96-1223 i � � i � Y i e �� 4 � �i � � �
' Council File #
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Green Sheet # 6
RESOLUTION
CITY OF SAINT P UL, MINNESOTA g,a
Presented By �
Referred To Committee: Date
RESOLUTION RECITING A PROPOSAL FOR FINANCING
A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT PROJECT
AND AUTHORIZING THE HOUSING A1�TD REDEVELOPMENT
AUTHORITY TO EXERCISE THE POWERS GR.ANTED IN
MINNESOTA STATUTES, SECTIONS 462C.01 TO 462C.08
1 WHEREAS:
2
3 A. Minnesota Statutes, Chapter 462C (the "Act") , confers upon cities,
4 or housing and redevelopment authorities authorized by ordinance to exercise
5 on behalf of a city the powers conferred by the Act, the power to issue
6 revenue bonds to finance a program for the purposes of planning,
7 administering, making or purchasing loans with respect to one or more
8 multifamily housing developments within the boundaries of the city; and
9
10 B. The Housing and Redevelopment Authority of the City of Saint Paul,
il Minnesota (the "HRA") , has received from Ted Bigos, (the "Developer") , a
12 proposal that the HRA undertake to refinance a multifamily rental housing
13 development as hereinafter described, through the issuance of revenue bonds or
14 obligations in one or more series (collectively, the "Bonds") pursuant to the
15 Act for the purpose of loaning the proceeds thereof to the Developer to '
16 finance the acquisition and rehabilitation by the Developer of an 144-unit
17 multifamily rental housing development located at 1359 Carling Drive, in the
18 City, currently known as "The Kendrick Apartments" (the "Project") pursuant to
19 the "housing program�� described below; and
20
21 C. Prior to publication of a notice of public hearing for the public
22 hearing described in (F) below, the City prepared a "housing program" (the
23 "Program") under the Act and submitted the Program for review to the
24 Metropolitan Council;
25
26 D. The Developer's proposal calls for the HRA to loan the proceeds
27 realized upon the sale of the Bonds to the Developer pursuant to a revenue
28 agreement or agreements wherein the Developer will be obligated to make
29 payments at the times and in the amounts sufficient to provide for the prompt
30 payment of principal of, premium, if any, and interest on the Bonds and all
31 costs and expenses of the HRA and the City incident to the issuance and sale
32 of the Bonds; and
33
34 E. The City desires to encourage the development and continued
35 operation of housing facilities designed for occupancy by persons of low and
36 moderate income and assist the City in achieving these objectives; and
37
38 F. A public hearing on the Program and the proposed financing of the
39 Project was held on September 25, 1996 following duly published notice, at
40 which time all persons that desired to speak were heard.
41
42 NOW THEREFORE BE IT RESOLVED by the City Council of the City of Saint Paul, as
43 follows:
44
45 1. The City hereby approves the Program and gives preliminary
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46 approval to the issuance of the Bonds for the financing of the Project and,
47 pursuant to Section 72 of the Saint Paul Administrative Code, hereby
48 authorizes and directs the HRA to exercise the powers granted in Minnesota
49 Statutes 462C.01 to 462C.08.
50
51 2. On the basis of information available to the City Council, it
52 appears, and the City Council hereby finds, .t,hat the project constitutes a
53 multifamily rental housing development and furthers the purposes of the Act;
54 that the Project is reserved for rental in part by persons of low and moderate
55 income; that the availability of financing under the Act and the willingness
56 of the HRA to furnish such financing will be a substantial inducement to the
57 Developer to operate the Project, and that the effect of the financing of the
58 Project, if undertaken, will be to assure that adequate housing will eontinue
59 to be available to residents of the City at a reasonable cost.
60
61 3. The Executive Director of the HR.A, is hereby authorized to execute
62 a Memorandum of Understanding with respect to the financing of the Project in
63 substantially the form on file with the HRA.
64
65 4. Leonard, Street and Deinard Professional Association, is hereby
66 retained as Bond Counsel for the issuance of the Bonds. Piper Jaffray Inc. is
67 hereby retained as the investment banker for this transaction. Leonard,
68 Street and Deinard and Piper Jaffray are hereby authorized to assist in the
69 preparation and review of necessary documents relating to the issuance of the
70 Bonds, to consult with the City Attorney, Developer and purchasers of the
71 Bonds as to the maturities, interest rates and other terms and provisions of
72 the Bonds and as to the covenants and other provisions of the necessary
73 documents and submit such documents to the HR.A for final approval.
74
75 5. The Developer has agreed and it is hereby determined that any and ,
76 all costs incurred by the City or the HRA in connection with the financing of
77 the Project, whether or not the proposed financing of the Project is carried
78 to completion and whether or not the issuance of Bonds is approved by the HRA, �•
79 will be paid by the Developer.
80
S1 6. Pursuant to Minn. Stat. Ch. 474A, the City has been allocated an
82 amount of tax exempt bonding authority (the "entitlement") in the approximate
83 amount of $15,785,000 for calendar year 1996. There is hereby reserved from
84 the 1996 entitlement the amount of $5,800,000 for the Bonds. The actual
85 amount of 1996 entitlement used for the Project shall be the original
86 principal amount of the Bonds.
87
88 7. Nothing in this resolution shall be construed to require the City
89 or the HRA to approve any element of the Project or the issuance of the Bonds,
90 nor shall this resolution be construed as vesting in the Developer any cause
91 of action against the City or the HRA arising from any failure or refusal by
92 the City or the HR.A to approve the issuance of the Bonds.
93
94 8. Nothing in this resolution or the documents prepared pursuant
95 hereto shall authorize the expenditure of any municipal funds on the financing
96 of the Project or the payment of the Bonds other than the revenues derived
97 from the Project or otherwise granted to the City or the HRA for this purpose.
98 The Bonds shall not constitute a change, lien or encumbrance, legal or
99 equitable, upon any property or funds of the City or the HRA except the
100 revenue and proceeds pledged to the payment thereof, nor shall the City or the
101 HRA be subject to any direct liability thereon. The holder of the Bonds shall
102 never have the right to compel any exercise of the taxing power of the City or
103 the HRA to pay the outstanding principal on the Bonds or the interest thereon,
104 or to enforce payment thereon against any property of the City or the HRA.
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105 The Bonds shall recite in substance that the Bonds, including the interest
106 thereon, are payable solely from the revenue and proceeds pledged to the
107 payment thereof. The Bonds shall not constitute an indebtedness of the City
108 or the HR.A within the meaning of any constitutional or statutory provision.
Y�e�as,,, Navs Absent Requeste by Department of:
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arris �— Pla i g & Economic Development
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For .A ov d b C y torney
By:
Adopted by Council: Date ��S �°�9�
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Adoption Certified by Council Secretary Approved by Mayor for Submission to
Council
By: �_ ,
Approved by Mayor: Date � �[� �� gy; �(� �
By:
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AFFICE/COUNCIL DAT INITI TED � �� ��
PED Housin 9 i� R' � GREEN SH �`• t�3
CONTACT PERSON 8 PHONE INITIA E INITIAUDATE
PARTMENT DIRECTOR �CITY COUNCIL
Allen Carlson 6-6616 ABSIGN C7VATTORNE �F-T �, ��r.�.,
M N COUNCIL A(i ATE) ROUTINGFOp UDQET DIRECTOR . �,
t. LS, 1996 ORDER MAYOR(OR A381STANn �Q-����
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TOTAL#OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQUESTED:
Sign the attached preliminary inducement resolution reciting a proposal for financing by mean
of multi-family revenue bonds a rental housing proposal (KendricN Apartments) and which
authorizes the HRA to exercise its powers to issue said bonds. (Consideration of the
resolution on 9/25/96 should be desi nated as a Public Hear
RECOMMENDATIONB:Approve(A)or Reject(R) PERSONAL SERVICE CONTRACT8 MUST ANSWER TME FOLLOWIN(3 CUESTIONS:
_ PLANNINO COMMISSIQN _CIVII SERVICE COMMISSION �• Has this person/firm ever worked under e contraCt fOr this department?
CIB I�AAMITTEE _�E'� YES NO
2. Has this person/firm ever been a city employee?
STAFF
_DISTRICTCOURT rD � � 1� YES NO
—;� 3. Does this person/firm possess a skill not normally posse8sed by any current city employee?
SUPPORTS WHICH COUNCIL OBJECTIVEI YES NO
�IIAYOfr�Of FIC� Explaln ell yss answers on ssparets shest and sttach to yresn sh�et
INITIATINO PROBLEM,ISSUE,OPPORTUNITY(Who,Whet,When,Where,Why):
The HRA has received a proposal to finance through the issuance of multifamily revenue bonds
the acquisition and rehabilitation of an existing 144-unit rental apartment complex known
as the Kendricl� Apartments located at 1359 Ca�ling Drive in Energy Park. The amount of the
bonds will not exceed $5,800,0000. The issuan�e of the bonds will count as part of the
City's $15,750,000 bonding allocation authority.
ADVANTAGE3 IF APPROVED:
l. The issuance of the bonds will permit a minimum of $576,000 of improvements to be made
to the pro�ect, thus assuring the project continues to provide high quality housing for
the neighborhood.
2. The project will continue to provide high quality housing for 20� of the units that
will be affordable to lower income households.
3. The issuance of the bonds will provide favorable financing that will assure the long
term profitability and stability of the project.
DISADVANTAOES IF APPROVED:
Issuance of bonds counts against the city's bonding allocation for housing pxe�ects,
thus preventing the financing of other housin projects. RECEIV��
Counc�l �,�c� Cent`r
5�� 1 � 1996 SEP 13 1996
DISADVANTAQES IF NOT APPROVED:
Improvements to the project would be deferred, thus impairing the marketability and
viability of the project.
TOTAL AMOUNT OF TRANSACTION s N�A COST/REVENUE BUDGETED(CIRCLE ONE) YES NO
FUNDIW�i SOURCE� � �L r7�v[ �Ob���4CTIVITY NUMBER �/7'� �
FINANCIAL INFORIu(ATION:(EXPLAIN)
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CITY COUNCIL OF THE CITY OF SAINT PAUL, MINNESOTA
REPORT TO THE CITY COUNCIL DATE: September 25, 1996
REGARDING: PUBLIC HEARING - RESOLUTION RECITING A PROPOSAL
FOR FINANCING A MULTIFAMILY RENTAL HOUSING
DEVELOPMENT PROJECT AND AUTHORIZING THE HOUSING
AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT
PAUL TO EXERCISE THE POWERS GRANTED IN MINNESOTA
STATUTES, SECTIONS 462C.01 TO 462C.08
PURPOSE
The Housing and Redevelopment Authority of the City of Saint Paul (HRA) has received an
application from Mr. Ted Bigos (Owner) requesting the HRA to issue up to $5,800,000 of
Tax Exempt Multifamily Revenue Bonds (Bonds) for the purpose of acquiring and
rehabilitating the Kendrick Apartments (Project) located on 1359 Carling Drive in Energy
Park.
The purpose of this report is to request the Ciry Council to consider adopting the attached
preliminary (inducement) resolution which would approve the following:
1. Authorize the Executive Director of the HRA to enter into a Memorandum of
Understanding (MOU) with Mr. Begos to work towards possible issuance of the
Bonds. The MOU also stipulates the terms and conditions for issuance of the Bonds
should the HRA decide to issue the Bonds; and
2. Authorize the HRA to issue up to $5,800,000 of tax exempt, multifamily rental
revenue bonds for the Project; and
3. Approve a Housing Program a copy of which is attached for financing the Project
prepared in accordance with the provisions of Minnesota Statutes, section 462C.03;
and
4. Retain Leonard, Street, and Deinard as bond counsel and Piper Jaffray, Inc. as
investment banker for said Bonds. And authorize them to assist in the preparation and
review of necessary documents relating to the Project and Housing Program and
consult with the HRA, City Attorney, Owner, and purchasers of the proposed Bonds.
Approval of the inducement resolution and execution of the Memorandum of Understanding
does not require or obli�ate the City or HRA to issue bonds or cause any action against the
City or HRA arising from anv failure or refusal by the City or HRA to approve the project
or issuance of the Bonds.
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With respect to multifamily housing bonds, Section 72.04 of Chapter 72 of the City's
Administrative Code provides that the HRA be designated to exercise on behalf of the City
the powers conferred by Minnesota Statutes 462C (housing programs and revenue bonds) but
only unless directed and authorized to do by resolution adopted by the City Council. Thus
the reason, this proposal is initiated before the City Council rather than the HRA.
The Owner purchased the Project on July 1, 1996. In order to be reimbursed the acquisition
price of the Project with Bond proceeds, the inducement resolution must be adopted by the
City Council within 60 days of the purchase date. To meet this time line, the inducement
resolution must be adopted by the City Council at a public hearing no later than September
28, 1996.
PROJECT
The Project, built in 1983, involves the acquisition and rehabilitation of the Kendrick
Apartments located in Energy Park. The Project consists of 144 rental units comprising 72
one bedroom units and 72 two bedroom units. Twenry-nine (20%) of the units are project-
based Section 8 units. Occupancy rates have consistently been above 97%. Amenities
include garages, washer and dryers, and microwaves for each unit and a swimming pool for
the complex. Current rents for the Project range from $550 to $565 per month for the one
bedroom units and $695 to $710 per month for the two bedroom units. Approximately
$700,000 of upgrades and rehabilitation are proposed including the following:
Enclose the 1 st level of the parking garage structure to provide 90
car parking garage including e�aust fans, wiring, controls, garage
doors, and 2400 SF of concrete enclosure.
$50,000
Enclose 12 stairways, approximately 1000 SF per stairway with a
roof system of a combination of flat and gabled roofs, modify
lighting. 175,000
Install 144 washer/dryers 115,000
Install 144 microwaves 50,000
Re-do existing laundry room to include a smaller laundry room and
new rental of�ce, thereby freeing up a two bedroom apartment now
used as a laundry room.
18,000
Install new swimming pool 35,000
Replacement apartment carpet and vinyl in approximately 75 units
@ 1,500/unit. 112,500
Replace 25 stoves and refrigerators. 21,000
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FINANCING
The estimated sources and uses of funds statement is as follows:
SOURCES USES
HRA Revenue Bonds 5 710 000 Purchase Price $4,450,000
Improvements 700,000
Debt Service Reserve Fund 360,000
Bond Financing Costs 196,975
Rounding Amount 3.025
TOTAL $5,710,000 TOTAL $5,710,000
ESTIMATED DETAILED FINANCING COSTS
Bond Counsel $20,000
Underwriter's Counsel 15,000
Issuer's Counsel 5,000
Trustee Upfront fee 3,000
Printing 3,000 ,
Letter of Credit Bank 57,100
Letter of Credit Counsel 10,000
Borrower's Counsel 12,500
Underwriter's Discount 71,375
TOTAL FINANCING COSTS $196,975
The preliminary term sheet for the Bonds is as follows:
Issue Amount $5,710,000
Term 30 years
Bond Interest Rate 4.75%
Issue Date December 1, 1996
Maturity Date December 1, 2027
Rating "AA"/"A1+" 7-day variable rate demand notes
Security for Bonds Principal and interest are secured by a Letter of Credit from
Norwest or First Bank
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Placement Method Public Offering
Due Diligence Project's financial statements
Appraisal
Phase I Environmental audit
Structural and mechanical engineer's report
Borrower Ted Bigos
Bond Counsel Leonard, Street & Deinard
Underwriter Piper Jaffray, Inc.
Trustee First Trust, Saint Paul
The Bonds are structured to accommodate a 30 year, level debt service schedule. Principal
is paid annually and semi annual interest payments reflect the current market rate, 4.75%,
for a bank letter of credit enhanced debt. In addition to the bank letter of credit, the
financing includes a $360,000 debt service reserve fund equal to the maximum annual debt
service obligation to be incurred throughout the financing. The debt service reserve fund is
assumed to be invested at a 5% annual rate. Reserve fund interest earnings are an offset to
annual debt service outlays.
The Project's operations support the annual debt service payments by a comfortable 1.3 debt
service coverage ratio.
FEES
The HRA is entitled to a non-refundable application fee of $5,000. Should the Bonds be
issued, the HRA will receive an administrative fee at closing equal to 0.5% of the principal
balance of the Bonds. On the second anniversary date of the Bonds the HRA will receive an
additional 0.5% fee. Every year thereafter that the Bonds remain outstanding the HRA will
receive an annual administrative fee equal to 0.01% of the outstanding principal balance of
the Bonds.
BUSINESS PROFILE
Ted Bigos, through various affiliates he controls, owns and manages over 3000 apartment
units with approximately $20 million of annual rental income.
Saint Paul multifamily projects owned by Mr. Bigos in Saint Paul are the McLaren
Apartments and Winslow Commons Apartments.
ADVERSE LENDING
Mr. Bigos does not have an adverse lending relationship with the HRA or the City of Saint
Paul.
MANDATED REQUIREMENTS AND STANDARDS
Pursuant to federal law regarding the issuance of tax-exempt multifamily revenue bonds at a
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minimum either 20% or 40% of the 144 dwelling units of the project must be specifically
reserved for tenants whose incomes are not greater than either 50% or 60% of the median
family income as adjusted for family size. As stated previously, 20% of the units are
currently project-based Section 8 units, therefore the project meets the 20% requirement.
There is no intention or benefit to the owner to reserve more than the required 20% or 40%
for lower income households.
REPAYMENT CAPACITY
The Project's Net Operating Income for 1993, 1994, and 1995 was $439,000, $456,000, and
$490,000. The projected NOI of $552,000 for 1997 appears to be a reasonable projection
that will meet the required 1.3 debt coverage ratio. Historically, operating expenses have
been stable at about $3,400/unit including real estate taxes. Operating expenses are
comparable to other projects similar to Kendrick.
5UPPORT
The Owner has not sought, but is willing to solicit input and support from the District 10
Planning Council.
PUBLIC PURPOSE
The following public purposes will be met:
1. The proposed rehabilitation will increase the value of the project and tax base for the
city. Without bond �nancing the proposed improvements would not be financially
feasible.
2. The Project will continue to be physically a Class A complex and provide 29 Section
8 affordable housing units.
3. The Project will continue to be a successful example of income integration of tenants.
4. The proposed financing and rehabilitation will reasonably assure the long term
viability of the Project and be an asset to the surrounding neighborhood.
BOND AUTHORITY; ALLOCATION PROCESS
The City of Saint Paul received a 1996 entitlement bond allocation from the State of
approximately $15,785,000. For the past several years, the entitlement has been used
exclusively to issue mortgage revenue bonds or mortgage credit certificates to finance the
City's single family mortgage program. Because the Kendrick will be owned by a for-profit
entity, the proposed bonds will count as part of the City's entitlement bond allocation.
However, staff believes that the single family mortgage program is amply funded for 1996
and possible part of 1997. None of the 1996 entitlement has been committed. Therefore,
issuance of rental revenue bonds would not diminish the City's single family mortgage
program.
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The strategy and timing of committing the City's entitlement allocation between the mortgage
revenue bond program and this proposal will be worked out by staff between the time the
inducement resolution is approved by the City Council and the time the issuance of the Bonds
would approved by the HRA.
Upon adoption of the inducement resolution staff will proceed to finalize the financing of the
proposal for presentation to the HRA and request the HRA to consider adoption of a
resolution to issue and sell revenue bonds to finance the project.
Questions may be directed to Allen Carlson, Housing Division of PED at 266-6616.
ATTACHMENTS
Housing Program
City Council Resolution
K:\SHARED�APC�KENDRICK\CC.RET �]
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CITY OF SAINT PAUL,MINNESOTA
PROGRAM FOR A
MULTIFAMILY HOUSING DEVELOPMENT
(KENDRICK APARTMENTS PROJECT)
Pursuant to Minnesota Statutes, Chapter 462C (the "Act"), the City of Saint Paul,
Minnesota(the "City") is authorized to develop and administer programs to finance the acquisition
and rehabilitation of multifamily housing developments under the circumstances and within the
limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs
for multifamily housing developments may be financed by revenue bonds issued by the City.
The City has received a proposal that it approve a program providing for the acquisition and
rehabilitation of an existing 144-unit rental apartment development and facilities functionally
related and subordinate thereto (the "Project") located at 1359 Carling Drive in the City, by Ted
Bigos, or an entity in which Ted Bigos is a principal, manager or general partner (the "Owner").
The acquisition and rehabilitation of the Project is to be funded through the issuance of revenue
bonds in the not to exceed amount of$5,800,000 to be issued by the Housing and Redevelopment
Authority of the City of Saint Paul, Minnesota (the "HRA") (the "Bonds"). The Owner will own
and operate the Project as a multifamily residential rental project. The Project will meet the
minimum rehabilitation requirements of Sections 147(d) of the Internal Revenue Code of 1986, as
amended(the "Code") and will be occupied by individuals ar families whose incomes at the time of
initial occupancy will meet the requirements of Sections 142(d) of the Code. Current rents for the
dwelling units in the Project range from $550 to $565 per month for the 72 one-bedroom units and
$695 to $710 per month for the 72 two-bedroom units.
The City, in establishing this multifamily housing program (the "Program"), has considered
the information contained in the City's 462C Housing Plan (the "Housing Plan"). The Project will
be acquired and rehabilitated in accordance with the requirements of Subdivisions 1 and 2 of
Section 462C.05 of the Act.
Section A. Definitions. The following terms used in this Program shall have the following
meanings,respectively:
"Act" shall mean Minnesota Statutes, Section 462C.01, et seq., as currently in effect
and as the same may be from time to time amended.
"Bonds" shall mean the revenue bonds to be issued by the HRA to finance the
Program.
"City" shall mean the City of Saint Paul,Minnesota.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Housing Plan" shall mean the City's 462C Housing Plan, adopted pursuant to the
Act, of which this Program is a part.
"Housing Unit" shall mean any one of the apartment units, each located in the
Project, occupied by one person or family, and containing complete living facilities.
"HRA" shall mean the Housing and Redevelopment Authority of the City of Saint
Paul, Minnesota.
"Land" shall mean the real property upon which the Project is situated.
"Owner" shall mean Ted Bigos, or an entity in which Ted Bigos is a principal,
manager or general partner..
"Program" shall mean this program for the financing of the Project pursuant to
the Act.
"Project" shall mean the residential rental housing development consisting of 144
total Housing Units, of which 72 are one-bedroom units and 72 are two-bedroom units to be
acquired and rehabilitated by the Owner,together with functionally related facilities.
Section B. Pro,�ram For Financing the Project. It is proposed that the City establish this
Program to provide financing for acquisition and rehabilitation of the Project at a cost and upon
such other terms and conditions as are set forth herein and as may be agreed upon in writing
between the HRA, the initial purchaser of the Bonds and the Owner. The City will delegate to the
HRA full power and authority to issue the Bonds, and it is expected that the Bonds will be issued as
soon as the terms of the Bonds have been agreed upon by the HRA, the Owner and the initial
purchaser of the Bonds. The proceeds of the Bonds will be loaned to the Owner to finance the
acquisition and rehabilitation of the Project,to fund required reserves and to pay the costs of issuing
the Bonds. It is expected that a trustee will be appointed by the HRA to monitor the rehabilitation
of the Project and the payment of principal and interest on the Bonds.
It is anticipated that the Bonds will have a final maturity of approximately thirty (30) years
and will bear interest at an average rate of approximately 4.75%per annum(the Bonds are expected
to be issued as variable rate demand obligations), however, the Bonds will be priced to the market
at the time of issuance. In addition, the Bonds will be secured by a Letter of Credit issued by a
financial institution.
The City and HRA will hire no additional staff for the administration of the Program.
Insofar as the HRA will be contracting with underwriters, legal counsel, bond counsel, the trustee,
and others, all of whom will be reimbursed from bond proceeds and revenues generated by the
Program, no administrative costs will be paid from the City's or HRA's budget with respect to this
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Program. The Bonds will not be general obligation bonds of the City or HRA, but are to be paid
only from properties pledged to the payment thereof, which may include additional security such as
additional collateral, insurance or letter of credit.
Section C. Local Contributions to the Program. The Owner has not requested any local
contributions to the Program with respect to the Project.
Section D. Standards and Rec�uirements Relating to the Financing of the Project Pursuant
to the Pro�am. The following standards and requirements shall apply with respect to the operation
of the Project by the Owner pursuant to this Program:
(1) Substantially all of the proceeds of the sale of the Bonds will be applied to
the acquisition and rehabilitation of the Project and to the funding of appropriate reserves.
The proceeds will be made available to the Owner pursuant to the terms of the Bond
offering, which will include certain covenants to be made by the Owner to the HRA
regarding the use of proceeds and the character and use of the Project.
(2) The Owner, and any subsequent owner of the Project, will not arbitrarily
reject an application from a proposed tenant because of race, color, creed, religion, national
origin, sex, affectional preference, marital status, or status with regard to public assistance
or disability.
(3) Either twenty percent (20%) or forty percent (40%) of the 144 dwelling
units will be specifically reserved for tenants whose incomes are not greater than either fifty
percent (50%) or sixty percent (60%) of the median family income (as adjusted for family
size) estimated by the United States Department of Housing and Urban Development for
the Minneapolis-St. Paul standard metropolitan statistical area. The current applicable
median income for all families is $54,600.
(4) Pursuant to Section 462C.05, Subdivision 2 of the Act, the Project is
designed to be affordable by persons and families with Adjusted Gross Income not in
excess of the greater of(a) 110 percent of the median family income as estimated by the
United States Department of Housing and Urban Development for the statistical area which
includes the City, or (b) 100 percent of the income limits established by the Minnesota
Housing Finance Agency for the City and (c) by other persons and families to the extent
determined to be necessary by the City in fizrtherance of the policy of economic integration.
Subsection E. Evidence of Com 1� iance. The HRA may require from the Owner at or
before the issuance of the Bonds, evidence satisfactory to the HRA of the ability and intention of
the Owner to complete the rehabilitation of the Project, and evidence satisfactory to the HRA of
compliance with the standards and requirements far the making of the financing established by the
HRA, as set forth herein; and in connection therewith, the HRA or its representatives may inspect
the relevant books and records of the Owner in order to confirm such ability, intention and
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compliance. In addition, the HRA may periodically require certification from either the Owner or ___
such other person deemed necessary concerning compliance with various aspects of this Program.
The Owner will be required to enter into restrictive covenants with the HRA to ensure compliance
with this Program and to ensure that the level of low and moderate income occupancy requirements
specified herein will be maintained for the period of time specified by the Act and the Code.
Subsection F. Issuance of Bonds. To finance the Program authorized by this Section the
HRA will by resolution authorize the HRA to issue and sell its revenue bonds in an aggregate
principal amount not to exceed $5,800,000. The Bonds shall be issued pursuant to Section
462C.07, Subdivision 1 of the Act, and shall be payable primarily from the revenues of the Program
authorized by this Section. Costs of the Project include not less than$ acquisition costs,
$ for reserve funds and not less than$576,000 for rehabilitation costs.
The costs of the Project may change between the date of preparation of this Program and
the date of issuance of the Bonds. The Bonds are expected to be issued within six (6) months
following the adoption of this Program.
Subsection G. Severabilitv. The provisions of this Program are severable and if any of its
provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute,
exceeding the authority of the City or HRA or otherwise illegal or inoperative by any court of
competent jurisdiction, the decision of such court shall not affect or impair any of the remaining
provisions.
Subsection H. Amendment. The City shall not amend this Program, while Bonds
authorized hereby are outstanding,to the detriment of the holders of such Bonds.
Subsection I. State Ceilin�. Not to exceed $5,800,000 of the state ceiling for private
activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and
Chapter 474A of Minnesota Statutes will be applied for with respect to the Bonds.
Adopted: September_, 1996
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