Discussion:
Shakopee Housing Partners, LP is proposing to acquire and renovate approximately 62 units of existing affordable housing at 1428 Fourth Avenue known as Shakopee Village Apartments. The units will remain affordable and at least one of the residents must be 62 years old.
This will preserve these units long term for seniors and there will be no displacement. The redeveloper anticipates spending approximately $30,000 per unit in improvements including bathroom and kitchen upgrades.
The city's bond counsel has provided a letter of explanation. The city has acted for similar debt in the past for BHS for its project at Windermere. This debt is for affordable housing.
If issued, the Bonds will be secured solely by the revenues derived from the loan agreement to be executed by the City and the Borrower and from other security provided by the Borrower. The Bonds will not constitute a general or moral obligation of the City and will not be secured by or payable from any property or assets of the City (other than the interests of the City in the loan agreements) and will not be secured by any taxing power of the City. The Bonds will not be subject to any debt limitation imposed on the City, and the issuance of the Bonds will not have any adverse impact on the credit rating of the City, even in the event that the Borrower encounters financial difficulties with respect to the Project to be financed with the proceeds of the Bonds. In addition, the issuance of the Bonds will not affect the ability of the City to issue and designate any general obligation bonds as “qualified tax-exempt obligations” (or “bank-qualified bonds”) in calendar year 2021.
The Borrower will agree to pay the out-of-pocket expenses of the City with respect to this transaction as well as the City’s administrative fee of $100,000.