HomeMy WebLinkAbout2007 Ordinance No. 034•
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ORDINANCE NO. Jj_
SERIES OF 2007
BY AUTHORITY
COUNCIL BILL NO . 31
INTRODUCED BY COUNCIL
MEMllER WOODWARD
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF AN
AMOUNT NOT TO EX(,EED $ I 1,200,000 VARIABLE RA TE DEMAND
MULTIFAMILY HOUSING REVENUE REF 'JNDING BONDS (MARKS
WEST APARTMENTS) SERIES 2007 OF THE CITY OF ENGLEWOOD,
COLORADO FOR THE PURPOSE OF FINANCING A PORTION OF THE
COST OF REFUNDING THE CITY OF ENGLEWOOD , COLORADO
MULTIFAMILY HOUSING REVENUE REFUNDING BONDS (MARKS
APARTMENTS PROJECT) SERIES 1996; APPROVING AND
AUTHORIZING EXECUTION OF A TRUST INDENTURE, A FINANCING
AGREEMENT , PURCHASE AGREEMENT, INTERCREDITOR
AGREEMENT, AND AN AMENDED AND RESTATED LAND USE
RESTRICTION AGREEMENT WITH RESPECT TO THE BONDS AND THE
MULTIFAMILY HOUSING PROJECT BEING REFINANCED WITH THE
PROCEEDS OF THE BONDS ; MAKING FINDINGS AND
DETERMINATIONS WITH RESPECT TO THE PROJECT AND THE BONDS ;
AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED
DOCUMENTS; AND REPEALING ALL ACTION HERETOFORE TAKEN IN
CONFLICT HEREWITH .
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WHEREAS, the City of Englewood , Colorado (the "City") i~ a duly organized and
existing home rule municipality of the State of Colorado (the "State"), created and operating
pursuant to Article XX of the Colorado Constitution and the home rule charter of the City (the
··charter"); and
WHEREAS, the County and Municipality Development Revenue Bond Act , constituting
Article 3 of Title 29 , Colorado Revised Statutes , as amended (the "Act'"), authorizes cities ~od
counties in the State to finance or refinance one or more projects , including any land, buildings
or other improvements, and all real and personal properties , whether 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 or intended occupants to the end
that more adequate residential housing facilities for low-and middle-income families or persons
may be provided , which promote the public health, welfare, safety, convenience and prosperity ;
and
WHEREAS, the City is further authorized by the Act to issue its revenue bonds for the
purposes of defraying the costs of financing or refinancing any such project, including all
incidental expenses incurred in issuing such bonds , and to secure the payment of such bonds as
provided in the Act ; and
WHEREAS , the City has previously made a loan of the proceeds of its Multifamily
Housing Revenue Refunding Bonds (Marks Apartments Project) Series 1996 (the "Prior Bonds")
in the aggregate principal amount of $11 ,200 ,000 pursuant to the terms of an Indenture of Trust
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dated as of October I , 1996 between the Issuer and The Bank of New York Trust Company, •
N.A., successor to American National Bank and Trust Company of Chicago, as trustee, to
provide for the refunding of the City's Variable Rate Demand Multifamily Housing Revenue
Bonds (The Marks Apartments) 1985 Series A (the "Original Bond~"); and
WHEREAS , the Original Bonds were issued and delivered to provide financing for a
multi-family rental development known as the Marks West Apartments (the "Project") located
within the boundaries of the City, for occupancy partially (at least 20%) by individuals of low or
moderate income within the meaning of and for the period required by Section I 03(b) of the
Internal Revenue Code of 1954, as amended, all for the public purpose of providing more
adequate residential housing facilities for low-and middle-income families and persons; and
WHEREAS, the present owner of the Project is EQR-Marlcs West, L.L .C., a Delaware
limited liability company (the "Owner"); and •
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WHEREAS, representatives of the Owner have requested that the City issue its variable
rate demand multifamily housing revenue refunding bonds pursuant to terms of the Act to refund
the Prior Bonds (the "Refunding Project"); and
WHEREAS, the r:it:,, has considered the request of the Owner and has concluded that the
Refunding Project will assure the continuing provision of low-and middle-income residential
rental facilities, promoting the public health, welfare, safety, convenience and prosperity , and
that the City should issue its variable rate demand multifamily housing revenue refunding bonds
under the Act to finance a portion of the r.ost of the Refunding Project , subject to the conditions
set forth herein ; and
WHEREAS , the City will issue , sell and deliver its City of Englewood, Colorado
Variable Rate Demand Multifamily Housing Revenue Refunding Bonds (Marks West
Apartments) Series 2007 (the "Bonds"), in an aggregate principal amount not to exceed
$11 ,2 00,000, pursuant to the terms of a Trust Indenture dated as of June I , 2007 (the
"Indenture") between the City and The Bank of New York Trust Company , N.A., as trustee (the
"Trustee"), to pay a portion of the cost of the Refunding Project; and
WHEREAS , the Owner will enter into a Financing Agreement dated as of June I, 2007
(the "Financing Agreement") among the City, the Owner and the Trustee pursuant to which the
proceeds of the Bonds will be loaned to the Owner (the "Bond Mortgage Loan "); and
WHEREAS, the Owner will execute a Bond Mortgage Note (the "Bond Mortgage Note")
evidencing its obligation to repay the Bond Mortgage Loan to be delivered upon the order of the
City pursuant to the Financing Agreement to the Trustee; and
WHEREAS , to secure the Owner 's obligations under the Bond Mortgage Note, the
Owner will execute and deliver to the Trustee on the date the Bonds are delivered a Multifamily
Deed of Trust, Assignment of Rents and Security Agreement (including Fixture Filing) with
respect to the Project ; and
WHEREAS, the Owner will cause to be delivered to the Trustee on the date of initial
issuance of the Bonds a direct pay Credit Enhancement Agreement dated as of June 1, 2007 (the
"Credit Enhancement Agreement") between the Federal Home Loan Mortgage Corporation
("Freddie Mac") and the Trustee which will provide for (i) draws in an amount equal to certain
"Guaranteed Payments " with respect to the Bond Mortgage Loan and (ii) liquidity draws by the
Trustee to the extent remarketing proceeds are insufficient to pay the purchase price of Bonds
while the Bonds bear interest at a variable rate ; and
WHEREAS, to evidence the Owner's reimbursement obligations to Freddie Mac for
draws made under the Credit Enhancement Agreement , the Owner and Freddie Mac will enter
into a Reimbursement and Security Agreement dated as of June l, 2007 (the "Reimbursement
Agreement"); and
WHEREAS, to secure the Owner's obligations under the Reimbursement Agreement, the
Owner will execute and deliver to the Trustee on the date the Bonds are delivered a Multifamily
Deed of Trust , Assignment of Rents and Security Agreement (including Fixture Filing) (the
"Reimbursement Mortgage") with respect to the Project ; and
WHEREAS, the Owner's obligations under the Reimbursement Agreement and the
Reimbursement Mortgage will be cross collateralized with other multifamily housing projects
owned by Equity Residential, a Maryland real estate investment trust ("EQR''), which is general
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partner of ERP Operating Limited Partnership, an Illinois limited partnership, which is managing
member of the Owner, or other multifamily housing projects owned by EQR's subsidiaries ; and
WHER EAS, the City has been requested to enter into an Intercreditor Agreement (the
"lntercreditor Agreement") in connection with Freddie Mac 's provision of credit enhancement;
and
WHEREAS, the City is authorized by the Supplemental Public Securities Act , Article 57
of Title 11 of Colorado Revised Statutes , as amended (the "Public Securities Act"), to delegate to
any of its members, chief executive officer, or chief financial officer the authority to sign a
contract for the purchase of securities or to accept a binding bid for securities and , in addition ,
may delegate the following determinations to such member or officer without any requirement
that the issuing authority approve such determinations: (a) the rate of interest on securities ; (b)
the conditions on which and the prices at which the applicable securities ma y he redeemed
before maturity ; (c) the existence and amount of any capitalized interest or rese rve funds ; (d) the
price at which the securities will be sold; ( e) the principal amount and denominations of the
securities; (f) the amount of principal maturing in any particular year; and (g) the dates on which
principal and interest shall be paid ; and
WHEREAS , the City hereby determines that it is in the City's best interest to delegate to
its Director of Finance and Administrative Services (the "Chief Financial Officer") the powers
enumerated in the Public Securities Act as more specifically provided in this Ordinance; and
WHEREAS , there have been presented to the City Council at this meeting the following
documents : (a) the proposed form of the Financing Agreement, (b) the proposed form of the
Indenture, (c) the proposed form of the lntercreditor Agreement, (d) the proposed form of the
Amended and Restated Land Use Restriction Agreement dated as of June I , 2007 (the
"Regulatory Agreement"), by and among the City, the Owner and the Trustee, and (e) the
proposed form of Purchase Agreement (the "Purchase Agreement") among the City, the Owner
and Merrill Lynch , Pierce, Fenner & Smith Incorporated (the "Underwriter").
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD ,
COLORADO:
Section I. Legal Authorization. The City is a duly organized and existing home
rule muni cipality of the State , created and operating pursuant to Article XX of the Colorado
Constitution and the City's Charter and is authorized under the Act to issue and sell its
multifamily housing revenue bonds in the form of one or more debt instruments, such as the
Bond s, for the purpose, in the manner and upon the terms and conditions set forth in the Act , in
this Ordinance, and in the Indenture .
Section 2. Findings . The City Council has heretofore determined, and does hereb y
determine , based upon the representations of the Owner, as follows :
(a) The Project is an eligib le "project ," as defined in the Act.
(b) The is suance of the Bonds will effectuate the public purposes of the City
and carry out the purposes of the Act by, among other things , providing residential
facilities for low-and middle-income persons in the City.
(c) The Bonds are special, limited obligations of the City payable solely out
of the income, revenues and receipts specifically pledged pursuant to the Indenture.
The Bonds, the premium , if any, and the interest thereon shall never constitute the debt
or indebtedness of the City within the meaning of any provision or limitation of the
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State Constitution, State statutes or the Charter, and shall no constitute nor give rise to
a pecuniary liability of the City or a charge against its general credit or taxing power
and shall not constitute a "multiple fiscal year direct or indirect debt or other financial
obligation" of the City under Article X, Section 20 of the Colorado Constitution.
Neither the State of Colorado nor any political subdivision thereof shall be obligated to
pay the principal of, premium, if any, or interest on the Bonds or other costs incident
thereto . The Bonds do not constitute a debt , loan, credit or pledge of the faith and
credit or taxing power of the State, the City or any political subdivision thereof.
Section 3. Authorization of Issuance of Bonds . To defray the cost of the
Refunding Project , there is hereb y authorized and created a series of variable rate revenue
bonds designated "City of Englewood, Colorado Variable Rate Demand Multifamily Housing
Re venue Refunding Bonds (Marks West Apartments) Series 2007" in an aggregate principal
amount not to exceed $11 ,200 ,000 . Subject to the determination of the Chief Financial
Officer, the issuance of the Bonds shall be in such principal amounts , bearing such dates and
provisions for determination of variable interest rat~s and such Bonds shall mature as set forth
in the Indenture . The Bonds shall be payable, shall be subject to redemption or purchase in
lieu of redemption and tender prior to maturity and shall be in substantially the form as
provided in the Indenture . Furthermore , the Bonds shall be payable at such place and in such
form, shall carry such re gistration privileges, shall be executed , and shall contain such terms
and conditions, as set forth in the Indenture . The maximum net effective interest rate on the
Bonds shall not exceed 12 .00% per annwn . Section I 1-57-204 of the Public Securities Act
provides that a public entity, including the City, may elect in an act of issuance to apply all or
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any of the provisions of the Public Securities Act. The City hereby elects to apply all of the
Public Securities Act to the Bonds .
Section 4. Sale of Bonds The placement and purchase of the Bonds pursuant to the
tenns of the Purchase Agreement be and the same are in ail respects hereby approved,
authorized and confinned , and the Mayor (or Mayor pro tern) is hereby authorized and directed
to execute the Bond s and the City Clerk is hereby authorized and directed to affix the seal of
the City and to attest the Bonds and each is hereby authorized to deliver the Bonds for and on
behalf of the City to the Trustee for authentication pursuant to the Indenture . The Bonds shall
be sold to the Underwriter for the purchase price as set forth in the Purchase Agreement
(subject to the limitations set forth herein).
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Section 5. Delegation. Pursuant to the tenns of the Public Securities Acl, the Chief •
Financial Officer is hereby delegated the authority to establish : (i) the tenns upon which the
interest rate or rates of the Bonds will be detennined and the payment dates therefore, provided
that the net effective interest rate for the Bonds shall not exceed 12 .00%; (ii) the prior
redemption provisions for the Bonds , provided , any redemption premium thereon shall not
exceed 4% of the principal amount to be redeemed ; (iii) the original issue discount or premium
thereon shall not exceed 4% of the aggregate principal amount of the Bonds ; and (iv) the dates
on which the Bonds shall mature, including the amounts to mature in each year, provided that,
the final maturity date for any Bond shall not be later than June I , 2042 .
Section 6. Appronl and Authorization of Documents. The Indenture, the
Financing Agreement, the Regulatory Agreement , the lntercreditor Agreement and the
Purchase Agreement be and the same are in ail r~pects hereby approved, authorized and
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confinned , and the Mayor (or Mayor pro tern) is hereby authorized and dire~.-·~ execute and
the City Clerk is hereby authorized and directed to affix tue seal of the City and to attest the
Indenture, the Financing Agreement, the Regulatory Agreement, the lnterc't'editor Agreement
and the Purchase Agreement in substantially the fonns and content as presented to the City on
this date , subject to the approval of bond counsel to the City, but with such changes,
modifications, additions and deletions therein as shall to them seem necessary, desirable or
appropriate, their execution thereof to constitute conclusive evidence of their approval of any
and all changes , modifications , additions and deletions from the fonns thereof as before this
date .
Section 7. All Actions Heretofore Taken . All anions (not inconsistent with the
provisions of this Ordinance) heretofore taken by the City Council and the officers of the City
directed toward the issuance and sale of the Bonds therefor are hereby ratified, approved and
confinned .
Section 8. Comp !i.-"~~ with the Act. The following determinations and findings are
hereby made in accordance with Sections 29-3-113 , 29-3 -114 and 29-3 -120 of the Act:
(a) The maximum amount necessary in each year to pay che principal of and
the interest on the Bonds (based on the maximum net effective interest rates set forth
herein , assuming that interest is paid monthly, and assuming no redemptions) shall not
exceed :
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• Principal
..Y.at. ...AmmlDL lDlmll. Iglll
2007 $ s 728 ,000 s 728 ,000
2008 1,344,000 1,344,000
2009 1,344,000 1.344,000
2010 1,344,000 1,344 ,000
2011 1,344 ,000 1,344,000
2012 1,344,000 1,344 ,000
2013 1,344 ,000 1,344 ,000
2014 1,344 ,000 1,3 44,000
2015 1,344 ,000 1,3 44 ,000
2016 1,344 ,000 1,344,000
2017 1,344 ,000 1,344,000
2018 1,344 ,000 1,344,000
2019 1,344,000 1,344 ,000
2020 1,344 ,000 1,344,000
2021 1,344 ,000 1,344,000
2022 1,344 ,000 1,344,000
2023 1,344 ,000 1,344,000
2024 1,3 44,000 1,344,000
2025 1,344 ,000 1,344,000
2026 1,344,000 1,344,000 • 2027 1,344 ,000 1,344,000
2028 1,344 ,0'X) 1,344,000
2029 1,344 ,000 1,344 ,000
2030 1,344 ,000 1,344,000
2031 1,3 44 ,')()() 1,344,000
2032 1,344 ,uOO 1,344 ,000
2033 1,344,000 1,344 ,000
2034 1,344,000 1,344 ,000
2035 1,344,000 1,344 ,000
2036 1,344 ,000 1,344,000
2037 1,344,000 1,344,000
2038 1,344,000 1,344 ,000
2039 1,344,000 1,344,000
2040 1,344,000 1,344,000
2041 1,344,000 1,344,000
2042 11 ,200,000 1,344,000 12,544,000
Provided , however, that subject to the detcnnination of the final maturity date of the Bonds as
provided in Section S of this Ordinance, the maximum amount necessary to pay the principal of
and the interest on the Bonds shown above for the year 2042 may occur prior to 2042 to coincide
with the final m.sturity date of the Bonds . •
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(b) Pursuant to the Indenture there shall be established certain debt service
reserve funds for payment of the Bonds, which reserves 81 ~ required to be replenished
from time to time , if necessary .. from Revenues (as defined in the Indenture).
(c) In the Financing Agreement , the Owner has covenanted to maintain , or
cause to be maintained , the Project and to carry, or cause to be canied, all proper
insurance with respect thereto .
(d) The revenues and other amounts payable under the Financing
Agreement are sufficient to pay, in addition to all other requirements of the Financing
Agreement and this Ordinance , all sum s re ferred to in paragraphs (a), (b) and (c) of this
Section and all taxes or payments in lieu of taxes levied upon the Project.
~0.!!.2. Investments . Proceeds from the sale of the Bonds and special funds from
the rev ,-:<i:,,, 1r<.,m the Refunding Project shall be invested and reinvested in such securitfo s and
other investments specified in , and otherwise in accordance with, the Indenture and Section 29-
3-109 of the Act and Section 24-75-601 .1, Colorado Revised Statutes .
~n 10. Authority to Execute and Deliver Additional Documents . The officers ,
employees and agents of the City shall take all action in conformity with the Act , the Public
Securities Act and the Charter necessary or reasonably required to effectuate the issuance of
the Bonds and shall take all action necessary or desirable in conformity with the Act and the
Charter to finance the portion of the costs of the Refunding Project to be financed with
proceeds of the Bonds and for carryin g out , giving effect to and consummating the transactions
contemplated by this Ordinance, the Financing Agreement, the Indenture, the Regulatory
Agreement , the lntercreditor Agreement and the Purchase Agreement including without
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limitation the execution, delivery and filing of any documents, statements or repons with the
United States Internal Revenue Service or with the Secretary of the United States Treasury or
his delegate necessary to maintain the exclusion of interest on the Bonds from gross income for
federal income tllX purposes, the execution of any lener of representation or similar document
required of any securities depository, and the execution and delivery of additional security
documents and any closing documents to be delivered in connection with the sale and deli very
of the Bonds .
Secdon 11. Bonds are Limited Obllgadons. The Bonds shall be special , limited
obligations of the City payable solely from the receipts and revenues of the City under the
Financing Agreement that are specifically pledged therefore under the Indenture; the Bonds
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shall never constitute a debt or indebtedness of the City. the State or any county, municipality •
or political subdivision of the Stale within the meaning of any provision or limitation of the
Constitution or statutes of the State or the charter of any political subdivision of the State ; and
the Bonds shall never constitute nor give rise to any pecuniary liability of, or a charge against
the general credit or taxing powers of, the City, the State or any county, municipality or
political subdivision of the State. The Bonds shall not constitute a "multiple fiscal year direct
or indirect debt or other financial obligation" of the City under Article X, Section 20 of the
Colorado Constitution.
Secdon 12. No Pecuniary Liability. Nothing contained in this Ordinance or in the
Bonds, the Financing Agreement, the Indenture, the Regulatory Agreement, the lntercreditor
Agreement or the Purchase Agreement or any other instrument shall give rise to a pccuniuy
liability of, or a charge upon the ge..-1eral credit or taxing powers of, the City, the State or any •
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county, municipality or political subdivision of the State. The breach by any party of any
agreement contained in this Ordinance, the Bonds , the Financing Agreement , the Indenture, the
Regulatory Agreement, the lntercreditor Agreement or the Purchase Agreement or any other
instrument shall not impose any pecuniary liability upon, or any charge upon the general credit
or taxing power.; of, the City, the State or any county, municipality or political subdivision of
the State , none of which has the power to pay out of its general fund , or otherwise contribute,
any part of the cost of refinancing the Project, or power to operate the Project as a business or
in any manner.
Section 13. No Condemnation by City . The City shall not co ndemn any land or
other propen y for the Project.
Section 14. Trustee and Remarketlag Agent. The Bank of New York Trust
Company, N.A. is hereby appointed as Trustee and Paying Agent under the Indenture and
Menill Lynch , Pierce, Fenner & Smith Incorporated is hereby appointed as Remarketing
Agent pursuant to the terms of the Indenture.
Section 15. Supplemental Ordinances . The City may, subject to the terms and
conditions of the Indenture, pas s and execute ordinances supplemental to this Ordinance which
shall not be inconsistent with the terms and provisions hereof.
Section 16. Limitation of Rights . With the exception of any rights herein expressly
conferred , nothing expressed or mentioned in or to be implied from the Ordinance or the
Bonds is intended or shall be construed to give to any person, other than the City, the Owner,
the Underwriter and the owners of the Bonds , any legal or equitable right, remedy or claim
under or with respect to this Ordinance or any covenants, conditions and provisions herein
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contained ; this Ordinance and all of the covenants, conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the City, the Owner, the
Underwriter and the owners of the Bonds as herein provided.
Sesdop 17. Pled1e of Revenues. The creation, perfection . enforcement , and priority
of the pledge of the Revenues to secure or pay the Bonds as provided herein and in the
Indenture shall be governed by Section 11-57-208 of the Public Securities Act and this
Ordinance . The Revenues for the payment of the Bonds , as received by or otherwise credited
to the City, shall immediately be subject to the lien of such pledge without any physical
delivery, filing, or further act. The lien of such pledge on the Revenues shall have priority
over any or all other obligations and liabilities of the City. The lien of such pledge shall be
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valid, binding , and enforceable as against all persons having claims of any kind in tort , •
contract, or otherwise against the City irrespective of whether such persons have notice of such
liens .
Section 18. Official Statement. The City acknowledges that the Underwriter shall
use an Official Statement in coMection with the offering of the Bonds , and the Chief Financial
Officer is hereby authorized to certify as to the accuracy of the information concerning the City
contained therein .
Section 19. Immunity of Officen. Pursuant to Section I 1-57-209 of the Public
Securities Act , if a member of the Council, or any officer or agent of the City acts in good
faith , no civil recourse shall be available against such council member, officer, or agent for
payment of the principal of or interest on the Bonds . No recourse for the payment of any part
of the principal of, premium, if any, or interest on the Bonds for the satisfaction of any liability
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arising from , founded upon or existing by reason of the issue, purchase or ownership of the
Bonds shall be had against any official, officer, council member or agent of the City or the
State, all such liability to be expressly released and waived as a condition of and as a part of
the consideration for the issue, sale and purchase of the Bonds .
Secdop 20, Limitations on Actions . In accordance with the Act, no action shall be
brought questioning the legality of any contract , financ ing agreement , mortgage, trust
indenture , proceeding relating to the Bonds or the Bonds, the Refunding Project or the Project
on and after thirty days from the effective date of this Ordinance.
Secdon 21. Counterparts . This Ordinance may be simultaneously executed in
several counterparts , each of which shall be an original and all of which shall constitute but
one and the same instrument.
Section 22. Captions. The captions or headings in this Ordinance are for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of
this Ordinance.
Sectjop 23. Valldlty of Bonds. Each Bond shall contain a recital that such Bond \3
issued pursuant to the Act and the Public Securities Act, and such recital shall be conclusive
evidence of its validity and of the regularity of its issuance.
Seetjop M, lrrepealabWty. 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.
Sectjop 251 SevenbWty. If any section, paragraph, clause or provision of this
Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
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unenforceability of such section , paragraph, clause or provision shall not affect any of the
remaining provisions of this Ordinance .
Sectjop 26. Repealer . All orders, ordinances , resolutions , bylaws, and regulations of
the City, or parts thereof, inconsistent with this Ordinance arc hereby repealed to the extent
only of such inconsistency.
Introduced , read in full, and passed on first reading on the 7th day of May, 2007 .
Published as a Bill for an Ordinance on the I Ith day of May, 2007.
A Public Hearing was held on May 21, 2007 .
Read by title and passed on final reading on the 21st day of May, 2007 .
Published by title as Ordinance NclfL._, Series of 2007 , on the 25th day of May, 2007 .
I, Loucrishia A. Ellis , City Clerk of the City of Englewood , Colorado , hereby certify that
the above and forcgoil)A_js a true copy of the Ordinance p on final reading and published by
title as Ordinance No-2;L Series of 2007 .
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COUNCIL COMMUNICATION
Date: Agenda Item: Subject:
May 7, 2007 11 a V Variable Rate Demand Multifamily Housing
Revenue Refunding Bonds (Marks West Apartments)
Series of 2007
Initiated By: I Staff Source:
Finance and Administrative Services Department Frank Gryglewicz, Director
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
City Council has not discussed this specific request but Council has acted in the past to help defray
the cost of financing the Marks Project. In 1996 Council approved Ordinance 44, Series of 1996
which approved the issuance and sale of Multifamily Housing Revenue Refunding Bonds (Marks
Apartments Project) Series 1996 which refunded a prior bond issued used for this project.
Council appro ved Ordinan ce 62 , Series of 2004 which approved issuing Variable Rate Demand
Multifamily Housing Revenue Refunding Bonds (Marks West Apartments) Series of 2004 tc; refund
the Multifamil y Housing Rev enue Bonds (Marks Apartments) 1965 Series B .
RECOMMENDED ACTION
Staff recommends City Council adopt the attached Bill for an Ordinance appro ving the refunding of
the Multifamil y House Revenue Refunding Bonds (Marks Apartments) Series of 1996 by issuing
Variable Rate Demand Multifamil y Housing Revenue Refunding Bonds (Marks West Apartments)
Series of 200 7.
This Bill for an Ordinance includes the following :
❖ Trust Indenture
❖ Financing Agreement
❖ Purchase Agreement
❖ lntercreditor Agreeme nt
❖ Ame nded and Restated Land Use Restriction Agreement
BACKGROUND, ANALYSIS, A D ALTERNATIVES IDENTIFIED
This Bill for an Ordinance auth orizes the Marks West to issue up to $11.2 million in variable rate
demand multifamily housing revenue refunding bonds as well as othP.r provisions related to the
issuance . The County and Municipality Development Revenue Bonn Act (Article 3 ofTitle 29 ,
Colorado Revised Statutes) authorizes cities to finance or refinance one or more projects, Including
any land, buildings or other improvements, and all real and personal properties which are suitable
for residential facilities for low and middle Income families or persons.
The Issuer uses the City 's tax exempt status to Issue debt that pays tax-exempt Interest over the life •
of bonds If strict restrictions are adhered to . The tax exempt status lowers the cost of borrowing,
and therefore may provide an Incentive to non-profit organizations to take on projects or provide
services that might not otherwise be undertaken. Although the issuer uses the tax exempt status o(
the City of Englewood, the City does not take on any responsibility for the repayment o( debt or
pledge Its credit. The City does risk loss o( reputation and nuisance lawsuits in the event of a
default.
Both the City Attorney and outside bond Counsel ha ve reviewed the proposed changes and have
given their appro va l. Wellsford has gu aranteed the ir bond rating wi ll not drop below inves tment
grade .
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) requir es a publi c hearing be held. This
hearing will be held from 1:00 to 2:00 p.m . on May 21, 200 7 in Room 3-212 in Civic Center, 1000
Englewoo d Parkway, Englewood, CO .
FINANCIAL IMi'ACT
EQR -Ma rks West, L.L.C. is solely respons ible for the repaym ent of this deb t. Th e City of Englewood
does not pledge its cre dit nor does it make any pledge, guarantee, or take any . espo nsibility
regarding the repa yment o( this debt.
The City will collect $12 ,500 to cover administrative expenses •~sociat ed with this issuance . The
City's outside attorney will be pai d by the issuer of the bonds .
LIST OF ATTACHMENTS
Prop osed Bill for an Ordinance
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