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HomeMy WebLinkAbout2007-11-05 HRA Regular Meeting • MINUTES OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY NOVEMBER 5,2007 7:00 P.M. ROLLCALL Answering rollcall were Commissioners Bennett, Housh, Masica, Swenson and Chair Hovland. CONSENT AGENDA ITEMS APPROVED Motion made by Commissioner Swenson and seconded by Commissioner Bennett approving the Consent Agenda for the Edina Housing and Redevelopment Authority as presented. Rollcall: Ayes: Bennett, Housh, Masica, Swenson, Hovland Motion carried. *MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY OCTOBER 16, 2007, APPROVED Motion made by Commissioner Swenson and seconded by Commissioner Housh approving the Minutes of the Regular Meeting of the Edina Housing and Redevelopment Authority from October 16, 2007. Motion carried on rollcall vote -five ayes. • PUBLIC HEARING (12/04/07) SET FOR VOLUNTEER OF AMERICA REVENUE BONDS Executive Director Hughes explained Volunteers of America in Minnesota (VOA) has requested that the Edina Housing and Redevelopment Authority (HRA) issue $2.5 million in non-profit revenue bonds to facilitate their purchase of 7625 Metro Boulevard. This building would serve as VOA's corporate headquarters. It has been proposed that the HRA Board of Commissioners hold a public hearing on the issuance of the revenue note at its December 4th meeting. Mr. Hughes said the note was proposed to be issued in a principal amount of up to $2,500,000 and it was expected that the ultimate purchaser of the note will be a bank. The reason that the HRA rather than the City was being requested to issue the note was so the note can be "bank qualified" under Section 265(b) of the Internal Revenue Code of 1986, as amended. Having the note bank qualified allows a bank to own the note and receive the tax-exempt interest thereon without losing an interest deduction. The HRA and the City may issue bank qualified bonds if such entity will not issue more than $10 million of tax-exempt bonds in a calendar year. The City has already issued bonds in excess of $10 million in 2007, so if the City were to issue the note it could not be bank qualified. However, the HRA has not issued any tax-exempt obligations in 2007 and the City's tax-exempt bonds are not taken into account in determining whether the HRA would be eligible to issue bank qualified bonds. Mr. Hughes said the debt service on the note will be payable solely from payments to be made . by the VOA, and the HRA will not have any liability with respect to the note. VOA will pay all HRA expenses with respect to the note and upon issuance of the note will pay the HRA a w fee in accordance with the City's policy for the issuance of revenue bonds (1/2 of 1% of the original principal amount of the note). Mr. Hughes said in 1995, the City adopted the guidelines for the consideration of tax exempt revenue bonds. While the proposed use of the bond proceeds would be lawful, the HRA should decide if the project conforms to the first guideline, i.e. that a significant amount of the proceeds must be used for property improvements or to promote or preserve housing for low and moderate income individuals or families. In this case, neither property improvements nor housing for low and moderate income persons are part of the proposal. However, part of VOA's mission involves such housing and, therefore, it can be argued that use of the bond proceeds will assist in the promotion of housing for low and moderate income persons. He said if the HRA wished at this time to proceed with the proposed financing the first step was to adopt a resolution calling for a public hearing. The HRA discussed the request of VOA. Their questions and staff's replies included the following: • Would issuance impact the City of Edina's bond rating? No. • Would allowing this action take the property off of the tax rolls? No. • Was the request consistent with the City's Comp Plan? Yes. • What was the cost of issuance to the City? No cost to the City. • Why would VOA go through the City? Lower rate to borrow funds, less costly to VOA through this approach. • Has this been done before? Yes, Fairview Southdale Hospital and Volunteers of America Housing Project. • Concern was expressed there was no housing component with this planned acquisition. Following a discussion, Commissioner Masica made a motion, seconded by Commission Housh to adopt Resolution 2007-02 setting the public hearing on the proposed issuance of a revenue note in the amount not to exceed$2,500,000 at the request of Volunteers of America in Minnesota. Rollcall: Ayes: Bennett, Housh, Masica, Swenson, Hovland Motion carried. *CONFIRMATION OF CLAIMS PAID Motion made by Commissioner Housh and seconded by Commissioner Swenson approving the payment of claims dated November 1, 2007, TOTAL$21,337.50. Motion carried on rollcall vote -five ayes. There being no further business on the Edina Housing and Redevelopment Authority Agenda, Chair Hovland declared the meeting adjourned. Executive Director