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1997-10-06 PH Notice Housing Program CITY OF ALBERTVILLE NOTICE OF PUBLIC HEARING ON A HOUSING PROGRAM AND ISSUANCE OF REVENUE BONDS TO FINANCE A HOUSING PROGRAM UNDER MINNESOTA STATUTES, CHAPTER 462C FOR THE ACQUISITION AND CONSTRUCTION OF A SENIOR HOUSING FACILITY NOTICE IS HEREBY GIVEN that the Albertville City Council (the "Council") will hold a public hearing on Monday, October 6, 1997 at or after 7:00 p.m. at City Hall in the City of Albertville, Minnesota, to consider a housing program for the issuance of revenue bonds under Minnesota Statutes, Chapter 462C, as amended, to finance a housing development in the City (the "Program"). At the public hearing, the Council will consider adoption of a resolution approving the Program and giving preliminary approval to the issuance of revenue bonds under the Program. The aggregate face amount of revenue bonds proposed to be issued to finance the Program is presently estimated not to exceed $4,000,000. The project proposed to be financed under the Program consists of the acquisition and construction of a 44-unit residential rental facility for senior citizens south of 57th Street NE, between Kalland Avenue and Wright County Highway No. 19, in the City, to be initially owned and operated by Zedakah Foundation, a Minnesota nonprofit corporation. The revenue bonds will be issued by the City of Albertville and will be limited obligations of the City payable solely from the revenues pledged to the payment thereof, and will not be a general obligation of or be secured by the taxing power of the City of Albertville. A copy of the proposed Housing Program is on file in City Hall. Anyone desiring to be heard during the public hearing will be afforded an opportunity to do so. Dated: [date of publication] BMB12 96 03 AL141-25 CITY OF ALBERTVILLE, MINNESOTA PROGRAM FOR A MUL TIF AMIL Y HOUSING DEVELOPMENT Pursuant to Minnesota Statutes, Chapter 462C (the "Act"), the City of Albertville, Minnesota (the "City") is authorized to develop and administer programs to finance the acquisition and rehabilitation of multifamily housing developments under the circumstances and within the limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the City. The City has received a proposal that it approve a program roviding for the acquisition and construction of a 44-unit residential rental facility for senior citiz ns south of 57th Street NE, between Kalland Avenue and Wright County Highway No. 19, in the City, by Zedakah Foundation, a Minnesota nonprofit corporation (the "Owner"). The cquisition and construction of the Project is to be funded through the issuance of up to $4,000, 00 in revenue bonds to be issued by the City (the "Bonds"). The Owner will own and ope ate the Project as a senior residential rental project. It is expected that 40 percent of the Hou ing Units will be rented to persons with 60 percent or less of the median area income. It is stimated that rents for the Housing Units will range from $_ per month to $ per mo tho The City, in establishing this multifamily housing prog am (the "Program"), has considered the information contained in the City's comprehensive plan. The Project will be acquired and rehabilitated in accordance with the requirements of Su divisions 1 and 2 of Section 462C.05 of the Act. Section A. Definitions. The following terms used in th s Program shall have the following meanings, respectively: "Act" shall mean Minnesota Statutes, Section 462C.Ol, et seq., as currently in effect and as the same may be from time to time amended. "Bonds" shall mean the revenue bonds to be issued y the City. "City" shall mean the City of Albertville, Minnesota. "Housing Unit" shall mean anyone of the apartme units, each located in the Project, occupied by one person or family, and containing c mplete living facilities. "Land" shall mean the real property upon which the roject is situated. "Owner" shall mean Zedakah Foundation, a Minneso a nonprofit corporation. "Program" shall mean this program for the financing f the Project pursuant to the Act. BMB129662 ALl41-25 1 "Project" shall mean the residential rental housing development consisting of approximately 44 one-bedroom Housing Units, to be acqu'red and constructed by the Owner. Section B. Program For Financing the Proiect. It is propos d that the City establish this Program to provide financing for acquisition and construction of th Project at a cost and upon such other terms and conditions as are set forth herein and as ma be agreed upon in writing between the City, the initial purchaser of the Bonds and the Owne. The City expects to issue the Bonds as soon as the terms of the Bonds have been agreed upon by the City, the Owner and the initial purchaser of the Bonds. The proceeds of the Bonds wil be loaned to the Owner to finance the acquisition of the Land and the construction of the Proje t, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a trus ee will be appointed by the City to monitor the construction of the Project and the payment of rincipal and interest on the Bonds. It is anticipated that the Bonds will have a maturity of approx mately thirty (30) years and will bear interest at a variable rate or at fixed rates consistent wi the market at the time of Issuance. The City will hire no additional staff for the administration of the Program. Insofar as the City will be contracting with underwriters, legal counsel, bo d counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Program, no administrative costs will be paid from the City's udget with respect to this Program. The Bonds will not be general obligation bonds of the ity, but are to be paid only from properties pledged to the payment thereof, which may includ additional security such as additional collateral, insurance or a letter of credit. Section C. Local Contributions To The Program. The Cit tax increment assistance with an estimated present value of $390, increment proceeds will be used primarily for land acquisition Owner has not requested any other local contributions to the Progr is providing approximately 00 to the Project. The tax d site improvements. The with respect to the Project. (1) Substantially all of the proceeds of the sale f the Bonds will be applied to the acquisition and construction of the Project and to the funding of appropriate reserves. The proceeds will be made available to the Owner pursuant to the terms of the Bond offering, which will include certain covenants to be m de by the Owner to the City regarding the use of proceeds and the character and use of e Project. (2) The Owner, and any subsequent owner of th Project, will not arbitrarily reject an application from a proposed tenant because of ace, color, creed, religion, national origin, sex, marital status, or status with regard to p blic assistance or disability. BMB129662 AL141-25 2 (3) The Project is designed primarily for rental to elderly persons. Thus, Section 462C.05, Subdivision 5 of the Act provides that the limitations set forth in Section 462C.05, Subdivision 2 of the Act are not applicable. Nevertheless, it is expected that at least forty 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 median family income, adjusted for family size. This set aside would satisfy the low-income occupancy requirements of Section 462C.05, Subdivision 2 of the Act, if they were applicable. (4) The Project is designed to be affordable by persons and families with Adjusted Gross Income not in excess of the greater of (a) 110 percent of the median family income as estimated by the United States Department of Housing and Urban Development for Hennepin County, or (b) 100 percent of the income limits established by the Minnesota Housing Finance Agency for the City and by other persons and families to the extent determined to be necessary by the City in furtherance of the policy of economic integration. Subsection E. Evidence of Compliance. The City may require from the Owner at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Owner to complete the construction of the Project, and evidence satisfactory to the City of compliance with the standards and requirements for the making of the financing established by the City, as set forth herein; and in connection therewith, the City or its representatives may inspect the relevant books and records of the Owner in order to confirm such ability, intention and compliance. In addition, the City may periodically require certification 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 City may by resolution authorize, issue and sell its revenue bonds in an aggregate principal amount of approximately $4,000,000. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primarily from the revenues of the Program authorized by this Section. The costs of the Project, including costs of issuance of the Bonds and required reserve funds, are presently expected to be approximately $4,000,000. The costs of the Project may change between the date of preparation of this program and the date of issuance of the Bonds. The Bonds are expected to be issued in October, 1997. Subsection G. Severability. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. Subsection H. Amendment. The City shall not amend this Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Subsection I. State Ceiling. None of the state ceiling for private activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and Chapter 474A of Minnesota Statutes, will be applied for with respect to the Bonds. BMB129662 AL141-25 3 CITY OF ALBERTVILLE, MINNESOTA PROGRAM FOR A MUL TIF AMIL Y HOUSING DEVELOPMENT Pursuant to Minnesota Statutes, Chapter 462C (the "Act"), the City of Albertville, Minnesota (the "City") is authorized to develop and administer programs to finance the acquisition and rehabilitation of multifamily housing developments under the circumstances and within the limitations set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds issued by the City. The City has received a proposal that it approve a program providing for the acquisition and construction of a 44-unit residential rental facility for senior citizens south of 57th Street NE, between Kalland Avenue and Wright County Highway No. 19, in the City, by Zedakah Foundation, a Minnesota nonprofit corporation (the "Owner"). The acquisition and construction of the Project is to be funded through the issuance of up to $4,000,000 in revenue bonds to be issued by the City (the "Bonds"). The Owner will own and operate the Project as a senior residential rental project. It is expected that 40 percent of the Housing Units will be rented to persons with 60 percent or less of the median area income. It is estimated that rents for the Housing Units will range from $_ per month to $_ per month. The City, in establishing this multifamily housing program (the "Program"), has considered the information contained in the City's comprehensive plan. The Project will be acquired and rehabilitated in accordance with the requirements of Subdivisions 1 and 2 of Section 462C.05 of the Act. Section A. Definitions. The following terms used In this Program shall have the following meanings, respectively: "Act" shall mean Minnesota Statutes, Se tion 462C.Ol, et seq., as currently in effect and as the same may be from time to tim amended. "Bonds" shall mean the revenue bonds to be issued by the City. "City" shall mean the City of Albertville, Minnesota. "Housing Unit" shall mean anyone of t e apartment units, each located in the Project, occupied by one person or family, and ontaining complete living facilities. "Land" shall mean the real property upo which the Project is situated. "Owner" shall mean Zedakah Foundation a Minnesota nonprofit corporation. "Program" shall mean this program for th financing of the Project pursuant to the Act. BMB129662 AL141-25 1 "Project" shall mean the residential rental housing development consIstmg of approximately 44 one-bedroom Housing Units, to be acquired and constructed by the Owner. Section B. Program For Financing the Proiect. It is proposed that the City establish this Program to provide financing for acquisition and construction of the Project at a cost and upon such other terms and conditions as are set forth herein and as may be agreed upon in writing between the City, the initial purchaser of the Bonds and the Owner. The City expects to issue the Bonds as soon as the terms of the Bonds have been agreed upon by the City, 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 the Land and the construction of the Project, to fund required reserves and to pay the costs of issuing the Bonds. It is expected that a trustee will be appointed by the City to monitor the construction of the Project and the payment of principal and interest on the Bonds. It is anticipated that the Bonds will have a maturity of approximately thirty (30) years and will bear interest at a variable rate or at fixed rates consistent with the market at the time of Issuance. The City will hire no additional staff for the administration of the Program. Insofar as the City will be contracting with underwriters, legal counsel, bond counsel, the trustee, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Program, no administrative costs will be paid from the City's budget with respect to this Program. The Bonds will not be general obligation bonds of the City, but are to be paid only from properties pledged to the payment thereof, which may include additional security such as additional collateral, insurance or a letter of credit. Section C. Local Contributions To The Program. The City is providing approximately tax increment assistance with an estimated present value of $390,000 to the Project. The tax increment proceeds will be used primarily for land acquisition and site improvements. The Owner has not requested any other local contributions to the Program with respect to the Project. Section D. Standards and Requirements Relating to the Financing of the Proiect Pursuant to the Program. The following standards and requirements shall apply with respect to the operation of the Project by the Owner pursuant to this Program: (1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition and construction of the Project and to the funding of appropriate reserves. The proceeds will be made available to the Owner pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Owner to the City regarding the use of proceeds and the character and use of the Project. (2) The Owner, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, marital status, or status with regard to public assistance or disability. BMB129662 AL141-25 2 (3) The Project is designed primarily for rental to elderly persons. Thus, Section 462C.05, Subdivision 5 of the Act provides that the limitations set forth in Section 462C.05, Subdivision 2 of the Act are not applicable. Nevertheless, it is expected that at least forty 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 median family income, adjusted for family size. This set aside would satisfy the low-income occupancy requirements of Section 462C.05, Subdivision 2 of the Act, if they were applicable. (4) The Project is designed to be affordable by persons and families with Adjusted Gross Income not in excess of the greater of (a) 110 percent of the median family income as estimated by the United States Department of Housing and Urban Development for Hennepin County, or (b) 100 percent of the income limits established by the Minnesota Housing Finance Agency for the City and by other persons and families to the extent determined to be necessary by the City in furtherance of the policy of economic integration. Subsection E. Evidence of Compliance. The City may require from the Owner at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Owner to complete the construction of the Project, and evidence satisfactory to the City of compliance with the standards and requirements for the making of the financing established by the City, as set forth herein; and in connection therewith, the City or its representatives may inspect the relevant books and records of the Owner in order to confirm such ability, intention and compliance. In addition, the City may periodically require certification 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 City may by resolution authorize, issue and sell its revenue bonds in an aggregate principal amount of approximately $4,000,000. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primarily from the revenues of the Program authorized by this Section. The costs of the Project, including costs of issuance of the Bonds and required reserve funds, are presently expected to be approximately $4,000,000. The costs of the Project may change between the date of preparation of this program and the date of issuance of the Bonds. The Bonds are expected to be issued in October, 1997. Subsection G. Severability. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions. Subsection H. Amendment. The City shall not amend this Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds. Subsection I. State Ceiling. None of the state ceiling for private activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and Chapter 474A of Minnesota Statutes, will be applied for with respect to the Bonds. BMB129662 AL141-25 3