2021.03.23 CC Packet - Laserfiche WebLink

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March 9, 2021 Housing Project). City Manager Massopust indicated Jenny Bolton with Kennedy & Graven would be presenting this item to the Council. Jenny Bolton, attorney with Kennedy & Graven, stated in accordance with the provisions of Minnesota State Statutes, the City is authorized to develop and administer a housing program to provide for the financing of new construction or the acquisition and rehabilitation of an existing building and site for providing a multi -family housing development. Furthermore, State Statutes also provide that such programs for multi -family housing developments may be financed by revenue bonds or obligations issued by the City. Federal tax law applicable to tax exempt conduit revenue bonds requires that the issuer's public hearing and final approval cannot be more than one year prior to the issuance of the bonds; therefore it is necessary for the City to hold another public hearing and reapprove the issuance of the remaining bonds for the Multifamily Housing Project. The Regulatory Loan Agreement, form of Subordinate Multifamily Housing Revenue Note, and Assignment of Loan Agreement identified as related documents are quite voluminous and have been prepared by the City's bond counsel. She commented further on the proposed affordable housing development that was being constructed along Old Highway 8 and recommended approval of the Resolution granting preliminary approval of the issuance of conduit revenue bonds to finance the project. Councilmember Abdulle requested further information on how the applicant can use affordable housing credits and questioned what would happen if the Dominium were to default on the bonds. Ms. Bolton explained affordable housing tax credits are a federal program. She discussed how tax credit's function and noted this project would receive 41/o tax credits. It was noted with this project, in order to maximise the tax credits all of the units would be available at 60% AMI. She explained this project was very close to completion so she did not anticipate the developer would be defaulting on the bonds given the great need for affordable housing in the area. She reported the risk of default was extremely low noting Dominium has great expertise in affordable housing. She indicated the City has not liability for the bonds noting the lender can only look to the guarantee that is being provided by the developer. Mayor Niedfeldt-Thomas asked when the City has used these types of bonds in the past. Ms. Bolton reported there were two bond issues for this development in 2019. She explained this would be the third and final financing for this facility. She commented there was a companion facility being built on this site by Dominium for seniors. City Manager Massopust stated he was aware of six other developments the City had completed with conduit revenue bonds in the past. Motion by Councilmember Allen, seconded by Councilmember Dunsworth to open the Public Hearing. A roll call vote was taken. 5 Ayes, 0 Nays - Motion Carried The Public Hearing was opened at 6:58 p.m. Mayor Niedfeldt-Thomas asked for comments, there were none. Motion by Councilmember Abdulle, seconded by Councilmember Axberg to close the Public Hearing. A roll call vote was taken. Page 3 of 8 Multifamily Housing Development and Granting Preliminary Approval to the Issuance of Conduit Revenue Bonds to Finance the Costs Thereof (Old Highway 8 Senior Housing Proj ect).