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HomeMy WebLinkAbout2013-02 Approving the Redemption of all Outstanding Timber Ridge Affordable HousingRESOLUTION NO. 2 SERIES OF 2013 A RESOLUTION APPROVING THE REDEMPTION OF ALL OUTSTANDING TIMBER RIDGE AFFORDABLE HOUSING CORPORATION ADJUSTABLE RATE HOUSING FACILITY REVENUE BONDS AND AUTHORIZING THE TOWN OF VAIL'S FUNDING OF THE TIMBER RIDGE AFFORDABLE HOUSING DEVELOPMENT VIA CAPITAL CONTRIBUTION AND A LOAN TO THE TIMBER RIDGE AFFORDABLE HOUSING CORPORATION WHEREAS, the Timber Ridge Affordable Housing Corporation ("TRAHC") is a Colorado non-profit corporation controlled by the Town of Vail (the "Town") and is the entity that currently holds the debt obligations for the Timber Ridge Apartments; WHEREAS, on or about July 17, 2003, and in connection with the purchase of the Timber Ridge Apartments, TRAHC issued $19,025,000 in adjustable rate housing facilities revenue bonds, Series 2003A; WHEREAS, the current outstanding balance of the adjustable rate housing facility revenue bonds is $17,265,000; WHEREAS, the Town and TRAHC desire to restructure the debt obligations for the Timber Ridge Apartments by the redemption of all outstanding adjustable rate housing facility revenue bonds; WHEREAS, pursuant to the debt restructuring, the Town will fund the outstanding principal balance due under the outstanding adjustable rate housing facility bonds by: (1) payment of the TRAHC reserve funds currently on deposit with US Bank pursuant to the bondholders letter of credit; (2) payment of a capital contribution to TRAHC which shall represent an investment in the deed restrictions for the Timber Ridge Apartments; and (3) issuance of a loan to TRAHC of the remainder of the outstanding balance. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO, THAT: Section 1. Findinqs. The Town Council finds and determines as follows: a. On or about July 17, 2003, and in connection with the purchase of the Timber Ridge Apartments, TRAHC issued $19,025,000 in Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A (the "Revenue Bonds"). b. The current outstanding balance of the Revenue Bonds is $17,265,000. c. In consideration for the issuance of the Revenue Bonds, TRAHC was required to set aside a debt service reserve fund of $595,197 and an additional letter of credit reserve of $615,296. The reserve funds are currently held in escrow at US Bank. Resolution No. 2, Series of 2013 The Town and TRAHC desire to restructure the debt obligations for the Timber Ridge Apartments by calling for the redemption of all outstanding Revenue Bonds and the provision of substitute funding by the Town as follows: d. Upon completion of the revenue bond redemption, the released Reserve Funds shall be applied to the outstanding debt. 1. The Town shall make a capital contribution to TRAHC in the amount of $8,000,000, which shall represent an investment in deed restrictions imposed on the Timber Ridge Apartments. 2. The Town shall grant TRAHC a loan (the "TRAHC Loan") in the principal amount of $8,000,000. e. The terms of the TRAHC Loan shall be as follows: 1. The term shall commence on February 1, 2013 and all principal and interest shall be due and payable in full no later than January 31, 2033. 2. The principal loan amount is $8,000,000, and shall be evidenced by a Promissory Note and Deed of Trust. 3. Simple interest shall accrue annually on the then outstanding principal loan balance at a rate of 1.5%. 4. Beginning August 1, 2013, semi-annual interest payments shall be due and payable to the Town on August 1St and February 15t of each year of the term in the amounts described in the schedule attached to the Promissory Note as Exhibit A. 5. Beginning February 1, 2014, annual principal payments shall be due and payable to the Town on February 1St of each year of the term. The amount of the annual principal payment shall be at the discretion of TRAHC, provided that such payment must comply with the loan's minimum debt service limit. 6. The minimum annual debt service of principal and interest that shall be due and payable to the Town shall be $465,966. 7. TRAHC may prepay the principal amount outstanding, in whole or in part, at any time without penalty. Section 2. Approval. The Town Council has reviewed and considered the above findings and hereby approves the debt restructuring of the Revenue Bonds, as described herein. Resolution No. 2, Series of 2013 . INTRODUCED, PASSED AND ADOPTED this 8th da f January, 2013. Andrew P. Daly, Ma ATTES : L r ei onaldson, Town Clerk Resolution No. 2, Series of 2013 � pF Vq�� � .. . L • A � � � � ' . . . : •c �'•••..... •�'AO.