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01-508�..s . . . .� . , � �- . .._. Council File # 0 � � 5�$� Resollltion # Green Sheet # �t�� RESOLUTION Presented By Referred To CITY O�SAiNT PAUL, MINNESOTA a0 COmmittee: Date 1 RESOLUTION RECTTING A PROPOSAL FOR A 2 FINANCING PROGRAM FOR A MLTLTT-FAMILY RENTAL 3 HOU5ING DEVELOPMENT, GIVING FINAL 4 APPROVAL TO THE PROJECT AND TI-� PROGRAM 5 PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, 6 AUTHORIZING THE HOUSING AND REDEVELOPMENT 7 AUTHORITY TO ISSUE A HOUSING REVENLJE NOTE 8 AND AUTHORIZING Tf� PREPARATION OF NECESSARY 9 DOCLJMENTS AND MATERIALS IN CONNECTION 10 WITH THE SAID PRO7ECT AND PROGRAM 11 (IRIS PARK COMMONS 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 14 city the powers confened by the Act, the power to issue revenue bonds to finance a progtam for 15 the purposes of planning, administer'vng, making or purchasing loans with respect to one or more 16 multi-family housing project developments within the boundaries of the city; 17 (b)The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 18 "I3RA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, 19 Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to 20 462C.081; 21 (c)The Housing and Redevelopment Authority of the City of Saint Paui, Minnesota (the 22 "HRA"), has received a proposal from Episcopal Corporation for the Elderly, a nonprofit 23 corporation organized under the laws of Minnesota (the °Company"), that the I�t1 undertake a 24 program (the "Housing Program") to fmance a Project hereinafter described, through the issuance 25 of a revenue note (the "Note") pursuant to the Act; and 26 (d)The Project to be fmanced by the Note is the acquisition, construction and equipping 27 of appro�mately 20 housing units (the "Project") to be added to an existing elderly housing 28 facility containing 40 units located at the southwest comer of Fauview Avenue and i3niversity 29 Avenue in the City of Saint Paul. 30 (e)The proposal calls for the HIiA to loan the proceeds realized upon the sale of the Note 31 to the Company pursuant to a revenue agreement or agreements wherein the Company wiil be �i`�s��.i�'u;°�SL o� So8' 1 obligated to make payments at the times and in amounts sufficient to provide for the prompt 2 payment of principal of, premium, if any, and interest on the Note and ali costs and expenses of 3 the HRA and the City incident to the issuance and sale of the Note; and 4 (flThe City desires to facilitate the acquisition and construction of an expansion from an 5 existing multifamily housing facility within the City; and the Projectwill assist the CiTy in 6 achieving these objectives; and '7 (g)A public heazing on the Housing Program and the Project was held on this date 8 following duly published notice, at which time all persons that desired to speak were heard. 9 (h)No public official of the City has either a direct or induect fmancial interest in the 10 Project nor will any public official either directly or indirectly benefit fmancially from the 11 Project; 12 (i)The Company has submitted to the HRA a form of Memorandum of Understanding 13 executed by the Company, expressing certain understandings by and between the HRA and the 14 Company pertaining to the Project, and the financing therefor. 15 NOW 'TF�REFORE, BE IT RESOLVED by the City Council of the City of Saint 16 Paul, Minnesota, as follows: 17 1.The City hereby gives preliminary approval to the proposal of the Borrower that 18 the City undertake the Project, described above, and the program of fmancing therefor, pursuant 19 to Minnesota Statutes, Chapter 462C, consisting of the acquisition and construction of an 20 addition to an existing multi-family rental housing facility within the City pursuant to the 21 Company's specifications and to a revenue agreement between the HRA and the Company on 22 such terms and conditions with provisions for revision from time to tnne as necessary so as to 23 produce income and revenues sufficient to pay, when due, the principal and intezest on the Note 24 in the total principal amount of appro�mately $2,000,000 to be issued pursuant to the Act to 25 finance the acquisition and construction of the Project; and said agreement may also provide for 26 the entire interest of the Company therein to be mortgaged to the purchasers of the Note, or a 27 trustee for the holder(s) of the Note; and the City, acting by and through the HRA hereby 28 undertakes preliminarily to issue its revenue bonds in accordance with such terms and conditions; 29 2.On the basis of information available to the Citq it appears, and the City hereby 30 fmds, that the Project constitutes a multi-family housing development within the meaning of 31 subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act 32 and the willingness of the City to furnish such fmancing will be a substantial inducement to the 33 Company to undertake the Project, and that the effect of the Project, if undertaken, will be to 34 encourage the provision of multi-family rental housing opporiunities to residents of the City, and 35 to promote more intensive development and use of land within the City; 36 3.The Project, and the program to finance the Project by the issuance of the Note, 37 is hereby given preluninary approval by the City subject to fmal approval by the HRA, the 38 Company and the purchasers of the Note as to ultimate details of the financing of the Project, 39 4.Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City 40 hereby authorizes and directs the Housing and Redevelopment Authority of the City of Saint 41 Paul, Minnesota (the "HRA") to issue the Note to fmance the Project and to take all actions 1^' *�`'` i 7' a r E � „'. , „ a � . �ds�s. a'i�� d4 - S08' 1 necessazy or desirable in connection therewith, and no further approval or authotization of the 2 City shall be required; provided that the HRA may, in its discreuoq authorize the Boazd to issue 3 the Note and to implement the program approved hereby, and the City hereby consents thereto; 4 S.The Company has agreed and it is hereby determined that any and ail costs 5 incurred by the City or the HRA in connection with the financing of the Proj ect whether or not 6 the Project is carried to completion and whether or not approved by HRA will be paid by the 7 10 I1 12 13 14 Company: 6.Briggs and Morgan, Professional Association, acting as bond counsel, and such investment bankers as may be selected by Company, with the consent of the HRA, are authorized to assist in the preparation and review of necessary documents relating to the Project and the financing program therefor, to consult with the City Attomey, Company and the purchaser of the Note as to the maturities, interest rates and other terms and provisions of the Note and as to the covenants and other provisions of the necessary documents and submit such docuxnents to the HRA for final approval; 15 7Nothing in this Resolution or the documents prepared pursuant hereto shall 16 authorize the expenditure of any municipal funds on the Project other than the revenues derived 17 from the Project or otherwise granted to the City or the HRA. The Note shall not constitute a 18 charge, lien or encumbrance, legal or equitable, upon any property or funds of the City or the 19 HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the 20 HRA be subject to any liability thereon. The holder of the Note shall never have the right to 21 compel any exercise of the tasing power of the City or HRA to pay the outstanding principal on 22 the Note or the interest thereon, or to enforce payment thereon against any properry of the City or 23 the IIRA. The Note sha11 recite in substance that Note, including the interest thereon, are payable 24 solely from the revenue and proceeds pledged to the payment thereo£ The Note shall not 25 constitute a debt of the City or HRA within the meaning of any constitutionai or statutory 26 27 28 29 30 31 32 33 lunitation. 8.In anticipation of the issuance of the Note 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 Company 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 Note, as the Company considers necessary, including the use of internn, short-term financing, subject to reimbursement from the proceeds of the Note if any when delivered but otherwise without liabiliry on the part of the City or the HRA. � -;�; ,�.t , �, { � € pd �' `�.� s [ 'ad Z ' �'ti f�i ..� fl� -S oY Adopted by the City Council of the City of Saint Paul, Minnesota this 23rd day of May, 2001. Requested by Department of: Adoption Certified by - - • - - �� . ��• �� Plannina & Economic Development a � ; �� Approved by Financial Services n �e�wT^^p� � �nG�(�s Form Approved by Citv Attorney Approved by Mayor for Submission to Council 'C� Adopted by Council: Date �"\a� ��..s a-�O� � a�-sof' DEPARTMENT/OFFICE/COUNCIL DATE INITIATED GREEN SHEET No 111211 PED 5/16/07 CONTACT PERSON & PHONE De ' � CM �uncil Patty Lilledahl 6-6582 �CityAttorney �Ci[yCMak MUST BE ON COUNqL AGENDA BY (DATE) � May 23 � 20�� p[�b'�G � �FnandalServicesDic �Fnancial/ACCtg 4MayororAss'</i. � I (�.�nr� (j �6�\ TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACTION REQUESTED Adoption of a City Council Resolution authorizing the HRA to issue a Housing Revenue Note for the Episcopal Corporetion for the Elderly Project referred to as Iris Park Commons Addition. The Council must also hold a Public Hearing on May 23 for the Project. RECOMMENDATION Approve (A) or Reject (R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: PLANNING COMMISSION 1, Has this person/firm ever worked under a contract for CIB COMMITTEE this department? yes no CIVIL SERVICE COMMISSION 2. Has this person/firm ever been a city employee? A City Council yes no A HRA 3. Does this person/firm possess a skill �oT normally possessed by any current city employee? yes no 4. Is this person/firm a targeted vendor? yes no 5. Explain all yes answers on separate sheet and attach to green sheet. INITIATING PROBLEM ISSUE, OPPORTUNITY (who, what, when, where, why) The new construction of 20 units of independent congregate housing units on the Episcopal Church Home Campus at Fairview and University. ADVANTGESIP APPROVED same as above DISADVANTAGES IF APPROVED None DISADVANTAGES IF NOT APPROVED Lost opportunity of tax-exempt financing for the project. TOTAL AMOUNT OF TRANSACTION S_2,000,000 REVENUE BUDGETED (CIRCLE ONE) YES N¢ FUNDMG SOURCE Tax-exempt Revenue Notes FINANCIAL INFORMATION (EXPLAIN) The HRA would issue up to 52m in 5011c�(3) taz-exempt elderly housing revenue notes which are repaid trom the project only. No liabiliry or obligation to the HRA or City - conduit revenue notes. p�—SoY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE COMMISSIONERS DATE MAY 23, 2001 REGARDING APPROVAL OF UP TO 52,000,000 OF ELDERLY HOUSING REVENUE NOTES FOR THE EPISCOPAL CORPORATION Purpose The purpose of this report is to request that the HRA consider adoption of the attached resolution authorizing staff to issue up to 52,000,000 of 501 (c)S3) tax exempt elderly housing revenue notes which will be repaid from revenues generated from the Iris Park Commons Addition project. There will be no liability or obligation on behalf of the HRA or the City of Saint Paul to repay the notes. Process The City Council will hold a public hearing at 5:30 on May 23 whereby they adopt a Resolution approving the Project and authorizing the HRA to issue a Housing Revenue Note for the Iris Park Commons Addition Project. Background/Proposal Episcopal Corporation for the Elderly, a Minnesota 501 (c)(3) corporation, is applying for tax exempt revenue note financing for the new construction of Iris Park Commons Addition project. EHHS currently owns and operates the two facilities on the main campus; (1) The Episcopal Church Home of Minnesota, a 131 bed nursing home facility, and (2) Iris Park Commons, an existing 40 unit seniors' apartment complex. EHHS plans to expand the existing campus by the new construction of two buildings; Iris Park Commons Addition and Seabury. An EHHS subsidiary is building Seabury, a 50 unit HUD 202 low income project to be occupied by elderly persons whose incomes cannot exceed 50% of the median income. Funding for Seabury has been committed from a combination of federal and Saint Paul STAR program funds. Iris Park Commons Addition will be comprised of 1 1 OI-SoY one bedroom units and 9 two bedroom units for moderate income seniors whose incomes do not exceed 80% of the median income limit. The campus expansion will be located on mostly vacant land on the southwest corner of Fairview and University (map attached). The 20 unit addition to Iris Park Commons would be located on the west end of the property, and Seabury will be constructed on the east end corner. Site improvements include parking, landscaping, brick pier/ metal fence, and substantial improvements to the public sidewalk. Construction of Iris Park is anticipated to begin June 1, 2001 with completion in May, 2002. Based upon an existing waiting list of over 40 potential tenants, the 20 units are anticipated to lease up within 90 days of completion. Financing Structure For Iris Park Addition Project The unrated Notes will be private placed with sophisticated investors in minimum denominations of $100,000. The first mortgage loan will be structured as a fixed rate instrument with a 20 year amortization. The STAR loan (which was approved in November, 2000) will have a 20 year term and an interest rate of 5.5%. This structure allows debt coverage of approximately 1.65 to 1 on the first mortgage and 1.2 to 1 on the second mortgage. Sources of Funds Tax exempt Note S 1,925,000 STAR Loan 700,000 Donation of Land 400,000 Equity 219,000 Total 53,244,000 Uses of Funds Land 400,000 Construction 2,452,000 Architect 1 15,092 Capitalized Interest 163,908 Other Fees 113,000 Total 53,244,OOQ p� —So Y' Project Senefits The new construction of 20 independent congregate housing units will further the following objectives of the Housing Plan: • Encourage the production of housing units to smaffer househoids • Encourage a diversity of building and unit types to meet the diversity of the market. Particular attention should be paid to assessing and meeting the needs of a growing number of older persons who are looking for alternative housing in their own neighborhoods. RECOMMENDATION Request that the HRA Board of Commissioners adopt the attached Resolution approving the sale of up to 82,000,000 in 501 (c1(3) tax exempt Revenue Notes and authorizing the execution of documents relating to the Iris Park Commons Addition Project. Sponsored by Prepared by Attachments Commissioner Benanav Patricia Lilledahl, Downtown Team 266-6582 Resolution Map R:\Shared\Ped\Lilledah\episcopalreport2.wpd b1-ScrY a i P� G_�.G C L lg� ct-Sos� RESOLUTION APPROVING T'I� ISSUANCE AND SALE OF THE $2,000,000 HOUSING DEVELOPMENT REVEN[IE NOTE, SERIES 2001 AND AUTHORrZING TIIE EXECUTION OF DOCLJMENTS RELATING TF3ERET0 (IRIS PARK COMMONS PROJECT') BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authority"), as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findin�s. The Authority hereby fmds, determines and declares as follows: (a) Minnesota Statutes, Chapter 462C (the "Act") confers upon cities, or housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing project developments within the boundaries of the city; and (b) the Authority has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to 462C.081; and (c) the Authority is a political subdivision of the State of Minnesota and is authorized to assist the project herein referred to, and to issue and sell the Note, as hereinafter defined, for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution; and (d) Episcopal Corporation for the Elderly, a Minnesota nonprofit corporatiou (the "Bonower") has proposed that the Authority issue a rental housing revenue note in the aggregate principal amount not to exceed $2,100,000 (the "Note") to fmance the acquisition, construction and equipping of a 20 unit addition (the 'Project") to an existing rental housing development in the City of Saint Paul known as Iris Pazk Commons; and (e) the City Council of the City of Saint Paul, Minnesota (the "City") has, after due publication of a notice of hearing thereon, held on this same date a public hearing on the Project and a housing program (the "Program") required under the Act in connection with the Project; and ( fl the Program has been reviewed by the Metropolitan Council or its staff, and no public official of the Authority or the City has either a direct or 3ndirect financial interest in the issuance of the Note, the Program or the Project nor will any public official either directly or indirectly benefit financially from the Program or Project; and 1284992v1 o �- SoP' (g) neither the full faith and credit of the Authority will be pledged to the Project or for the payment of the principal of, premium, if any, and interest on the Note; and (h) the issuance and sale of the Rental Housing Revenue Note, Series 2001 (Iris Pazk Comxnons Project) (the "Note") by the Authority, pursuant to the Act, is in the best interest of the Authority, and the Authority hereby determines to issue the Note and to seli the Note to Wells Fargo Brokerage Services, LLC (the "I,ender"), as provided herein. The Authority will loan the proceeds of the Note (the "Loan") to the Bonower in order to finance the Pro}ect; and (i) pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the Authority and the Borrower, the Borrower has agreed to repay the Note in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the construction, the maintenance and operarion of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the Authority and the Bonower deem necessary or desirable for the fmancing of the Project. A draft of the Loan Agreement has been submitted to the Board; and (j) pursuant to a Pledge Agreement to be entered into between the Authority and the Lender, the Authority has pledged and granted a security interest in all o£ its rights, tide, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the Board; and (k) pursuant to a Mortgage, Security Agreement and Fixhxre Financing Statement (the "Mortgage") to be executed by the Borrower in favor of the Authority, the Bonower has secured payment of amounts due under the Loan Agreement and Note by granting to the Authority a mortgage and security interest in the properiy described therein. Pursuant to an Assignment of Mortgage executed by the Authority (the "AssignmenP'), the Authority has assigned the Mortgage to the Lender. A draft of the Mortgage and Assignment haue been submitted to the Board; and (1) pursuant to a Disbursement Agreement (the "Disbursement Agreement") by and between the Borrower, the City, the Authority, the Lender and a title company ("Title"), and Title will disburse the proceeds of the Note to the Bonower to construct the Project; and (m) pursuant to a Subordination Agreement (the "Subordination Agreement") by and between the Authority, the City of Saint Paul (the "City") and the Lender, the City has agreed to subordinate to the Mortgagee the mortgage granted to the City by the Borrower to secure a Star loan; and i2sa99z�i c�_�og' (n) the Note will be a special iimited obligation of the Authority. The Note shall not be payable from or chazged upon any funds other than the revenues pledged to the payment thereof, nor shali the Authority be subject to any liability thereon. No holder of the Note sha11 ever have the right to compel any exercise of the taxing power of the Authority to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the Authority. The Note shall not constitute a debt of the Authoriry within the meaning of any constirixtional or statutory limitation; and (o) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the costs of the Project. 1.2 Authorization and Ratification of Proiect. The Authority has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, Yo provide for the conshuction of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction and acquisition of other municipal facilities, and the Authority hereby ratifies, affirms, and approves all acfions heretofore taken by the Bonower consistent with and in anticipation of such authority. On the basis of information available to the Authority it appeazs, and the Autiaority hereby fmds, that the Project constitutes a multi-family housing development within the meaning of subdivision 5 of Section 462CA2 of the Act; that the availability of the financing under the Act and the willingness of the Authority to fiunish such financing will be a substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of additional multi-family elderly rental housing opportunities to residents of the Authority. SECTION 2. THE NOTE. 2.1 Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form attached as Exhibit A with such appropriate variations, omissions and insertions as are pernnitted or required by this Resolution, and in accardance with the fitz�ther provisions hereof; and the total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $2,000,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall beaz interest at the rate of % per annum. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and sha11 be subject to such other terms and conditions as are set forth therein. 23 Execution. The Note shall be executed on behalf of the Authority by the signatures of its Chair or Commissioner, Secretary or Commissioner and Director, Office of Financial Services and shall be sealed with the seal of the Authority; provided that the seal may be intentionally omitted as provided by law. In case any officer whose signature sha11 appear on 1284992v1 o � _so8' the Note shall cease to be such o� cer before the delivery of the I�iote, such signature shall nevertheless be valid and sufficient for ali purposes, the same as if had remained in office until delivery. In the event of the absence or disability of any Chair or Commissioner, Secretary of Commissioner or D'uector, Office of Financial Services of the Authority as, in the opinion of the City's Attomey, may act in their behalf, shall without further act or authorization of the Board execute and deliverthe Note. 2.4 Delivery of Iroitial Note. Before delivery of the Note there shatl be filed with the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Mortgage; (d) the Assignxnent; (e) the Guaranty; ( fl the Disbursement Agreement; and (g) the Subordination Agreement (2) an opinion of Counsel far the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income t�ation under Section 501(c)(3) of the Code; (S) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Note Proceeds. Upon delivery of the Note to Lender, the Lender shail, on behaif of the Authority, disburse the proceeds of the Note for payment of Project Costs in accordance with the terms of the Disbursement Agreement. 2.6 Reeistration of Transfer. Notwithstanding anything herein to the contrary, although the Note is being issued in the form of a sepazate instrument, the aggregate principal 1284992v1 o � -so�' amount of the Note shall always be registered in the name of only one registered owner. The Authority will cause to be kept at the office of the Boazd allote Register in which, subject to such reasonable regularions as it may prescribe, the Authority shall provide for the registration of transfers of ownership of the Note. The Note shall be uurially registered in the name of the Lender and shall be transferabie upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written insrivment of transfer satisfactory to the Board, duly executed by the Lender or its duly authorized agent. The following form of assigxunent shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said Authority with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the Board shall note the date of registration and the name and address of the new Lender in the Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroved Note. In case any Note issued hereunder sha11 become mutilated ar be destroyed or lost, the Authority shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substiturion for and upon cancellafion of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the Authority in connection therewith, and in the case of a Note destroyed or lost, the filing with the Authority of evidence satisfactory to the Authority with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownershin of Note. The Authority may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the Authority shall not be affected by any nofice to the contrary. 2.9 Limitation on Note Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in 1284992v1 �t"rs�� the Note be given pursuant to any participation agreement, except upon receipt of a written opinion of Bond Counsel that an exemption e�ists for such transfer. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the Authority shall, at the request and expense of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to nuxnber, principal amount, and the amount of the monthly instaliments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 Severabilitv. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particulaz case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or mare phrases, sentences, clauses or pazagraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcrint. The officers of the Authority are directed to fuivish to Bond Counsel certified copies of this Resolution and all documents refened to herein, and �davits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore fitrnished, shall constitute recitals of the Authority as to the correctness of a11 statements contained therein. 33 Authorization to Execute Agreements. The forms of the proposed Loan Agreement, the Pledge Agreement, the Mortgage, the Assignment, the Disbursement Agreement, and the Subordination Agreement are hereby approved in substantially the form heretofore presented to the Board of Commissioners, together with such additional details therein as inay be necessary and appropriate and such modifications thereof, deletions there&om and additions thereto as may be necessary and appropriate and approved by Bond Counsel and the City Attorney prior to the execution of the documents, and the Chair or Commissioner, Secretary of Commissioner, Executive Director and Director, Office of Financial Services is authorized to execute the Loan Agreement, the Pledge Agreement, the Mortgage, the Assignment, the Disbursement Agreement, and the Subordination Agreement in the name of and on behalf of the Authority and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Chair or Commissioner, Secretary or Commissioner, Executive Director, Director, Office of Financial Services of the Authority such other officer of the Authonity as, in the opinion of the City Attorney, may act in their behalf, shall without fiu�ther act or authorization of the Authority do ail things and execute all instnunents and documents required to be done or executed by such absent or disabled officer. The execution of any insUuinent by tlie appropriate Chair or Commissioner, Secretary or 1284992v1 ot-soa' Commissioner, Execufive Director, Office of Financial Sezvices of the Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 3.4 Memorandum of Understaudine. The Memorandum of Understanding by and between the Authority and the Borrower is hereby approved in substantially the form submitted, together with such additions, deletions or revisions as aze approved by the Executive Director of the Authority. The Executive Director is hereby authorized to execute the Memorandum of Understanding on behaif of the Authority. 3.5 Not a Charge Lien or Encumbrance. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the eapenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the Authority or the City for this purpose. The Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Authority or the City, egcept the revenues and proceeds pledged to the payment thereof, nor shall the Authority nor the City, be subject to any liability thereon. The holders of the Note shall never have the right to compel any exercise of the taxing power of the Authority or the City to pay the outstanding principal on the Note or the interest thereon, or to enforce payment thereof against any property of, the Authority or the City. The Note shall recite in substance that the Note, including interest thereon, is payable solely from the revenue and proceeds pledged to the payment thereof. The Note shall not constitute a debt of the AuthoriTy or the City within the meaning of any constitutional or statutory limitation. Adopted by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, this 23` day of May, 2001. 1284992v1 v►-So8' � ...� �,�n IJNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF FtAMSEY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA Rentai Housing Revenue Note, Series 2001 (Iris Park Commons Project) $2,000,000 FOR VALUE RECEIVED the HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAiNT PAIJL, MINNESOTA (the "Authority") hereby promises to pay WELLS FARGO BROKERAGE SERVICES, LLC, in Minneapolis, Minnesota, its successors or registered assigns (the "Lender"), from the source and in the manner hereinafter provided, the principai sum of TWO MILLION DOLLARS ($2,000,000), or so much thereof as remains unpaid from time to rime (the "Principal Balance"), with interest thereon from the date hereof until paid or otherwise dischazged at the rate of _°/u per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 1. The Principal Balance and accrued interest hereon shall be amortized and paid in the semiannual installments set forth on Appendix 1 attached hereto, commencing on December 1, 2001 and on each June 1 and December 1 thereafter through and including June 1, 2016 (the "Fina1 Maturity Date"), at which time any remaining Principal Balance and accrued interest thereon shall be paid in full. Paynnents shall be applied first to interest due on the Principal Balance and thereafter to reduction of the Principal Balance. 2. In any event, the payments hereunder shall be su�cient to pay all principal and interest due, as such principal and interest becomes due, and to pay any premium or service charge, at maturity, upon redemption, or otherwise. Interest shall be computed on the basis of a 360 day yeaz, but chazged for the actual number of days elapsed. 3. Principal and interest and premium or service charge, if any, due hereunder shall be payable at the principal office of the Lender, or at such other place as the Lender may designate in writing. 4. This Note is issued by the Authority to provide funds for a housing project consisfing of the acquisition, construction and equipping of approxunately 20 housing units to be added to an existing elderly housing facility by Iris Pazk Corporation for the Elderiy, a Minnesota nonprofit corporation (the "Bonower") pursuant to a Loan Agreement dated as of May 1, 2001 by and between the Authority and the Borrower (the "Loan AgreemenY'), and this Note is further issued pursuant to and in fu11 compliance with the Constitution and laws of the A-1 1254992v1 o�-Sor State of Minnesota, particulazly Miunesota Statutes, Chapter 462C and pursuant to a resolution of the Boazd of Commissioners duly adopted on May 23, 2001 (the "Resolution"). 5. This Note is secured by a Pledge Agreement of even date herewith between the Authority and the Lender (the "Pledge Agreement") and is fiirther secured by a Mortgage, Security Agreement and Fixture Financing Statement, of even date herewith executed by the Bonower, as mortgagor, in favor of the Authority, as mortgagee (the "Mortgage"). 6. The Authority, for itself, its successors and assigns, hereby waives demand, presenhnent, protest and notice of dishonor; and to the extent pernutted by law, the Lender may ea�tend interest and/or principal of or any service chazge or premium due on this Note, including the Final Maturity Date, or release any part or parts of the property and interest subject to the Mortgage or to any other security document from the same, all without notice to or consent of any pariy liable hereon or thereon and without releasing any such party from such liability and whether or not as a result thereof the interest on the Note is no longer exempt from the federal or state income tax. In no event, however, may the Fina1 Maturity Date of the Note be extended beyond thirty (30) years from the date hereof. 7. This Note may be prepaid in whole, but not in part, at the option of the Bonower, at any time, at a price equal to the "After Payment Termination Values" set forth on Schedule 1 attached hereto. 8. Upon the occurrence of certain Events of Default, as defined in the Loan Agreement and Mortgage, the Lender may declaze the Principal Balance and accrued interest on the Note to be immediately due and payable. 9. In the event of prepayment of this Note, the Lender sha11 apply any such prepayment against the accrued interest on the Principal Balance and finally against the final principal amounts due under the Note. The semiannual payments due under pazagraph 1 hereof, shall continue to be due and payable in full unril the entire Principal Balance and accrued interest due on this Note have been paid regardless of any partial prepayment made hereunder. 10. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the Authority at the office of the Authority, by the Lender in person or by its agent duly authorized in writing, at the Lender's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Board, duly executed by the Lender or its duly authorized agent. Upon such transfer the Secretary of the Authority will note the date of registration and the name and address of the new registered owner in the registrafion blank appearing below. The Authority may deem and ireat the person in whose name the Note is last registered upon the books of the Authority with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on the account, of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Lender or upon his order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the Authority shall not be affected by any notice to the contrary. A-2 1284992v1 o�-sdY 1 L All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Mortgage, the Loan Agreement and the Pledge Agreement aze hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. 12. This Note and interest thereon and any service chazge or premium, if any, due hereunder aze payable solely from the revenues and proceeds derived from the Loan Agreement and the Mortgage and do not constitute a debt of the Authority or the City of Saint Paul (the "City") of the City of Saint Paul (the "City") within the meaning of any constitutional or statutory i'unitation, aze not payable from or a chazge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the Authority or any of its officers, agents or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the Authority or the City to pay this Note or the interest thereon, or to enforce payment thereof against any property of the Authority or the City, and this Note does not constitute a chazge, lien or encumbrance, legal ar equitable, upon any property of the Authority or the City, and the agreement of the Authority to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds fiu•nished for such purpose in accordance with the Loan Agreement, sufficient to pay all costs of such performance or the enforcement thereof. 13. If an Event of Default (as that term is defined in the Mortgage and the Loan Agreement) sha11 occur, then the Lender shall have the right and option to declare, upon ten (10) days written notice, the Principal Balance and accrued interest thereon, immediately due and payable, whereupon the same, plus any premiums or service charges, shall be due and payable, but solely from sums made available under the Loan Agreement and the Mortgage. Failure to exercise such option at any ume shall not constitute a waiver of the right to exercise the same at any subsequent time. 14. The remedies of the Lender, as provided herein and in the Mortgage, the Loan Agreement and the Pledge Agreement, aze not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 15. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and, then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a baz to ar waiver of any right or remedy as to a subsequent event. 16. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participafion agreement, except in accordance with an applicable A-3 1284992v1 o � -So b� exemption from such registration requirements. The Authority acknowledges that the Lender intends to enter into a participation agreement with one or more insritutional investors. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to e�st to happen and to be performed precedent to or in the issuance of this Note do e�st, have happened and have been performed in regular and due form as required by law. IN WITNESS WFIEREOF, the Authority has caused this Note to be duly executed in its name by the manual signatures of the officers set forth below, the corporate seal having been intentionally omitted as permitted by law, and has caused this Note to be dated as of , 2001. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL MINNESOTA :� Chair or Commissioner : Secretary or Commissioner : Director, Office of Financial Services A-4 1284992v1 o�-S�s' PROVISIONS AS TO REGIS"TRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota in the name of the holder last noted below. Date of R�e istration Name and Address Registered Owner Signature of Secre ,2001 Wells Fazgo Brokerage Services, LLC Wells Fazgo Center Sixth St. & Marquette Ave. Minneaoolis, MN 55479-0146 A-5 1284992v1 �..s . . . .� . , � �- . .._. Council File # 0 � � 5�$� Resollltion # Green Sheet # �t�� RESOLUTION Presented By Referred To CITY O�SAiNT PAUL, MINNESOTA a0 COmmittee: Date 1 RESOLUTION RECTTING A PROPOSAL FOR A 2 FINANCING PROGRAM FOR A MLTLTT-FAMILY RENTAL 3 HOU5ING DEVELOPMENT, GIVING FINAL 4 APPROVAL TO THE PROJECT AND TI-� PROGRAM 5 PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, 6 AUTHORIZING THE HOUSING AND REDEVELOPMENT 7 AUTHORITY TO ISSUE A HOUSING REVENLJE NOTE 8 AND AUTHORIZING Tf� PREPARATION OF NECESSARY 9 DOCLJMENTS AND MATERIALS IN CONNECTION 10 WITH THE SAID PRO7ECT AND PROGRAM 11 (IRIS PARK COMMONS 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 14 city the powers confened by the Act, the power to issue revenue bonds to finance a progtam for 15 the purposes of planning, administer'vng, making or purchasing loans with respect to one or more 16 multi-family housing project developments within the boundaries of the city; 17 (b)The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 18 "I3RA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, 19 Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to 20 462C.081; 21 (c)The Housing and Redevelopment Authority of the City of Saint Paui, Minnesota (the 22 "HRA"), has received a proposal from Episcopal Corporation for the Elderly, a nonprofit 23 corporation organized under the laws of Minnesota (the °Company"), that the I�t1 undertake a 24 program (the "Housing Program") to fmance a Project hereinafter described, through the issuance 25 of a revenue note (the "Note") pursuant to the Act; and 26 (d)The Project to be fmanced by the Note is the acquisition, construction and equipping 27 of appro�mately 20 housing units (the "Project") to be added to an existing elderly housing 28 facility containing 40 units located at the southwest comer of Fauview Avenue and i3niversity 29 Avenue in the City of Saint Paul. 30 (e)The proposal calls for the HIiA to loan the proceeds realized upon the sale of the Note 31 to the Company pursuant to a revenue agreement or agreements wherein the Company wiil be �i`�s��.i�'u;°�SL o� So8' 1 obligated to make payments at the times and in amounts sufficient to provide for the prompt 2 payment of principal of, premium, if any, and interest on the Note and ali costs and expenses of 3 the HRA and the City incident to the issuance and sale of the Note; and 4 (flThe City desires to facilitate the acquisition and construction of an expansion from an 5 existing multifamily housing facility within the City; and the Projectwill assist the CiTy in 6 achieving these objectives; and '7 (g)A public heazing on the Housing Program and the Project was held on this date 8 following duly published notice, at which time all persons that desired to speak were heard. 9 (h)No public official of the City has either a direct or induect fmancial interest in the 10 Project nor will any public official either directly or indirectly benefit fmancially from the 11 Project; 12 (i)The Company has submitted to the HRA a form of Memorandum of Understanding 13 executed by the Company, expressing certain understandings by and between the HRA and the 14 Company pertaining to the Project, and the financing therefor. 15 NOW 'TF�REFORE, BE IT RESOLVED by the City Council of the City of Saint 16 Paul, Minnesota, as follows: 17 1.The City hereby gives preliminary approval to the proposal of the Borrower that 18 the City undertake the Project, described above, and the program of fmancing therefor, pursuant 19 to Minnesota Statutes, Chapter 462C, consisting of the acquisition and construction of an 20 addition to an existing multi-family rental housing facility within the City pursuant to the 21 Company's specifications and to a revenue agreement between the HRA and the Company on 22 such terms and conditions with provisions for revision from time to tnne as necessary so as to 23 produce income and revenues sufficient to pay, when due, the principal and intezest on the Note 24 in the total principal amount of appro�mately $2,000,000 to be issued pursuant to the Act to 25 finance the acquisition and construction of the Project; and said agreement may also provide for 26 the entire interest of the Company therein to be mortgaged to the purchasers of the Note, or a 27 trustee for the holder(s) of the Note; and the City, acting by and through the HRA hereby 28 undertakes preliminarily to issue its revenue bonds in accordance with such terms and conditions; 29 2.On the basis of information available to the Citq it appears, and the City hereby 30 fmds, that the Project constitutes a multi-family housing development within the meaning of 31 subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act 32 and the willingness of the City to furnish such fmancing will be a substantial inducement to the 33 Company to undertake the Project, and that the effect of the Project, if undertaken, will be to 34 encourage the provision of multi-family rental housing opporiunities to residents of the City, and 35 to promote more intensive development and use of land within the City; 36 3.The Project, and the program to finance the Project by the issuance of the Note, 37 is hereby given preluninary approval by the City subject to fmal approval by the HRA, the 38 Company and the purchasers of the Note as to ultimate details of the financing of the Project, 39 4.Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City 40 hereby authorizes and directs the Housing and Redevelopment Authority of the City of Saint 41 Paul, Minnesota (the "HRA") to issue the Note to fmance the Project and to take all actions 1^' *�`'` i 7' a r E � „'. , „ a � . �ds�s. a'i�� d4 - S08' 1 necessazy or desirable in connection therewith, and no further approval or authotization of the 2 City shall be required; provided that the HRA may, in its discreuoq authorize the Boazd to issue 3 the Note and to implement the program approved hereby, and the City hereby consents thereto; 4 S.The Company has agreed and it is hereby determined that any and ail costs 5 incurred by the City or the HRA in connection with the financing of the Proj ect whether or not 6 the Project is carried to completion and whether or not approved by HRA will be paid by the 7 10 I1 12 13 14 Company: 6.Briggs and Morgan, Professional Association, acting as bond counsel, and such investment bankers as may be selected by Company, with the consent of the HRA, are authorized to assist in the preparation and review of necessary documents relating to the Project and the financing program therefor, to consult with the City Attomey, Company and the purchaser of the Note as to the maturities, interest rates and other terms and provisions of the Note and as to the covenants and other provisions of the necessary documents and submit such docuxnents to the HRA for final approval; 15 7Nothing in this Resolution or the documents prepared pursuant hereto shall 16 authorize the expenditure of any municipal funds on the Project other than the revenues derived 17 from the Project or otherwise granted to the City or the HRA. The Note shall not constitute a 18 charge, lien or encumbrance, legal or equitable, upon any property or funds of the City or the 19 HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the 20 HRA be subject to any liability thereon. The holder of the Note shall never have the right to 21 compel any exercise of the tasing power of the City or HRA to pay the outstanding principal on 22 the Note or the interest thereon, or to enforce payment thereon against any properry of the City or 23 the IIRA. The Note sha11 recite in substance that Note, including the interest thereon, are payable 24 solely from the revenue and proceeds pledged to the payment thereo£ The Note shall not 25 constitute a debt of the City or HRA within the meaning of any constitutionai or statutory 26 27 28 29 30 31 32 33 lunitation. 8.In anticipation of the issuance of the Note 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 Company 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 Note, as the Company considers necessary, including the use of internn, short-term financing, subject to reimbursement from the proceeds of the Note if any when delivered but otherwise without liabiliry on the part of the City or the HRA. � -;�; ,�.t , �, { � € pd �' `�.� s [ 'ad Z ' �'ti f�i ..� fl� -S oY Adopted by the City Council of the City of Saint Paul, Minnesota this 23rd day of May, 2001. Requested by Department of: Adoption Certified by - - • - - �� . ��• �� Plannina & Economic Development a � ; �� Approved by Financial Services n �e�wT^^p� � �nG�(�s Form Approved by Citv Attorney Approved by Mayor for Submission to Council 'C� Adopted by Council: Date �"\a� ��..s a-�O� � a�-sof' DEPARTMENT/OFFICE/COUNCIL DATE INITIATED GREEN SHEET No 111211 PED 5/16/07 CONTACT PERSON & PHONE De ' � CM �uncil Patty Lilledahl 6-6582 �CityAttorney �Ci[yCMak MUST BE ON COUNqL AGENDA BY (DATE) � May 23 � 20�� p[�b'�G � �FnandalServicesDic �Fnancial/ACCtg 4MayororAss'</i. � I (�.�nr� (j �6�\ TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACTION REQUESTED Adoption of a City Council Resolution authorizing the HRA to issue a Housing Revenue Note for the Episcopal Corporetion for the Elderly Project referred to as Iris Park Commons Addition. The Council must also hold a Public Hearing on May 23 for the Project. RECOMMENDATION Approve (A) or Reject (R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: PLANNING COMMISSION 1, Has this person/firm ever worked under a contract for CIB COMMITTEE this department? yes no CIVIL SERVICE COMMISSION 2. Has this person/firm ever been a city employee? A City Council yes no A HRA 3. Does this person/firm possess a skill �oT normally possessed by any current city employee? yes no 4. Is this person/firm a targeted vendor? yes no 5. Explain all yes answers on separate sheet and attach to green sheet. INITIATING PROBLEM ISSUE, OPPORTUNITY (who, what, when, where, why) The new construction of 20 units of independent congregate housing units on the Episcopal Church Home Campus at Fairview and University. ADVANTGESIP APPROVED same as above DISADVANTAGES IF APPROVED None DISADVANTAGES IF NOT APPROVED Lost opportunity of tax-exempt financing for the project. TOTAL AMOUNT OF TRANSACTION S_2,000,000 REVENUE BUDGETED (CIRCLE ONE) YES N¢ FUNDMG SOURCE Tax-exempt Revenue Notes FINANCIAL INFORMATION (EXPLAIN) The HRA would issue up to 52m in 5011c�(3) taz-exempt elderly housing revenue notes which are repaid trom the project only. No liabiliry or obligation to the HRA or City - conduit revenue notes. p�—SoY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE COMMISSIONERS DATE MAY 23, 2001 REGARDING APPROVAL OF UP TO 52,000,000 OF ELDERLY HOUSING REVENUE NOTES FOR THE EPISCOPAL CORPORATION Purpose The purpose of this report is to request that the HRA consider adoption of the attached resolution authorizing staff to issue up to 52,000,000 of 501 (c)S3) tax exempt elderly housing revenue notes which will be repaid from revenues generated from the Iris Park Commons Addition project. There will be no liability or obligation on behalf of the HRA or the City of Saint Paul to repay the notes. Process The City Council will hold a public hearing at 5:30 on May 23 whereby they adopt a Resolution approving the Project and authorizing the HRA to issue a Housing Revenue Note for the Iris Park Commons Addition Project. Background/Proposal Episcopal Corporation for the Elderly, a Minnesota 501 (c)(3) corporation, is applying for tax exempt revenue note financing for the new construction of Iris Park Commons Addition project. EHHS currently owns and operates the two facilities on the main campus; (1) The Episcopal Church Home of Minnesota, a 131 bed nursing home facility, and (2) Iris Park Commons, an existing 40 unit seniors' apartment complex. EHHS plans to expand the existing campus by the new construction of two buildings; Iris Park Commons Addition and Seabury. An EHHS subsidiary is building Seabury, a 50 unit HUD 202 low income project to be occupied by elderly persons whose incomes cannot exceed 50% of the median income. Funding for Seabury has been committed from a combination of federal and Saint Paul STAR program funds. Iris Park Commons Addition will be comprised of 1 1 OI-SoY one bedroom units and 9 two bedroom units for moderate income seniors whose incomes do not exceed 80% of the median income limit. The campus expansion will be located on mostly vacant land on the southwest corner of Fairview and University (map attached). The 20 unit addition to Iris Park Commons would be located on the west end of the property, and Seabury will be constructed on the east end corner. Site improvements include parking, landscaping, brick pier/ metal fence, and substantial improvements to the public sidewalk. Construction of Iris Park is anticipated to begin June 1, 2001 with completion in May, 2002. Based upon an existing waiting list of over 40 potential tenants, the 20 units are anticipated to lease up within 90 days of completion. Financing Structure For Iris Park Addition Project The unrated Notes will be private placed with sophisticated investors in minimum denominations of $100,000. The first mortgage loan will be structured as a fixed rate instrument with a 20 year amortization. The STAR loan (which was approved in November, 2000) will have a 20 year term and an interest rate of 5.5%. This structure allows debt coverage of approximately 1.65 to 1 on the first mortgage and 1.2 to 1 on the second mortgage. Sources of Funds Tax exempt Note S 1,925,000 STAR Loan 700,000 Donation of Land 400,000 Equity 219,000 Total 53,244,000 Uses of Funds Land 400,000 Construction 2,452,000 Architect 1 15,092 Capitalized Interest 163,908 Other Fees 113,000 Total 53,244,OOQ p� —So Y' Project Senefits The new construction of 20 independent congregate housing units will further the following objectives of the Housing Plan: • Encourage the production of housing units to smaffer househoids • Encourage a diversity of building and unit types to meet the diversity of the market. Particular attention should be paid to assessing and meeting the needs of a growing number of older persons who are looking for alternative housing in their own neighborhoods. RECOMMENDATION Request that the HRA Board of Commissioners adopt the attached Resolution approving the sale of up to 82,000,000 in 501 (c1(3) tax exempt Revenue Notes and authorizing the execution of documents relating to the Iris Park Commons Addition Project. Sponsored by Prepared by Attachments Commissioner Benanav Patricia Lilledahl, Downtown Team 266-6582 Resolution Map R:\Shared\Ped\Lilledah\episcopalreport2.wpd b1-ScrY a i P� G_�.G C L lg� ct-Sos� RESOLUTION APPROVING T'I� ISSUANCE AND SALE OF THE $2,000,000 HOUSING DEVELOPMENT REVEN[IE NOTE, SERIES 2001 AND AUTHORrZING TIIE EXECUTION OF DOCLJMENTS RELATING TF3ERET0 (IRIS PARK COMMONS PROJECT') BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authority"), as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findin�s. The Authority hereby fmds, determines and declares as follows: (a) Minnesota Statutes, Chapter 462C (the "Act") confers upon cities, or housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing project developments within the boundaries of the city; and (b) the Authority has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to 462C.081; and (c) the Authority is a political subdivision of the State of Minnesota and is authorized to assist the project herein referred to, and to issue and sell the Note, as hereinafter defined, for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution; and (d) Episcopal Corporation for the Elderly, a Minnesota nonprofit corporatiou (the "Bonower") has proposed that the Authority issue a rental housing revenue note in the aggregate principal amount not to exceed $2,100,000 (the "Note") to fmance the acquisition, construction and equipping of a 20 unit addition (the 'Project") to an existing rental housing development in the City of Saint Paul known as Iris Pazk Commons; and (e) the City Council of the City of Saint Paul, Minnesota (the "City") has, after due publication of a notice of hearing thereon, held on this same date a public hearing on the Project and a housing program (the "Program") required under the Act in connection with the Project; and ( fl the Program has been reviewed by the Metropolitan Council or its staff, and no public official of the Authority or the City has either a direct or 3ndirect financial interest in the issuance of the Note, the Program or the Project nor will any public official either directly or indirectly benefit financially from the Program or Project; and 1284992v1 o �- SoP' (g) neither the full faith and credit of the Authority will be pledged to the Project or for the payment of the principal of, premium, if any, and interest on the Note; and (h) the issuance and sale of the Rental Housing Revenue Note, Series 2001 (Iris Pazk Comxnons Project) (the "Note") by the Authority, pursuant to the Act, is in the best interest of the Authority, and the Authority hereby determines to issue the Note and to seli the Note to Wells Fargo Brokerage Services, LLC (the "I,ender"), as provided herein. The Authority will loan the proceeds of the Note (the "Loan") to the Bonower in order to finance the Pro}ect; and (i) pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the Authority and the Borrower, the Borrower has agreed to repay the Note in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the construction, the maintenance and operarion of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the Authority and the Bonower deem necessary or desirable for the fmancing of the Project. A draft of the Loan Agreement has been submitted to the Board; and (j) pursuant to a Pledge Agreement to be entered into between the Authority and the Lender, the Authority has pledged and granted a security interest in all o£ its rights, tide, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the Board; and (k) pursuant to a Mortgage, Security Agreement and Fixhxre Financing Statement (the "Mortgage") to be executed by the Borrower in favor of the Authority, the Bonower has secured payment of amounts due under the Loan Agreement and Note by granting to the Authority a mortgage and security interest in the properiy described therein. Pursuant to an Assignment of Mortgage executed by the Authority (the "AssignmenP'), the Authority has assigned the Mortgage to the Lender. A draft of the Mortgage and Assignment haue been submitted to the Board; and (1) pursuant to a Disbursement Agreement (the "Disbursement Agreement") by and between the Borrower, the City, the Authority, the Lender and a title company ("Title"), and Title will disburse the proceeds of the Note to the Bonower to construct the Project; and (m) pursuant to a Subordination Agreement (the "Subordination Agreement") by and between the Authority, the City of Saint Paul (the "City") and the Lender, the City has agreed to subordinate to the Mortgagee the mortgage granted to the City by the Borrower to secure a Star loan; and i2sa99z�i c�_�og' (n) the Note will be a special iimited obligation of the Authority. The Note shall not be payable from or chazged upon any funds other than the revenues pledged to the payment thereof, nor shali the Authority be subject to any liability thereon. No holder of the Note sha11 ever have the right to compel any exercise of the taxing power of the Authority to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the Authority. The Note shall not constitute a debt of the Authoriry within the meaning of any constirixtional or statutory limitation; and (o) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the costs of the Project. 1.2 Authorization and Ratification of Proiect. The Authority has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, Yo provide for the conshuction of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction and acquisition of other municipal facilities, and the Authority hereby ratifies, affirms, and approves all acfions heretofore taken by the Bonower consistent with and in anticipation of such authority. On the basis of information available to the Authority it appeazs, and the Autiaority hereby fmds, that the Project constitutes a multi-family housing development within the meaning of subdivision 5 of Section 462CA2 of the Act; that the availability of the financing under the Act and the willingness of the Authority to fiunish such financing will be a substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of additional multi-family elderly rental housing opportunities to residents of the Authority. SECTION 2. THE NOTE. 2.1 Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form attached as Exhibit A with such appropriate variations, omissions and insertions as are pernnitted or required by this Resolution, and in accardance with the fitz�ther provisions hereof; and the total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $2,000,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall beaz interest at the rate of % per annum. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and sha11 be subject to such other terms and conditions as are set forth therein. 23 Execution. The Note shall be executed on behalf of the Authority by the signatures of its Chair or Commissioner, Secretary or Commissioner and Director, Office of Financial Services and shall be sealed with the seal of the Authority; provided that the seal may be intentionally omitted as provided by law. In case any officer whose signature sha11 appear on 1284992v1 o � _so8' the Note shall cease to be such o� cer before the delivery of the I�iote, such signature shall nevertheless be valid and sufficient for ali purposes, the same as if had remained in office until delivery. In the event of the absence or disability of any Chair or Commissioner, Secretary of Commissioner or D'uector, Office of Financial Services of the Authority as, in the opinion of the City's Attomey, may act in their behalf, shall without further act or authorization of the Board execute and deliverthe Note. 2.4 Delivery of Iroitial Note. Before delivery of the Note there shatl be filed with the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Mortgage; (d) the Assignxnent; (e) the Guaranty; ( fl the Disbursement Agreement; and (g) the Subordination Agreement (2) an opinion of Counsel far the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income t�ation under Section 501(c)(3) of the Code; (S) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Note Proceeds. Upon delivery of the Note to Lender, the Lender shail, on behaif of the Authority, disburse the proceeds of the Note for payment of Project Costs in accordance with the terms of the Disbursement Agreement. 2.6 Reeistration of Transfer. Notwithstanding anything herein to the contrary, although the Note is being issued in the form of a sepazate instrument, the aggregate principal 1284992v1 o � -so�' amount of the Note shall always be registered in the name of only one registered owner. The Authority will cause to be kept at the office of the Boazd allote Register in which, subject to such reasonable regularions as it may prescribe, the Authority shall provide for the registration of transfers of ownership of the Note. The Note shall be uurially registered in the name of the Lender and shall be transferabie upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written insrivment of transfer satisfactory to the Board, duly executed by the Lender or its duly authorized agent. The following form of assigxunent shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said Authority with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the Board shall note the date of registration and the name and address of the new Lender in the Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroved Note. In case any Note issued hereunder sha11 become mutilated ar be destroyed or lost, the Authority shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substiturion for and upon cancellafion of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the Authority in connection therewith, and in the case of a Note destroyed or lost, the filing with the Authority of evidence satisfactory to the Authority with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownershin of Note. The Authority may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the Authority shall not be affected by any nofice to the contrary. 2.9 Limitation on Note Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in 1284992v1 �t"rs�� the Note be given pursuant to any participation agreement, except upon receipt of a written opinion of Bond Counsel that an exemption e�ists for such transfer. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the Authority shall, at the request and expense of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to nuxnber, principal amount, and the amount of the monthly instaliments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 Severabilitv. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particulaz case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or mare phrases, sentences, clauses or pazagraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcrint. The officers of the Authority are directed to fuivish to Bond Counsel certified copies of this Resolution and all documents refened to herein, and �davits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore fitrnished, shall constitute recitals of the Authority as to the correctness of a11 statements contained therein. 33 Authorization to Execute Agreements. The forms of the proposed Loan Agreement, the Pledge Agreement, the Mortgage, the Assignment, the Disbursement Agreement, and the Subordination Agreement are hereby approved in substantially the form heretofore presented to the Board of Commissioners, together with such additional details therein as inay be necessary and appropriate and such modifications thereof, deletions there&om and additions thereto as may be necessary and appropriate and approved by Bond Counsel and the City Attorney prior to the execution of the documents, and the Chair or Commissioner, Secretary of Commissioner, Executive Director and Director, Office of Financial Services is authorized to execute the Loan Agreement, the Pledge Agreement, the Mortgage, the Assignment, the Disbursement Agreement, and the Subordination Agreement in the name of and on behalf of the Authority and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Chair or Commissioner, Secretary or Commissioner, Executive Director, Director, Office of Financial Services of the Authority such other officer of the Authonity as, in the opinion of the City Attorney, may act in their behalf, shall without fiu�ther act or authorization of the Authority do ail things and execute all instnunents and documents required to be done or executed by such absent or disabled officer. The execution of any insUuinent by tlie appropriate Chair or Commissioner, Secretary or 1284992v1 ot-soa' Commissioner, Execufive Director, Office of Financial Sezvices of the Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 3.4 Memorandum of Understaudine. The Memorandum of Understanding by and between the Authority and the Borrower is hereby approved in substantially the form submitted, together with such additions, deletions or revisions as aze approved by the Executive Director of the Authority. The Executive Director is hereby authorized to execute the Memorandum of Understanding on behaif of the Authority. 3.5 Not a Charge Lien or Encumbrance. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the eapenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the Authority or the City for this purpose. The Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Authority or the City, egcept the revenues and proceeds pledged to the payment thereof, nor shall the Authority nor the City, be subject to any liability thereon. The holders of the Note shall never have the right to compel any exercise of the taxing power of the Authority or the City to pay the outstanding principal on the Note or the interest thereon, or to enforce payment thereof against any property of, the Authority or the City. The Note shall recite in substance that the Note, including interest thereon, is payable solely from the revenue and proceeds pledged to the payment thereof. The Note shall not constitute a debt of the AuthoriTy or the City within the meaning of any constitutional or statutory limitation. Adopted by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, this 23` day of May, 2001. 1284992v1 v►-So8' � ...� �,�n IJNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF FtAMSEY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA Rentai Housing Revenue Note, Series 2001 (Iris Park Commons Project) $2,000,000 FOR VALUE RECEIVED the HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAiNT PAIJL, MINNESOTA (the "Authority") hereby promises to pay WELLS FARGO BROKERAGE SERVICES, LLC, in Minneapolis, Minnesota, its successors or registered assigns (the "Lender"), from the source and in the manner hereinafter provided, the principai sum of TWO MILLION DOLLARS ($2,000,000), or so much thereof as remains unpaid from time to rime (the "Principal Balance"), with interest thereon from the date hereof until paid or otherwise dischazged at the rate of _°/u per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 1. The Principal Balance and accrued interest hereon shall be amortized and paid in the semiannual installments set forth on Appendix 1 attached hereto, commencing on December 1, 2001 and on each June 1 and December 1 thereafter through and including June 1, 2016 (the "Fina1 Maturity Date"), at which time any remaining Principal Balance and accrued interest thereon shall be paid in full. Paynnents shall be applied first to interest due on the Principal Balance and thereafter to reduction of the Principal Balance. 2. In any event, the payments hereunder shall be su�cient to pay all principal and interest due, as such principal and interest becomes due, and to pay any premium or service charge, at maturity, upon redemption, or otherwise. Interest shall be computed on the basis of a 360 day yeaz, but chazged for the actual number of days elapsed. 3. Principal and interest and premium or service charge, if any, due hereunder shall be payable at the principal office of the Lender, or at such other place as the Lender may designate in writing. 4. This Note is issued by the Authority to provide funds for a housing project consisfing of the acquisition, construction and equipping of approxunately 20 housing units to be added to an existing elderly housing facility by Iris Pazk Corporation for the Elderiy, a Minnesota nonprofit corporation (the "Bonower") pursuant to a Loan Agreement dated as of May 1, 2001 by and between the Authority and the Borrower (the "Loan AgreemenY'), and this Note is further issued pursuant to and in fu11 compliance with the Constitution and laws of the A-1 1254992v1 o�-Sor State of Minnesota, particulazly Miunesota Statutes, Chapter 462C and pursuant to a resolution of the Boazd of Commissioners duly adopted on May 23, 2001 (the "Resolution"). 5. This Note is secured by a Pledge Agreement of even date herewith between the Authority and the Lender (the "Pledge Agreement") and is fiirther secured by a Mortgage, Security Agreement and Fixture Financing Statement, of even date herewith executed by the Bonower, as mortgagor, in favor of the Authority, as mortgagee (the "Mortgage"). 6. The Authority, for itself, its successors and assigns, hereby waives demand, presenhnent, protest and notice of dishonor; and to the extent pernutted by law, the Lender may ea�tend interest and/or principal of or any service chazge or premium due on this Note, including the Final Maturity Date, or release any part or parts of the property and interest subject to the Mortgage or to any other security document from the same, all without notice to or consent of any pariy liable hereon or thereon and without releasing any such party from such liability and whether or not as a result thereof the interest on the Note is no longer exempt from the federal or state income tax. In no event, however, may the Fina1 Maturity Date of the Note be extended beyond thirty (30) years from the date hereof. 7. This Note may be prepaid in whole, but not in part, at the option of the Bonower, at any time, at a price equal to the "After Payment Termination Values" set forth on Schedule 1 attached hereto. 8. Upon the occurrence of certain Events of Default, as defined in the Loan Agreement and Mortgage, the Lender may declaze the Principal Balance and accrued interest on the Note to be immediately due and payable. 9. In the event of prepayment of this Note, the Lender sha11 apply any such prepayment against the accrued interest on the Principal Balance and finally against the final principal amounts due under the Note. The semiannual payments due under pazagraph 1 hereof, shall continue to be due and payable in full unril the entire Principal Balance and accrued interest due on this Note have been paid regardless of any partial prepayment made hereunder. 10. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the Authority at the office of the Authority, by the Lender in person or by its agent duly authorized in writing, at the Lender's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Board, duly executed by the Lender or its duly authorized agent. Upon such transfer the Secretary of the Authority will note the date of registration and the name and address of the new registered owner in the registrafion blank appearing below. The Authority may deem and ireat the person in whose name the Note is last registered upon the books of the Authority with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on the account, of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Lender or upon his order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the Authority shall not be affected by any notice to the contrary. A-2 1284992v1 o�-sdY 1 L All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Mortgage, the Loan Agreement and the Pledge Agreement aze hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. 12. This Note and interest thereon and any service chazge or premium, if any, due hereunder aze payable solely from the revenues and proceeds derived from the Loan Agreement and the Mortgage and do not constitute a debt of the Authority or the City of Saint Paul (the "City") of the City of Saint Paul (the "City") within the meaning of any constitutional or statutory i'unitation, aze not payable from or a chazge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the Authority or any of its officers, agents or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the Authority or the City to pay this Note or the interest thereon, or to enforce payment thereof against any property of the Authority or the City, and this Note does not constitute a chazge, lien or encumbrance, legal ar equitable, upon any property of the Authority or the City, and the agreement of the Authority to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds fiu•nished for such purpose in accordance with the Loan Agreement, sufficient to pay all costs of such performance or the enforcement thereof. 13. If an Event of Default (as that term is defined in the Mortgage and the Loan Agreement) sha11 occur, then the Lender shall have the right and option to declare, upon ten (10) days written notice, the Principal Balance and accrued interest thereon, immediately due and payable, whereupon the same, plus any premiums or service charges, shall be due and payable, but solely from sums made available under the Loan Agreement and the Mortgage. Failure to exercise such option at any ume shall not constitute a waiver of the right to exercise the same at any subsequent time. 14. The remedies of the Lender, as provided herein and in the Mortgage, the Loan Agreement and the Pledge Agreement, aze not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 15. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and, then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a baz to ar waiver of any right or remedy as to a subsequent event. 16. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participafion agreement, except in accordance with an applicable A-3 1284992v1 o � -So b� exemption from such registration requirements. The Authority acknowledges that the Lender intends to enter into a participation agreement with one or more insritutional investors. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to e�st to happen and to be performed precedent to or in the issuance of this Note do e�st, have happened and have been performed in regular and due form as required by law. IN WITNESS WFIEREOF, the Authority has caused this Note to be duly executed in its name by the manual signatures of the officers set forth below, the corporate seal having been intentionally omitted as permitted by law, and has caused this Note to be dated as of , 2001. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL MINNESOTA :� Chair or Commissioner : Secretary or Commissioner : Director, Office of Financial Services A-4 1284992v1 o�-S�s' PROVISIONS AS TO REGIS"TRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota in the name of the holder last noted below. Date of R�e istration Name and Address Registered Owner Signature of Secre ,2001 Wells Fazgo Brokerage Services, LLC Wells Fazgo Center Sixth St. & Marquette Ave. Minneaoolis, MN 55479-0146 A-5 1284992v1 �..s . . . .� . , � �- . .._. Council File # 0 � � 5�$� Resollltion # Green Sheet # �t�� RESOLUTION Presented By Referred To CITY O�SAiNT PAUL, MINNESOTA a0 COmmittee: Date 1 RESOLUTION RECTTING A PROPOSAL FOR A 2 FINANCING PROGRAM FOR A MLTLTT-FAMILY RENTAL 3 HOU5ING DEVELOPMENT, GIVING FINAL 4 APPROVAL TO THE PROJECT AND TI-� PROGRAM 5 PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, 6 AUTHORIZING THE HOUSING AND REDEVELOPMENT 7 AUTHORITY TO ISSUE A HOUSING REVENLJE NOTE 8 AND AUTHORIZING Tf� PREPARATION OF NECESSARY 9 DOCLJMENTS AND MATERIALS IN CONNECTION 10 WITH THE SAID PRO7ECT AND PROGRAM 11 (IRIS PARK COMMONS 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 14 city the powers confened by the Act, the power to issue revenue bonds to finance a progtam for 15 the purposes of planning, administer'vng, making or purchasing loans with respect to one or more 16 multi-family housing project developments within the boundaries of the city; 17 (b)The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the 18 "I3RA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, 19 Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to 20 462C.081; 21 (c)The Housing and Redevelopment Authority of the City of Saint Paui, Minnesota (the 22 "HRA"), has received a proposal from Episcopal Corporation for the Elderly, a nonprofit 23 corporation organized under the laws of Minnesota (the °Company"), that the I�t1 undertake a 24 program (the "Housing Program") to fmance a Project hereinafter described, through the issuance 25 of a revenue note (the "Note") pursuant to the Act; and 26 (d)The Project to be fmanced by the Note is the acquisition, construction and equipping 27 of appro�mately 20 housing units (the "Project") to be added to an existing elderly housing 28 facility containing 40 units located at the southwest comer of Fauview Avenue and i3niversity 29 Avenue in the City of Saint Paul. 30 (e)The proposal calls for the HIiA to loan the proceeds realized upon the sale of the Note 31 to the Company pursuant to a revenue agreement or agreements wherein the Company wiil be �i`�s��.i�'u;°�SL o� So8' 1 obligated to make payments at the times and in amounts sufficient to provide for the prompt 2 payment of principal of, premium, if any, and interest on the Note and ali costs and expenses of 3 the HRA and the City incident to the issuance and sale of the Note; and 4 (flThe City desires to facilitate the acquisition and construction of an expansion from an 5 existing multifamily housing facility within the City; and the Projectwill assist the CiTy in 6 achieving these objectives; and '7 (g)A public heazing on the Housing Program and the Project was held on this date 8 following duly published notice, at which time all persons that desired to speak were heard. 9 (h)No public official of the City has either a direct or induect fmancial interest in the 10 Project nor will any public official either directly or indirectly benefit fmancially from the 11 Project; 12 (i)The Company has submitted to the HRA a form of Memorandum of Understanding 13 executed by the Company, expressing certain understandings by and between the HRA and the 14 Company pertaining to the Project, and the financing therefor. 15 NOW 'TF�REFORE, BE IT RESOLVED by the City Council of the City of Saint 16 Paul, Minnesota, as follows: 17 1.The City hereby gives preliminary approval to the proposal of the Borrower that 18 the City undertake the Project, described above, and the program of fmancing therefor, pursuant 19 to Minnesota Statutes, Chapter 462C, consisting of the acquisition and construction of an 20 addition to an existing multi-family rental housing facility within the City pursuant to the 21 Company's specifications and to a revenue agreement between the HRA and the Company on 22 such terms and conditions with provisions for revision from time to tnne as necessary so as to 23 produce income and revenues sufficient to pay, when due, the principal and intezest on the Note 24 in the total principal amount of appro�mately $2,000,000 to be issued pursuant to the Act to 25 finance the acquisition and construction of the Project; and said agreement may also provide for 26 the entire interest of the Company therein to be mortgaged to the purchasers of the Note, or a 27 trustee for the holder(s) of the Note; and the City, acting by and through the HRA hereby 28 undertakes preliminarily to issue its revenue bonds in accordance with such terms and conditions; 29 2.On the basis of information available to the Citq it appears, and the City hereby 30 fmds, that the Project constitutes a multi-family housing development within the meaning of 31 subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act 32 and the willingness of the City to furnish such fmancing will be a substantial inducement to the 33 Company to undertake the Project, and that the effect of the Project, if undertaken, will be to 34 encourage the provision of multi-family rental housing opporiunities to residents of the City, and 35 to promote more intensive development and use of land within the City; 36 3.The Project, and the program to finance the Project by the issuance of the Note, 37 is hereby given preluninary approval by the City subject to fmal approval by the HRA, the 38 Company and the purchasers of the Note as to ultimate details of the financing of the Project, 39 4.Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the City 40 hereby authorizes and directs the Housing and Redevelopment Authority of the City of Saint 41 Paul, Minnesota (the "HRA") to issue the Note to fmance the Project and to take all actions 1^' *�`'` i 7' a r E � „'. , „ a � . �ds�s. a'i�� d4 - S08' 1 necessazy or desirable in connection therewith, and no further approval or authotization of the 2 City shall be required; provided that the HRA may, in its discreuoq authorize the Boazd to issue 3 the Note and to implement the program approved hereby, and the City hereby consents thereto; 4 S.The Company has agreed and it is hereby determined that any and ail costs 5 incurred by the City or the HRA in connection with the financing of the Proj ect whether or not 6 the Project is carried to completion and whether or not approved by HRA will be paid by the 7 10 I1 12 13 14 Company: 6.Briggs and Morgan, Professional Association, acting as bond counsel, and such investment bankers as may be selected by Company, with the consent of the HRA, are authorized to assist in the preparation and review of necessary documents relating to the Project and the financing program therefor, to consult with the City Attomey, Company and the purchaser of the Note as to the maturities, interest rates and other terms and provisions of the Note and as to the covenants and other provisions of the necessary documents and submit such docuxnents to the HRA for final approval; 15 7Nothing in this Resolution or the documents prepared pursuant hereto shall 16 authorize the expenditure of any municipal funds on the Project other than the revenues derived 17 from the Project or otherwise granted to the City or the HRA. The Note shall not constitute a 18 charge, lien or encumbrance, legal or equitable, upon any property or funds of the City or the 19 HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the 20 HRA be subject to any liability thereon. The holder of the Note shall never have the right to 21 compel any exercise of the tasing power of the City or HRA to pay the outstanding principal on 22 the Note or the interest thereon, or to enforce payment thereon against any properry of the City or 23 the IIRA. The Note sha11 recite in substance that Note, including the interest thereon, are payable 24 solely from the revenue and proceeds pledged to the payment thereo£ The Note shall not 25 constitute a debt of the City or HRA within the meaning of any constitutionai or statutory 26 27 28 29 30 31 32 33 lunitation. 8.In anticipation of the issuance of the Note 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 Company 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 Note, as the Company considers necessary, including the use of internn, short-term financing, subject to reimbursement from the proceeds of the Note if any when delivered but otherwise without liabiliry on the part of the City or the HRA. � -;�; ,�.t , �, { � € pd �' `�.� s [ 'ad Z ' �'ti f�i ..� fl� -S oY Adopted by the City Council of the City of Saint Paul, Minnesota this 23rd day of May, 2001. Requested by Department of: Adoption Certified by - - • - - �� . ��• �� Plannina & Economic Development a � ; �� Approved by Financial Services n �e�wT^^p� � �nG�(�s Form Approved by Citv Attorney Approved by Mayor for Submission to Council 'C� Adopted by Council: Date �"\a� ��..s a-�O� � a�-sof' DEPARTMENT/OFFICE/COUNCIL DATE INITIATED GREEN SHEET No 111211 PED 5/16/07 CONTACT PERSON & PHONE De ' � CM �uncil Patty Lilledahl 6-6582 �CityAttorney �Ci[yCMak MUST BE ON COUNqL AGENDA BY (DATE) � May 23 � 20�� p[�b'�G � �FnandalServicesDic �Fnancial/ACCtg 4MayororAss'</i. � I (�.�nr� (j �6�\ TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACTION REQUESTED Adoption of a City Council Resolution authorizing the HRA to issue a Housing Revenue Note for the Episcopal Corporetion for the Elderly Project referred to as Iris Park Commons Addition. The Council must also hold a Public Hearing on May 23 for the Project. RECOMMENDATION Approve (A) or Reject (R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: PLANNING COMMISSION 1, Has this person/firm ever worked under a contract for CIB COMMITTEE this department? yes no CIVIL SERVICE COMMISSION 2. Has this person/firm ever been a city employee? A City Council yes no A HRA 3. Does this person/firm possess a skill �oT normally possessed by any current city employee? yes no 4. Is this person/firm a targeted vendor? yes no 5. Explain all yes answers on separate sheet and attach to green sheet. INITIATING PROBLEM ISSUE, OPPORTUNITY (who, what, when, where, why) The new construction of 20 units of independent congregate housing units on the Episcopal Church Home Campus at Fairview and University. ADVANTGESIP APPROVED same as above DISADVANTAGES IF APPROVED None DISADVANTAGES IF NOT APPROVED Lost opportunity of tax-exempt financing for the project. TOTAL AMOUNT OF TRANSACTION S_2,000,000 REVENUE BUDGETED (CIRCLE ONE) YES N¢ FUNDMG SOURCE Tax-exempt Revenue Notes FINANCIAL INFORMATION (EXPLAIN) The HRA would issue up to 52m in 5011c�(3) taz-exempt elderly housing revenue notes which are repaid trom the project only. No liabiliry or obligation to the HRA or City - conduit revenue notes. p�—SoY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE COMMISSIONERS DATE MAY 23, 2001 REGARDING APPROVAL OF UP TO 52,000,000 OF ELDERLY HOUSING REVENUE NOTES FOR THE EPISCOPAL CORPORATION Purpose The purpose of this report is to request that the HRA consider adoption of the attached resolution authorizing staff to issue up to 52,000,000 of 501 (c)S3) tax exempt elderly housing revenue notes which will be repaid from revenues generated from the Iris Park Commons Addition project. There will be no liability or obligation on behalf of the HRA or the City of Saint Paul to repay the notes. Process The City Council will hold a public hearing at 5:30 on May 23 whereby they adopt a Resolution approving the Project and authorizing the HRA to issue a Housing Revenue Note for the Iris Park Commons Addition Project. Background/Proposal Episcopal Corporation for the Elderly, a Minnesota 501 (c)(3) corporation, is applying for tax exempt revenue note financing for the new construction of Iris Park Commons Addition project. EHHS currently owns and operates the two facilities on the main campus; (1) The Episcopal Church Home of Minnesota, a 131 bed nursing home facility, and (2) Iris Park Commons, an existing 40 unit seniors' apartment complex. EHHS plans to expand the existing campus by the new construction of two buildings; Iris Park Commons Addition and Seabury. An EHHS subsidiary is building Seabury, a 50 unit HUD 202 low income project to be occupied by elderly persons whose incomes cannot exceed 50% of the median income. Funding for Seabury has been committed from a combination of federal and Saint Paul STAR program funds. Iris Park Commons Addition will be comprised of 1 1 OI-SoY one bedroom units and 9 two bedroom units for moderate income seniors whose incomes do not exceed 80% of the median income limit. The campus expansion will be located on mostly vacant land on the southwest corner of Fairview and University (map attached). The 20 unit addition to Iris Park Commons would be located on the west end of the property, and Seabury will be constructed on the east end corner. Site improvements include parking, landscaping, brick pier/ metal fence, and substantial improvements to the public sidewalk. Construction of Iris Park is anticipated to begin June 1, 2001 with completion in May, 2002. Based upon an existing waiting list of over 40 potential tenants, the 20 units are anticipated to lease up within 90 days of completion. Financing Structure For Iris Park Addition Project The unrated Notes will be private placed with sophisticated investors in minimum denominations of $100,000. The first mortgage loan will be structured as a fixed rate instrument with a 20 year amortization. The STAR loan (which was approved in November, 2000) will have a 20 year term and an interest rate of 5.5%. This structure allows debt coverage of approximately 1.65 to 1 on the first mortgage and 1.2 to 1 on the second mortgage. Sources of Funds Tax exempt Note S 1,925,000 STAR Loan 700,000 Donation of Land 400,000 Equity 219,000 Total 53,244,000 Uses of Funds Land 400,000 Construction 2,452,000 Architect 1 15,092 Capitalized Interest 163,908 Other Fees 113,000 Total 53,244,OOQ p� —So Y' Project Senefits The new construction of 20 independent congregate housing units will further the following objectives of the Housing Plan: • Encourage the production of housing units to smaffer househoids • Encourage a diversity of building and unit types to meet the diversity of the market. Particular attention should be paid to assessing and meeting the needs of a growing number of older persons who are looking for alternative housing in their own neighborhoods. RECOMMENDATION Request that the HRA Board of Commissioners adopt the attached Resolution approving the sale of up to 82,000,000 in 501 (c1(3) tax exempt Revenue Notes and authorizing the execution of documents relating to the Iris Park Commons Addition Project. Sponsored by Prepared by Attachments Commissioner Benanav Patricia Lilledahl, Downtown Team 266-6582 Resolution Map R:\Shared\Ped\Lilledah\episcopalreport2.wpd b1-ScrY a i P� G_�.G C L lg� ct-Sos� RESOLUTION APPROVING T'I� ISSUANCE AND SALE OF THE $2,000,000 HOUSING DEVELOPMENT REVEN[IE NOTE, SERIES 2001 AND AUTHORrZING TIIE EXECUTION OF DOCLJMENTS RELATING TF3ERET0 (IRIS PARK COMMONS PROJECT') BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authority"), as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findin�s. The Authority hereby fmds, determines and declares as follows: (a) Minnesota Statutes, Chapter 462C (the "Act") confers upon cities, or housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing project developments within the boundaries of the city; and (b) the Authority has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to 462C.081; and (c) the Authority is a political subdivision of the State of Minnesota and is authorized to assist the project herein referred to, and to issue and sell the Note, as hereinafter defined, for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution; and (d) Episcopal Corporation for the Elderly, a Minnesota nonprofit corporatiou (the "Bonower") has proposed that the Authority issue a rental housing revenue note in the aggregate principal amount not to exceed $2,100,000 (the "Note") to fmance the acquisition, construction and equipping of a 20 unit addition (the 'Project") to an existing rental housing development in the City of Saint Paul known as Iris Pazk Commons; and (e) the City Council of the City of Saint Paul, Minnesota (the "City") has, after due publication of a notice of hearing thereon, held on this same date a public hearing on the Project and a housing program (the "Program") required under the Act in connection with the Project; and ( fl the Program has been reviewed by the Metropolitan Council or its staff, and no public official of the Authority or the City has either a direct or 3ndirect financial interest in the issuance of the Note, the Program or the Project nor will any public official either directly or indirectly benefit financially from the Program or Project; and 1284992v1 o �- SoP' (g) neither the full faith and credit of the Authority will be pledged to the Project or for the payment of the principal of, premium, if any, and interest on the Note; and (h) the issuance and sale of the Rental Housing Revenue Note, Series 2001 (Iris Pazk Comxnons Project) (the "Note") by the Authority, pursuant to the Act, is in the best interest of the Authority, and the Authority hereby determines to issue the Note and to seli the Note to Wells Fargo Brokerage Services, LLC (the "I,ender"), as provided herein. The Authority will loan the proceeds of the Note (the "Loan") to the Bonower in order to finance the Pro}ect; and (i) pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the Authority and the Borrower, the Borrower has agreed to repay the Note in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the construction, the maintenance and operarion of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the Authority and the Bonower deem necessary or desirable for the fmancing of the Project. A draft of the Loan Agreement has been submitted to the Board; and (j) pursuant to a Pledge Agreement to be entered into between the Authority and the Lender, the Authority has pledged and granted a security interest in all o£ its rights, tide, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the Board; and (k) pursuant to a Mortgage, Security Agreement and Fixhxre Financing Statement (the "Mortgage") to be executed by the Borrower in favor of the Authority, the Bonower has secured payment of amounts due under the Loan Agreement and Note by granting to the Authority a mortgage and security interest in the properiy described therein. Pursuant to an Assignment of Mortgage executed by the Authority (the "AssignmenP'), the Authority has assigned the Mortgage to the Lender. A draft of the Mortgage and Assignment haue been submitted to the Board; and (1) pursuant to a Disbursement Agreement (the "Disbursement Agreement") by and between the Borrower, the City, the Authority, the Lender and a title company ("Title"), and Title will disburse the proceeds of the Note to the Bonower to construct the Project; and (m) pursuant to a Subordination Agreement (the "Subordination Agreement") by and between the Authority, the City of Saint Paul (the "City") and the Lender, the City has agreed to subordinate to the Mortgagee the mortgage granted to the City by the Borrower to secure a Star loan; and i2sa99z�i c�_�og' (n) the Note will be a special iimited obligation of the Authority. The Note shall not be payable from or chazged upon any funds other than the revenues pledged to the payment thereof, nor shali the Authority be subject to any liability thereon. No holder of the Note sha11 ever have the right to compel any exercise of the taxing power of the Authority to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the Authority. The Note shall not constitute a debt of the Authoriry within the meaning of any constirixtional or statutory limitation; and (o) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the costs of the Project. 1.2 Authorization and Ratification of Proiect. The Authority has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, Yo provide for the conshuction of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction and acquisition of other municipal facilities, and the Authority hereby ratifies, affirms, and approves all acfions heretofore taken by the Bonower consistent with and in anticipation of such authority. On the basis of information available to the Authority it appeazs, and the Autiaority hereby fmds, that the Project constitutes a multi-family housing development within the meaning of subdivision 5 of Section 462CA2 of the Act; that the availability of the financing under the Act and the willingness of the Authority to fiunish such financing will be a substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of additional multi-family elderly rental housing opportunities to residents of the Authority. SECTION 2. THE NOTE. 2.1 Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form attached as Exhibit A with such appropriate variations, omissions and insertions as are pernnitted or required by this Resolution, and in accardance with the fitz�ther provisions hereof; and the total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $2,000,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall beaz interest at the rate of % per annum. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and sha11 be subject to such other terms and conditions as are set forth therein. 23 Execution. The Note shall be executed on behalf of the Authority by the signatures of its Chair or Commissioner, Secretary or Commissioner and Director, Office of Financial Services and shall be sealed with the seal of the Authority; provided that the seal may be intentionally omitted as provided by law. In case any officer whose signature sha11 appear on 1284992v1 o � _so8' the Note shall cease to be such o� cer before the delivery of the I�iote, such signature shall nevertheless be valid and sufficient for ali purposes, the same as if had remained in office until delivery. In the event of the absence or disability of any Chair or Commissioner, Secretary of Commissioner or D'uector, Office of Financial Services of the Authority as, in the opinion of the City's Attomey, may act in their behalf, shall without further act or authorization of the Board execute and deliverthe Note. 2.4 Delivery of Iroitial Note. Before delivery of the Note there shatl be filed with the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Mortgage; (d) the Assignxnent; (e) the Guaranty; ( fl the Disbursement Agreement; and (g) the Subordination Agreement (2) an opinion of Counsel far the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income t�ation under Section 501(c)(3) of the Code; (S) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Note Proceeds. Upon delivery of the Note to Lender, the Lender shail, on behaif of the Authority, disburse the proceeds of the Note for payment of Project Costs in accordance with the terms of the Disbursement Agreement. 2.6 Reeistration of Transfer. Notwithstanding anything herein to the contrary, although the Note is being issued in the form of a sepazate instrument, the aggregate principal 1284992v1 o � -so�' amount of the Note shall always be registered in the name of only one registered owner. The Authority will cause to be kept at the office of the Boazd allote Register in which, subject to such reasonable regularions as it may prescribe, the Authority shall provide for the registration of transfers of ownership of the Note. The Note shall be uurially registered in the name of the Lender and shall be transferabie upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written insrivment of transfer satisfactory to the Board, duly executed by the Lender or its duly authorized agent. The following form of assigxunent shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said Authority with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the Board shall note the date of registration and the name and address of the new Lender in the Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroved Note. In case any Note issued hereunder sha11 become mutilated ar be destroyed or lost, the Authority shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substiturion for and upon cancellafion of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the Authority in connection therewith, and in the case of a Note destroyed or lost, the filing with the Authority of evidence satisfactory to the Authority with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownershin of Note. The Authority may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the Authority shall not be affected by any nofice to the contrary. 2.9 Limitation on Note Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in 1284992v1 �t"rs�� the Note be given pursuant to any participation agreement, except upon receipt of a written opinion of Bond Counsel that an exemption e�ists for such transfer. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the Authority shall, at the request and expense of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to nuxnber, principal amount, and the amount of the monthly instaliments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 Severabilitv. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particulaz case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or mare phrases, sentences, clauses or pazagraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcrint. The officers of the Authority are directed to fuivish to Bond Counsel certified copies of this Resolution and all documents refened to herein, and �davits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore fitrnished, shall constitute recitals of the Authority as to the correctness of a11 statements contained therein. 33 Authorization to Execute Agreements. The forms of the proposed Loan Agreement, the Pledge Agreement, the Mortgage, the Assignment, the Disbursement Agreement, and the Subordination Agreement are hereby approved in substantially the form heretofore presented to the Board of Commissioners, together with such additional details therein as inay be necessary and appropriate and such modifications thereof, deletions there&om and additions thereto as may be necessary and appropriate and approved by Bond Counsel and the City Attorney prior to the execution of the documents, and the Chair or Commissioner, Secretary of Commissioner, Executive Director and Director, Office of Financial Services is authorized to execute the Loan Agreement, the Pledge Agreement, the Mortgage, the Assignment, the Disbursement Agreement, and the Subordination Agreement in the name of and on behalf of the Authority and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Chair or Commissioner, Secretary or Commissioner, Executive Director, Director, Office of Financial Services of the Authority such other officer of the Authonity as, in the opinion of the City Attorney, may act in their behalf, shall without fiu�ther act or authorization of the Authority do ail things and execute all instnunents and documents required to be done or executed by such absent or disabled officer. The execution of any insUuinent by tlie appropriate Chair or Commissioner, Secretary or 1284992v1 ot-soa' Commissioner, Execufive Director, Office of Financial Sezvices of the Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 3.4 Memorandum of Understaudine. The Memorandum of Understanding by and between the Authority and the Borrower is hereby approved in substantially the form submitted, together with such additions, deletions or revisions as aze approved by the Executive Director of the Authority. The Executive Director is hereby authorized to execute the Memorandum of Understanding on behaif of the Authority. 3.5 Not a Charge Lien or Encumbrance. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the eapenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the Authority or the City for this purpose. The Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Authority or the City, egcept the revenues and proceeds pledged to the payment thereof, nor shall the Authority nor the City, be subject to any liability thereon. The holders of the Note shall never have the right to compel any exercise of the taxing power of the Authority or the City to pay the outstanding principal on the Note or the interest thereon, or to enforce payment thereof against any property of, the Authority or the City. The Note shall recite in substance that the Note, including interest thereon, is payable solely from the revenue and proceeds pledged to the payment thereof. The Note shall not constitute a debt of the AuthoriTy or the City within the meaning of any constitutional or statutory limitation. Adopted by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, this 23` day of May, 2001. 1284992v1 v►-So8' � ...� �,�n IJNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF FtAMSEY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA Rentai Housing Revenue Note, Series 2001 (Iris Park Commons Project) $2,000,000 FOR VALUE RECEIVED the HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAiNT PAIJL, MINNESOTA (the "Authority") hereby promises to pay WELLS FARGO BROKERAGE SERVICES, LLC, in Minneapolis, Minnesota, its successors or registered assigns (the "Lender"), from the source and in the manner hereinafter provided, the principai sum of TWO MILLION DOLLARS ($2,000,000), or so much thereof as remains unpaid from time to rime (the "Principal Balance"), with interest thereon from the date hereof until paid or otherwise dischazged at the rate of _°/u per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 1. The Principal Balance and accrued interest hereon shall be amortized and paid in the semiannual installments set forth on Appendix 1 attached hereto, commencing on December 1, 2001 and on each June 1 and December 1 thereafter through and including June 1, 2016 (the "Fina1 Maturity Date"), at which time any remaining Principal Balance and accrued interest thereon shall be paid in full. Paynnents shall be applied first to interest due on the Principal Balance and thereafter to reduction of the Principal Balance. 2. In any event, the payments hereunder shall be su�cient to pay all principal and interest due, as such principal and interest becomes due, and to pay any premium or service charge, at maturity, upon redemption, or otherwise. Interest shall be computed on the basis of a 360 day yeaz, but chazged for the actual number of days elapsed. 3. Principal and interest and premium or service charge, if any, due hereunder shall be payable at the principal office of the Lender, or at such other place as the Lender may designate in writing. 4. This Note is issued by the Authority to provide funds for a housing project consisfing of the acquisition, construction and equipping of approxunately 20 housing units to be added to an existing elderly housing facility by Iris Pazk Corporation for the Elderiy, a Minnesota nonprofit corporation (the "Bonower") pursuant to a Loan Agreement dated as of May 1, 2001 by and between the Authority and the Borrower (the "Loan AgreemenY'), and this Note is further issued pursuant to and in fu11 compliance with the Constitution and laws of the A-1 1254992v1 o�-Sor State of Minnesota, particulazly Miunesota Statutes, Chapter 462C and pursuant to a resolution of the Boazd of Commissioners duly adopted on May 23, 2001 (the "Resolution"). 5. This Note is secured by a Pledge Agreement of even date herewith between the Authority and the Lender (the "Pledge Agreement") and is fiirther secured by a Mortgage, Security Agreement and Fixture Financing Statement, of even date herewith executed by the Bonower, as mortgagor, in favor of the Authority, as mortgagee (the "Mortgage"). 6. The Authority, for itself, its successors and assigns, hereby waives demand, presenhnent, protest and notice of dishonor; and to the extent pernutted by law, the Lender may ea�tend interest and/or principal of or any service chazge or premium due on this Note, including the Final Maturity Date, or release any part or parts of the property and interest subject to the Mortgage or to any other security document from the same, all without notice to or consent of any pariy liable hereon or thereon and without releasing any such party from such liability and whether or not as a result thereof the interest on the Note is no longer exempt from the federal or state income tax. In no event, however, may the Fina1 Maturity Date of the Note be extended beyond thirty (30) years from the date hereof. 7. This Note may be prepaid in whole, but not in part, at the option of the Bonower, at any time, at a price equal to the "After Payment Termination Values" set forth on Schedule 1 attached hereto. 8. Upon the occurrence of certain Events of Default, as defined in the Loan Agreement and Mortgage, the Lender may declaze the Principal Balance and accrued interest on the Note to be immediately due and payable. 9. In the event of prepayment of this Note, the Lender sha11 apply any such prepayment against the accrued interest on the Principal Balance and finally against the final principal amounts due under the Note. The semiannual payments due under pazagraph 1 hereof, shall continue to be due and payable in full unril the entire Principal Balance and accrued interest due on this Note have been paid regardless of any partial prepayment made hereunder. 10. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the Authority at the office of the Authority, by the Lender in person or by its agent duly authorized in writing, at the Lender's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Board, duly executed by the Lender or its duly authorized agent. Upon such transfer the Secretary of the Authority will note the date of registration and the name and address of the new registered owner in the registrafion blank appearing below. The Authority may deem and ireat the person in whose name the Note is last registered upon the books of the Authority with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on the account, of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Lender or upon his order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the Authority shall not be affected by any notice to the contrary. A-2 1284992v1 o�-sdY 1 L All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Mortgage, the Loan Agreement and the Pledge Agreement aze hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. 12. This Note and interest thereon and any service chazge or premium, if any, due hereunder aze payable solely from the revenues and proceeds derived from the Loan Agreement and the Mortgage and do not constitute a debt of the Authority or the City of Saint Paul (the "City") of the City of Saint Paul (the "City") within the meaning of any constitutional or statutory i'unitation, aze not payable from or a chazge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the Authority or any of its officers, agents or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the Authority or the City to pay this Note or the interest thereon, or to enforce payment thereof against any property of the Authority or the City, and this Note does not constitute a chazge, lien or encumbrance, legal ar equitable, upon any property of the Authority or the City, and the agreement of the Authority to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds fiu•nished for such purpose in accordance with the Loan Agreement, sufficient to pay all costs of such performance or the enforcement thereof. 13. If an Event of Default (as that term is defined in the Mortgage and the Loan Agreement) sha11 occur, then the Lender shall have the right and option to declare, upon ten (10) days written notice, the Principal Balance and accrued interest thereon, immediately due and payable, whereupon the same, plus any premiums or service charges, shall be due and payable, but solely from sums made available under the Loan Agreement and the Mortgage. Failure to exercise such option at any ume shall not constitute a waiver of the right to exercise the same at any subsequent time. 14. The remedies of the Lender, as provided herein and in the Mortgage, the Loan Agreement and the Pledge Agreement, aze not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. 15. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender and, then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a baz to ar waiver of any right or remedy as to a subsequent event. 16. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participafion agreement, except in accordance with an applicable A-3 1284992v1 o � -So b� exemption from such registration requirements. The Authority acknowledges that the Lender intends to enter into a participation agreement with one or more insritutional investors. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to e�st to happen and to be performed precedent to or in the issuance of this Note do e�st, have happened and have been performed in regular and due form as required by law. IN WITNESS WFIEREOF, the Authority has caused this Note to be duly executed in its name by the manual signatures of the officers set forth below, the corporate seal having been intentionally omitted as permitted by law, and has caused this Note to be dated as of , 2001. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL MINNESOTA :� Chair or Commissioner : Secretary or Commissioner : Director, Office of Financial Services A-4 1284992v1 o�-S�s' PROVISIONS AS TO REGIS"TRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota in the name of the holder last noted below. Date of R�e istration Name and Address Registered Owner Signature of Secre ,2001 Wells Fazgo Brokerage Services, LLC Wells Fazgo Center Sixth St. & Marquette Ave. Minneaoolis, MN 55479-0146 A-5 1284992v1