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98-1057ORIGINAL Council File # `18 - (os Resolution # Green Sheet # �' � ' 1 S RESOLUTION OF SAINT PAUL, MINNESOTA i Presented By Referred To Committee: Date '� RESOLIITION RECITING A PROPOSAL FOR FINANCING A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT PROJECT AND AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO EXERCISE THE POWERS GRANTED IN MINNESOTA STATUTES, SECTIONS 462C.01 TO 462C.08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 WHEREAS: A. Minnesota Statutes, Chapter 462C (the "Act"), confers upon cities, or housing and redevelopment 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 multifamily housing developments within the boundaries of the city; and B. The Housing and Redevelopment Authority of the CiYy of Saint Paul, Minnesota (the "HRA"), has received frora the Governmental Educational Assistance Corporation, (the "Owner"), a proposal that the HRA undertake to finance a qualified residential rental housing development as hereinafter described, through the issuance of t�-exempt or taxable 501(c)(3) revenue bonds in one or more seraes (collectively, the "Bonds") pursuant to the Act for the purpose of loaning the proceeds thereof to the Owner, or to a limited liability company in which the Owner is the sole member, to finance the acquisition by the Owner of a 103-unit rental apartment development and facilities functionally related and subordinated thereto (the "ProjecP') located at 180 Wayzata Street, in the City, known as the Lewis Park Aparhnents pursuant to the "housing program" described below; and 17 C. Prior to publication of a notice of public hearing for the public hearing described in (F) 18 below, the City prepared a"housing program" (the "Program") under the Act and submitted the 19 Program for review to the Metropolitan Council; 20 D. The Owner's proposal calls for the HRA to loan the proceeds realized upon the sale of 21 the Bonds to the Owner pursuant to a loan agreement or agreements wherein the Owner will be 22 obligated to make payments at the times and in the amounts sufficient to provide for the prompt 23 payment of principal of, premium, if any, and interest on the Bonds and all costs and expenses of the 24 HRA and the City incident to the issuance and sale of the Bonds; and 25 E. The City desires to encourage the continued operation of housing facilities designed for 26 occupancy by persons of low and moderate income; and ` Lewis Park Apartmenu Project 1998 1738917.01 ORIG(NAL 1 2 3 qg - ►os � F. A public hearing on the Program and the proposed financing of the Project was held on this date following duly published notice, at which time all persons that desired to speak were heard. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Saint Paul, as follows: 4 1. The City hereby approves the Program and gives preliminary approvai to the issuance of 5 the Bonds for the fmancing of the Project and, pursuant to Section 72 of the Saint Paul 6 Administrative Code, hereby authorizes and directs the HRA to exercise the powers granted in 7 Minnesota Statutes 462C.01 to 462C.08. 8 9 10 11 12 13 14 15 2. On the basis of information available to the City Council, it appears, and the City Council hereby finds, that the project constitutes a multifamily rental housing development and furthers the purposes of the Act; that the Project is reserved for rental in part by persons of low and moderate income; that the availability of financing under the Act and the willingness of the HRA to furnish such financing will be a substantial inducement to the Owner to continue to operate the Project as low-income housing, and that the effect of the financing of the Project, if undertaken, will be to assure that adequate housing wili continue to be available to residents of the City at a reasonable cost. 16 3. The Executive Director of the HRA, is hereby authorized to execute a Memorandum of 17 Understanding with respect to the financing of the Project in substantially the form on file with the 18 HRA. 19 20 21 22 23 24 25 26 4. Leonard, Street and Deinard Professional Association, is hereby retained as Bond Counsel for the issuance of the Bonds. Miller & Schroeder Financial, Inc. ("Miller & Schroeder") is hereby retained as the underwriter for this transaction. Leonard, Street and Deinard and Miller & Schroeder are hereby authorized to assist in the preparation and review of necessary documents relating to the issuance of the Bonds, to consult with the City Attorney, Owner and purchasers of the Bonds as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval. 27 5. The Owner has agreed and it is hereby determined that any and all costs incuned by the 28 City or the HRA in connection with the financing of the Project, whether or not the proposed 29 financing of the Project is carried to completion and whether or not the issuance of Bonds is 30 approved by the HRA, will be paid by the Owner. 31 6. Nothing in this resolution shall be construed to require the City or the I-IRA to approve 32 any element of the Project or the issuance of the Bonds, nor shali this resolution be construed as 33 vesting in the Owner any cause of action against the City or the IIRA arising from any failure or 34 refusal by the CiTy or the HRA to approve the issuance of the Bonds. 35 36 37 38 39 40 7. Nothing in this resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the financing of the Project ar the payment of the Bonds other than the revenues derived from the Project or otherwise granted to the City or the HRA for this purpose. The Bonds shall not constitute a charge, ]ien or encumbrance, legal or equitable, upon any property or funds of the City or the HRA except the revenue and proceeds pledged to the payment tl�ereof, nor shall the City or the HRA be subject to any direct liability thereon. The holder of the 173891'7.01 Lewis Pazk Apartments Project 1998 ORIGIf�AL °lg -losh Bonds shall never have the right to compel any exercise of the taxing power of the City or the HRA 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 the Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereo£ The Bonds shall not constitute an indebtedness of the City or the HRA within the meaning of any constitutional or statutory provision. Reguested by Department of: Plannin & E mic Develo>ment gy; � : v �� 1 i Form Approved by City orney By: Approved by M or.for Sub i.sion Council Adoption Certified by Council Secretary By: a - m-� By: Approved by Mayor: a e �` ` g � Lewis Park Apartrnents 'ect 1998 Y738917.01 Adopted by Council: Date L]q.c__ �., �\\0 q8-losq . ��: PROGRAM FOR A MLTLTIFAMII,Y HOUSING DEVELOPMENT Pursuant to Mimiesota Statutes, Chapter 462C (the "Act") and applicable provisions of the Saint Paul Admiuistrative Code, the Housing and Redevelopment Authority of the Ciry of Saint Paul, Mimiesota (the "Issuer") is authorized to develop and administer programs to finance the acquisition of multifamily housing developments under the circumstatices and within the lnnitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the Issuer. The Issuer has received a proposal that it approve a program providing for the acquisition of an interest in an existing 103-unit rental apartment development and facilities funcfionally related and subordinate thereto (the "Project") located at 180 Wayzata Street in the City of St. Paul (the "City"), by Governmental and Educational Assistance Corporation, a 501(c)(3) not-for-profit corporation or a limited liability company in which it will be the sole member (the "Owner"). Such acquisition is to be funded through the issuance of up to $6,650,000 in tax-exempt or tasable 501(c)(3) revenue bonds to be issued by the Issuer (the `Bonds"). The Owner will own an interest in and will operate the Project as a multifamily residential rental project. The Project will be occupied by individuals or families whose incomes at the time of inifial occupancy will meet the requirements of Sections 142(d) and 42(g) of the Code. It is estimated that rents for the Housing Units will range from $697 per month to $826 per month. The Owner's interest in the Project will be acquired in accordance with Subdivision 1( fl of Section 462C.05 of the Act. Section A. Definitions. The following terms used in this Program shall have the following meanings, respectively: "AcP' shall mean Minnesota Statutes, Secrion 462C.01, et seq., as currendy in effect and as the same may be from time to time amended. `Bonds" shall mean the revenue bonds to be issued by the Issuer to fmance the Program. "Housing UniY' shall mean any one of the apartment units, each located in the Project, occupied by one person or family, and containing complete living facilities. "Issuer" shall mean the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota. "Land" shall mean the real properiy upon which the Project is situated. Lewis Pazk Apartrnents Project 1998 1671391 q g- �o5r1 "Owner" shall mean Governmental and Educational Assistance Corpararion, or a limited liability entity of wl�ich Govemmental and Fducational Assistance Corporation is the sole member, or its successors or assigns. "Progaui" shall mean this program for the financing of the Project pursuant to the Act. "ProjecY' shall mean the residential rental housing development consisting of appro�cimately 103 Housing Units, consisting of 68 one-bedroom and 35 two-bedroom iini an interest in which will be acquired by the Owner. Section B. Pro¢ram For Financine the Project. It is proposed that the Issuer establish this Program to provide financing for acquisition of an interest in the Project at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the Issuer, the initial purchaser of the Bonds and the Owner. The Issuer expects to issue the Bonds as soon as the terms of the Bonds haue been agreed upon by the Issuer, the Owner and the initial purchaser of the Bonds. The proceeds of the Bonds will be loaned to the Owner to finance the acquisition of an interest in the Project, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a hustee will be appointed by the Issner to monitar the payment of principal and interest on the Bonds. It is anticipated that the Bonds will have a mahxrity of approximately twenty-two (22) yeazs and will bear interest at the rate set to the market at the time of sale (except that the Bonds may initially be issued at a variable rate}. The Issuer will hire no additional staff for the administration of the Program. Insofaz as the Issuer will be contracting with undenvriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Project, no administrative costs will be paid from the Issuer's budget with respect to this Program. The Bonds will not be general obiigafion bonds of the Issuer, but aze to be paid only from properties pledged to the payment thereof, which may include addiflonal security such as additional wllateral, insurance or a letter of credit. Section C. Loca1 Contriburions To The Pro�. The Owner has not requested any local contributions to the Program with respect to the Project. Section D. Standards and Requirements Relating to the Financing of the Project Pursuant to the Proeram. The following standazds and requirements shall apply with respect to the operation of the Proj ect by the Owner pursuant to this Program: (1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition of an interest in the Project and to The funding of appropriate reserves. The proceeds will be made available to the Owner pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Owner to the Issuer regarding the use of proceeds and the character and use of the Project. 2 Lewis Pazk Apaztrnents Project 1998 1671391 qg. �os� (2) The Owner, and any subsequent owner of the Project, will not azbitrarily reject an application from a proposed tenant because of race, color, creed, religion, nafional origin, sex, marital status, or status with regard to pubiic assistance or disability. (3) At least foriy percent (40%) of the Housing Units will be held for occupancy by families or individuals with gross income not in excess of sixty percent (60%) of inedian family income, adjusted for family size, in order to comply with Federal ta�c law requirements for the use of tas-exempt financing. This set aside will also satisfy the low- income occupancy requirements of Secrion 462C.05, Subdivision 2 of the Act. (4) The Project is subject to a Secfion 8 HAP Contract which the Owner will be required to maintain during the term of the Bonds. Units in the Project will be occupied by persons and families who meet the Secrion 8 income requirements. Subsection E. Evidence of Comoliance. The Issuer may require from the Owner at or before the issuance of the Bonds, evidence satisfactory to the Issuer of the ability and intention of the Owner of compliance with the standards and requirements for the making of the financing established by the Issuer, as set forth herein; and in connection therewith, the Issuer or its representatives may inspect the relevant books and records of the Owner in arder to confirm such ability, intenrion and compliance. In addition, the Issuer may periodically require cerkification from either the Owner or such other person deemed necessary concerning compliance with various aspects of this Program. Subsection F. Issuance of Bonds. To finance the Program authorized by this Section the Issuer may by resolufion authorize, issue and sell its revenue bonds in an aggregate principal amount of approximately $6,650,000 tax-exempt or taacable 501(c)(3) revenue bonds. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primazily from the revenues of the Program authorized by this Section. The costs of the Project are presently expected to be as follows: Acquisition Reserves Costs of Issuance �� $5,800,000 550,000 300,000 $6,650,000 The costs of the Project may change beriveen the date of preparation of this program and the date of issuance of the Bonds. The Bonds aze expected to be issued in 1998. Subsection G. Severabilitv. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs sha11 be held unconstitutional, contrary to statute, exceeding the authority of the Issuer or otherwise illegal ar inopera6ve by any court of competent jurisdicrion, the decision of such court shall not affect or impair any of the remaining provisions. 3 Lewis Park Apar[ments Project 1998 1671391 q�' � Subsection H. Amendment. The Issuer shali not amend this Prograui while Bonds authorized hereby aze outstanding to the deh of the holders of such Bonds. Subsecrion L State Ceiling. None of the state ceiling for private activity bonds, pursuant to Secrion 146 of the Intemal Revenue Code of 1986, as amended, and Chapter 474A of Mimiesota Statutes will be necessary for the Bonds. 4 Lewis Pazk Apartmen[s Project 1998 167139I q�' �OS�I �, �� INRINTED GREEN SHEET No 61475 �66� 2 f Z. � . Y� TOTAL # OF SIGNATURE PAGES �.,,�,� �a,�. 0 ��,�1� p � �.,�, �„«� _ ❑ �,��. ❑ ,.�,Q�,.��.a Q w,�� ❑ (CLIP LOCATIONS FOR SIGNATURE) CTIONREQUESfm �re�,`�,.inar� eiE GY��;'lfZe�sG�`e�-y. -�"v,•- Q •�/f.'—T'�r��ly ,�a.rv /�ovsins � - ev� f ��o��l�} � � yvvsi�z j /Zav�iv-�e �z�r� {�� `G�Pt;ut �Quvi`s l��L. �2r�i�rr�u�! �1' ( '�s�. zou oor�) � . �- /��S�.y'c�-Ci�Ci! R�S�a�� = ' � NOV 2 � � _ PLANNING CAMMISSION � CIB CAMMITTEE _ CIVSSEfiVI��MMISSION � tSONALSERViCE CON7RACT5 MUSTANSWEItTHE FOLLOWING QUESlIONS: Has Nis Pe�soMrtn ever worked undx a conUxt for Gus deGartment? VES NO .., - . Hes this pereaJfi�m e�er heen a cilK empbyce9 - YES NO ooes tnis cersonlfirm oossess s sldu not norma��vvossessea ev sov ourreirt citv emw�'ee7 YES � Ic thie pe'soMim a taryeted venda? VES NO VITIATING PROBLEM ISSUE, OPPORTUNITV (WFw, What, When, y � W � hy) / / �� q � � �- � ,/ / �L!{ LUc/'r1�. fOf�/'r�c D'�TY[� ��J �� ./�i �'v!'� � 7'� S�`� sl'-ow,�-N w� evv�c�.Q e` � '�-� �sr �a� � e C'o � rGBvr� rd�' .-` • 7dz, r , - . .�S'�e. F+2�E�fS /v'-Z �Yd✓�^G.t/l � �S��dlZ��///GLd/�r1! �7� � t✓ i�6!'i�J�J.�!-Q� y = , ✓ �, �•.(/f Sy� � ! �DVAMAGES IF APPROVED �� - -L�� T/� e s'P�i v�-. ��.3is�2�'�ro�`er�°' CA�-� �.'�-,..h �e.i �v � d� s�r {�or /o v- %r� ov� �e �Z�-� �'�� j�`B�s�"` s - RECENED NOV 1 g 1998 �FAPPROYED �Q�� AYOR OFFIC� iFrvoraa — fdrt s�° ��r/s�ed v�t�°�i G�.g,�/�✓ sf,Y/ / 2.20� {�y .f�l/� e �i�'��ro�`� /��C.�.�jiif ✓� �,LU� S//l9Si F'2 �P [� S COSTlREVENUE BUDliETm (CIRCLE ON� YES NO 16 SOURCE �P��'H '� ��-" ' ACTNITV NUMBER n O�INFORMATION(IXPWM /' P � � �,y,C ��" � '✓"✓ , �I/� s G, � du� `� �' .�a•�. e � ,� J , (J!(� G� � Ur �f�d('//� ;� �k�E�l `� �NLAMA//JAAiTe rT/�/l�(�✓UL � /W"`-�/ d" </ �✓ � LY.1`7�/G/Q�/•�� r2{� al U '� Gid� ��-�Ci� �i�rtrt, �� G��F_ _ MAYOR'S OFFICE q �.t�� CITY COUNCIL OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE CITY COUNCIL DATE December 2, 1998 REGARDING Resolution Authorizing the Issuance of $6,200,000 of Tazc Exempt Multi-Family Revenue Bonds and Execution of Documents for the I.ewis Park Apartments, District 6(Conduit Financing) PURPOSE The Housing and Redevelopment Authority of the City of Saint Paul (HRA) has received an application from Government & Educational Assistance Corporation ("GEAC"), a 501 (c)(3) non -profit corporation, requesting the HRA to issue up to $6,200,000 of Tax Exempt Multi- family Revenue Bonds (Bonds) for the purpose of acquiring a leasehold interest in the Lewis Park Apartments (Project) located at 180 Wayzata Street, in District 6. This use of the tax exempt bonds will keep the Section 8 Housing Assistance Program (HAP) contract in place and through its term to March 15, 2019. The GEAC is a non-profit corporation so the tas- exempt bonds do not count against the annual revenue bond volume limit available to the HRA. The purpose of this report is to request the City Council consider adopting the attached prel'uninary (inducement) resolution which would approve the following: Authorize the Executive Director of the HRA to enter into a Memorandum of Understanding (MOU) with the Government & Educational Assistance Corporauon to work towards possible issuance of the Bonds. The MOU also stipulates the terms and conditions for issuance of the Bonds should the HRA decide to issue the Bonds; and 2. Authorize HRA to issue up to $6,200,000 of ta�c exempt mulu-family rental revenue bonds for the Project; and Approve a Resolution for a Financing Program for a Mulu-family Rental Housing Development, a copy of which is attached for the financing of the project prepared in accordance with the provisions of Minnesota Statutes, section 462C.03; and 4. Retain Leonazd, Street and Deinard as bond counsel and Miller & Schroeder Financial, Inc., as investment banker for said Bonds, authorize them to assist in the preparation and review of necessary documents relating to the Project and Housing Program and consult with the HRA, City Attorney, Owner, and purchasers of the proposed Bonds. K: \SFIARED\SANCHEZT\LewisParkApts.CC`pt ��•�� Approval of the inducement resolution and execution of the Memorandum of Understanding does not require or obligate the City or HRA to issue bonds or cause any action against the City or HRA arising from any failure or refusal by the City or HRA to approve the project or issuance of the Bonds. With respect to multi-family housing bonds, Section 72.04 of Chapter 72 of the City's Adminisuative Code provides that the HRA be designated to exercise on behalf of the City the powers confened 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 before the Ciry Council rather than the HRA. PROJECT The Project, built in 1978, has a Section 8 Housing Assistance Payment ("HAP") contract covering all of the 103 handicapped apartment units. The Project is comprised of 68 one- bedroom units and 35 two bedroom units. Rents charged are approved by HUD and are $718 and $856 respectively. Real estate taxes are $102,880 per year. The Section 8 HAP contract allows the current owner, Lewis Park Ltd., to get out of the HAP contract every 5 years. The lunited partners are currenUy trying to sell the project. The intent of GEAC is to preserve the Section 8 contact and to keep the I.ewis Park Apartments operating as affordable subsidized housing. The GEAC will enter into an Installment Purchase Contract (leasehold interest) and land lease. The land lease will have a term of 20 years beyond the term of the bonds and the IIAP contract. The initial payment will occur at the bond closing and the second payment will be made at the end of the HAP contract to extend the ownership to the end of the land lease. The second payment will be equal to the balance of the appraised value future valued at the bond interest rate and at the option of GEAC. If the second payment is not made then the property would revert to the back to the current owner. FINANCING The estimated sources and uses of funds statement is as follows: Sources HRA Revenue Bonds Uses $5.687,000 Purchase price $4,887,299 224,070 59,000 467,047 21,149 28.435 $5,687,000 Financing Costs Replacement Reserve Debt Service Reserve Real Estate Closing Nonprofit fee Total $5,687,000 K: \SHARED\SANCHEZT\LewisPazkApts. CCtpt ag - (os�l The preliminary term sheet for the Bonds is as follows: Issue Amount: $5,451,000 50,000 Term: Bond Interest Rate Issue Date: Maturity Date: Bonds: Rating: Security for Bonds Zl years fully amortizing taY exempt bonds; taxable bonds 186,000 1 year fully amortizing 5.4% 6.4% 5.5% December 1998 2019 2000 2019 Three series of bonds: 1. Two series of bonds to be a qualified 501 (c) (3), rated tas exempt; 2. One series of bonds to be a qualified 501 (c) (3), rated tasable bond. Series A"A" rated, t� exempt bonds of $5,451,000; Series B"A" rated, taz�able bonds of $50,000; Series C" BBB" rated taY exempt bonds of $186,000 1. First I.easehold Mortgage on the Land and Improvements; 2. Assignment of I.eases and Rents and the HAP Contract; 3. Debt Service Reserve Fund; 4. Repair and Replacement Reserve Placement Method: Public Offering Due Diligence: Project's Cnancial statements Appraisal Phase I Environmental audit Borrower: Bond Counsel: Underwriter: Trustee: Shuctural and mechanical engineer's report Governmental & Educational Assistance Corporation L,eonard, Street and Deinard Miller & Schroeder Financial First Trust The Project's operating income supports an annual debt service coverage ratio of 1.15 for "A" rated bonds and 1.10 for the "BBB" rated bonds. FEES The non-refundable application fee of $5,000 has been received. Should the Bonds be issued, the HRA will receive an administrative fee at closing equal to 0.5% of the principal balance of the Bonds. On the second anniversary date of the Bonds the HRA will receive an additional 0.5 % fee. Every year thereafter that the Bonds remain outstanding the HRA will receive an annual administrative fee equal to 0.01 % of the outstanding principal balance of the Bonds. BUSIlVESS PROFILE The Govemment & Educational Assistance Corporation ("GEAC") is a non-profit 501(c)(3) corporation formed to preserve affordable housing. The GEAC is newly formed and has no assets. The principals of the corporauon are Messrs. Thomas Maple, Phil McMullen, Donald Roby, and Patrick Rafferty. K: \SIIARED\SANCHEZT\LewisParkApts.CC�t � ADVERSE LENDING The GEAC does not have an adverse lending relationsIup with the HRA or tfie City of Saint Paul. REPAYMENT CAPACITY The Project's 15 yeaz Income Projections-Cash Flow appears to be a reasonable projection that will meet the debt coverage ratio of 1.15 for the "A" rated bonds and 110 for the "BBB" rated bonds. Historically, operating e�enses have been stable. Operating expenses appear to be reasonable. 1VIANDATED REQUIItEMENTS AND STANDARDS Pursuant to the federal law regarding the issuance of tax-exempt multi-family revenue bonds, at a miniinum either 20% or 40% of the 103 dwelling units of the project must be specifically reserved for tenants whose incomes are not greater than either 50% or 60% of the median family income as adjusted for family size. The project is currently 100% Section 8 assisted so the minimum income requirement will be met. SUPPORT The GEAC has received a letter of support from the District 6 Planning Council. PUBLIC PURPOSE The following public purposes will be met: The Project fmancing will preserve affordable housing units and will reasonably assure the long term viabiliry of the Project as an asset to the surrounding neighborhood. BOND AUTHORITY; ALLOCATION PROCESS The GEAC is a non-profit corporation so the tax-exempt bonds do not count against the annual revenue bond volume 1'unit available to the HRA. Upon adoption of the inducement resolution staff will proceed to finalize the financing of the proposal for presentation to the HRA and request the HRA to consider adoption of a resolution to issue and sell revenue bonds to fmance the project. Questions may be directed to Tom Sanchez, Northwest Quadrant Team of PED at 266-6617. ATTACHMENT City Council Resolution Sponsored by Councilmember Reiter K:ISHARED\SANCHEZTILewisPazkAprs.CC`pc wpd ORIGINAL Council File # `18 - (os Resolution # Green Sheet # �' � ' 1 S RESOLUTION OF SAINT PAUL, MINNESOTA i Presented By Referred To Committee: Date '� RESOLIITION RECITING A PROPOSAL FOR FINANCING A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT PROJECT AND AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO EXERCISE THE POWERS GRANTED IN MINNESOTA STATUTES, SECTIONS 462C.01 TO 462C.08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 WHEREAS: A. Minnesota Statutes, Chapter 462C (the "Act"), confers upon cities, or housing and redevelopment 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 multifamily housing developments within the boundaries of the city; and B. The Housing and Redevelopment Authority of the CiYy of Saint Paul, Minnesota (the "HRA"), has received frora the Governmental Educational Assistance Corporation, (the "Owner"), a proposal that the HRA undertake to finance a qualified residential rental housing development as hereinafter described, through the issuance of t�-exempt or taxable 501(c)(3) revenue bonds in one or more seraes (collectively, the "Bonds") pursuant to the Act for the purpose of loaning the proceeds thereof to the Owner, or to a limited liability company in which the Owner is the sole member, to finance the acquisition by the Owner of a 103-unit rental apartment development and facilities functionally related and subordinated thereto (the "ProjecP') located at 180 Wayzata Street, in the City, known as the Lewis Park Aparhnents pursuant to the "housing program" described below; and 17 C. Prior to publication of a notice of public hearing for the public hearing described in (F) 18 below, the City prepared a"housing program" (the "Program") under the Act and submitted the 19 Program for review to the Metropolitan Council; 20 D. The Owner's proposal calls for the HRA to loan the proceeds realized upon the sale of 21 the Bonds to the Owner pursuant to a loan agreement or agreements wherein the Owner will be 22 obligated to make payments at the times and in the amounts sufficient to provide for the prompt 23 payment of principal of, premium, if any, and interest on the Bonds and all costs and expenses of the 24 HRA and the City incident to the issuance and sale of the Bonds; and 25 E. The City desires to encourage the continued operation of housing facilities designed for 26 occupancy by persons of low and moderate income; and ` Lewis Park Apartmenu Project 1998 1738917.01 ORIG(NAL 1 2 3 qg - ►os � F. A public hearing on the Program and the proposed financing of the Project was held on this date following duly published notice, at which time all persons that desired to speak were heard. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Saint Paul, as follows: 4 1. The City hereby approves the Program and gives preliminary approvai to the issuance of 5 the Bonds for the fmancing of the Project and, pursuant to Section 72 of the Saint Paul 6 Administrative Code, hereby authorizes and directs the HRA to exercise the powers granted in 7 Minnesota Statutes 462C.01 to 462C.08. 8 9 10 11 12 13 14 15 2. On the basis of information available to the City Council, it appears, and the City Council hereby finds, that the project constitutes a multifamily rental housing development and furthers the purposes of the Act; that the Project is reserved for rental in part by persons of low and moderate income; that the availability of financing under the Act and the willingness of the HRA to furnish such financing will be a substantial inducement to the Owner to continue to operate the Project as low-income housing, and that the effect of the financing of the Project, if undertaken, will be to assure that adequate housing wili continue to be available to residents of the City at a reasonable cost. 16 3. The Executive Director of the HRA, is hereby authorized to execute a Memorandum of 17 Understanding with respect to the financing of the Project in substantially the form on file with the 18 HRA. 19 20 21 22 23 24 25 26 4. Leonard, Street and Deinard Professional Association, is hereby retained as Bond Counsel for the issuance of the Bonds. Miller & Schroeder Financial, Inc. ("Miller & Schroeder") is hereby retained as the underwriter for this transaction. Leonard, Street and Deinard and Miller & Schroeder are hereby authorized to assist in the preparation and review of necessary documents relating to the issuance of the Bonds, to consult with the City Attorney, Owner and purchasers of the Bonds as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval. 27 5. The Owner has agreed and it is hereby determined that any and all costs incuned by the 28 City or the HRA in connection with the financing of the Project, whether or not the proposed 29 financing of the Project is carried to completion and whether or not the issuance of Bonds is 30 approved by the HRA, will be paid by the Owner. 31 6. Nothing in this resolution shall be construed to require the City or the I-IRA to approve 32 any element of the Project or the issuance of the Bonds, nor shali this resolution be construed as 33 vesting in the Owner any cause of action against the City or the IIRA arising from any failure or 34 refusal by the CiTy or the HRA to approve the issuance of the Bonds. 35 36 37 38 39 40 7. Nothing in this resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the financing of the Project ar the payment of the Bonds other than the revenues derived from the Project or otherwise granted to the City or the HRA for this purpose. The Bonds shall not constitute a charge, ]ien or encumbrance, legal or equitable, upon any property or funds of the City or the HRA except the revenue and proceeds pledged to the payment tl�ereof, nor shall the City or the HRA be subject to any direct liability thereon. The holder of the 173891'7.01 Lewis Pazk Apartments Project 1998 ORIGIf�AL °lg -losh Bonds shall never have the right to compel any exercise of the taxing power of the City or the HRA 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 the Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereo£ The Bonds shall not constitute an indebtedness of the City or the HRA within the meaning of any constitutional or statutory provision. Reguested by Department of: Plannin & E mic Develo>ment gy; � : v �� 1 i Form Approved by City orney By: Approved by M or.for Sub i.sion Council Adoption Certified by Council Secretary By: a - m-� By: Approved by Mayor: a e �` ` g � Lewis Park Apartrnents 'ect 1998 Y738917.01 Adopted by Council: Date L]q.c__ �., �\\0 q8-losq . ��: PROGRAM FOR A MLTLTIFAMII,Y HOUSING DEVELOPMENT Pursuant to Mimiesota Statutes, Chapter 462C (the "Act") and applicable provisions of the Saint Paul Admiuistrative Code, the Housing and Redevelopment Authority of the Ciry of Saint Paul, Mimiesota (the "Issuer") is authorized to develop and administer programs to finance the acquisition of multifamily housing developments under the circumstatices and within the lnnitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the Issuer. The Issuer has received a proposal that it approve a program providing for the acquisition of an interest in an existing 103-unit rental apartment development and facilities funcfionally related and subordinate thereto (the "Project") located at 180 Wayzata Street in the City of St. Paul (the "City"), by Governmental and Educational Assistance Corporation, a 501(c)(3) not-for-profit corporation or a limited liability company in which it will be the sole member (the "Owner"). Such acquisition is to be funded through the issuance of up to $6,650,000 in tax-exempt or tasable 501(c)(3) revenue bonds to be issued by the Issuer (the `Bonds"). The Owner will own an interest in and will operate the Project as a multifamily residential rental project. The Project will be occupied by individuals or families whose incomes at the time of inifial occupancy will meet the requirements of Sections 142(d) and 42(g) of the Code. It is estimated that rents for the Housing Units will range from $697 per month to $826 per month. The Owner's interest in the Project will be acquired in accordance with Subdivision 1( fl of Section 462C.05 of the Act. Section A. Definitions. The following terms used in this Program shall have the following meanings, respectively: "AcP' shall mean Minnesota Statutes, Secrion 462C.01, et seq., as currendy in effect and as the same may be from time to time amended. `Bonds" shall mean the revenue bonds to be issued by the Issuer to fmance the Program. "Housing UniY' shall mean any one of the apartment units, each located in the Project, occupied by one person or family, and containing complete living facilities. "Issuer" shall mean the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota. "Land" shall mean the real properiy upon which the Project is situated. Lewis Pazk Apartrnents Project 1998 1671391 q g- �o5r1 "Owner" shall mean Governmental and Educational Assistance Corpararion, or a limited liability entity of wl�ich Govemmental and Fducational Assistance Corporation is the sole member, or its successors or assigns. "Progaui" shall mean this program for the financing of the Project pursuant to the Act. "ProjecY' shall mean the residential rental housing development consisting of appro�cimately 103 Housing Units, consisting of 68 one-bedroom and 35 two-bedroom iini an interest in which will be acquired by the Owner. Section B. Pro¢ram For Financine the Project. It is proposed that the Issuer establish this Program to provide financing for acquisition of an interest in the Project at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the Issuer, the initial purchaser of the Bonds and the Owner. The Issuer expects to issue the Bonds as soon as the terms of the Bonds haue been agreed upon by the Issuer, the Owner and the initial purchaser of the Bonds. The proceeds of the Bonds will be loaned to the Owner to finance the acquisition of an interest in the Project, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a hustee will be appointed by the Issner to monitar the payment of principal and interest on the Bonds. It is anticipated that the Bonds will have a mahxrity of approximately twenty-two (22) yeazs and will bear interest at the rate set to the market at the time of sale (except that the Bonds may initially be issued at a variable rate}. The Issuer will hire no additional staff for the administration of the Program. Insofaz as the Issuer will be contracting with undenvriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Project, no administrative costs will be paid from the Issuer's budget with respect to this Program. The Bonds will not be general obiigafion bonds of the Issuer, but aze to be paid only from properties pledged to the payment thereof, which may include addiflonal security such as additional wllateral, insurance or a letter of credit. Section C. Loca1 Contriburions To The Pro�. The Owner has not requested any local contributions to the Program with respect to the Project. Section D. Standards and Requirements Relating to the Financing of the Project Pursuant to the Proeram. The following standazds and requirements shall apply with respect to the operation of the Proj ect by the Owner pursuant to this Program: (1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition of an interest in the Project and to The funding of appropriate reserves. The proceeds will be made available to the Owner pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Owner to the Issuer regarding the use of proceeds and the character and use of the Project. 2 Lewis Pazk Apaztrnents Project 1998 1671391 qg. �os� (2) The Owner, and any subsequent owner of the Project, will not azbitrarily reject an application from a proposed tenant because of race, color, creed, religion, nafional origin, sex, marital status, or status with regard to pubiic assistance or disability. (3) At least foriy percent (40%) of the Housing Units will be held for occupancy by families or individuals with gross income not in excess of sixty percent (60%) of inedian family income, adjusted for family size, in order to comply with Federal ta�c law requirements for the use of tas-exempt financing. This set aside will also satisfy the low- income occupancy requirements of Secrion 462C.05, Subdivision 2 of the Act. (4) The Project is subject to a Secfion 8 HAP Contract which the Owner will be required to maintain during the term of the Bonds. Units in the Project will be occupied by persons and families who meet the Secrion 8 income requirements. Subsection E. Evidence of Comoliance. The Issuer may require from the Owner at or before the issuance of the Bonds, evidence satisfactory to the Issuer of the ability and intention of the Owner of compliance with the standards and requirements for the making of the financing established by the Issuer, as set forth herein; and in connection therewith, the Issuer or its representatives may inspect the relevant books and records of the Owner in arder to confirm such ability, intenrion and compliance. In addition, the Issuer may periodically require cerkification from either the Owner or such other person deemed necessary concerning compliance with various aspects of this Program. Subsection F. Issuance of Bonds. To finance the Program authorized by this Section the Issuer may by resolufion authorize, issue and sell its revenue bonds in an aggregate principal amount of approximately $6,650,000 tax-exempt or taacable 501(c)(3) revenue bonds. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primazily from the revenues of the Program authorized by this Section. The costs of the Project are presently expected to be as follows: Acquisition Reserves Costs of Issuance �� $5,800,000 550,000 300,000 $6,650,000 The costs of the Project may change beriveen the date of preparation of this program and the date of issuance of the Bonds. The Bonds aze expected to be issued in 1998. Subsection G. Severabilitv. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs sha11 be held unconstitutional, contrary to statute, exceeding the authority of the Issuer or otherwise illegal ar inopera6ve by any court of competent jurisdicrion, the decision of such court shall not affect or impair any of the remaining provisions. 3 Lewis Park Apar[ments Project 1998 1671391 q�' � Subsection H. Amendment. The Issuer shali not amend this Prograui while Bonds authorized hereby aze outstanding to the deh of the holders of such Bonds. Subsecrion L State Ceiling. None of the state ceiling for private activity bonds, pursuant to Secrion 146 of the Intemal Revenue Code of 1986, as amended, and Chapter 474A of Mimiesota Statutes will be necessary for the Bonds. 4 Lewis Pazk Apartmen[s Project 1998 167139I q�' �OS�I �, �� INRINTED GREEN SHEET No 61475 �66� 2 f Z. � . Y� TOTAL # OF SIGNATURE PAGES �.,,�,� �a,�. 0 ��,�1� p � �.,�, �„«� _ ❑ �,��. ❑ ,.�,Q�,.��.a Q w,�� ❑ (CLIP LOCATIONS FOR SIGNATURE) CTIONREQUESfm �re�,`�,.inar� eiE GY��;'lfZe�sG�`e�-y. -�"v,•- Q •�/f.'—T'�r��ly ,�a.rv /�ovsins � - ev� f ��o��l�} � � yvvsi�z j /Zav�iv-�e �z�r� {�� `G�Pt;ut �Quvi`s l��L. �2r�i�rr�u�! �1' ( '�s�. zou oor�) � . �- /��S�.y'c�-Ci�Ci! R�S�a�� = ' � NOV 2 � � _ PLANNING CAMMISSION � CIB CAMMITTEE _ CIVSSEfiVI��MMISSION � tSONALSERViCE CON7RACT5 MUSTANSWEItTHE FOLLOWING QUESlIONS: Has Nis Pe�soMrtn ever worked undx a conUxt for Gus deGartment? VES NO .., - . Hes this pereaJfi�m e�er heen a cilK empbyce9 - YES NO ooes tnis cersonlfirm oossess s sldu not norma��vvossessea ev sov ourreirt citv emw�'ee7 YES � Ic thie pe'soMim a taryeted venda? VES NO VITIATING PROBLEM ISSUE, OPPORTUNITV (WFw, What, When, y � W � hy) / / �� q � � �- � ,/ / �L!{ LUc/'r1�. fOf�/'r�c D'�TY[� ��J �� ./�i �'v!'� � 7'� S�`� sl'-ow,�-N w� evv�c�.Q e` � '�-� �sr �a� � e C'o � rGBvr� rd�' .-` • 7dz, r , - . .�S'�e. F+2�E�fS /v'-Z �Yd✓�^G.t/l � �S��dlZ��///GLd/�r1! �7� � t✓ i�6!'i�J�J.�!-Q� y = , ✓ �, �•.(/f Sy� � ! �DVAMAGES IF APPROVED �� - -L�� T/� e s'P�i v�-. ��.3is�2�'�ro�`er�°' CA�-� �.'�-,..h �e.i �v � d� s�r {�or /o v- %r� ov� �e �Z�-� �'�� j�`B�s�"` s - RECENED NOV 1 g 1998 �FAPPROYED �Q�� AYOR OFFIC� iFrvoraa — fdrt s�° ��r/s�ed v�t�°�i G�.g,�/�✓ sf,Y/ / 2.20� {�y .f�l/� e �i�'��ro�`� /��C.�.�jiif ✓� �,LU� S//l9Si F'2 �P [� S COSTlREVENUE BUDliETm (CIRCLE ON� YES NO 16 SOURCE �P��'H '� ��-" ' ACTNITV NUMBER n O�INFORMATION(IXPWM /' P � � �,y,C ��" � '✓"✓ , �I/� s G, � du� `� �' .�a•�. e � ,� J , (J!(� G� � Ur �f�d('//� ;� �k�E�l `� �NLAMA//JAAiTe rT/�/l�(�✓UL � /W"`-�/ d" </ �✓ � LY.1`7�/G/Q�/•�� r2{� al U '� Gid� ��-�Ci� �i�rtrt, �� G��F_ _ MAYOR'S OFFICE q �.t�� CITY COUNCIL OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE CITY COUNCIL DATE December 2, 1998 REGARDING Resolution Authorizing the Issuance of $6,200,000 of Tazc Exempt Multi-Family Revenue Bonds and Execution of Documents for the I.ewis Park Apartments, District 6(Conduit Financing) PURPOSE The Housing and Redevelopment Authority of the City of Saint Paul (HRA) has received an application from Government & Educational Assistance Corporation ("GEAC"), a 501 (c)(3) non -profit corporation, requesting the HRA to issue up to $6,200,000 of Tax Exempt Multi- family Revenue Bonds (Bonds) for the purpose of acquiring a leasehold interest in the Lewis Park Apartments (Project) located at 180 Wayzata Street, in District 6. This use of the tax exempt bonds will keep the Section 8 Housing Assistance Program (HAP) contract in place and through its term to March 15, 2019. The GEAC is a non-profit corporation so the tas- exempt bonds do not count against the annual revenue bond volume limit available to the HRA. The purpose of this report is to request the City Council consider adopting the attached prel'uninary (inducement) resolution which would approve the following: Authorize the Executive Director of the HRA to enter into a Memorandum of Understanding (MOU) with the Government & Educational Assistance Corporauon to work towards possible issuance of the Bonds. The MOU also stipulates the terms and conditions for issuance of the Bonds should the HRA decide to issue the Bonds; and 2. Authorize HRA to issue up to $6,200,000 of ta�c exempt mulu-family rental revenue bonds for the Project; and Approve a Resolution for a Financing Program for a Mulu-family Rental Housing Development, a copy of which is attached for the financing of the project prepared in accordance with the provisions of Minnesota Statutes, section 462C.03; and 4. Retain Leonazd, Street and Deinard as bond counsel and Miller & Schroeder Financial, Inc., as investment banker for said Bonds, authorize them to assist in the preparation and review of necessary documents relating to the Project and Housing Program and consult with the HRA, City Attorney, Owner, and purchasers of the proposed Bonds. K: \SFIARED\SANCHEZT\LewisParkApts.CC`pt ��•�� Approval of the inducement resolution and execution of the Memorandum of Understanding does not require or obligate the City or HRA to issue bonds or cause any action against the City or HRA arising from any failure or refusal by the City or HRA to approve the project or issuance of the Bonds. With respect to multi-family housing bonds, Section 72.04 of Chapter 72 of the City's Adminisuative Code provides that the HRA be designated to exercise on behalf of the City the powers confened 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 before the Ciry Council rather than the HRA. PROJECT The Project, built in 1978, has a Section 8 Housing Assistance Payment ("HAP") contract covering all of the 103 handicapped apartment units. The Project is comprised of 68 one- bedroom units and 35 two bedroom units. Rents charged are approved by HUD and are $718 and $856 respectively. Real estate taxes are $102,880 per year. The Section 8 HAP contract allows the current owner, Lewis Park Ltd., to get out of the HAP contract every 5 years. The lunited partners are currenUy trying to sell the project. The intent of GEAC is to preserve the Section 8 contact and to keep the I.ewis Park Apartments operating as affordable subsidized housing. The GEAC will enter into an Installment Purchase Contract (leasehold interest) and land lease. The land lease will have a term of 20 years beyond the term of the bonds and the IIAP contract. The initial payment will occur at the bond closing and the second payment will be made at the end of the HAP contract to extend the ownership to the end of the land lease. The second payment will be equal to the balance of the appraised value future valued at the bond interest rate and at the option of GEAC. If the second payment is not made then the property would revert to the back to the current owner. FINANCING The estimated sources and uses of funds statement is as follows: Sources HRA Revenue Bonds Uses $5.687,000 Purchase price $4,887,299 224,070 59,000 467,047 21,149 28.435 $5,687,000 Financing Costs Replacement Reserve Debt Service Reserve Real Estate Closing Nonprofit fee Total $5,687,000 K: \SHARED\SANCHEZT\LewisPazkApts. CCtpt ag - (os�l The preliminary term sheet for the Bonds is as follows: Issue Amount: $5,451,000 50,000 Term: Bond Interest Rate Issue Date: Maturity Date: Bonds: Rating: Security for Bonds Zl years fully amortizing taY exempt bonds; taxable bonds 186,000 1 year fully amortizing 5.4% 6.4% 5.5% December 1998 2019 2000 2019 Three series of bonds: 1. Two series of bonds to be a qualified 501 (c) (3), rated tas exempt; 2. One series of bonds to be a qualified 501 (c) (3), rated tasable bond. Series A"A" rated, t� exempt bonds of $5,451,000; Series B"A" rated, taz�able bonds of $50,000; Series C" BBB" rated taY exempt bonds of $186,000 1. First I.easehold Mortgage on the Land and Improvements; 2. Assignment of I.eases and Rents and the HAP Contract; 3. Debt Service Reserve Fund; 4. Repair and Replacement Reserve Placement Method: Public Offering Due Diligence: Project's Cnancial statements Appraisal Phase I Environmental audit Borrower: Bond Counsel: Underwriter: Trustee: Shuctural and mechanical engineer's report Governmental & Educational Assistance Corporation L,eonard, Street and Deinard Miller & Schroeder Financial First Trust The Project's operating income supports an annual debt service coverage ratio of 1.15 for "A" rated bonds and 1.10 for the "BBB" rated bonds. FEES The non-refundable application fee of $5,000 has been received. Should the Bonds be issued, the HRA will receive an administrative fee at closing equal to 0.5% of the principal balance of the Bonds. On the second anniversary date of the Bonds the HRA will receive an additional 0.5 % fee. Every year thereafter that the Bonds remain outstanding the HRA will receive an annual administrative fee equal to 0.01 % of the outstanding principal balance of the Bonds. BUSIlVESS PROFILE The Govemment & Educational Assistance Corporation ("GEAC") is a non-profit 501(c)(3) corporation formed to preserve affordable housing. The GEAC is newly formed and has no assets. The principals of the corporauon are Messrs. Thomas Maple, Phil McMullen, Donald Roby, and Patrick Rafferty. K: \SIIARED\SANCHEZT\LewisParkApts.CC�t � ADVERSE LENDING The GEAC does not have an adverse lending relationsIup with the HRA or tfie City of Saint Paul. REPAYMENT CAPACITY The Project's 15 yeaz Income Projections-Cash Flow appears to be a reasonable projection that will meet the debt coverage ratio of 1.15 for the "A" rated bonds and 110 for the "BBB" rated bonds. Historically, operating e�enses have been stable. Operating expenses appear to be reasonable. 1VIANDATED REQUIItEMENTS AND STANDARDS Pursuant to the federal law regarding the issuance of tax-exempt multi-family revenue bonds, at a miniinum either 20% or 40% of the 103 dwelling units of the project must be specifically reserved for tenants whose incomes are not greater than either 50% or 60% of the median family income as adjusted for family size. The project is currently 100% Section 8 assisted so the minimum income requirement will be met. SUPPORT The GEAC has received a letter of support from the District 6 Planning Council. PUBLIC PURPOSE The following public purposes will be met: The Project fmancing will preserve affordable housing units and will reasonably assure the long term viabiliry of the Project as an asset to the surrounding neighborhood. BOND AUTHORITY; ALLOCATION PROCESS The GEAC is a non-profit corporation so the tax-exempt bonds do not count against the annual revenue bond volume 1'unit available to the HRA. Upon adoption of the inducement resolution staff will proceed to finalize the financing of the proposal for presentation to the HRA and request the HRA to consider adoption of a resolution to issue and sell revenue bonds to fmance the project. Questions may be directed to Tom Sanchez, Northwest Quadrant Team of PED at 266-6617. ATTACHMENT City Council Resolution Sponsored by Councilmember Reiter K:ISHARED\SANCHEZTILewisPazkAprs.CC`pc wpd ORIGINAL Council File # `18 - (os Resolution # Green Sheet # �' � ' 1 S RESOLUTION OF SAINT PAUL, MINNESOTA i Presented By Referred To Committee: Date '� RESOLIITION RECITING A PROPOSAL FOR FINANCING A MULTI-FAMILY RENTAL HOUSING DEVELOPMENT PROJECT AND AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO EXERCISE THE POWERS GRANTED IN MINNESOTA STATUTES, SECTIONS 462C.01 TO 462C.08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 WHEREAS: A. Minnesota Statutes, Chapter 462C (the "Act"), confers upon cities, or housing and redevelopment 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 multifamily housing developments within the boundaries of the city; and B. The Housing and Redevelopment Authority of the CiYy of Saint Paul, Minnesota (the "HRA"), has received frora the Governmental Educational Assistance Corporation, (the "Owner"), a proposal that the HRA undertake to finance a qualified residential rental housing development as hereinafter described, through the issuance of t�-exempt or taxable 501(c)(3) revenue bonds in one or more seraes (collectively, the "Bonds") pursuant to the Act for the purpose of loaning the proceeds thereof to the Owner, or to a limited liability company in which the Owner is the sole member, to finance the acquisition by the Owner of a 103-unit rental apartment development and facilities functionally related and subordinated thereto (the "ProjecP') located at 180 Wayzata Street, in the City, known as the Lewis Park Aparhnents pursuant to the "housing program" described below; and 17 C. Prior to publication of a notice of public hearing for the public hearing described in (F) 18 below, the City prepared a"housing program" (the "Program") under the Act and submitted the 19 Program for review to the Metropolitan Council; 20 D. The Owner's proposal calls for the HRA to loan the proceeds realized upon the sale of 21 the Bonds to the Owner pursuant to a loan agreement or agreements wherein the Owner will be 22 obligated to make payments at the times and in the amounts sufficient to provide for the prompt 23 payment of principal of, premium, if any, and interest on the Bonds and all costs and expenses of the 24 HRA and the City incident to the issuance and sale of the Bonds; and 25 E. The City desires to encourage the continued operation of housing facilities designed for 26 occupancy by persons of low and moderate income; and ` Lewis Park Apartmenu Project 1998 1738917.01 ORIG(NAL 1 2 3 qg - ►os � F. A public hearing on the Program and the proposed financing of the Project was held on this date following duly published notice, at which time all persons that desired to speak were heard. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Saint Paul, as follows: 4 1. The City hereby approves the Program and gives preliminary approvai to the issuance of 5 the Bonds for the fmancing of the Project and, pursuant to Section 72 of the Saint Paul 6 Administrative Code, hereby authorizes and directs the HRA to exercise the powers granted in 7 Minnesota Statutes 462C.01 to 462C.08. 8 9 10 11 12 13 14 15 2. On the basis of information available to the City Council, it appears, and the City Council hereby finds, that the project constitutes a multifamily rental housing development and furthers the purposes of the Act; that the Project is reserved for rental in part by persons of low and moderate income; that the availability of financing under the Act and the willingness of the HRA to furnish such financing will be a substantial inducement to the Owner to continue to operate the Project as low-income housing, and that the effect of the financing of the Project, if undertaken, will be to assure that adequate housing wili continue to be available to residents of the City at a reasonable cost. 16 3. The Executive Director of the HRA, is hereby authorized to execute a Memorandum of 17 Understanding with respect to the financing of the Project in substantially the form on file with the 18 HRA. 19 20 21 22 23 24 25 26 4. Leonard, Street and Deinard Professional Association, is hereby retained as Bond Counsel for the issuance of the Bonds. Miller & Schroeder Financial, Inc. ("Miller & Schroeder") is hereby retained as the underwriter for this transaction. Leonard, Street and Deinard and Miller & Schroeder are hereby authorized to assist in the preparation and review of necessary documents relating to the issuance of the Bonds, to consult with the City Attorney, Owner and purchasers of the Bonds as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval. 27 5. The Owner has agreed and it is hereby determined that any and all costs incuned by the 28 City or the HRA in connection with the financing of the Project, whether or not the proposed 29 financing of the Project is carried to completion and whether or not the issuance of Bonds is 30 approved by the HRA, will be paid by the Owner. 31 6. Nothing in this resolution shall be construed to require the City or the I-IRA to approve 32 any element of the Project or the issuance of the Bonds, nor shali this resolution be construed as 33 vesting in the Owner any cause of action against the City or the IIRA arising from any failure or 34 refusal by the CiTy or the HRA to approve the issuance of the Bonds. 35 36 37 38 39 40 7. Nothing in this resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the financing of the Project ar the payment of the Bonds other than the revenues derived from the Project or otherwise granted to the City or the HRA for this purpose. The Bonds shall not constitute a charge, ]ien or encumbrance, legal or equitable, upon any property or funds of the City or the HRA except the revenue and proceeds pledged to the payment tl�ereof, nor shall the City or the HRA be subject to any direct liability thereon. The holder of the 173891'7.01 Lewis Pazk Apartments Project 1998 ORIGIf�AL °lg -losh Bonds shall never have the right to compel any exercise of the taxing power of the City or the HRA 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 the Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereo£ The Bonds shall not constitute an indebtedness of the City or the HRA within the meaning of any constitutional or statutory provision. Reguested by Department of: Plannin & E mic Develo>ment gy; � : v �� 1 i Form Approved by City orney By: Approved by M or.for Sub i.sion Council Adoption Certified by Council Secretary By: a - m-� By: Approved by Mayor: a e �` ` g � Lewis Park Apartrnents 'ect 1998 Y738917.01 Adopted by Council: Date L]q.c__ �., �\\0 q8-losq . ��: PROGRAM FOR A MLTLTIFAMII,Y HOUSING DEVELOPMENT Pursuant to Mimiesota Statutes, Chapter 462C (the "Act") and applicable provisions of the Saint Paul Admiuistrative Code, the Housing and Redevelopment Authority of the Ciry of Saint Paul, Mimiesota (the "Issuer") is authorized to develop and administer programs to finance the acquisition of multifamily housing developments under the circumstatices and within the lnnitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the Issuer. The Issuer has received a proposal that it approve a program providing for the acquisition of an interest in an existing 103-unit rental apartment development and facilities funcfionally related and subordinate thereto (the "Project") located at 180 Wayzata Street in the City of St. Paul (the "City"), by Governmental and Educational Assistance Corporation, a 501(c)(3) not-for-profit corporation or a limited liability company in which it will be the sole member (the "Owner"). Such acquisition is to be funded through the issuance of up to $6,650,000 in tax-exempt or tasable 501(c)(3) revenue bonds to be issued by the Issuer (the `Bonds"). The Owner will own an interest in and will operate the Project as a multifamily residential rental project. The Project will be occupied by individuals or families whose incomes at the time of inifial occupancy will meet the requirements of Sections 142(d) and 42(g) of the Code. It is estimated that rents for the Housing Units will range from $697 per month to $826 per month. The Owner's interest in the Project will be acquired in accordance with Subdivision 1( fl of Section 462C.05 of the Act. Section A. Definitions. The following terms used in this Program shall have the following meanings, respectively: "AcP' shall mean Minnesota Statutes, Secrion 462C.01, et seq., as currendy in effect and as the same may be from time to time amended. `Bonds" shall mean the revenue bonds to be issued by the Issuer to fmance the Program. "Housing UniY' shall mean any one of the apartment units, each located in the Project, occupied by one person or family, and containing complete living facilities. "Issuer" shall mean the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota. "Land" shall mean the real properiy upon which the Project is situated. Lewis Pazk Apartrnents Project 1998 1671391 q g- �o5r1 "Owner" shall mean Governmental and Educational Assistance Corpararion, or a limited liability entity of wl�ich Govemmental and Fducational Assistance Corporation is the sole member, or its successors or assigns. "Progaui" shall mean this program for the financing of the Project pursuant to the Act. "ProjecY' shall mean the residential rental housing development consisting of appro�cimately 103 Housing Units, consisting of 68 one-bedroom and 35 two-bedroom iini an interest in which will be acquired by the Owner. Section B. Pro¢ram For Financine the Project. It is proposed that the Issuer establish this Program to provide financing for acquisition of an interest in the Project at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the Issuer, the initial purchaser of the Bonds and the Owner. The Issuer expects to issue the Bonds as soon as the terms of the Bonds haue been agreed upon by the Issuer, the Owner and the initial purchaser of the Bonds. The proceeds of the Bonds will be loaned to the Owner to finance the acquisition of an interest in the Project, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a hustee will be appointed by the Issner to monitar the payment of principal and interest on the Bonds. It is anticipated that the Bonds will have a mahxrity of approximately twenty-two (22) yeazs and will bear interest at the rate set to the market at the time of sale (except that the Bonds may initially be issued at a variable rate}. The Issuer will hire no additional staff for the administration of the Program. Insofaz as the Issuer will be contracting with undenvriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Project, no administrative costs will be paid from the Issuer's budget with respect to this Program. The Bonds will not be general obiigafion bonds of the Issuer, but aze to be paid only from properties pledged to the payment thereof, which may include addiflonal security such as additional wllateral, insurance or a letter of credit. Section C. Loca1 Contriburions To The Pro�. The Owner has not requested any local contributions to the Program with respect to the Project. Section D. Standards and Requirements Relating to the Financing of the Project Pursuant to the Proeram. The following standazds and requirements shall apply with respect to the operation of the Proj ect by the Owner pursuant to this Program: (1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition of an interest in the Project and to The funding of appropriate reserves. The proceeds will be made available to the Owner pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Owner to the Issuer regarding the use of proceeds and the character and use of the Project. 2 Lewis Pazk Apaztrnents Project 1998 1671391 qg. �os� (2) The Owner, and any subsequent owner of the Project, will not azbitrarily reject an application from a proposed tenant because of race, color, creed, religion, nafional origin, sex, marital status, or status with regard to pubiic assistance or disability. (3) At least foriy percent (40%) of the Housing Units will be held for occupancy by families or individuals with gross income not in excess of sixty percent (60%) of inedian family income, adjusted for family size, in order to comply with Federal ta�c law requirements for the use of tas-exempt financing. This set aside will also satisfy the low- income occupancy requirements of Secrion 462C.05, Subdivision 2 of the Act. (4) The Project is subject to a Secfion 8 HAP Contract which the Owner will be required to maintain during the term of the Bonds. Units in the Project will be occupied by persons and families who meet the Secrion 8 income requirements. Subsection E. Evidence of Comoliance. The Issuer may require from the Owner at or before the issuance of the Bonds, evidence satisfactory to the Issuer of the ability and intention of the Owner of compliance with the standards and requirements for the making of the financing established by the Issuer, as set forth herein; and in connection therewith, the Issuer or its representatives may inspect the relevant books and records of the Owner in arder to confirm such ability, intenrion and compliance. In addition, the Issuer may periodically require cerkification from either the Owner or such other person deemed necessary concerning compliance with various aspects of this Program. Subsection F. Issuance of Bonds. To finance the Program authorized by this Section the Issuer may by resolufion authorize, issue and sell its revenue bonds in an aggregate principal amount of approximately $6,650,000 tax-exempt or taacable 501(c)(3) revenue bonds. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primazily from the revenues of the Program authorized by this Section. The costs of the Project are presently expected to be as follows: Acquisition Reserves Costs of Issuance �� $5,800,000 550,000 300,000 $6,650,000 The costs of the Project may change beriveen the date of preparation of this program and the date of issuance of the Bonds. The Bonds aze expected to be issued in 1998. Subsection G. Severabilitv. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs sha11 be held unconstitutional, contrary to statute, exceeding the authority of the Issuer or otherwise illegal ar inopera6ve by any court of competent jurisdicrion, the decision of such court shall not affect or impair any of the remaining provisions. 3 Lewis Park Apar[ments Project 1998 1671391 q�' � Subsection H. Amendment. The Issuer shali not amend this Prograui while Bonds authorized hereby aze outstanding to the deh of the holders of such Bonds. Subsecrion L State Ceiling. None of the state ceiling for private activity bonds, pursuant to Secrion 146 of the Intemal Revenue Code of 1986, as amended, and Chapter 474A of Mimiesota Statutes will be necessary for the Bonds. 4 Lewis Pazk Apartmen[s Project 1998 167139I q�' �OS�I �, �� INRINTED GREEN SHEET No 61475 �66� 2 f Z. � . Y� TOTAL # OF SIGNATURE PAGES �.,,�,� �a,�. 0 ��,�1� p � �.,�, �„«� _ ❑ �,��. ❑ ,.�,Q�,.��.a Q w,�� ❑ (CLIP LOCATIONS FOR SIGNATURE) CTIONREQUESfm �re�,`�,.inar� eiE GY��;'lfZe�sG�`e�-y. -�"v,•- Q •�/f.'—T'�r��ly ,�a.rv /�ovsins � - ev� f ��o��l�} � � yvvsi�z j /Zav�iv-�e �z�r� {�� `G�Pt;ut �Quvi`s l��L. �2r�i�rr�u�! �1' ( '�s�. zou oor�) � . �- /��S�.y'c�-Ci�Ci! R�S�a�� = ' � NOV 2 � � _ PLANNING CAMMISSION � CIB CAMMITTEE _ CIVSSEfiVI��MMISSION � tSONALSERViCE CON7RACT5 MUSTANSWEItTHE FOLLOWING QUESlIONS: Has Nis Pe�soMrtn ever worked undx a conUxt for Gus deGartment? VES NO .., - . Hes this pereaJfi�m e�er heen a cilK empbyce9 - YES NO ooes tnis cersonlfirm oossess s sldu not norma��vvossessea ev sov ourreirt citv emw�'ee7 YES � Ic thie pe'soMim a taryeted venda? VES NO VITIATING PROBLEM ISSUE, OPPORTUNITV (WFw, What, When, y � W � hy) / / �� q � � �- � ,/ / �L!{ LUc/'r1�. fOf�/'r�c D'�TY[� ��J �� ./�i �'v!'� � 7'� S�`� sl'-ow,�-N w� evv�c�.Q e` � '�-� �sr �a� � e C'o � rGBvr� rd�' .-` • 7dz, r , - . .�S'�e. F+2�E�fS /v'-Z �Yd✓�^G.t/l � �S��dlZ��///GLd/�r1! �7� � t✓ i�6!'i�J�J.�!-Q� y = , ✓ �, �•.(/f Sy� � ! �DVAMAGES IF APPROVED �� - -L�� T/� e s'P�i v�-. ��.3is�2�'�ro�`er�°' CA�-� �.'�-,..h �e.i �v � d� s�r {�or /o v- %r� ov� �e �Z�-� �'�� j�`B�s�"` s - RECENED NOV 1 g 1998 �FAPPROYED �Q�� AYOR OFFIC� iFrvoraa — fdrt s�° ��r/s�ed v�t�°�i G�.g,�/�✓ sf,Y/ / 2.20� {�y .f�l/� e �i�'��ro�`� /��C.�.�jiif ✓� �,LU� S//l9Si F'2 �P [� S COSTlREVENUE BUDliETm (CIRCLE ON� YES NO 16 SOURCE �P��'H '� ��-" ' ACTNITV NUMBER n O�INFORMATION(IXPWM /' P � � �,y,C ��" � '✓"✓ , �I/� s G, � du� `� �' .�a•�. e � ,� J , (J!(� G� � Ur �f�d('//� ;� �k�E�l `� �NLAMA//JAAiTe rT/�/l�(�✓UL � /W"`-�/ d" </ �✓ � LY.1`7�/G/Q�/•�� r2{� al U '� Gid� ��-�Ci� �i�rtrt, �� G��F_ _ MAYOR'S OFFICE q �.t�� CITY COUNCIL OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE CITY COUNCIL DATE December 2, 1998 REGARDING Resolution Authorizing the Issuance of $6,200,000 of Tazc Exempt Multi-Family Revenue Bonds and Execution of Documents for the I.ewis Park Apartments, District 6(Conduit Financing) PURPOSE The Housing and Redevelopment Authority of the City of Saint Paul (HRA) has received an application from Government & Educational Assistance Corporation ("GEAC"), a 501 (c)(3) non -profit corporation, requesting the HRA to issue up to $6,200,000 of Tax Exempt Multi- family Revenue Bonds (Bonds) for the purpose of acquiring a leasehold interest in the Lewis Park Apartments (Project) located at 180 Wayzata Street, in District 6. This use of the tax exempt bonds will keep the Section 8 Housing Assistance Program (HAP) contract in place and through its term to March 15, 2019. The GEAC is a non-profit corporation so the tas- exempt bonds do not count against the annual revenue bond volume limit available to the HRA. The purpose of this report is to request the City Council consider adopting the attached prel'uninary (inducement) resolution which would approve the following: Authorize the Executive Director of the HRA to enter into a Memorandum of Understanding (MOU) with the Government & Educational Assistance Corporauon to work towards possible issuance of the Bonds. The MOU also stipulates the terms and conditions for issuance of the Bonds should the HRA decide to issue the Bonds; and 2. Authorize HRA to issue up to $6,200,000 of ta�c exempt mulu-family rental revenue bonds for the Project; and Approve a Resolution for a Financing Program for a Mulu-family Rental Housing Development, a copy of which is attached for the financing of the project prepared in accordance with the provisions of Minnesota Statutes, section 462C.03; and 4. Retain Leonazd, Street and Deinard as bond counsel and Miller & Schroeder Financial, Inc., as investment banker for said Bonds, authorize them to assist in the preparation and review of necessary documents relating to the Project and Housing Program and consult with the HRA, City Attorney, Owner, and purchasers of the proposed Bonds. K: \SFIARED\SANCHEZT\LewisParkApts.CC`pt ��•�� Approval of the inducement resolution and execution of the Memorandum of Understanding does not require or obligate the City or HRA to issue bonds or cause any action against the City or HRA arising from any failure or refusal by the City or HRA to approve the project or issuance of the Bonds. With respect to multi-family housing bonds, Section 72.04 of Chapter 72 of the City's Adminisuative Code provides that the HRA be designated to exercise on behalf of the City the powers confened 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 before the Ciry Council rather than the HRA. PROJECT The Project, built in 1978, has a Section 8 Housing Assistance Payment ("HAP") contract covering all of the 103 handicapped apartment units. The Project is comprised of 68 one- bedroom units and 35 two bedroom units. Rents charged are approved by HUD and are $718 and $856 respectively. Real estate taxes are $102,880 per year. The Section 8 HAP contract allows the current owner, Lewis Park Ltd., to get out of the HAP contract every 5 years. The lunited partners are currenUy trying to sell the project. The intent of GEAC is to preserve the Section 8 contact and to keep the I.ewis Park Apartments operating as affordable subsidized housing. The GEAC will enter into an Installment Purchase Contract (leasehold interest) and land lease. The land lease will have a term of 20 years beyond the term of the bonds and the IIAP contract. The initial payment will occur at the bond closing and the second payment will be made at the end of the HAP contract to extend the ownership to the end of the land lease. The second payment will be equal to the balance of the appraised value future valued at the bond interest rate and at the option of GEAC. If the second payment is not made then the property would revert to the back to the current owner. FINANCING The estimated sources and uses of funds statement is as follows: Sources HRA Revenue Bonds Uses $5.687,000 Purchase price $4,887,299 224,070 59,000 467,047 21,149 28.435 $5,687,000 Financing Costs Replacement Reserve Debt Service Reserve Real Estate Closing Nonprofit fee Total $5,687,000 K: \SHARED\SANCHEZT\LewisPazkApts. CCtpt ag - (os�l The preliminary term sheet for the Bonds is as follows: Issue Amount: $5,451,000 50,000 Term: Bond Interest Rate Issue Date: Maturity Date: Bonds: Rating: Security for Bonds Zl years fully amortizing taY exempt bonds; taxable bonds 186,000 1 year fully amortizing 5.4% 6.4% 5.5% December 1998 2019 2000 2019 Three series of bonds: 1. Two series of bonds to be a qualified 501 (c) (3), rated tas exempt; 2. One series of bonds to be a qualified 501 (c) (3), rated tasable bond. Series A"A" rated, t� exempt bonds of $5,451,000; Series B"A" rated, taz�able bonds of $50,000; Series C" BBB" rated taY exempt bonds of $186,000 1. First I.easehold Mortgage on the Land and Improvements; 2. Assignment of I.eases and Rents and the HAP Contract; 3. Debt Service Reserve Fund; 4. Repair and Replacement Reserve Placement Method: Public Offering Due Diligence: Project's Cnancial statements Appraisal Phase I Environmental audit Borrower: Bond Counsel: Underwriter: Trustee: Shuctural and mechanical engineer's report Governmental & Educational Assistance Corporation L,eonard, Street and Deinard Miller & Schroeder Financial First Trust The Project's operating income supports an annual debt service coverage ratio of 1.15 for "A" rated bonds and 1.10 for the "BBB" rated bonds. FEES The non-refundable application fee of $5,000 has been received. Should the Bonds be issued, the HRA will receive an administrative fee at closing equal to 0.5% of the principal balance of the Bonds. On the second anniversary date of the Bonds the HRA will receive an additional 0.5 % fee. Every year thereafter that the Bonds remain outstanding the HRA will receive an annual administrative fee equal to 0.01 % of the outstanding principal balance of the Bonds. BUSIlVESS PROFILE The Govemment & Educational Assistance Corporation ("GEAC") is a non-profit 501(c)(3) corporation formed to preserve affordable housing. The GEAC is newly formed and has no assets. The principals of the corporauon are Messrs. Thomas Maple, Phil McMullen, Donald Roby, and Patrick Rafferty. K: \SIIARED\SANCHEZT\LewisParkApts.CC�t � ADVERSE LENDING The GEAC does not have an adverse lending relationsIup with the HRA or tfie City of Saint Paul. REPAYMENT CAPACITY The Project's 15 yeaz Income Projections-Cash Flow appears to be a reasonable projection that will meet the debt coverage ratio of 1.15 for the "A" rated bonds and 110 for the "BBB" rated bonds. Historically, operating e�enses have been stable. Operating expenses appear to be reasonable. 1VIANDATED REQUIItEMENTS AND STANDARDS Pursuant to the federal law regarding the issuance of tax-exempt multi-family revenue bonds, at a miniinum either 20% or 40% of the 103 dwelling units of the project must be specifically reserved for tenants whose incomes are not greater than either 50% or 60% of the median family income as adjusted for family size. The project is currently 100% Section 8 assisted so the minimum income requirement will be met. SUPPORT The GEAC has received a letter of support from the District 6 Planning Council. PUBLIC PURPOSE The following public purposes will be met: The Project fmancing will preserve affordable housing units and will reasonably assure the long term viabiliry of the Project as an asset to the surrounding neighborhood. BOND AUTHORITY; ALLOCATION PROCESS The GEAC is a non-profit corporation so the tax-exempt bonds do not count against the annual revenue bond volume 1'unit available to the HRA. Upon adoption of the inducement resolution staff will proceed to finalize the financing of the proposal for presentation to the HRA and request the HRA to consider adoption of a resolution to issue and sell revenue bonds to fmance the project. Questions may be directed to Tom Sanchez, Northwest Quadrant Team of PED at 266-6617. ATTACHMENT City Council Resolution Sponsored by Councilmember Reiter K:ISHARED\SANCHEZTILewisPazkAprs.CC`pc wpd