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HomeMy Public PortalAbout2021-08 Resolution Approving Amendments to Educational Facilities Revenue Note - Yeshiva - Series 2018Member DesLauriers introduced the following resolution and moved its adoption. CITY OF MEDINA, MINNESOTA RESOLUTION NO. 2021-08 RESOLUTION APPROVING AMENDMENTS TO THE EDUCATIONAL FACILITIES REVENUE NOTE (YESHIVA OF MINNEAPOLIS PROJECT), SERIES 2018, AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO BE IT RESOLVED by the City Council (the "City Council") of the City of Medina, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. On December 28, 2018, the City issued its Educational Facilities Revenue Note (Yeshiva of Minneapolis Project), Series 2018 (the "Note"), in the original aggregate principal amount of $7,000,000, pursuant to Minnesota Statutes, Sections 469.152 through 469.1655, as amended, Minnesota Statutes, Section 471.656, as amended, and a resolution adopted by the City Council on December 4, 2018 (the "Note Resolution"). The City loaned the proceeds of the Note (the "Loan") to Yeshiva of Minneapolis, a Minnesota nonprofit corporation (the "Borrower"), pursuant to the terms of a Loan Agreement, dated as of December 1, 2018 (the "Loan Agreement"), between the City and the Borrower. The City assigned its rights to the basic payments and certain other rights under the Loan Agreement to Bremer Bank, National Association, a national banking association (the "Lender"), pursuant to a Pledge Agreement, dated as of December 1, 2018 (the "Pledge Agreement"), between the City and the Lender. The Borrower secured its obligations with respect to the repayment of the Loan pursuant to a Combination Mortgage, Security Agreement, and Fixture Financing Statement, dated as of December 1, 2018 (the "Mortgage"), by the Borrower in favor of the Lender, and an Assignment of Leases and Rents, dated as of December 1, 2018 (the "Assignment of Leases and Rents"), by the Borrower in favor of the Lender. 1.02. The proceeds of the Note were used to (i) refmance the acquisition of a building located at 4411 Minnetonka Boulevard, St. Louis Park, Minnesota, and to expand the Borrower's school facilities located at 3115 Ottawa Avenue South, St. Louis Park, Minnesota, by constructing a new gymnasium and constructing new student dormitories (the "Project"); (ii) finance capitalized interest during the construction of the Project, if necessary; and (iii) pay costs of issuance of the Note. With the permission of Bremer Bank, National Association, a national banking association, as the purchaser of the Note, the Project may also include the renovation of the building located at 4411 Minnetonka Boulevard, St. Louis Park, Minnesota, to provide faculty housing. 1.03. The Lender has agreed to amend certain terms of the Note (the "Amendments"), including lowering the interest rate payable on the Note and extending the maturity date of the Note. 1.04. The City has been advised by Kennedy & Graven, Chartered, acting as bond counsel ("Bond Counsel"), that the proposed Amendments constitute a significant modification of the Note and will cause a "reissuance" of the Note for tax purposes pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended (the "Code"). For tax purposes, the Note will be treated as being refunded on the effective date of the Amendments. 1.05. On the date hereof, the City Council held a duly noticed public hearing regarding the approval of the Amendments, where all persons interested were given the opportunity to be heard. Resolution No. 2021-08 February 2, 2021 1.06. There has been presented before the City Council (i) an amended and restated form of the Note, which incorporates the Amendments; and (ii) an amendment to the Mortgage between the Borrower and the Lender, which extends the maturity date set forth in the Mortgage. Section 2. Findings; Authorizations and Approvals. 2.01. The City Council hereby consents to and approves the Amendments to the Note and authorizes and directs the Mayor and the City Administrator to execute the amended and restated Note substantially in the form on file with the City on the date hereof, which is hereby approved, with such changes as shall be approved by the Mayor and the City Administrator; provided that the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such approval. 2.02. The Mayor and the City Administrator are hereby designated as the representatives of the City with respect to the Amendments to the Note. The Mayor, the City Administrator, and other officers of the City are authorized and directed to execute and deliver any and all certificates, agreements, or other documents which are required by the Loan Agreement, or any other agreements, certificates, or documents which are deemed necessary by Bond Counsel to documents as are necessary, customary, or appropriate in connection with the reissuance of the Note, or are required by Bond Counsel to complete the Amendments to the Note and establish the validity or enforceability of the Note or the exclusion from gross income of interest on the Note for purposes of federal income taxation and State of Minnesota taxation (including but not limited to the execution of an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038). 2.03. As provided in the Loan Agreement and the Note Resolution, the Note shall not be payable from nor charged upon any funds other than the revenues pledged to its payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Note shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Note or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which have been assigned to the Lender pursuant to the Pledge Agreement. The Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the interests of the City in the Loan Agreement, and the revenues and assets thereunder, which have been assigned to the Lender pursuant to the Pledge Agreement. Section 3. Effective Date. This resolution shall be in full force and effect from and after its passage. Dated: February 2, 2021. Kathleen Martin, Mayor Attest: GJA, Jodi M Gallup, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member Cavanaugh and upon vote being taken thereon, the following voted in favor thereof: Albers, Cavanaugh, DesLauriers, Martin, Reid And the following voted against same: None Whereupon said resolution was declared duly passed and adopted. Resolution No. 2021-08 2 February 2, 2021