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HomeMy WebLinkAbout1985 Ordinance No. 078ORDINANCE No.fl SERIES OF 1985 BY AUTHORITY COUNCIL BILL 91 INTRODUCED BY COUNCIL MEMBER BRADSHAW AN ORDINANCE AUTHORIZING THE SSUANCE AND SALE or THE CITY OF ENGLEWOOD, COLl 1RADO, VARIABLE RATE DEMAND MULTIFAMILY HOUSING REVENUE BONDS (THE MARKS APARTMENTS) 1985 SF RlES A, IN THE AGGREGATE PRINCIPAL AMOUNT OF $12,200,000 TO FINANCE RESIIJENTIAL FACILITIES FOR LOW-AND MIDDLE-INCOME FAMILIES AND PERSONS; RATIFYING CERTAIN ACTION HERETOFORE TAKEN; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A LOAN AGREEMENT, INDENTURE OF TRUST, LAND USE RESTRICTION AGP.EEMENT, BOND PURCHASE AGREEMENT, SUCH BONDS AND CLOSING DOCUMENTS IN CONNECTION THEREWITH; AAKING DETERMINATIONS AS TO "LOW-AND MIDDLE-INCOME FAMILIES AND PERSONS," AS TO THE SUFFICIENn' OF REVENUES AND AS TO OTHER MATTERS RELATED TO THE RESIDENTIAL FACILITIES; AND REPEALING /1(. rION HERETOFORE TAKEN IN CONFLICT HEREWITH. WHEREAS, the City of Englewood, Colorado (the "City") is authorized by the County and Municipality Development Revenue Bond Act, constituting Sections 29-3-101 through 29-3-123, inclusive, Colorado Revised Statutes (the "Act"), to finance one or more projects, including any land, building or other improvement, and all real and personal pror,erties, w• .• tner or not in existence, which shall be suitable for residential facilities for low-and middle-income families or persons and intended for use as the sole place of residence by the owners er intended cccupants to the end that more adequate residen t ial housing facilities for low-and middle-income families and persons may be provide~, which promot -the public health, welfare, safet y , con venience and prospe ri ty; and ;,/HEREAS, the Act authorizes the City (i) to issue its revenue bo nds for the pur pose of defray i ng the cost of financing a ny project and all in cidental expenses incurrec: i n connection with the issue .. <? of such bonds, ( ii) tc enter into financing agreements with others for the purpose of providing revenues to pay the bonds authorized to be issued under the Act and upon such terms and conditions as the City Council of the City may deem advisable, and (iii) to secure the payment of the principal of, premium, if any, and interest on such bonds as provided in the Act; and WHEREAS, the City ha ■ determined that it is advisable and in the best interests of the City to issue, sell and deliver its Variable Rate Demand Multifamily Housing Revenue Bonds (The Marks Apartments) 1985 Series A, in the aggregate principal amount of $12,200,000 (the "Bonds"), to Citicorp Investment Ban k , Citibank, N,A. and Hanifen, I~hoff Inc. (the "Underwriters") in c,der to provide financing to HG Venture, a Texas limited partnership ( the "Developer"), for the acquisition, construction and installation of the first phase of a multifamily rental housing project (the "Project") which is to be located within the City, occupied by persons of low and middle income, as detetmined by the City, and occupied partially by individuals of low or moderate income within the meaning of and for the period required by Section 103(b) (12) of the Internal Revenue Code of 1954, as amended (the "Code"), all for the public pucpose of providing more adequate residential housing facilHies for low-and middle-income families and persons; and WHEREAS, in order to prov i de such financing, the City will make a loan from the proceeds of the Bonds to the Developer pursuant to a Loan Agreement dated as of December l, 1985 (the "Loan Agreement"), between the City and the Developer, and the De vel oper will acquire, operate and maintain the Project in accordance with the requirements of ~he Act and Sect ion 103(b)(4)(A) o f t he Code ; and -3 - WHEREAS, the Bonds will be secured by ( i) a pledge of the Loan A~reement, (ii) a pledge of the revenues and recl"ipts derived by the City pursuant to the Loan Agreement, (iii) a First Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of December 1, 1985 (the "Deed of Trust"), from the Developer to the Public Trustee of the County of Arapahoe, Colorado, and (iv) a Letter of Credit to be issued by Citibank, N.A. (the "Bank"), to Mellon Bank, N.A., as Trustee ( the "Trustee"), pursuant to a Reimbursement Agreement dated as of December 1, 1985, among the Developer, the Bank and Citicorp Real Estate, Inc., as agent for the Bank ( the "Servicer" J; and WHEREAS, on July 1, 1985, the City Council of the City adopted II resolution whereby the City agreed to authorize the issuanc~ ind sale of the Bonds, it being understood that no costs of issuar.,·e and sale were to be borne by the City and that the necessary financing documents were subject to formal approval by ordinance ~f the City Council; and WHEREAS, there have been presented to the City Council (i) the proposed form of Loan Agreement, (ii) the proposed form of Indenture of Trust dated as of December l, 1985 (the "Indenture"), between the City and the Trustee, (iii) the proposed form of Land Use Restriction Agreement dated as of December l, 1985 (the "Land Use Restriction Agreement") among the City, the Trustee, the Developer and the Servicer, (iv ) the proposed form of Bond Purchase Agreement dated December ...!i_, 1985 (the "Bond Purchase Agreement"), between the City and the Underwriters, and (v) the proposed form of Preliminary Official Statement (the "Preliminary Official Statement"), to be distributed by the Underwritets to prospective purchasers of the Bonds. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL or THE C:TY OF ENGLEWOOD, COLORADO: -4 - Section l, All action (not inconsistent with the provisions of this ordinance) heretofore taken by the City Council and the officers of the City directed toward the financing of the Project and the iasuance and sale of the Bonde therefor be, and the same is hereby, ratified, approved and confirmed . Section 2. The City shall finance the Project subject to the terms of the Loan Agreement, the Indenture and the Land Use Restriction Agreement, by the issue, sale and delivery of the Bonds. Section 3. To defray the cost of such ~inancing, there is hereby authorized and created an issue of revenue bonds designated before conversion of the interest rate borne by the Bonds to the Fixed Rate (as defined in the Indenture), as the "City of Eng~ewood, Colorado, Variable Rate Demand Multifamily Housing Revenue Bonds (T~e Marks Apartments) 1985 Series A," and after such conversion of the interest rate borne by the Bonds to the Fixed Rate (as defined in the Indenture), as the "City of Englewood, Colorado, Multifamily Housing Revenue Bonds (The Marks Apartments) 1985 Series A," in the aggregate principal amcunt ot $12,200,000, issuable as fully registered bonds in the denomination, before conversion of the interest rate borne by the Bonds to the Fixed Rate, of $100,000 principal amount or any integral multiple thereof, and after such conversion of the interest rate borne by the Bonds to the Fixed Rate, of $5,000 principal amount or any integral multiple thereof, dated as provided in the Indenture and maturing on December 15, 1997. Intere;t accrued on the Bonds during each Interest Period (as defined in the Indenture) shall b~ paid on each Interest Payment Date (as defined in the Indenture) and (except as otherwise provided in the Indenture following conversion of -5 - I I I the interest rate borne by the Bonds to the Fixed Rate) computed on the basis of 365 or 366 days, as appropriate, for the actual number of days elapsed. From the date ot initial iHuance and delivery of the Bonds to and including January 6, 1986, the Bonds shall bear interest at the rate per annum determined by Citibank, N.A., as Remarketing Agent (as defined in the Indenture) to be the interest rate which, if borne by the Bonds, would, in its judgment having due regard for prevailing financial market conditions, be the interest rate necessary, but which would not exceed the interest rate necessary, to produce as nearly as practicable a par bid (disregarding accrued interest, if any) if all the Bonds were sold on the Interest Computation Date (as defined in the Indenture) preceding the date of issuanc-:! and delivery of the s; provided, however, that the interest rate so determined shall not be less than 80\ nor more than 120\ of the Interest Index (as defined · n the Indenture) as of such Interest Computation Date preceding the date of issuance and delivery of the Bonds; and provided further that such interest rate shall not exceed 14\ per annum unless and to the extent that a Letter of Credit satisfying the requirements of the Loan Agreement is delivered to the Trustee in an amount equal to the aggregate principal amount of the Bonds plus interest thereon for a period of 95 days at such higher rate. Thereafter, unless the interest rate on the Bonds shall have been established at the Fixed Rate as provided in the Indenture, the interest rate borne by the Bonds shall be a variable rate determined as follows: for each Interest Accrual Period (as defined in the Indenture), the interest rate borne by the Bonds shall be that rate determined by the Remarketing Agent on the I nterest Computation Date for such Interest Accrual Period to be the rate of interest which, if borne b/ the Bonds, would, in its judgment having due regard for prevailing market conditions, be the interest rate necessary, but which would not exceed the interest rate necessary, to produce as -6 - nearly as practicable a par bid (disregarding accrued interest) if all the Bonds were sold on such Interest Computation Date, provided, however, that the interest rate so determined shall not be less than 80\ nor more than 120\ of the Interest Index for such Interest Accrual Period; and provided further that such interest rate shall not exceed 14\ per annum unless and to the extent that a Letter of Credit satisfying the requirements o• the Loan Agreement is delivered to the Trustee in an amount equcl to the aggregate principal amount of the Bonds then outstanding plus interest thereon for a period of 95 calendar days at such higher rate. Upon the satisfaction of certain requirements, the inte:est rate borne by the Bonds may be converted from a variable rate to a fixed rate per annum, as more particularly described in the Indenture. In no event shall the interest rate borne by the Bonds exceed 20\ per annum. The Bonds shall be payable, shall be subject to redemption prior to maturity and shall be in substantially the forms as provided in the Indenture. Pursuant to the Bond Purchase Agreement, the Bonds shall be sold to the Underwriters at a private sale at a purchase price equal to 100\ of the aggregate principal amount of t~e Bonds. The net effective maximum interest rate on the Bonds is / --2Jl_\, which rate is hereby determined to be the maximum netee1tt"l{i:'Y'l,e interest rate on the Bonds. Section 4. Pursuant to Section 29-3-l0J(l0)(d) of the Act, the City Council of the City hereby finds and determines that for purposes of multifamily rental housf~g projects such as the Project, "low-and middle-income persons and famil i es" means and includes any person whose Adjusted Gross Income as defined in the Loan Agreement), toget her with the Adjusted Gross Income of all persons who intend to reside with such person in one dwelling unit, did not, for the taxable year immediately preceding the .l r initial occupancy of such dwelling unit, exc~ed an amount equal -7 - I I I to 1751 of the Median Gron Income for the Arn (H defined in the Loan Agreement), adjusted for the number of persons who intend to reside in ■uch dwelling unit in a manner con ■i ■tent with making adjustments for family size for purpose ■ of determining "lower income families• under Section 8(f)(3) of the United States Housing Act of 1937, as amended, or such other amount as may be established from time to time by the City Council of the City, in accordance wi~h the Act, as the maximum income for "low-and middle-income persons and families" within the meaning of the Act, and that such persons and families lack the financial ability to pay rentals sufficient to induce private enterprise in the City to build a sufficient supply of adequate, safe and sanitary dwellings without the special assistance afforded by the Act. Section S. The following det ir rminations and findings are hereby made in accordance with r-,,, d ons 29-3-113, 29-3-114 and 29-3-120 of the Act. (a) The maximum amount necessary in each year to pay the principal of and the interest on the Bonds is as follows: Annual Period Annual to and Interest Principal to be Debt Including for such Retired in such Service Qs:i;;i:mt!u is !!ui.2!:! Pi:riod Bi:gyi,ri:mi:n~ 1986 $2,440,000 .00 $ -o-$2,440,000.00 1987 2,440,000.00 -o-2,440,000.00 1988 2,440,000.00 -o-2,440,000.00 1989 2,440,000.00 -o-2,4 40,000.00 1990 2,440,000.00 -o-2,440,000.00 1991 2,440,000.00 -o-2,440,000.00 1992 2,440,000.00 -o-2,440,vOO.OO !993 2,440,000.00 -o-2,440,000.00 1994 2,440,000.00 -o-2,440,000.00 1995 2,440,000.00 -o-2,440,000.00 . 1996 2,440,000.00 -0 ·· 2,440,000.00 1997 2,440,000.00 -o-2,440,000.00 1998 2,440,000.00 -o-2,440,000.00 1999 2,440,000.00 -o-2,440,000.00 2000 2,440,000.00 -o-2,440,000.00 2001 2,440,000.00 -o-2,440,000.00 -8 - 2002 2003 2004 2005 2006 2007 proposed to be maintenance of 2,440,000.00 -o-2,440,000,00 2,440,000.00 -o-2,440,000.00 2,440,000.00 -o-2,440,000.00 2,440,000.00 -o-2,440,000.00 2,440,000.00 -o-2,440,000.00 I 2,440,000.00 12,200,000.00 14,640,000.00 (bl No reserve fund has been established nor i established for the retirement of the Bonda or the the Project and accordingly it will not be necessary to pay amounts into any such reserve fund. ( c) The terms under which the Project is to be financed provide that the Developer shall maintain the Project and carry all proper insurance with respect thereto. documents (d) The with respect revenues to the payable Bonds under and the the financing Project are sufficient to pay, in addition to all other requirements of such financing documents and this ordinance, all sums referred to in parag r aphs (a) and (c) of this Section. (e) The revenues payable under the f i nancing documents with respect to the Bonds and the Project are sufficient to pay, in addition to all other requirements of such financing eocuments and this ordinance, all taxes payable pursuan t to Section 29-3-120 of the Act. Section 6. The form, terms and provisions of the Loan Agreement, the Indenture, the Land Use Restriction Agreement and the Bond Purchase Agreement be and they hereby are approved and the City shall enter into the Loan Agreement, the Indent u re, the Land Use Restriction Agreement and the Bond Purchase Agreement substantially in the forms of such documen t s pres en t ed to the City Council at th is meeting; and the Mayor of the City is hereby authorized and direc t ed to execute and deliver the Loan Agreement, the Indenture, the Land Use Restriction Agreement and -9 - the Bond Purchase Agreement and the City Clerk i ■ hereby authorized and directed to affix 'he City seal to and to attest the Loan Agreement, the Indenture, the Land Use Restriction Agreement and the Bond Purchase Agreement. Section 7. The City -acknowledges· the use •by the underwriters of the Preliminary Official Statement in connection with the offering of the Bonds to the public. The City acknowledges the use by the Underwriters in connection with the sale of the Bonda of a final official statement ( the "Official Statement") to be prepared by the Underwriters and to be substantially in the form of the Preliminary Official Statement but containing such amendments as may be dee1,1ed appropri.ite by the Underwriters. The City makes no representation or warranty as to, and has no responsibility fc,r, the accuracy or completeness of the information contained in the Preliminary Official Statement or the Official Statement. Section 8. The forms, terms and provisions of the Bonds, substantially in the form contained in the Indenture, be and they hereby are approved; and the Mayor of the City is hereby authorized and directed to execute the Bonds and the City Clerk is hereby authorized and directed to affix the seal of the City to the Bonds and to attest the Bonds. The signatures of the Mayor and the City Clerk on the Bonds and the seal of the City on the Bonds shall be mauually affixed or by facsimile. Section 9. The Mayor is hereby authorized and directed to execute and dPliver to the Trustee the written order of the City for the authentication and delivery of the Bonds by the Trustee, in accordance with Section 3,01 of the Indenture. Section 10 . Mellor. Bank, N.A., Pittsburgh, Pennsylvania, is hereby appointed as Trustee, paying agent, and bond registrar. Me llon Securities Trust Company, New York, New -1 0 - York, is hereby appointed as Tender #.gent (a ■ defined in the Indenture), co-bond registrar and co-authenticating agent under the Indenture. Citibank, N.A., New York, New York, ia hereby appointed as Remarketing Agent (as defined in the Indenture) and Indexing Agent (as defined in the Indenture) under the Indenture. Section ll. The officers of the City shall take all action in conformity with the Act necessary or reasonably required to effectuate the issuance of the Bonda and shall take all action in conformity with the Act necessary or desirable to finance the cost of the Project and for carrying out, giving effect to and consummating the transactions contemplated by this ordinance and the Loan Agreement, the I!ldenture, the Land use Restriction Agreement a nd the Bond Purchase Agreement, including without lim i tation, the execution and delivery of any closing documents to be delivered in connection with the sale and delivery of the Bonds. Section 12, The cost of financing the Project, including incidental issuing expenses, will only be paid out of the proceeds of the Bonds and none of the Bonds will be the general obligation of the City nor shall any of the Bonds, including interest thereon, constitute the debt or indebtedness of the City within the meaning of the Constitution or statutes of the State of Colorado or of the home rule charter of any political subdivision thereof, including the City, nor shall anything contained in this ordinance or in the Bonds, the Loan Agreement, the Indenture, the Land Use Restriction Agreemen t: or the Bond Purchase Agreement, or any other instrument give rise to a pecuniary liability of the Cit:, or a charge upon the general credit or taxing powers of the City, nor shall the breach of any agreement contained in this ordinance, the Bonds, or the Loan Agreement, the Indenture, the Land Use Restriction Agreement or the Bond Purchase Agreement impose any pecuniary liability on the City or a charge upon the general credit or taxing powers of the -11 - I City, the City having no power to pay out of it ■ general fund, or otherwise contribute an~• part of the costs of financing the Project, nor power to operate the Project as a business or in any manner, nor shall the City condemn any land or other property for the Project nor contribute any land or other property to the Project. Nothing contained in this ordinance or the Loan Agreement, the Indenture, the Land Use Restriction Agreement or the Bond Purchase Agreement shall give rise to any personal or pecuniary liability of any officer, employee or agent of the City. Section 13. After any of the Bonds are issued, this ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid, canceled and discharged. Section 14. If any section, paragraph, clause or provision of th i s ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this ordinance. Section 15. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith and with the documents hereby approved, are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance, or part thereof. -12 - J Section 16. This ordinance shall be in full force and effect thirty days after publication following final passage. Introduced, read in full, and passed on first reading the 4th day of November, 1985. Published as a Bill for an Ordinance on the 6th day of Nove1 ,,ber, 1985. Read by· tit.lP. and passed on final reading the /.f&{ day of A{,~ , 1985, --- Published by ti~ly as Ordinance No • .2.£.., Series of 1985, on the~day of ~.1..~~ Jf::3.L, 1985. Attest: I, Gar y R. Higbee, ex officio City Clerk-Ti-easurer of the City of Englewood, Colorado, hereby certify that the above and foregoing is a true and complete copy of the Ordinance passed on final reading and published by title as Ordinance No. ;z.:J_, Series of 1985. -13 -