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HomeMy WebLinkAboutR12-127 Lake Creek Defeasance of Certain Bonds Commissioner "I / moved adoption of the followin solution: BOARD OF COUNTY COMMISSIONERS COUNTY OF EAGLE, STATE OF COLORADO RESOLUTION NO. 2012- RESOLUTION REGARDING CERTAIN ACTIONS IN CONNECTION WITH THE DEFEASANCE OF CERTAIN BONDS ISSUED TO FINANCE THE LAKE CREEK AFFORDABLE HOUSING PROJECT, ACQUISITION OF LAKE CREEK AFFORDABLE HOUSING PROJECT FROM LAKE CREEK AFFORDABLE HOUSING CORPORATION AND TRANSFERRING TITLE TO THE PROJECT TO LAKE CREEK VILLAGE LLC, AND AUTHORIZING EXECUTION OF ALL LEGAL DOCUMENTS IN CONNECTION THEREWITH WHEREAS, Lake Creek Affordable Housing Corporation (the "Corporation ") issued its Multifamily Housing Property Revenue Refunding Bonds, Series 1998A and its Multifamily Housing Property Subordinate Revenue Refunding Bonds, Series 1998B (collectively, the "Series 1998 Bonds ") pursuant to, and secured by, a Trust Indenture dated as of July 1, 1993, as supplemented and amended by a First Supplemental Trust Indenture dated as of August 1, 1998 (the "Indenture ") between the Corporation and U.S. Bank National Association (formerly known as U.S. Bank Trust National Association, as successor to First Trust National Association), as trustee (the "Trustee "); and WHEREAS, the Series 1998 Bonds were issued to refund certain Series 1993 Bonds (as defined in the Indenture) of the Corporation proceeds of which were used to finance the costs of acquisition and construction of the affordable rental housing complex known as Lake Creek Village Apartments, located at 4923 Lake Creek Village Drive, Edwards Colorado (the "Property ") in Eagle County (the "County "), to fund debt service reserve fund and to pay certain costs of issuance; and WHEREAS, the Series 1998 Bonds are further secured by (1) two deeds of trust on the Property each dated as of July 1, 1993, as amended on August 11, 1998, from the Corporation for the benefit of the Trustee (collectively, the "Deeds of Trust ") and (2) two assignments of rents and leases, each dated as of July 26, 1993, as amended on August 11, 1998 from the Corporation to the Trustee (collectively with the Deeds of Trust referred to as the "Security Documents "); WHEREAS, the County and the Corporation entered into an Amended and Restated Project Agreement dated as of August 1, 1998 (the "Project Agreement "), under the terms of which the Corporation is responsible to operate the Property, and title 1 \\DE - 065064/000022 - 551523 v2 to the Property shall vest in the County upon defeasance of the Series 1998 Bonds pursuant to the terms of the Indenture and the Project Agreement; and WHEREAS, Section 14.02 of the Indenture and Section 3 of the Project Agreement grants the County the right (the "Right to Acquire the Property ") to obtain, at any time, fee title and exclusive possession of the Property free from liens and encumbrances created by the Corporation related to the Series 1998 Bonds (but subject to certain permitted encumbrances) by placing into escrow an amount that will be sufficient to defease the Series 1998 Bonds and complying with certain other requirements of the Indenture, provided that at any time before it defeases the Series 1998 Bonds, the County shall not agree or otherwise be obligated to convey any interest in the Property to any person for any period extending beyond or beginning after the County defeases the Series 1998 Bonds; and WHEREAS, pursuant to the terms of the Indenture and the Project Agreement, upon defeasance of the Series 1998 Bonds, the Indenture, the Security Documents and the Project Agreement are to be released or terminated and unencumbered title to the Property (subject to certain permitted encumbrances) is to be conveyed by the Corporation to the County; and WHEREAS, Lake Creek Village LLC ( "Lake Creek Village "), whose sole member is the Eagle County Housing and Development Authority (the "Authority "), has been formed in order to, among other things, refinance, own and operate the Property after it acquires title to the Property; and WHEREAS, the Authority is a body corporate and politic and a Commissioner of the County serves as the chairman of the board of commissioners of the Authority and appoints the two other members of the Board of Commissioners of the Authority; and WHEREAS, because Lake Creek Village is wholly owned and controlled by the Authority, and the Authority is a governmental instrumentality of the County, the County may agree to transfer title to the Property to Lake Creek Village prior to the Series 1998 Bonds being defeased without violating the provision in the Indenture and the Project Agreement which states that at any time before the County defeases the Series 1998 Bonds the County is prohibited from agreeing or otherwise being obligated to convey any interest in the Property to any person; and WHEREAS, Lake Creek Village is expected to obtain a loan (the "Loan ") from Wells Fargo Bank, National Association ( "Wells "), which will be insured by the United States Department of Housing and Urban Development, and to make a portion of the proceeds of the Loan available to the County to defease the Series 1998 Bonds pursuant to an escrow instructions letter (the "Escrow Letter ") from Ballard Spahr LLP addressed to, and to be executed by, Commonwealth Land Title Insurance Company and the Trustee and to be acknowledged by Lake Creek Village, the County; and 2 \\DE - 065064/000022 - 551523 v2 WHEREAS, an application of the portion of the proceeds of the Loan to fund the defeasance of the Series 1998 Bonds is intended to provide cost and other efficiencies for the County to effect the defeasance of the Series 1998 Bonds and shall not be construed as creating an obligation on the part of the County to repay such Loan proceeds nor shall it create an indebtedness or financial obligation on the part of the County for purposes of any provisions or limitations of any statutory or constitutional provisions of the laws of the State of Colorado, and the obligation to repay the Loan shall be and remain solely the obligation of Lake Creek Village; WHEREAS, to effect the defeasance of the Series 1998 Bonds, the County proposes to enter into a Defeasance Agreement among Board, the Corporation and the Trustee (the "Defeasance Agreement ") and into an Acknowledgment and Agreement Concerning Termination of Project Agreement (the "Termination of Project Agreement ") between the Board and the Corporation; and WHEREAS, there have been presented to the Board the proposed forms of (1) the Defeasance Agreement and (2) the Project Termination Agreement (collectively, the "County Agreements "), and (3) the Escrow Letter; and WHEREAS, the Board of County Commissioners (the "Board ") deems it appropriate and in the best interests of the County to exercise the Right to Acquire Property and in connection therewith to take the following actions: (1) To authorize the County to exercise the Right to Acquire Property and defease the Series 1998 Bonds by causing to be deposited in escrow with the Trustee pursuant to the Defeasance Agreement sufficient funds to effect the defeasance in accordance with the provisions of the Indenture and the Project Agreement, such escrow to be funded with a portion of the proceeds of the Loan made available to the County pursuant to the Escrow Letter, available funds on deposit in certain funds and accounts held by the Trustee pursuant to the Indenture (as permitted by the Indenture) and other available sources, and in connection therewith to secure and effect the release or termination of the Indenture, the Security Documents and the Project Agreement; (2) To approve the County Agreements in substantially the forms of such documents presented at this meeting and to authorize the County to acknowledge and agree to the terms of the Escrow Letter; (3) Upon defeasance of the Series 1998 Bonds, to authorize the County to acquire unencumbered title to the Property (subject to certain permitted encumbrances) (the "Property Acquisition "); and (4) Upon the Property Acquisition, to authorize the County to transfer unencumbered title to the Property (subject to certain permitted 3 \\DE - 065064/000022 - 551523 v2 II I encumbrances) to Lake Creek Village pursuant to the Option Agreement ( "Transfer to Lake Creek Village "); NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF EAGLE, STATE OF COLORADO: THAT, the County is authorized to exercise its Right to Acquire the Property and to effect the defeasance of the Series 1998 Bonds and execute and deliver any and all agreements and other instruments and do any acts necessary or desirable to effect such defeasance in accordance with the Indenture, the Project Agreement and the Defeasance Agreement, such defeasance to be funded with a portion of the proceeds of the Loan made available to the County pursuant to the Escrow Letter and available funds on deposit in certain funds and accounts held by the Trustee pursuant to the Indenture (as permitted by the Indenture) and other available sources. THAT, the County Agreements in substantially the forms presented to the Board at this meeting are hereby approved. The County is authorized to execute the County Agreements in substantially the form of each of such documents presented to the Board at this meeting, with such changes therein as are deemed necessary or desirable by a Commissioner executing such documents, such approval to be evidenced by the execution thereof. THAT, the County is authorized to execute and deliver any and all agreements and other instruments and do any acts necessary or desirable to effect the Property Acquisition and Property's Transfer to Lake Creek Village, including without limitation executing a conveyance agreement or agreements, a special warranty deeds and assignments needed to effect said acquisition from the Corporation and subsequent transfer to Lake Creek Village. THAT, for purposes of cost and other efficiencies in connection with the funding of the defeasance of the Series 1998 Bonds, the County is authorized to acknowledge and agree to the terms of the Escrow Letter; provided that no provision in the Escrow Letter, the County's execution of the acknowledgment thereof or application of a portion of the Loan proceeds to fund the defeasance of the Series 1998 Bonds shall be construed as creating an obligation, on the part of the County to repay such Loan proceeds nor shall it create an indebtedness or financial obligation on the part of the County for purposes of any provisions or limitations of any statutory or constitutional provisions of the laws of the State of Colorado. THAT, each of the Commissioners acting alone are authorized (i) to execute the County Agreements and all other documents required to consummate the foregoing transactions and (ii) to take any and all additional actions as may be necessary or appropriate, and to execute and deliver such additional agreements, certificates and instruments as a Commissioner executing the same shall deem necessary or appropriate to fully perform the terms and conditions of the foregoing resolutions and to fully implement the purpose and intent of the foregoing resolutions. No further consent or 4 \\DE - 065064/000022 - 551523 v2 authorization of the Board shall be required for the County to undertake the foregoing actions. THAT, the Board hereby finds, determines and declares that this Resolution is necessary for the public health, safety and welfare of the residents of the County of Eagle, State of Colorado. 5 \\DE - 065064/000022 - 551523 v2 • MOVED, READ AND ADOPTED by the Board of County Commissioners of the County of Eagle, State of Colorado, at its regular meeting held the l lth day of December, 2012 COUNTY OF EAGLE STATE OF COLORADO, By and Through Its BOARD OF COUNTY COMMISSIONERS ATTEST: '� c , Vk ‘%4 4.6 gap � a Clerk of the Boar of County A . Peter F. Runyon, Ch ,b an Commissioners -�u Jon : ney, Vice ha rmi an /C Sara J. Fisher, Co issioner i Commissioner seconded the adoption of the forgoing resolution. The roll having been called, the vote was as follows: Commissioner Runyon ,/ Commissioner Stavney Commissioner Fisher a i This resolution passed by ( vote of the Board of County Commissioners of the County of Eagle, State of Colorado. \\3E_ 065064/000022 - 551523 v2