06-117Council File #
Green Sheet #
RESOLUTION
CITY
Presented By
Referred To
�
PAUL, MINNESOTA
��
Committee: Date
RESOLUTION RECTI'ING A PROPOSAL FOR A
FINANCING PROGRAM FOR A MULTI-FAMII.Y RENTAL
HOUSING DEVELOPMENT, GNING PRELIMINARY
APPROVAL TO THE PROGRAM PURSUANT TO
MINNESOTA STATUTES, CHAPTER 462C,
AUTHORIZING THE HOUSING r1ND REDEVELOPNIENT
AUTHORITY TO ISSUE HOUSING REVENUE REF[JNDING BONDS
AND AUTHORTZING THE PREPARATION OF NECESSARY
DOCLTMENTS AND MATERIALS IN CONNECTION
WITH THE SAID PROJECT AND PROGRAM
(GATEWAY RENTAL PROJECT) District 15
1 (a) Minnesota SCatutes, Chapter 462C (the "Act) confers upon cities, or housing and
2 redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a
3 city the powers conferred by the Act, the power to issue revenue bonds to finance a program far
4 the purposes of planning, administering, making or purchasing loans with respect to one or more
5 multi-family housing project developments within the boundaries of the city;
6 (b) The Housing and Redevelopment Authority of the City of Saint Paui, Minnesota
7 (the "HIZA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul,
8 Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to
0
10
11
12
13
14
15
462C.081;
{c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota
(the "HRA"), has received a proposal from Gateway Apartments Limited Partnership, a
Minnesota limited partnership (the "Borrower"), that the HRA undertake a program (the
"Housing Program") to refinance a Project hereinafter described, through the issuance of housing
revenue refunding bonds in the approximate principal amount of $5,000,000 pursuant to
Minnesota Statutes, Section 469.178, subd. 4(the "Bonds");
16 (d) The Project to be refinanced by the Bonds is a portion of the costs of the
17 acquisition, construction and equipping of a multifamily rental housing project consisting of 313
18 units ]ocated south of West Seventh Street between Munster and Norfolk Avenues in the City of
19 Saint Paul (the 'Project");
20 (e) The proposal calls for the HRA to loan the proceeds realized upon the sale of the
21 Bonds to the Borrower pursuant to a loan agreement wherein the Borrower will be obligated to
22 repay the Bonds and pay all costs and expenses of the HRA and the City incident to the issuance
23 and sale of the Bonds;
Ob-Il�l
3029293
1557183v2
. . . . p (, - I 1 �1
24 ( fl A public hearing on the Hous3ng Program and the Project was held on this date
25 following duly published notice, at which time all persons that desired to speak were heard; and
26 (g} No public official of the City has either a direct or indirect financial intezest in the
27 Project nor will any public official either directly or indirectly benefit financially from the
28 Project.
29 NOW THEREFORE, BE TT RESOLVED by the City Council of the City of Saint
30 Paul, Minnesota, as follows:
31 1. The City hereby gives preliminary approval to the proposal of the
32 Borrower that the City and HRA undertake the refinancing of the Project, described above,
33 pursuant to Minnesota Statutes, Chapter 462C.
34 3. On the basis of information available to the City it appears, and the City
35 hereby finds, that the Project constitutes a multifamily housing development within the meaning
36 of subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the
37 Act and the willingness of the City to furnish such financing will be a substantial benefit to the
38 Project, and that the effect of the Project is to encourage the provision of multifamily rental
39 housing opportunities to residents of the City, and to promote more intensive development and
40 use of land within the City.
41 3. The Project and the Housing Program to refinance the Project by the
42 issuance of the Bonds, is hereby given approval by the City subject to final approval by the
43 HRA, the Bonower and the purchasers of the Bonds as to ultimate details of the refinancing of
44 the Project.
45 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the
46 City hereby authorizes and,directs the Aousing and Redevelopment Authority of the City of
47 Saint Paul, Minnesota (the "HRA") to issue the Bonds to refinance the Project and to take all
48 actions necessary or desirable in connection therewith, and no further approval or authorization
49 of the City shall be required;
50 5. The Borrower has agreed and it is hereby deternuned that any and a11 costs
51 incurred by the City or the HRA in connection with the financing of the Project whether or not
52 the refinancing of the Project is carried to completion and whether or not approved by HRA will
53 be paid by the Bonower:
54 6. Briggs and Morgan, Professional Association, acting as bond counsel, and
55 such investment bankers as may be selected by Bonower, with the consent of the HRA, are
56 authorized to assist in the preparation and review of necessary documents relaUng to refinancing
57 of the Project, to consult with the City Attomey, Borrower and the purchaser of the Bonds as to
58 the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants
59 and other provisions of the necessary documents and submit such documents to the HRA for
60 final approval;
61
1557183v2 '
62
63
64
65
66
67
68
69
70
71
72
73
:/
74
75 2006,
76
Adopted by the City Council of the City of Saint Paul, Minnesota this lst day of February,
Director of Financial Services
7. Nothing in this Resolution or the documents prepared pursuant hereto
shall authorize the expenditure of any municipal funds on the Project other than the revenues
derived from the Project or otherwise granted to the City or the HRA. The Bonds shall not
constitute a charge, lien or encumbrance, legaT or equitable, upon any property or funds of the
City or the fII2A except the revenue and proceeds pledged to the payment thereof, nor shall the
City or the f7RA be subject to any liability thereon. The holders of the Bonds shall never have
the right to compel any exercise of the ta�cing power of the City or I3E2A to pay the outstanding
principal on the Bonds or the interest thereon, or to enforce payment thereon against any
property of the City or the HRA. The Bonds shall recite in substance that Bonds, including the
interest thereon, aze payable solely from the revenue and proceeds pledged to the payment
hereof. The Bonds shall not constitute a debt of the City or HRA within ihe meaning of any
constitutional or statutory limitation.
Benanav
BOShOm
HartiS
Thune
Adopted by Council: Date
✓
db-1��
Requ s ed by Depaztmem of:
�
BY� � `— ,\ )
✓
� Form Ap ov d� "y oi ey �
oZ By: _� �(� i
�r�
Adoption Certlfied by Council Secretary U
By:
Approved y Date � (��J
By:
Form
E�
. � , ,_. . . ,
I
'� �•. � � � � ��
�„Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
PE - P�mo�og & EconomicDevelopmeat
ConfactPerson & Phone:
J Trulsen/P Lilledahi � b(. 5$ �,�
26G-6694
Must Be on Council Agenda by (D�
01-FEB-06 (
P[. L.I. G hPSY
ContractType:
RE-RESOLUTION
i • �.
� '
Assign
Number
For
Routing
Order
Green Sheet NO: 3029293
0 lannin & Econ mic Dev o
7 lan in & Ec omic Develo e ar[m nt Direc or �
2 i Attorne
3 a r' w a isfant
4 n cil
5 er Cle k
Total # of Signature Pages ` (Clip NI Locations for Signature)
Signatures on Resolution for February 1, 2006 City Council Public Hearing Agenda Item
wanons: Npprrne (q) or rte�ect
Planning Commission
CB Committee
Ciwl Service Commission
1. Has this persoNfirm e�er worked under a contract for this depadment?
Yes No
2. Has this persoNfirm e�er been a city employee?
Yes No
3. Does this person/firtn possess a skill not nortnally possessed by any
current city employee?
Yes No
Explain all yes answers o� separate sheet and attach W green sheet
InBiating Pro6lem, lssues, Opportunity (Who, What, When, Where, Why):
Request foc Resolution to be added.�to the Feb. 1 2006 City Council.Public Hearing Agenda: City Council's Pzeliminary Approvai for
proposal for fmancing program for the Gat'eway 313 Unit Apartment Project and authoriznig the HRA to issue Housing Revenuc
Refunding Bond'. -
Pdvantaaes If P,pproved:
Increases soundness of fmancial status
Disadvanta57es IfApproved;
None
D1saAvanpoes If NotAaproved:
High interest costs continue
� ocai amoun[ ot
Transaction: ���00,0�0 CosNRevenueBudgeted:
Funding Souroe: ActiviN Number: � � � ---� � �'o � ��
Financiallnformation: ,.i,7�$�c ��h iR..� r- �� L(�{� �� ��7 f.L(+Zf2�1l�L"�.
(Explain) ,
1 D� � r�a-- y Gd�'�' ��' }� w.� �'�'r 6vQ --
. _ _ �L''Y k.� � `�^�'"' �i �81h�_� �� �'`'y"aai? :_^ , , .<. ,
�3��a � t� "� �:""
����
Questions:
January 5, 2006 2:43 PM Page 1
DEPARTMENT OF PLANNING &
ECONOMIC DEVELOPMENT
To'ry Scherder, ]ntenm Dir¢ctor
CI I'Y OF SAINT PAUL
Christopker B. Coleman, Mayor
February 1, 2006
Memo to: City Council Members
25 West Fourth Street
Saint Paul, MN 55102
0���
Telephone: 651-266-6565
Facsimile: 657 -228-3?6!
From: Tony Sr�h�, Department of Planning and Economic Development Interim
Director ��
REPORT TO THE CITY COUNCIL REGARDING:
A Resolution reciting a proposal for a financing program for a multi-family rental housing
Development, giving Preliminary Approval to fl�e Program pursuant to Minnesota Statutes,
Chapter 462C, Authorizing the Housing and Redevelopment Authority to issue Housing
Revenue Refunding Bonds and authorizing the preparation of necessary documents and materials
in connecrion with the said project and program (Gateway Rental Project)
PUBLIC HEARING District 15
PURPOSE
The Housing and Redevelopment Authority ofi the City ofi Saint Paul, Minnesota has received a
proposal from Gateway Apartmenis Limited Partnership, a Minnesota limited partnership that
the HRA undertake a program (the "Housing Program") to refund the Shepard Davern
(Gateway) Project through the issuance ot tax increment revenue bonds in the approximate
principal amount of $5,000,000.
The proceeds from the original bonds were used to fund a portion of the public redevelopment
costs of the acquisition, construction and equipping of a multifamily rental housing project
consisting of approximately 313 units located south of West Seventh Street between Munster
and Norfolk Avenues in the City of Saint Paul.
The proposal calls for the HRA to grant the proceeds realized upon the sale of the Bonds to the
Borrower wherein the Borrower will pay off the original bonds. The Borrower will also be
obligated to pay all costs and expenses of the HRA and the City incident to the issuance and
sale of the Bonds;
PUBLIC PURPOSE
The following public purposes will be met:
Refunding will reduce the interest costs on a project that provides housing opportunities
to persons with a variety of incomes.
o�-i�� .
2. Project meets objectives of The Housing Plan, adopted as part of the City's
Comprehensive Plan, Section 6.0, Strategy 3: Ensure Availability of Affordable Housing.
AFFORDABILITY:
The housing project meets the affordability goals of the City Council. Ten percent of the units
are affordable to persons with incomes at 30% of area median income. Fifteen percent of the
units are affordable to person with incomes at 50% of area median income.
FINANCiNG
The Borrower is requesting that the Housing and Redevelopment Authority of the City of Saint
Paul grant additional tax-exempt volume cap allocation in the amount of $2,211,000. The project
was initially financed in part by the issuance of $2,211,0�0 in Taxabfe Tax lncrement Revenue
Bonds, Series 2003D. The Series 2003D Bonds were issued as taxable bonds because neither
the City of Saint Paul nor the State of Minnesota had sufficient tax-exempt volume cap to
allocate to the project in 2003. The additional volume cap would be used to refinance the Series
2003D Bonds. The project would benefit by the allocation of volume cap. The refinancing bonds
could be issued as tax-exempt and therefore at lower interest rates. Tax Increment Revenue
Bonds Series 2003C Tax Exempt in the amount of $2,609,000 would be refiunded. The total
amount of the refunding will be less than $5,000,000. It is anticipated that the refunding bonds
will be secured by a direct pay letter of credit issued by LaSalle Bank. The refunding bonds will
be issued as variable rate demand bonds ("VRDBs").
BOND AUTHORITY; ALLOCATION PROCESS
The proposed bonds will count as part of the City's entitlement bond allocation. However, there
is sufficient ailocation to fund this project along with other multi-family projects.
Staff will present to the HRA a report detailing the financing of the Project and request the HRA
to consider adoption of a resolution to issue Tax Increment Revenue bonds to finance the
refunding ofi the projecL
With respect to multifamily housing bonds, Section 72.04 of Chapter 72 of the City's
Administrative Code provides that the HRA be designated to exercise on behalf of the City the
powers conferred by Minnesota Statutes 462C (housing programs and revenue bonds) but only
unless directed and authorized to do so by resolution adopted by the City Council. Thus the
reason, this proposal is initiated befiore the City Councii rather than the HRA.
Attachments: City Council Resolution
Prepared by: Joan Trulsen, PED Project Manager- West Team, 266-6694