HomeMy WebLinkAbout7.A. Joint Powers Agreement with City of Victoria for the Issuance of Revenue Bonds-Res. No. 6959
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CITY OF SHAKOPEE
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: Public Hearing for Joint Powers Agreement - City of Victoria
DATE: November 20, 2009
Introduction & Background
Augustana Care is purchasing several facilities including Emerald Crest
in Shakopee. The City of Victoria is issuing revenue bonds to finance
the purchase. Augustana Emerald Care, LLC is Augustana's newly formed
affiliate that will actually be doing the project.
The Council has set a public hearing for December 1, 2009 to adopt a
resolution and execute a joint powers agreement to authorize the sale
of bonds. There is no liability or obligation to the City of Shakopee.
This is to cooperate with the City of Victoria and Shakopee has done
this before for Park Nicolet Clinic and the hospital. Shakopee's out
of pocket costs will be paid by Augustana Care.
Kennedy and Graven has reviewed the documents.
A representative from Augustana Emerald Care, LLC will be at the
hearing to respond to questions.
Action
Offer Resolution Number 6964, a RESOLUTION GIVING HOST APPROVAL AND
AUTHORIZING A JOINT POWERS AGREEMENT WITH THE CITY OF VICTORIA FOR THE
ISSUANCE OF REVENUE BONDS (EMERALD CREST PROJECT) and move its
adoption.
Move to authorize the proper city officials to execute the joint powers
agreement for the Augustana Emerald Crest project.
Gregg Voxland
Finance Director
H, \Finance\docs\
Augustana Care Corporation,
November 23,2009
Mr. Mark McNeill
City Administrator
Shakopee, MN
Re: Joint Powers Agreement on behalf of Augustana Emerald Crest, LLC
Dear Mr. McNeill:
Augustana Emerald Crest, LLC wishes to finance the acquisition of four assisted living/memory care
facilities located in Victoria, Bumsville, Minnetonka and Shakopee via revenue bonds in a principal
amount not to exceed $24,000,000. The issuance ofthe Bonds will be by the City of Victoria and would
be authorized by a Joint Powers Agreement to be entered into by the Cities ofMinnetonka, Shakopee
and Bumsville. Weare requesting the City of Shakopee approve the Joint Powers Agreement on
December 1, 2009.
Description of Augustana
Augustana Emerald Crest, LLC (the "Company" or the "Borrower"), d.b.a Augustana Emerald Crest of
Minnetonka, Augustana Emerald Crest of Burnsville, Augustana Emerald Crest of Shakopee and
Augustana Emerald Crest of Victoria, is a Minnesota limited liability company that was established in
October 2009 to acquire, own and operate four specialized assisted living campuses with a total of 164
units located in Burnsville, Minnetonka, Shakopee and Victoria, Minnesota
The Company's principal administrative offices are located at 1007 East 14th Street, Minneapolis,
Minnesota 55404. The telephone number for the Company's administrative offices is: 612-238-5201.
The sole member of the Company is Augustana Care Corporation, a Minnesota nonprofit corporation.
The acquisition by the Company of the Project Facilities will add to the continuum of care provided by
Augustana Care Corporation, which has its roots in the Elliot Park neighborhood of the City of
Minneapolis and dates its existence back to 1896. Augustana Care Corporation, through its various
affiliates, owns and operates facilities for the care and housing of the elderly. These facilities include a
campus in Minneapolis, comprised of Augustana Health Care Center of Minneapolis and Augustana
Apartments; a campus in Hopkins consisting of Augustana Chapel View Care Center and Chapel View
Apartments; Augustana Health Care Center of Hastings and Park Ridge Apartments, which are situated
in the City of Hasting; Open Circle Adult Day Center, located in Hopkins, Minnesota; Augustana
Health Care Center of Apple Valley and Apple Valley Villa apartments located in Apple Valley,
Minnesota; Augustana Regent at Burnsville, located in Burnsville, Minnesota; and Augustana Dassel
Lakeside Community Home located in Dassel Minnesota. Augustana also provides home health
services, therapy services and has a foundation. Augustana employs over 1500 people who provide
services and care to over 2300 seniors in 11 communities throughout Minnesota and Iowa. The
organization's total revenue for 2009 is estimated to be approximately $90 Million and its total assets
are approximately $125,000,000.
Description of the Projects to be Acquired
The project facilities include a portfolio of four specialized assisted living campuses with a total of 164
units in the Twin Cities metropolitan marketplace. The communities are all newer single-story
construction ofless than 10 years and are all similarly designed to provide state-ofthe-art care for
dementia/Alzheimer's residents. Multiple individual homes at each site offer 12-15 private suites per
building to provide the highest level of supervision, programming and individualized care. Emerald
Crest enjoys a reputation as the "provider of choice" and "expert in memory care services" because of
its innovative building design and cognitive care program.
Each resident private suite/unit has its own bathroom along with immediate. barrier-free access to
common space consisting of a central kitchen and serving area, dining room, living room/activity area,
laundry and assisted bathing and shower areas. Exterior enclosed courtyards including flower beds,
walking trails and resident/guest seating is also available for each resident.
Residents receive 24 hour supervision and assistance with activities of daily living as needed (i.e.,
bathing, grooming, dressing, eating, etc) from specially trained care givers. Its Cognitive Care Program
which utilizes Occupational Therapy personnel in conjunction with Registered Nurses offers a
professional and purposeful approach to providing memory care services not made available at other
competing senior care projects.
The Project Facilities, are located at 13401 Lake Street Extension Minnetonka, Minnesota; 451 East
Travelers Trail Burnsville, Minnesota; 1855 10th Avenue West Shakopee, Minnesota; and 8150 Bavaria
Road Victoria, all of which are in Minnesota, and were constructed as individual facilities.
Benefit to the Community
The benefits ofthe acquisition to the community are several. First and foremost the acquisition, by a
non-profit such as Augustana, includes the commitment to, provide up to 20% of the units for affordable
memory care for Older Adults in each community served. Having the opportunity to age in place and
choose among a variety of affordable, accessible senior housing options is one cornerstone to living in a
community for a lifetime. In addition, the facilities provide employment opportunities for 165 people
locally and various volunteer opportunities for community residents. AugtIstana is committed to
keeping the employment opportunities local. You should know too, that Augustana Care Corporation
brings with it 113 years of community service in offering a helping hand to the communities of which it
is part. Augustana will strive to partner with local churches and other community programs in order to
bring the highest quality of care to the residents of these facilities. Finally, given Augustana's not for
profit status, Augustana is able to do things above and beyond what for profit entities are capable of via
the ability to fund raise charitable contributions. All of these factors, we believe, will strengthen the
neighborhoods and communities Augustana is a part of, while at the same time, meeting the needs of
people in those communities.
It is Augustana's intention that the facilities would continue to pay real estate taxes.
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The bonds being issued are Housing Revenue Bonds and therefore the City has no legal obligation for
any payment of interest or principal.
If you have any questions feel free to contact either Craig Kittelson, Augustana CFO, at 612-238-5205
or me at 612-238-5445.
Sincerely,
Kathy Kopp
VP of New Business
Mission Statement
n& /'llissiOf/ ofAt{gllJtaJla Care Corporatioll iJ to Jme God ~yfosteril~gfuIIJl8Js o/Iiftfor the older ad1llt af/d
otMr f}eople ill f/eed thr01~gh theprol1iJioll o/healthmre, homillg tlfld other JfI'Vit"os if/ a (]Jristitlfl enbinilllJiellt.
1007 East Fourteenth Street, I'vfinneapolis, Minnesota 55404..1395
TelephoNe 6123331551 F0.-,c 6123383016
www.augustanacare.org
An Equal Opportunity / Affirmative ActionF:mpJoyer
Extract of Minutes of Meeting of the
City Council of the City of Shakopee, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Shakopee, Minnesota (the "City"), was duly held at City Hall in said City on the _ day of
,2009, at_p.m.
The following Council members were present:
and the following were absent:
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The Mayor then opened a Public Hearing to consider the issuance and sale of revenue
bonds, in one or more series, by the City of Victoria, Minnesota, pursuant to a Joint Powers
Agreement, in an amount of up to $24,000,000 (the "Bonds"), at the request of Augustana Care
Corporation, a Minnesota nonprofit corporation ("Augustana"), to provide financing for the
acquisition by Augustana or an affiliate thereof (referred to in the alternative as the "Borrower")
of certain existing assisted living/memory care facilities, together with any necessary
improvements in connection therewith, located in the City, and in the Cities of Victoria,
Minnetonka and Shakopee, Minnesota (the "Project"). Among others, the Project includes an
assisted living/ memory care facility located at 1855 1 Oth Avenue West in the City of Shakopee.
The following persons appeared:
Name
Summary of Comments
The Public Hearing was then closed.
Council Member
introduced the following resolution and moved its
adoption:
RESOLUTION NO. 6964
A RESOLUTION GIVING HOST APPROV AL
AND AUTHORIZING A JOINT POWERS AGREEMENT
WITH THE CITY OF VICTORIA FOR THE ISSUANCE OF
REVENUE BONDS (EMERALD CREST PROJECT)
The motion for the adoption of the foregoing resolution was duly seconded by Member
, and after full discussion thereof and upon vote being taken thereon, the
following voted in favor thereof:.
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
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Resolution No. 6964
RESOLUTION GIVING HOST APPROVAL
AND AUTHORIZING A JOINT POWERS AGREEMENT
WITH THE CITY OF VICTORIA FOR THE ISSUANCE OF
REVENUE BONDS (EMERALD CREST PROJECT)
WHEREAS, Augustana Care Corporation, a Minnesota nonprofit corporation (the
"Augustana"), has proposed that it, or an affiliate to be formed by it for the purpose (referred to
in the alternative as the "Borrower") obtain financing for a project (as described further below,
the "Project"), located in, among other places, the City of Shakopee (the "City"), through the
issuance of revenue bonds by the City of Victoria, Minnesota (the "Issuer"), pursuant to
Minnesota Statutes, Sections 469.152 to 469.1651, as amended, and Minnesota Statutes,
Section 471.59, as amended (referred to together as the "Act"); and
WHEREAS, the Project consists of the acquisition by the Borrower of certain existing
assisted living/memory care facilities, together with any necessary improvements in connection
therewith, located at, among other places, 1855 1 oth Avenue West in the City of Shakopee (the
"Project"); and
WHEREAS, the Borrower has proposed that the City enter into a Joint Powers
Agreement (the "Joint Powers Agreement") with the Issuer, and each of the other Host Cities
referred to in Exhibit A (all collectively referred to as the "Host Cities"), under the provisions of
which the Issuer will issue its revenue bonds, in one or more series, in an original aggregate
principal amount not to exceed $24,000,000 (the "Bonds"), to provide financing for the Project;
and
WHEREAS, a copy of the proposed form of the Joint Powers Agreement has been placed
on file with the City in the offices of the City Clerk and has been presented to the governing
body of the City in connection with this Resolution; and
WHEREAS, the Joint Powers Agreement provides that the Borrower shall pay all costs
the City incurs with respect to the Project and the provision of host approval for the Bonds; and
WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), requires that each governmental unit in which facilities to be financed by the Bonds are
located must approve the issuance of the Bonds following a public hearing; and
WHEREAS, a public hearing on this matter was held by the governing body of the City
on the date hereof; and
WHEREAS, the Bonds are payable solely from revenues pledged thereto, and will not be
a general or moral obligation of the Issuer or the Host Cities or of any other political subdivision
of the State of Minnesota, but will be payable solely from payments required to be made by the
Borrower;
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Shakopee,
Minnesota, as follows:
1. F or purposes of Section 147 (f) of the Code, the City of Shakopee hereby approves
the issuance of the Bonds by the Issuer.
2. In no event shall the Bonds ever be payable from or charged upon any funds of
the Host Cities; the Host Cities shall not be subject to any liability thereon; no owners ofthe
Bonds shall ever have the right to compel the exercise of the taxing powers of the Host Cities to
pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property
of the Host Cities; the Bonds shall not constitute a charge, lien or encumbrance, legal or
equitable, upon any property ofthe Host Cities; and the Bonds do not constitute an indebtedness
of the Host Cities within the meaning of any constitutional, statutory, or charter limitation.
3. The Joint Powers Agreement is hereby approved in substantially the form now on
file in the offices of the City Clerk; and the Mayor, the City Administrator and the City Clerk, or
other officers of the City, are authorized to execute the same in the name of and on behalf of the
City. In the event ofthe disability or the resignation or other absence ofthe Mayor or the City
Administrator or the City Clerk, such other officers ofthe City who may act in their behalf shall
without further act or authorization of the City do all things and execute all instruments and
documents required to be done or to be executed by such absent or disabled officials. The
approval hereby given to the Joint Powers Agreement includes approval of such additional
details therein as may be necessary and appropriate and such modifications thereof, deletions
therefrom and additions thereto as may be necessary and appropriate and approved by the
officers ofthe City authorized herein to execute the Joint Powers Agreement, such approval to be
conclusively evidenced by the execution thereof.
Adopted by the City Council of the City of Shakopee, Minnesota this _ day of
,2009.
Mayor
ATTEST:
City Clerk
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EXHIBIT A
(List of Host Cities)
1. City of Bumsville
2. City of Minnetonka
3. City of Shakopee
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN )
I, the undersigned, being the duly qualified and acting City Clerk of the City of
Shakopee, Minnesota, do hereby certify that I have compared the attached and foregoing extract
of minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council of said City duly called and
held on the date therein indicated, insofar as such minutes relate to a resolution giving host
approval to the issuance of revenue bonds by the City of Victoria and authorizing execution of a
Joint Powers Agreement, and that attached hereto is a true, compared and correct copy of a
Resolution duly adopted by said City Council at a regular meeting thereof duly called and held
,2009, and that said Resolution No. 6964 has not been amended, modified,
on
rescinded or revoked since the date of its adoption and is in full force and effect on the date
hereof.
WITNESS My hand this _ day of
,2009.
City Clerk
4813-4443-8277/2
DRAFT: 11/02/09
JOINT POWERS AGREEMENT
This JOINT POWERS AGREEMENT (the "Joint Powers Agreement" or the
"Agreement"), is entered into as of the 1st day of December, 2009 by and between the City of
Victoria, Minnesota (the "Issuer"), and the City ofBurnsville, a Minnesota municipal
corporation ("Burnsville"), the City of Minnetonka, a municipal corporation ("Minnetonka") and
the City of Shakopee, a Minnesota municipal corporation ("Shakopee"), a Minnesota municipal
corporation.
RECIT ALS
WHEREAS, Minnesota Statutes, Section 471.59 (the "Joint Powers Act"), provides that
two or more governmental units, by agreement entered into through action oftheir governing
bodies, may jointly or cooperatively exercise any power common to the contracting parties;
WHEREAS, in connection with revenue bonds issued under Minnesota Statutes, Sections
469.152 to 469.165 (the "Municipal Industrial Development Act" or the "MID Act"), Section
469.155, subd. 9 ofthe MID Actprovides for intergovernmental agreements between
municipalities and political subdivisions relating to the financing of projects under the Municipal
Industrial Development Act;
WHEREAS, the Issuer, Burnsville, Minnetonka and Shakopee are "governmental units"
under the Joint Powers Act, and are "municipalities" under the Municipal Industrial
Development Act, with power to issue bonds under the MID Act;
WHEREAS, the projects to be financed pursuant to the MID Act are described in
Appendix A hereto (all collectively sometimes referred to as the "Projects" or the "Project"), and
each constitutes a "project" within the meaning of Section 469.153, subdivisions 2(b) and 2(d),
of the MID Act;
WHEREAS, Augustana Care Corporation, a Minnesota nonprofit corporation
("Augustana"), has proposed, on behalf of itself or an affiliate to be formed by Augustana for
purposes of undertaking the Projects, that the Issuer issue revenue bonds to finance the portions
ofthe Project located within the jurisdictions ofBurnsville, Minnetonka and Shakopee, but only
with the consent of Burnsville, Minnetonka and Shakopee, as required by Minnesota Statutes,
Section 469.155, subdivision 9;
WHEREAS, the Bonds shall not constitute an indebtedness or pledge the full faith and
credit of the Issuer, Burnsville, Minnetonka, Shakopee, the State of Minnesota, or any other
agency or political subdivision thereof, but shall be payable solely from the revenues pledged
and assigned thereto pursuant to the Indenture (as defined below); and
WHEREAS, the governing bodies ofthe Issuer, Burnsville, Minnetonka and Shakopee
have authorized the execution and delivery of this Agreement and consented to the issuance of
Bonds as contemplated herein;
NOW, THEREFORE, the Issuer, Burnsville, Minnetonka and Shakopee hereby agree as
follows:
1. In order to finance the Project, the Issuer shall issue revenue bonds, in one or
more series (the "Bonds") in an amount not to exceed $24,000,000, pursuant to the Joint Powers
Act, the MID Act, and the terms of a Trust Indenture (the "Indenture") to be entered into
between the Issuer and U.S. Bank National Association, as trustee (the "Trustee"). The proceeds
of the Bonds will be loaned to Augustana, or an affiliate thereof (referred to in the alternative as
the "Borrower"), pursuant to a Loan Agreement (the "Loan Agreement") between the Issuer and
the Borrower.
2. Burnsville has approved the portion of the Project to be located within its
boundaries and consented to the issuance of Bonds by the Issuer to provide financing therefor,
after a public hearing as required by Section 147 (f) of the Internal Revenue Code of 1986, as
amended. Burnsville shall not be a party to the Indenture, the Loan Agreement or any other
document, other than this Agreement, in connection with the Bonds, and shall have no obligation
to any person under the Indenture, the Loan Agreement or the Bonds.
3. Minnetonka has approved the portion of the Project to be located within its
boundaries and consented to the issuance of the Bonds by the Issuer to provide refinancing
therefor, after a public hearing as required by Section 147(f) of the Internal Revenue Code of
1986, as amended. Minnetonka shall not be a party to the Indenture, the Loan Agreement or any
other document, other than this Agreement, in connection with the Bonds, and shall have no
obligation to any person under the Indenture, the Loan Agreement or the Bonds.
4. Shakopee has approved the portion of the Project to be located within its
boundaries and consented to the issuance of the Bonds by the Issuer to provide refinancing
therefor, after a public hearing as required by Section 147(f) of the Internal Revenue Code of
1986, as amended. Shakopee shall not be a party to the Indenture, the Loan Agreement or any
other document, other than this Agreement, in connection with the Bonds, and shall have no
obligation to any person under the Indenture, the Loan Agreement or the Bonds.
5. The liability of the Issuer, Burnsville, Minnetonka and Shakopee with respect to
the Bonds shall be limited as provided in the MID Act and in the Indenture. Except to the extent
specifically provided herein, the Issuer, Burnsville, Minnetonka and Shakopee shall not incur
any obligations or liabilities to each other as a result of the financing or use of the Project by the
Borrower. The Bonds shall be special, limited obligations of the Issuer payable solely from
proceeds, revenues and other amounts pledged thereto and more fully described in the Indenture.
The Bonds and the interest thereon shall neither constitute nor give rise to a pecuniary liability,
general or moral obligation or a pledge of the full faith or loan of credit of the Issuer, Burnsville,
Minnetonka, Shakopee, the State of Minnesota or any political subdivision of the above, within
the meaning of any charter, constitutional or statutory provisions.
6. All costs incurred by the Issuer, Bumsville, Minnetonka and Shakopeein the
authorization, execution, delivery and performance of this Agreement, and providing approval of
the Project and host approval for the issuance of the Bonds, shall be paid by the Borrower.
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7. Any property acquired as a result of the Bonds, the Indenture, the Loan
Agreement or this Agreement shall be and remain the property of the Issuer, to be disposed of
pursuant to the terms ofthe Loan Agreement and the Indenture. Any surplus moneys remaining
after the purpose of this Agreement has been completed, unless otherwise provided for in the
Indenture or Loan Agreement shall belong ratably to the Issuer, Bumsville, Minnetonka and
Shakopee, or the Borrower, as their respective interests may appear.
8. This Agreement may not be terminated by any party so long as any Bonds are
Outstanding (as defined in the Indenture).
9. This Agreement may be amended by the Issuer, Bumsville, Minnetonka and
Shakopee at any time. No amendment may impair the rights ofthe holders ofthe Bonds, unless
they have consented to such amendment in the manner provided for an amendment ofthe
Indenture.
10. This Agreement maybe executed in several counterparts, each of which shall be
regarded as an original and all of which shall constitute but one and the same Agreement.
..,
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IN 'WITNESS WHEREOF, duly authorized officers ofthe Issuer, Bumsville, Minnetonka
and Shakopee have executed this Agreement as of the date set forth above but actually on the
_ day of December, 2009.
CITY OF VICTORIA
By
Mayor
Attest:
City Administrator
[Signature Page - Joint Powers Agreement]
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CITY OF BURNSVILLE
By
Mayor
Attest:
City Manager
[Signature Page - Joint Powers Agreement]
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CITY OF MINNETONKA
By
Mayor
And by:
City Manager
[Signature Page - Joint Powers Agreement]
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CITY OF SHAKOPEE
By
Mayor
By:
City Administrator
By:
City Clerk
[Signature Page - Joint Powers Agreement]
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EXHIBIT A
The Proiects
Victoria Proiect
The Victoria Project consists of the acquisition by the Borrower of an existing assisted
living/memory care facility located at 8150 Barvaria Road in the City of Victoria, together with
any necessary improvements in connection therewith.
Bumsvil1e Proiect
The Bumsville Project consists of the acquisition by the Borrower of an existing assisted
living/memory care facility located at 451 East Travelers Trail in the City of Burnsville, together
with any necessary improvements in connection therewith.
MinnetonkaProiect
The Minnetonka Project consists of the acquisition by the Borrower of an existing assisted
living/memory care facility located at 13401 Lake Street Extension in the City ofMinnetonka,
together with any necessary improvements in connection therewith.
Shakopee Project
The Shakopee Project consists of the acquisition by the Borrower of an existing assisted
living/memory care facility located at 1855 1 Oth Avenue West in the City of Shakopee, together
with any necessary improvements in connection therewith.
A-I
4833-7393-8948/3