof, nor sha11 the City or the HRA be subject to any liability thereon. The 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 property of the City ar 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 thereof. The Bonds shall not constitute a debt of the Ciry or HRA within the meaning of any constitutionai or statutory limitation. 8. In anticipation of the issuance of the Bonds to fmance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Borrower is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, as the Bonower considers necessazy, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without liability on the part of the City or the HRA. 9. The Executive Director of the H12A is hereby authorized to execute a 104 Memoranduxn of Understanding with respect to the Project in substantially the form on file with the 105 HRA. 106 Adopted by the City Council of the City of Saint Paul, Minnesota this 24th day of October, 2001 ,--: �, � ,.-• ; �; � ; % � ` ' �`� " �.. _ . '.,�t< <r O 1- tii�{� Requested by Department of: Planninv & Economic Develonment Adopted by Council: Date U¢S , o�.� e�-ap � By: i l�L�T�/`.''�" � " � Approved by Financial Services Adoption Certified by Council Secretary $�'� ll k � �,._' \\��/� `�y�� By: Approved by Mayor: Date �� Q ( r ' i � � / / Fosm Approved by City Attomey Approved by Mayor for Submission to Council /,� �/ , - .. DEPAR'i'MENT/OFFICE/COUNCII.: DATE INITIATED GREEN SHEET No.:111258 Ot,.''{�5 PED Oct 8, 2001 CONTACT PERSON & PIIONE: A vY1TTN,�uA'PE Patty Lilledahl6-6582 � 1 DEPARI'MENT DI3t. 5 CITYCOUNCIL MUST BE ON COUNCII, AGENDA BY (DATE) ��ER Z CTTY ATTORNEY � � �� CITY CLERK �C124 2001 PUBLIC HEARING F0g 3 FINANCIAI, SERV DIIL �Z FINANCIAL SEAV/ACCTG ROUTING pgpgg 4 MAYOR (OR ASST.) _ CIVII. SERVICE COMIvIISSION TOTAL # OF SIGNA'i'URE PAGES _(CLIP ALL LOCATIONS FOR SIGNATURE) acriox xEQUES�n: Adoption of a City Council Resolution authorizing the HRA to issue Elderly Housing Revenue Bonds for the Riverview Highland project. The Council must also hold a Public Hearing on October 24, 2001. RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CON112ACI'S MUST ANSWER THE FOLLOWING QUESTIONS: PLANIVING CONA�IISSION 1. Has this persodfirm ever worked under a contract for this departrttent? CIB COMbIITTEE Yes No CIVIL SERVICE COMbIISSION 2 Has tkus person/fim� ever been a city employee? A_ CITY COUNCII. Yes No A_ HRA 3. Does this person/ficm possess a skill not normally possessed by any curzent ciTy employee? Yes No Ezplain aIl yes answers on separate sheet and attach to green sheet INITIATING PROBLEM, ISSUE, OPPORTIINI7Y (W ho, W hat, W hen, Where, W hy). The acquisition and refinancing of an existing 54 unit elderly rental housing facility located at 1834 Mississippi River Blvd S by Riverview Highlands Aparhnents LLC. nnvniv�racss � nrrxovEn: Improves the financial position of the Franciscan Heakh and Housing, Inc. by replacing taxable debt with tax-exempt debt. DISADVAN'fAGESIFAPPROVED. � �� None � ��,.�m� ,. .. ��,,� DISADVANTAGES IF NOT APPROVED: k � F n'* ` Lost opportunity of senior housing. TOTAL AMOUNT OF TRANSACTION: $4,700,000 COST/REVENUE BUDGETED: Na F'ONDING SOURCE: 501(c)(3) Revenue Bonds ACTIVITY NUMBER: fifi�� c•y, .� FINANCIAL IIVFORMATION: (EXPLAI� n $ ar��;; ` Conduit ievenue nmes. Thece will no liability or obligaiion on behalf of the IIItA oi the CiTy. �[w� , Z �. � �.�q� ' K:VShared�PalU.illedah\gmsM1t flm ,,s / ti�' -� ----� __-- -----____�_________.._____�� ---------_____._.__�____ ______�_____----- - Nancy Anderson - riverviewhiyhlccr�ort wpd ._ _ Page 1 �i-� !Yw . �" � S c�!-11yS HOUSINGAND REDEVELOPMENTAUTHORITY Briarz Sweeney, Ezecutive D'uector CITY OF SAINT PAUL 25WestAourlhStreet Telephone:651-2666655 NormColeman,Mayor SmntP¢u1,MN55l02 Facsimde:651-228-3261 October 2G, 2001 MEMO TO: City Council Members FROM: Brian Sweeney, Director REGARDING: Public Hearing and Preliminary Approval of up to $4,700,000 of Elderly Housing Revenue Bonds for the Riverview Highlands Apartments And Public Hearing on the Issuance of up to $11,000,000 of Elderly Housing Revenue Bonds for St. Mary's Apartments Purpose The purpose of this report is to request the City Council consider adoption of the attached resolution authorizing staff to issue on behalf of the HRA up to $4,700,000 of 501(c)(3) tax exempt elderly housing revenue bonds which will be repaid from revenues generated from the Riverview Highlands Apartments. There will be no liability or obiigation of the HRA or the City of Saint Paul to repay the bonds. A new public hearing is necessary for the St. Mary's project due to the fact that the last public hearing was conducted over one year ago. Background �__ _ _ _� _ _ __ _ __ _ _ _ --�_ _ . _._____ __ - — � _. _ Nancy Anderson nverviewh�hlccre�ort.�d ,_,._ _ Page 2 D1 -lly.s 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 existing facility also houses the corporate headquarters for the Franciscan Health Community. The organization and its mission of caring for neighborhood's senior population was founded in 1936 by the Franciscan Sisters of Saint Paul. Proposal The Riverview Highland Apartments, located at 1834 Mississippi River Boulevard S, consist of 54 assisted living/congregate housing units for seniors. There are 18 one bedroom units renting for $926 -$1,047 and 36 two bedroom units rents for $1,059 - $1,328. Twenty percent (20%) of the units are currently occupied by persons at or below 50°/a of the area median income and the bond documents wili require that 20% of the units must be occupied by individuals whose income is at or below 50% of the area median income for the life of the bonds. The Bond Loan Agreement will be secured by a first mortgage and the mortgage will be endorsed by FHA and GNMA through the 223(� program. The Bonds will be rated AAA and carry a 35 year term. Sources of Funds for Riverview Series A Bonds $3,665,000.00 Series B Bonds 535.000.00 Total $4,200,000.00 Uses of Funds for Riverview Payoff Existing Debt on Rivervie Payoff Cannon Falls Debt Replacement Reserves Deposit to Bond Fund Bond Costs Real Estate Costs GNMA Lag Payment Contingency Total w $2,552,885.49 1,304,455.75 40,500.00 20,000.00 170,350.00 99,846.00 11,728.21 234.55 $4,200,000.00 The Riverview Bond proceeds will be used to pay off existing taxable debt and to acquire the Riverview Highland Apartments through a newly formed LLC of which Franciscan Health and Housing Services will be the general partner. Bond proceeds may also be used to pay costs of any functionally related and subordinate facilities. :NancyAnderson�riverviewhighlccreportwpd _ _ � I , //[/ � The refinancing of existing taxable debt on the Riverview Highlands project will be coupled with the financing of the Franciscan's St. Mar�s project. In order to accomplish this plan, Franciscan Health and Housing, Inc. need to `unwind' an existing Bond Indenture that covers all of Franciscan's assets. This involved selling a facility in Cannon Falts. A portion of the sales proceeds from the Cannon Falls facility will be used as a source of funds in the St. Mary's project to fiil the equity gap. The St. Mary's project received preliminary bond approvai one year ago and was delayed due to HUD running out of credit subsidy for their mortgage insurance programs. The St. Mary's Apartment project will consist of the new construction of 71 units of independent congregate housing units for seniors. Staff will return to the HRA Board for final bond approval on the St. Mary's project in November. Recommendation Request that the City Council adopt the attached Resolution approving a Housing Program and granting preliminary approval of up to $4,700,000 in 501(c)(3) tax exempt Elderly Housing Revenue Bonds for the Riverview Highland project. Further the City Council authorizes the HRA Board to grant final approval of the Riverview Bonds. Sponsored by Council Member Harris Report prepared by Patricia Lilledahl, 266-6582 �' � t 1 �t,� ; \ � L� � f�� e 1._4 Council File # a �T � y.$ Resolution # Green Sheet # � � � �� RESOLUTION MINNESOTA � Presented By Referred To 7S Committee: Date 2 3 4 5 6 7 8 9 10 11 RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE ELDERLY HOUSING REVENUE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PROGRAM (RIVERVIEW ffiGHLANDS PROJECT) 12 (a) Minnesota Statutes, Chapter 462C (the "Act) confers upon cities, or housing and 13 redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the 14 powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of 15 planning, administering, making or purchasing loans with respect to one or more multi-family housing 16 project developments within the boundaries of the city; and 17 (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 18 "HRA") has been designated, by ordinance, to exercise, on behalf of the City of 5aint Paul, Minnesota 19 (the "City") the powers conferred by Minnesota Statutes, Section 462CA1 to 462C.081; and 20 (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 21 "HRA"}, has received a proposal from Riverview Highlands Apartments, LLC, a Minnesota limited 22 liability company (the "Borrower"), that the HRA undertake a program (the "Housing Program") to 23 finance a Project hereinafter described, through the issuance of revenue bonds or obligations in one or 24 more series (collectively, the "Bonds") pursuant to the Act; and 25 26 27 28 29 30 31 (d) The Project to be financed by the Bonds is acquisition by the Borrower of the existing 54-unit elderly rental housing facility located at 1834 Mississippi River Boulevard South in the City of Saint Paul (the "Housing Facility"), and includes the refunding of certain taxable debt incurred by the prior owner in connection with its acquisition of the Housing Facility, and the refunding of a portion of the Nursing Home Revenue Bonds (Franciscan Health Community Project) Series 1996B previously issued by the City of Cannon Falls to fmance the acquisition of a skilled care nursing home facility (collectively, the "ProjecY'); and �,�,ar�i��;� 32'.�% E�a� �' ��Th�proposal calls for the HRA to loan the proceeds realized upon the sale of the Bonds 33 to the Borrower pursuant to a revenue agreement or agreements wherein the Company will be obligated 34 to make payments at the times and in amounts sufficient to provide for the prompt payment of principai 35 of, prexnium, if any, and interest on the Bonds and all costs and expenses of the HRA and the CiTy 36 incident to the issuance and sale of the Bonds; and 37 ( fl The City desires to facilitate the acquisition and construction of an elderly multifaxnily 38 rental housing facility within the City; and the Project will assist the City in achieving these objecrives; 39 and 40 (g) A public hearing on the Housing Program and the Project was held on this date following 41 duly published notice, at which tune all persons that desired to speak were heazd; and 42 (h) No public official of the City has either a direct or indirect financial interest in the Project 43 nor will any public official either directly or indirectly benefit fmancially from the Project; and 44 45 46 (i) The Company has submitted to the HRA a form of Memorandum of Understanding executed by the Company, expressing certain understandings by and between the HRA and the Company pertaining to the Project, and the financing therefor. 47 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint 48 Paul, Minnesota, as follows: 49 1. The City hereby gives preliminary approval to the proposal of the Borrower that 50 the City undertake the Project, described above, and the program of financing therefor, pursuant to S l Minnesota Statutes, Chapter 462C, and to a revenue agreement between the HRA and the Bonower on 52 such terms and conditions with provisions for revision from time to time as necessary so as to produce 53 income and revenues sufficient to pay, when due, the principal and interest on the Bonds in the total 54 principal amount of approximately $4,700,000 to be issued pursuant to the Act to finance the Project; 55 and said agreement may also provide for the entire interest of the Company therein to be mortgaged to 56 the purchasers of the Bonds, or a trustee for the holder(s) of the Bonds; and the City, acting by and 57 through the HRA hereby undertakes preliminarily to issue its revenue bonds in accordance with such 58 terms and conditions. 59 2. On the basis of information available to the City it appears, and the City hereby 60 finds, that the Project constitutes an elderly multi-family housing development within the meaning of 61 subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the 62 witlingness of the City to furnish such financing will be a substantial inducement to the Company to 63 undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the 64 provision of multi-family rental housing opportunities to residents of the City, and to promote more 65 intensive development and use of land within the City. 66 3. The Project, and the program to finance the Project by the issuance of revenue 67 bonds, is hereby given preliminary approval by the City subject to fmal approval by the HIZA, the 6$ Company and the purchasers of the Bonds as to ultimate details of the financing of the Project. 69 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City 7� hexeby authorizes and directs the Housing and Redevelopment Authority of the City of Saint Paul, 71 Minnesota (the "HRA") to issue housing revenue bonds to finance the Project and to take a11 actions 72 necessary or desirable in connecfion therewith, and no furdier approval ar authorization of the City shall 73 be required; provided that the HRA may, in its discretion, authorize the Boazd to issue the Bonds and to 74 implement the program approved hereby, and the City hereby consents thereto. C t —�� 75 � �5[ �� i�� ^ -� The Borrower has agreed and it is hereby determined tbax any and all costs a, � t��( S 76 incurred by the (:rty or the FIFtA in connection with the fmancing of the Project whether or not the 77 Project is carried to complerion and whether or not approved by HRA will be paid by the Borrower. 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 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 IIRA, aze authorized to assist in the prepazation and review of necessary documents relating to the Project and the finaucing program therefor, to consult with the City Attorney, Bonower and purchasers of the Bonds (or trustee for the purchasers of the Bonds) as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval. 7. Nothing in this Resolution or the documents prepazed pursuant hereto shali authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City or the HRA. The Bonds shall not constitute a charge, lien or encuxnbrance, legal or equitable, upon any properiy or funds of the City or the F3RA except the revenue and proceeds pledged to the payment thereof, nor sha11 the City or the HRA be subject to any liability thereon. The 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 property of the City ar 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 thereof. The Bonds shall not constitute a debt of the Ciry or HRA within the meaning of any constitutionai or statutory limitation. 8. In anticipation of the issuance of the Bonds to fmance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Borrower is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, as the Bonower considers necessazy, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without liability on the part of the City or the HRA. 9. The Executive Director of the H12A is hereby authorized to execute a 104 Memoranduxn of Understanding with respect to the Project in substantially the form on file with the 105 HRA. 106 Adopted by the City Council of the City of Saint Paul, Minnesota this 24th day of October, 2001 ,--: �, � ,.-• ; �; � ; % � ` ' �`� " �.. _ . '.,�t< <r O 1- tii�{� Requested by Department of: Planninv & Economic Develonment Adopted by Council: Date U¢S , o�.� e�-ap � By: i l�L�T�/`.''�" � " � Approved by Financial Services Adoption Certified by Council Secretary $�'� ll k � �,._' \\��/� `�y�� By: Approved by Mayor: Date �� Q ( r ' i � � / / Fosm Approved by City Attomey Approved by Mayor for Submission to Council /,� �/ , - .. DEPAR'i'MENT/OFFICE/COUNCII.: DATE INITIATED GREEN SHEET No.:111258 Ot,.''{�5 PED Oct 8, 2001 CONTACT PERSON & PIIONE: A vY1TTN,�uA'PE Patty Lilledahl6-6582 � 1 DEPARI'MENT DI3t. 5 CITYCOUNCIL MUST BE ON COUNCII, AGENDA BY (DATE) ��ER Z CTTY ATTORNEY � � �� CITY CLERK �C124 2001 PUBLIC HEARING F0g 3 FINANCIAI, SERV DIIL �Z FINANCIAL SEAV/ACCTG ROUTING pgpgg 4 MAYOR (OR ASST.) _ CIVII. SERVICE COMIvIISSION TOTAL # OF SIGNA'i'URE PAGES _(CLIP ALL LOCATIONS FOR SIGNATURE) acriox xEQUES�n: Adoption of a City Council Resolution authorizing the HRA to issue Elderly Housing Revenue Bonds for the Riverview Highland project. The Council must also hold a Public Hearing on October 24, 2001. RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CON112ACI'S MUST ANSWER THE FOLLOWING QUESTIONS: PLANIVING CONA�IISSION 1. Has this persodfirm ever worked under a contract for this departrttent? CIB COMbIITTEE Yes No CIVIL SERVICE COMbIISSION 2 Has tkus person/fim� ever been a city employee? A_ CITY COUNCII. Yes No A_ HRA 3. Does this person/ficm possess a skill not normally possessed by any curzent ciTy employee? Yes No Ezplain aIl yes answers on separate sheet and attach to green sheet INITIATING PROBLEM, ISSUE, OPPORTIINI7Y (W ho, W hat, W hen, Where, W hy). The acquisition and refinancing of an existing 54 unit elderly rental housing facility located at 1834 Mississippi River Blvd S by Riverview Highlands Aparhnents LLC. nnvniv�racss � nrrxovEn: Improves the financial position of the Franciscan Heakh and Housing, Inc. by replacing taxable debt with tax-exempt debt. DISADVAN'fAGESIFAPPROVED. � �� None � ��,.�m� ,. .. ��,,� DISADVANTAGES IF NOT APPROVED: k � F n'* ` Lost opportunity of senior housing. TOTAL AMOUNT OF TRANSACTION: $4,700,000 COST/REVENUE BUDGETED: Na F'ONDING SOURCE: 501(c)(3) Revenue Bonds ACTIVITY NUMBER: fifi�� c•y, .� FINANCIAL IIVFORMATION: (EXPLAI� n $ ar��;; ` Conduit ievenue nmes. Thece will no liability or obligaiion on behalf of the IIItA oi the CiTy. �[w� , Z �. � �.�q� ' K:VShared�PalU.illedah\gmsM1t flm ,,s / ti�' -� ----� __-- -----____�_________.._____�� ---------_____._.__�____ ______�_____----- - Nancy Anderson - riverviewhiyhlccr�ort wpd ._ _ Page 1 �i-� !Yw . �" � S c�!-11yS HOUSINGAND REDEVELOPMENTAUTHORITY Briarz Sweeney, Ezecutive D'uector CITY OF SAINT PAUL 25WestAourlhStreet Telephone:651-2666655 NormColeman,Mayor SmntP¢u1,MN55l02 Facsimde:651-228-3261 October 2G, 2001 MEMO TO: City Council Members FROM: Brian Sweeney, Director REGARDING: Public Hearing and Preliminary Approval of up to $4,700,000 of Elderly Housing Revenue Bonds for the Riverview Highlands Apartments And Public Hearing on the Issuance of up to $11,000,000 of Elderly Housing Revenue Bonds for St. Mary's Apartments Purpose The purpose of this report is to request the City Council consider adoption of the attached resolution authorizing staff to issue on behalf of the HRA up to $4,700,000 of 501(c)(3) tax exempt elderly housing revenue bonds which will be repaid from revenues generated from the Riverview Highlands Apartments. There will be no liability or obiigation of the HRA or the City of Saint Paul to repay the bonds. A new public hearing is necessary for the St. Mary's project due to the fact that the last public hearing was conducted over one year ago. Background �__ _ _ _� _ _ __ _ __ _ _ _ --�_ _ . _._____ __ - — � _. _ Nancy Anderson nverviewh�hlccre�ort.�d ,_,._ _ Page 2 D1 -lly.s 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 existing facility also houses the corporate headquarters for the Franciscan Health Community. The organization and its mission of caring for neighborhood's senior population was founded in 1936 by the Franciscan Sisters of Saint Paul. Proposal The Riverview Highland Apartments, located at 1834 Mississippi River Boulevard S, consist of 54 assisted living/congregate housing units for seniors. There are 18 one bedroom units renting for $926 -$1,047 and 36 two bedroom units rents for $1,059 - $1,328. Twenty percent (20%) of the units are currently occupied by persons at or below 50°/a of the area median income and the bond documents wili require that 20% of the units must be occupied by individuals whose income is at or below 50% of the area median income for the life of the bonds. The Bond Loan Agreement will be secured by a first mortgage and the mortgage will be endorsed by FHA and GNMA through the 223(� program. The Bonds will be rated AAA and carry a 35 year term. Sources of Funds for Riverview Series A Bonds $3,665,000.00 Series B Bonds 535.000.00 Total $4,200,000.00 Uses of Funds for Riverview Payoff Existing Debt on Rivervie Payoff Cannon Falls Debt Replacement Reserves Deposit to Bond Fund Bond Costs Real Estate Costs GNMA Lag Payment Contingency Total w $2,552,885.49 1,304,455.75 40,500.00 20,000.00 170,350.00 99,846.00 11,728.21 234.55 $4,200,000.00 The Riverview Bond proceeds will be used to pay off existing taxable debt and to acquire the Riverview Highland Apartments through a newly formed LLC of which Franciscan Health and Housing Services will be the general partner. Bond proceeds may also be used to pay costs of any functionally related and subordinate facilities. :NancyAnderson�riverviewhighlccreportwpd _ _ � I , //[/ � The refinancing of existing taxable debt on the Riverview Highlands project will be coupled with the financing of the Franciscan's St. Mar�s project. In order to accomplish this plan, Franciscan Health and Housing, Inc. need to `unwind' an existing Bond Indenture that covers all of Franciscan's assets. This involved selling a facility in Cannon Falts. A portion of the sales proceeds from the Cannon Falls facility will be used as a source of funds in the St. Mary's project to fiil the equity gap. The St. Mary's project received preliminary bond approvai one year ago and was delayed due to HUD running out of credit subsidy for their mortgage insurance programs. The St. Mary's Apartment project will consist of the new construction of 71 units of independent congregate housing units for seniors. Staff will return to the HRA Board for final bond approval on the St. Mary's project in November. Recommendation Request that the City Council adopt the attached Resolution approving a Housing Program and granting preliminary approval of up to $4,700,000 in 501(c)(3) tax exempt Elderly Housing Revenue Bonds for the Riverview Highland project. Further the City Council authorizes the HRA Board to grant final approval of the Riverview Bonds. Sponsored by Council Member Harris Report prepared by Patricia Lilledahl, 266-6582 �' � t 1 �t,� ; \ � L� � f�� e 1._4 Council File # a �T � y.$ Resolution # Green Sheet # � � � �� RESOLUTION MINNESOTA � Presented By Referred To 7S Committee: Date 2 3 4 5 6 7 8 9 10 11 RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVING PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE ELDERLY HOUSING REVENUE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PROGRAM (RIVERVIEW ffiGHLANDS PROJECT) 12 (a) Minnesota Statutes, Chapter 462C (the "Act) confers upon cities, or housing and 13 redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the 14 powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of 15 planning, administering, making or purchasing loans with respect to one or more multi-family housing 16 project developments within the boundaries of the city; and 17 (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 18 "HRA") has been designated, by ordinance, to exercise, on behalf of the City of 5aint Paul, Minnesota 19 (the "City") the powers conferred by Minnesota Statutes, Section 462CA1 to 462C.081; and 20 (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 21 "HRA"}, has received a proposal from Riverview Highlands Apartments, LLC, a Minnesota limited 22 liability company (the "Borrower"), that the HRA undertake a program (the "Housing Program") to 23 finance a Project hereinafter described, through the issuance of revenue bonds or obligations in one or 24 more series (collectively, the "Bonds") pursuant to the Act; and 25 26 27 28 29 30 31 (d) The Project to be financed by the Bonds is acquisition by the Borrower of the existing 54-unit elderly rental housing facility located at 1834 Mississippi River Boulevard South in the City of Saint Paul (the "Housing Facility"), and includes the refunding of certain taxable debt incurred by the prior owner in connection with its acquisition of the Housing Facility, and the refunding of a portion of the Nursing Home Revenue Bonds (Franciscan Health Community Project) Series 1996B previously issued by the City of Cannon Falls to fmance the acquisition of a skilled care nursing home facility (collectively, the "ProjecY'); and �,�,ar�i��;� 32'.�% E�a� �' ��Th�proposal calls for the HRA to loan the proceeds realized upon the sale of the Bonds 33 to the Borrower pursuant to a revenue agreement or agreements wherein the Company will be obligated 34 to make payments at the times and in amounts sufficient to provide for the prompt payment of principai 35 of, prexnium, if any, and interest on the Bonds and all costs and expenses of the HRA and the CiTy 36 incident to the issuance and sale of the Bonds; and 37 ( fl The City desires to facilitate the acquisition and construction of an elderly multifaxnily 38 rental housing facility within the City; and the Project will assist the City in achieving these objecrives; 39 and 40 (g) A public hearing on the Housing Program and the Project was held on this date following 41 duly published notice, at which tune all persons that desired to speak were heazd; and 42 (h) No public official of the City has either a direct or indirect financial interest in the Project 43 nor will any public official either directly or indirectly benefit fmancially from the Project; and 44 45 46 (i) The Company has submitted to the HRA a form of Memorandum of Understanding executed by the Company, expressing certain understandings by and between the HRA and the Company pertaining to the Project, and the financing therefor. 47 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint 48 Paul, Minnesota, as follows: 49 1. The City hereby gives preliminary approval to the proposal of the Borrower that 50 the City undertake the Project, described above, and the program of financing therefor, pursuant to S l Minnesota Statutes, Chapter 462C, and to a revenue agreement between the HRA and the Bonower on 52 such terms and conditions with provisions for revision from time to time as necessary so as to produce 53 income and revenues sufficient to pay, when due, the principal and interest on the Bonds in the total 54 principal amount of approximately $4,700,000 to be issued pursuant to the Act to finance the Project; 55 and said agreement may also provide for the entire interest of the Company therein to be mortgaged to 56 the purchasers of the Bonds, or a trustee for the holder(s) of the Bonds; and the City, acting by and 57 through the HRA hereby undertakes preliminarily to issue its revenue bonds in accordance with such 58 terms and conditions. 59 2. On the basis of information available to the City it appears, and the City hereby 60 finds, that the Project constitutes an elderly multi-family housing development within the meaning of 61 subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the 62 witlingness of the City to furnish such financing will be a substantial inducement to the Company to 63 undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the 64 provision of multi-family rental housing opportunities to residents of the City, and to promote more 65 intensive development and use of land within the City. 66 3. The Project, and the program to finance the Project by the issuance of revenue 67 bonds, is hereby given preliminary approval by the City subject to fmal approval by the HIZA, the 6$ Company and the purchasers of the Bonds as to ultimate details of the financing of the Project. 69 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City 7� hexeby authorizes and directs the Housing and Redevelopment Authority of the City of Saint Paul, 71 Minnesota (the "HRA") to issue housing revenue bonds to finance the Project and to take a11 actions 72 necessary or desirable in connecfion therewith, and no furdier approval ar authorization of the City shall 73 be required; provided that the HRA may, in its discretion, authorize the Boazd to issue the Bonds and to 74 implement the program approved hereby, and the City hereby consents thereto. C t —�� 75 � �5[ �� i�� ^ -� The Borrower has agreed and it is hereby determined tbax any and all costs a, � t��( S 76 incurred by the (:rty or the FIFtA in connection with the fmancing of the Project whether or not the 77 Project is carried to complerion and whether or not approved by HRA will be paid by the Borrower. 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 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 IIRA, aze authorized to assist in the prepazation and review of necessary documents relating to the Project and the finaucing program therefor, to consult with the City Attorney, Bonower and purchasers of the Bonds (or trustee for the purchasers of the Bonds) as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval. 7. Nothing in this Resolution or the documents prepazed pursuant hereto shali authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City or the HRA. The Bonds shall not constitute a charge, lien or encuxnbrance, legal or equitable, upon any properiy or funds of the City or the F3RA except the revenue and proceeds pledged to the payment thereof, nor sha11 the City or the HRA be subject to any liability thereon. The 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 property of the City ar 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 thereof. The Bonds shall not constitute a debt of the Ciry or HRA within the meaning of any constitutionai or statutory limitation. 8. In anticipation of the issuance of the Bonds to fmance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Borrower is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, as the Bonower considers necessazy, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without liability on the part of the City or the HRA. 9. The Executive Director of the H12A is hereby authorized to execute a 104 Memoranduxn of Understanding with respect to the Project in substantially the form on file with the 105 HRA. 106 Adopted by the City Council of the City of Saint Paul, Minnesota this 24th day of October, 2001 ,--: �, � ,.-• ; �; � ; % � ` ' �`� " �.. _ . '.,�t< <r O 1- tii�{� Requested by Department of: Planninv & Economic Develonment Adopted by Council: Date U¢S , o�.� e�-ap � By: i l�L�T�/`.''�" � " � Approved by Financial Services Adoption Certified by Council Secretary $�'� ll k � �,._' \\��/� `�y�� By: Approved by Mayor: Date �� Q ( r ' i � � / / Fosm Approved by City Attomey Approved by Mayor for Submission to Council /,� �/ , - .. DEPAR'i'MENT/OFFICE/COUNCII.: DATE INITIATED GREEN SHEET No.:111258 Ot,.''{�5 PED Oct 8, 2001 CONTACT PERSON & PIIONE: A vY1TTN,�uA'PE Patty Lilledahl6-6582 � 1 DEPARI'MENT DI3t. 5 CITYCOUNCIL MUST BE ON COUNCII, AGENDA BY (DATE) ��ER Z CTTY ATTORNEY � � �� CITY CLERK �C124 2001 PUBLIC HEARING F0g 3 FINANCIAI, SERV DIIL �Z FINANCIAL SEAV/ACCTG ROUTING pgpgg 4 MAYOR (OR ASST.) _ CIVII. SERVICE COMIvIISSION TOTAL # OF SIGNA'i'URE PAGES _(CLIP ALL LOCATIONS FOR SIGNATURE) acriox xEQUES�n: Adoption of a City Council Resolution authorizing the HRA to issue Elderly Housing Revenue Bonds for the Riverview Highland project. The Council must also hold a Public Hearing on October 24, 2001. RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CON112ACI'S MUST ANSWER THE FOLLOWING QUESTIONS: PLANIVING CONA�IISSION 1. Has this persodfirm ever worked under a contract for this departrttent? CIB COMbIITTEE Yes No CIVIL SERVICE COMbIISSION 2 Has tkus person/fim� ever been a city employee? A_ CITY COUNCII. Yes No A_ HRA 3. Does this person/ficm possess a skill not normally possessed by any curzent ciTy employee? Yes No Ezplain aIl yes answers on separate sheet and attach to green sheet INITIATING PROBLEM, ISSUE, OPPORTIINI7Y (W ho, W hat, W hen, Where, W hy). The acquisition and refinancing of an existing 54 unit elderly rental housing facility located at 1834 Mississippi River Blvd S by Riverview Highlands Aparhnents LLC. nnvniv�racss � nrrxovEn: Improves the financial position of the Franciscan Heakh and Housing, Inc. by replacing taxable debt with tax-exempt debt. DISADVAN'fAGESIFAPPROVED. � �� None � ��,.�m� ,. .. ��,,� DISADVANTAGES IF NOT APPROVED: k � F n'* ` Lost opportunity of senior housing. TOTAL AMOUNT OF TRANSACTION: $4,700,000 COST/REVENUE BUDGETED: Na F'ONDING SOURCE: 501(c)(3) Revenue Bonds ACTIVITY NUMBER: fifi�� c•y, .� FINANCIAL IIVFORMATION: (EXPLAI� n $ ar��;; ` Conduit ievenue nmes. Thece will no liability or obligaiion on behalf of the IIItA oi the CiTy. �[w� , Z �. � �.�q� ' K:VShared�PalU.illedah\gmsM1t flm ,,s / ti�' -� ----� __-- -----____�_________.._____�� ---------_____._.__�____ ______�_____----- - Nancy Anderson - riverviewhiyhlccr�ort wpd ._ _ Page 1 �i-� !Yw . �" � S c�!-11yS HOUSINGAND REDEVELOPMENTAUTHORITY Briarz Sweeney, Ezecutive D'uector CITY OF SAINT PAUL 25WestAourlhStreet Telephone:651-2666655 NormColeman,Mayor SmntP¢u1,MN55l02 Facsimde:651-228-3261 October 2G, 2001 MEMO TO: City Council Members FROM: Brian Sweeney, Director REGARDING: Public Hearing and Preliminary Approval of up to $4,700,000 of Elderly Housing Revenue Bonds for the Riverview Highlands Apartments And Public Hearing on the Issuance of up to $11,000,000 of Elderly Housing Revenue Bonds for St. Mary's Apartments Purpose The purpose of this report is to request the City Council consider adoption of the attached resolution authorizing staff to issue on behalf of the HRA up to $4,700,000 of 501(c)(3) tax exempt elderly housing revenue bonds which will be repaid from revenues generated from the Riverview Highlands Apartments. There will be no liability or obiigation of the HRA or the City of Saint Paul to repay the bonds. A new public hearing is necessary for the St. Mary's project due to the fact that the last public hearing was conducted over one year ago. Background �__ _ _ _� _ _ __ _ __ _ _ _ --�_ _ . _._____ __ - — � _. _ Nancy Anderson nverviewh�hlccre�ort.�d ,_,._ _ Page 2 D1 -lly.s 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 existing facility also houses the corporate headquarters for the Franciscan Health Community. The organization and its mission of caring for neighborhood's senior population was founded in 1936 by the Franciscan Sisters of Saint Paul. Proposal The Riverview Highland Apartments, located at 1834 Mississippi River Boulevard S, consist of 54 assisted living/congregate housing units for seniors. There are 18 one bedroom units renting for $926 -$1,047 and 36 two bedroom units rents for $1,059 - $1,328. Twenty percent (20%) of the units are currently occupied by persons at or below 50°/a of the area median income and the bond documents wili require that 20% of the units must be occupied by individuals whose income is at or below 50% of the area median income for the life of the bonds. The Bond Loan Agreement will be secured by a first mortgage and the mortgage will be endorsed by FHA and GNMA through the 223(� program. The Bonds will be rated AAA and carry a 35 year term. Sources of Funds for Riverview Series A Bonds $3,665,000.00 Series B Bonds 535.000.00 Total $4,200,000.00 Uses of Funds for Riverview Payoff Existing Debt on Rivervie Payoff Cannon Falls Debt Replacement Reserves Deposit to Bond Fund Bond Costs Real Estate Costs GNMA Lag Payment Contingency Total w $2,552,885.49 1,304,455.75 40,500.00 20,000.00 170,350.00 99,846.00 11,728.21 234.55 $4,200,000.00 The Riverview Bond proceeds will be used to pay off existing taxable debt and to acquire the Riverview Highland Apartments through a newly formed LLC of which Franciscan Health and Housing Services will be the general partner. Bond proceeds may also be used to pay costs of any functionally related and subordinate facilities. :NancyAnderson�riverviewhighlccreportwpd _ _ � I , //[/ � The refinancing of existing taxable debt on the Riverview Highlands project will be coupled with the financing of the Franciscan's St. Mar�s project. In order to accomplish this plan, Franciscan Health and Housing, Inc. need to `unwind' an existing Bond Indenture that covers all of Franciscan's assets. This involved selling a facility in Cannon Falts. A portion of the sales proceeds from the Cannon Falls facility will be used as a source of funds in the St. Mary's project to fiil the equity gap. The St. Mary's project received preliminary bond approvai one year ago and was delayed due to HUD running out of credit subsidy for their mortgage insurance programs. The St. Mary's Apartment project will consist of the new construction of 71 units of independent congregate housing units for seniors. Staff will return to the HRA Board for final bond approval on the St. Mary's project in November. Recommendation Request that the City Council adopt the attached Resolution approving a Housing Program and granting preliminary approval of up to $4,700,000 in 501(c)(3) tax exempt Elderly Housing Revenue Bonds for the Riverview Highland project. Further the City Council authorizes the HRA Board to grant final approval of the Riverview Bonds. Sponsored by Council Member Harris Report prepared by Patricia Lilledahl, 266-6582