Loading...
274160 't , (� g W1iTTE - tITV C�ERK '�')�l9��0 /_ li PINK � FINANCE CITY OF SAINT PAUL Council !d f C�ANARV..- DEPARTMENT File NO. lUE - MAVOR E:i.tyAttny/�'IIi . . Co�nc�l Resolut�on Presented By Referred To Committee: Date Out of Committee By Date RESOLUTION APPROVING THE ISSUANCE BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNE30TA OF HOUSING DEVELOPMENT REVENUE BONDS (GALLERY TOWERS PROJECT) OF THE CITY IN FURTHERANCE OF THE REDEVELOPMENT PLAN FOR THE SEVENTH PLACE REDEVELOPMENT PROJECT, COMMUNITY DEVELOPMENT DISTRICT 17, AND APPROVING CRITERIA FOR MORTGAGE LOANS FOR THE GALLERY TOWERS PROJECT BE IT RESOLVED by the Council of the City of Saint Paul: 1. The members of this Council, meeting as the commissioners and governing body of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the HRA) approved on April 18, 1979 , by unanimous vote, a proposal presented by Galleria Towers, now known as Gallery Towers, a partnership of Ted Glasrud Associates , Inc. and Sherman Investment Corporation (the Developer) , to complete the devel- opntient of Block 7A, Seventh Place Rede�elopment Project, Community Development District 17, by the purchase of air rights over the north- west approximately one-quarter of the City parking ramp in that block and the construction of a condominium apartment building to contain residential family living units (the Project) . The proposal �was conditioned upon the financing of loans for the construction of the ' Project and for the acquisition of dwelling units therein by individuals _ by the issuance of tax exempt revenue bonds or notes. The amount of financing required was estimated at $10,000 ,000. By said action, the City and HRA undertook to finance the construction and long term financing of the Project by the issua�ce of Housing Development Revenue Bonds of the City in an amount not to exceed $10,000 ,000, and directed COUIVCILMEIV Requested by Department of: Yeas Nays Butler [n Favor Hozza Hunt Levine __ Against BY � _ Maddox � Showalter Tedesco Form Approved City At orne Adopted by Council: Date Certified Yassed by Council Secretary BY � By l�lpproved by 1Aavor: Date _ Approve by Mayor for Submission to Council ' By — — BY , � • �,;� �,ca r��} �r+6��..k',.�u�7 the HRA staff to develop final agreements with the Developer to make such financing possible. These agreements and the preparation of final Revenue Bond documents were formally approved by Resolution adopted by the Council on May 17, 1979 , Council File No. 272972. 2. The foregoing was the culmination of approximately four years of action by the Mayor, Council, HRA and their staffs looking toward the redevelopment of Block 7A and of the Project site in particular, including the issuance of general obligation bonds of the City for site development and the execution of development agreements with the predecessor developer e�lected in 1975, the revision of such agreements, substition of -la- � � � � �����_��� developers , and construction of the city parking ramp in 1976 and 1977, and the preparation of documents looking toward a different type of public revenue financing in 1978, which proved impractical to accomplish. Subsequent to said action the HRA staff proceeded to finalize agreements regarding design, reimbursement of site purchase and improvement costs and financing which were approved by the HRA and Council . Pursuant to Minnesota Laws 1975, Chapter 260, Sec tions 1, 3 and 4 , and the Regulations contained in Chapter 72 of �the Saint Paul , Minnesota , Administrative Code (codifying Ordinance No. 15975, adopted March 16 , 1976, as amended by Ordinance No . 16504, adopted February 13 , 1979, and as further amended by Ordinance No. 16592, adopted October 23 , 1979) (the Req ulations) , the Mayor , in cooperation with the HRA, has developed the City' s program for public revenue bond financing of mortgaqP loans for the construction and long term financinq of the Project and has formulated criteria for the making of such loans and the issuance of Housing Development Revenue Bonds� for that purpose. 3. Pursuant to the City' s agreement of April 18 , 1979, and in accordance with the Regulations and the criteria developed hy the Mayor , the HRA has, by Resolution adopted December 19 , 1979 (the R;esolution) , provided for the issuance and sale of Housing Development Revenue Bonds (Gallery Towers Project) of the City _ in the principal amount of $10 ,000, 000, or so much thereof as shall be advanced pursuant to the Resolution for the construction and long te.rm financing of the Project, and has approved the form of a Loan Agreement by and among the HRA, on behalf of the City, and the Developer and Northwestern National Bank of Minneapolis, as purchaser of the Revenue Bonds , on behalf of itself and other participating financial institutions, and the form of the Revenue Bonds to be issued, and has provided for the registration of exchange and transfer of the Revenue Bonds upon the assumption by Eliqible Borrowers of portions of the principal amount of the Loan, and for certifications and procedures to establish eligibi].ity o� such borrowers , and has authorized the execution of other documents in connection therewith. The Council has reviewed the Resolution and the forms of documents approved thereby, and approves the Resolution and documents, subject to such moc�ifi,�ations as may be found necessary and appropriate, insuhstantial in nature, and consistent with the Act and the Regulations, which are approved by the City Attorney pr'ior to adoption , anc� approves the issuance anc� sale of the Revenue Bonds by the HRA on behalf of the City of Saint Paul , as provided in said Resolution and documents. -2- , � �s:�; �' ,s`�' ' • . �, � �. ��,�:' 4. The criteria for the making of mortgage loans for the construction and long term financing of the Project which have been developed by the Mayor are hereby approved and ar_e as follows: CRITERIA FOR MORTGAGE LOANS FOR GALLERY TOWERS PROJECT . P'reamble Multifamily housing developments , like other construction in the redevelopment of a Pormerly blighted or deteriorated area, should be substantial , attracti��e and permanent to prevent a recurrence of the conditions causing �edevelopment, and to preserve the tax base needed to finance municipal service. To this end they should provide basic amenities comparable to those of single famity homPS. The cost of such construction must be reflected in the rentals or the sale price of dwelling units in the developments. Public revenue financing of construction reduces capital` cost by reducing interest during the construction period, making the dwelling units generally affordable by families with a lower level of income. Long term public revenue financing of ownership is desirable to reduce occupants ' rentals or mortgage payments to a still lower affordability level. The enlargement of the market thus made possible not only helps to make redevelopment of deteriorated areas more economically feasible , but also answers the needs of elderly citizens and those of modest means for housing that will enable them to stay in or return to the City. However , the cost of construction necessar.y to meet the objectives of redevelopment must be the basis for determining the level of income at which rental or purchase is affordable without direct subsidy of rent or mortgage payments. Cr. iteria (1) The criterion for determining whether construction financing may properly be provided in whole or in part by the issuance of Housing Development Revenue Bonds for the Project , or whether such financing is otherwise available from private lenders upon terms and conditions which are affordabte by a Developer applying for public financing , shall be whether : (a) The plans and specifications for the Project have been approved by HRA as suitable and necessary to complement existing and planned construction in meetinq the objectives of the City ' s plan for the redevelopment of the area : -3- ���"-��.�i�� (b) Financing from private sources is unavailable, or is available only at an interest cost which, when combined with the cost of acquisition and construction and other costs incidental to construction of the Project, would impair the marketability of the dwelling units to be provided, or the housing and redevelopment objectives of providing them, by excluding middle-income purchasers .or renters ; and (c) Revenues which may be produced by the marketing or rental of dwelling units, in the number and upon the terms made possible by public revenue financing , are estimated to be sufficient to meet payments when due on the Revenue Bonds. (2) The criterion for determining whether the purchase of a dwelling unit in the Project may properly be financed in whole or in part by permitting the purchaser to assume a portion of the ��loan made to the Developer for construc tion, or whether such financing is otherwise available from private lenders upon terms and conditions which are afforda ble by the purchaser , shall be whether : (a) The interest rate, discount and term then available in the conventional mortgage market for a comparable mortgage loan is ascertained from a qualified l.ending instituti.on and verified by the HRA Director to the best of his information and belief ; (b) The annualized amounts of principal and interest payments, taxes, insurance and common expenses (as defined in Minnesota Statutes Section 515 ,02, Subdivision 8) are computed by the HRA Director to the best of his information and belief , in cooperation with the Developer and financial institution; (c) The Adjusted Annual Income of_ the applicant is computed by the HRA Director from information certified by the applicant, as: (1) Gross famity income f_rom al1 source s, less : ( 2) The following : (a) the income of any resic�ent (except the primar.y income recipient) who is under eighteen years of age or a fulJ..-time student and who is related by bloo�, adoption or marriage to a resi�3ent income recipient or his/her spouse; (b) nonrecurring income as determined by the HRA Director and sums received for foster -4- ��� , , �'���_�� child care � (c) extraordinary medical or other expenses as the HRA Director approves for exclusion ; (d) income of each additional income recipient eighteen years of age or older , other than the primary income recipient, but not exceeding the amount of $750 ; (e) an amount equal to $750 for each resident of the dwelling unit who is eighteen years of age or over (maximum of two) and $500 for each additional resident ; (f) an amount up to $750 for child care expenses that are eligible for deduction under United States Internal Revenue Service Tax Regulations, but not exceec3ing the amount of $750. (d) The total of the annualized amounts referred to in clause (b) exceeds 20 percent of the Adjusted Annual Income computed pursuant to clause (c) , in which case the applicant shall be deemed an Eligible Borrower . (3) Additional criteria and requirements for public financinq of the Project by the issuance of Housing Development Revenue Bonds 5ha11 be that: (a) Upon the sale of each dwetling unit an amount which is not less than 90� of the gross sales price of the dwelling unit, less any portion of the principal amount of the Revenue Bonds which is assumed by a purchaser who is an Eligible Borrower , shall be deposited in a Collateral Account with Northwestern National Bank of Minneapolis (the original purchaser of the Revenue Bonds) as securit�� for performance of the Developer ' s obligations with respect to the Revenue Bonds. Nothing herein prevents the sale of a dwelling unit to a person who is not an Eligible Borrower , if 90$ of the sale price is deposited as required herein. (b) The Developer shall be required to prepay the entire principal amount of the Revenue Bonds which has not been assumed by Eligible Borrowers by September 1, 1981 (and may use the Collateral Account for this purpose) . (c) The holder or holders of the Revenue Bonds � shall be required to satisfy themselves of the credit worthiness of the Developer and of each Eligible Borrower obligated for any portion of the loan financed by the Revenue Bonds, and of the sufficiency of any mortgage or security agreement given them by the Developer or an Eligible Borrower , and the City shall make no -5- • ��`3��� WH�TE - Ci,TV CL�ERK COI1fIC11 PINK -��FINANCE GITY OF SAINT PAUL. - CANARVr- C)EPARTMENT �B�U E , -•M A V!O R � FIIE N O. r Council Resolution Presented By Referred To Committee: Date Out of Committee By Date representation to the holders except as to the proper organization of the City and its authority and the propriety of its corporate action taken to authorize, issue and sell the Revenue Bonds and pledge and assign to the holders for the security thereof all payments receivable and all of its rights under the documents executed on behalf, evidencing the obligations of the Developer and Eligible Borrowers with respect to the repayment of the loan of the proceeds of the Revenue Bonds. (d) The Revenue Bonds shall not be payable from nor a charge upon any funds of the City or the HRA other than the loan repayments pledged to the payment thereof. The City and the HRA shall not be subject to any other pecuniary liability thereon. No holder or holders of the Revenue Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Revenue Bonds or premium or interest thereon. (e) The effectiveness of public revenue financing for urban renewal and housing for citizens depends upon the exemption of interest payable on Revenue Bonds issued for these purposes from income taxation by the federal and state governments (other than the Minnesota corporate franchise and bank excise taxes measured by income, an�. federal income taxes oh interest on bonds while held by users of the facilities financed thereby or related persons) . No representation can be made as to the possibility or effect of future federal or state legislation or regula- tions purporting to tax such interest. However, the HRA may secure and furnish to bond purchasers opinions of counsel as to the effect, if any, of any pending legislation or regulations, and may by resolution provide for an increase in interest rate or mandatory redemption of bonds from payments required from obligors on the loan, in the event of a Determina- tion of Taxability, as defined in the Loan Agreement. -6- COUNCILMEN Yeas Nays /� Requested by Department of: /� H�� �c��-��� � [n Favor ; Hm�• ' C.� Levine _ d __ Against BY Maddox � Showalter Tedesco DEC 2 p �g�g Form Approved by City A orne Adopted by Council: Date Certified b Counc� , cre BY ` By � t�pproved by : Date D�`� � O �g� Ap ve Ma or f r ubmission to Council By BY �t�$���H E� �F C �2 9 1979