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HomeMy WebLinkAbout1987-02-23 HRA Regular Meeting MINUTES EDINA HOUSING AND REDEVELOPMENT AUTHORITY FEBRUARY 23, 1987 Answering rollcall were Commissioners Kelly, Richards, Smith, Turner and Courtney. SUPPLEMENTAL REGULATORY AGREEMENT WITH EDINA PARK PLAZA APPROVED. Attorney Erickson explained that a Supplemental Restrictive Covenants and Regulatory Agreement has been submitted to the HRA by legal counsel for the general partners of Edina Park Plaza Associates Limited Partnership who are the developers of the elderly building in the Edinborough project. The general partners of the Partnership have asked the HRA to enter into that agreement to enable the Partnership and its investors to take advantage of certain favorable tax provisions that were adopted by the Tax Reform Act of 1986. The Act eliminated nearly all forms of tax shelter investments. However, Section 502 of the tax act permits investors in limited partnerships to continue to enjoy tax shelter benefits if, among other things, the partnership has an agreement with a governmental authority that 1) limits the amount of cash that may be distributed to investors by the partnership and 2) limits the amount of rent that may be charged to tenants in the project. The agreement that the HRA has been asked to sign includes limitations on Partnership distributions and rent levels. The agreement required the partner- ship and its general partners to indemnify the HRA and the City for any costs or damages that may be incurred by the HRA or City arising either directly or indirectly out of any action or inaction of the HRA relating to the agreement. This pro- vision should protect the HRA and City in the event the agreement is not closely monitored or enforced. Also the agreement requires the Partnership and its general partners to pay all costs incurred by the City or HRA in enforcing the agreement or in connection with reviewing any documents submitted pursuant to the agreement, including costs of staff and outside consultants and attorneys. In addition, the limited partners of the Partnership will give a guaranty to the HRA for payment of all moneys due to the HRA under the agreement including the indemnity. Commissioner Smith commented that he felt the Commissioners should review the actual document before giving approval. Commissioner Turner asked if there would be any problem with the delay of a week. In response Henry Hyatt, representing the developers explained that under the Tax Act the regulatory agreement must be in place before a certificate of occupancy is issued for the building and that they expected initial occupancy early in March. Accordingly, they would have to delay occupancy so that the full impact of the tax regulations would not be lost. Following further discussion, Commissioner Turner introduced the following reso- lution and moved its adoption: RESOLUTION AUTHORIZING THE EXECUTION OF SUPPLEMENTAL RESTRICTIVE COVENANTS AND REGULATORY AGREEMENT RELATING TO A MULTIFAMILY HOUSING PROGRAM UNDER THE MUNICIPAL HOUSING ACT WHEREAS, by resolution adopted by the Housing and Redevelopment Authority of Edina, Minnesota (the "HRA') on October 7, 1985, the HRA gave final approval to a program for the development of a multifamily development to be financed by the issuance of revenue bonds pursuant to Minnesota Statutes, Chapter 462C (the "Act") ; and WHEREAS, by resolutions adopted by the City Council of the City of Edina, Minnesota (the "City") on June 17, 1985 and September 23, 1985, the City Council approved a program pursuant to the Municipal Housing Act (the "Program") with respect to the acquisition and construction of an 18-story multifamily rental housing development containing approximately 203 units, together with parking and other functionally related and subordinate facilities, to be located at 7800 York Avenue in the City (the "Project") and gave its final approval to the issuance of revenue bonds to finance the Project; and H.R.A. Minutes of 2/23/87 Page Two WHEREAS, Edina Park Plaza Associates, Limited Partnership, an Illinois limited partnership (the "Developer") , whose general partners are Partners for Senior Communities, Inc. , an Illinois corporation and Henry Hyatt (the "General Partners") have agreed to develop the Project in accordance with the Program and the Act; and WHEREAS, the City has issued its Housing Development Revenue Bonds (FHA Insured Mortgage Loan - The Edina Park Plaza Project) , in an aggregate principal amount of $17,622,800 (the "Bonds") , pursuant to the Act and has lent the proceeds to the Developer for the financing of the Project, for the purposes of providing housing in accordance with the Program therefor; and WHEREAS, the HRA is advised that the Developer has entered into a Regulatory Agreement with the United States Department of Housing and Urban Development (the "Regulatory Agreement") ; and WHEREAS, the Project is subject to the terms and restrictions contained in the Deed and Covenants Running with the Land, dated as of October 1, 1985 (the "Restrictive Covenants") executed by the HRA and accepted by the Developer; and WHEREAS, to help effectuate the purposes of the Program, the Developer and the HRA are considering entering into a Supplemental Restrictive Covenants and Regulatory Agreement (the "Supplemental Regulatory Agreement") to thereby supple- ment the Restrictive Covenants and the Regulatory Agreement by imposing limitations on the rate of return of the Project and limitations on the rental or occupancy charges for units in the Project; and WHEREAS, the form of the Supplemental Regulatory Agreement is on file with the Executive Director of the HRA. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE HRA: 1. The form of the Supplemental Regulatory Agreement on file with the Executive - Director is hereby approved. The Chairman and Secretary of the HRA (the "HRA Officials") are hereby authorized and directed, on behalf of the HRA, to execute the Supplemental Regulatory Agreement in substantially the form hereby approved, but including such modifications, insertions and additions as are necessary and appropriate, in conformity with this resolution and consistent with the Act. Copies of the Supplemental' Regulatory Agreement, when executed, shall be delivered, filed and recorded as provided therein. The execution of the Supplemental Regulatory Agreement shall be done simultaneously with the execution and delivery of a Guaranty on file with the Executive Director, to be given in connection with the Supplemental Regulatory Agreement. Approval hereby given to the document referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifi- cations thereof and deletions therefrom as may be approved by the HRA attorney and the HRA Officials authorized herein to execute said documents prior to their execution; and said HRA Officials are hereby authorized to approve said changes on behalf of the HRA. The execution of any instrument by the appropriate officer or officers of the HRA herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the absence of the Chairman or Secretary, the documents authorized by this resolution to be executed may be executed by the Vice Chairman or Assistant Secretary. f,. C' Chairman Attest: -� Executive Directo H.R.A. Minutes of 2/23/87 Page Three The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Kelly, and upon vote being taken thereon, the following voted in favor thereto: Kelly, Richards, Turner, Courtney and the following voted against the same: Smith whereupon said resolution was declared passed and adopted and was signed by the Chairman and his signature attested by the Executive Director. BID AWARDED FOR SPOTLIGHTS AND BULBS - EDINBOROUGH PARK. Mr. Rosland presented tabulation of bids for spotlight and bulbs for Edinborough Park showing Secoa at $10,000.00, Gopher Lighting at $14,524.96 and Norcostco at $12,796.02. Motion of Commissioner Kelly was seconded by Commissioner Smith for award of bid to recommended low bidder, Secoa, at $10,000.00. Ayes: Kelly, Richards, Smith, Turner, Courtney Motion carried. There being no further business on the HRA Agenda, the meeting was adjourned by motion of Commissioner Turner, seconded by Commissioner Kelly. Motion carried. Executive irector