HomeMy WebLinkAboutCity Council - 99-20 RESOLUTION NO. 99-20
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH APPROVING A
THIRD SUPPLEMENTAL INDENTURE OF TRUST AND A
THIRD AMENDMENT TO LOAN ORIGINATION AND SERVICING AGREEMENT,
AND AUTHORIZING AND DIRECTING THE
EXECUTION AND DELIVERY THEREOF AND OF OTHER DOCUMENTS
AND ACTIONS TO BE TAKEN IN CONNECTION THEREWITH
WHEREAS, the City of Huntington Beach (the "Issuer") has issued its Variable Rate
Demand Multifamily Housing Revenue Bonds (Mercury Savings and Loan Association/Village
Partnership Project) 1986 Series A in the initial principal amount of$7,700,000 (the 'Bonds")
pursuant to an Indenture of Trust, dated as of November 1, 1986, as amended by that certain First
Supplemental Trust Indenture, dated as of June 1, 1989 and that certain Second Supplemental
Trust Indenture, dated as of March 1, 1997 (collectively, the "Original Indenture"), each by and
between the Issuer and U.S. Bank Trust National Association, as successor trustee to First Trust
Washington, the successor in interest to Seattle-First National Bank(the "Trustee"); and
The Issuer entered into a Loan Origination and Servicing Agreement, dated as of
November 1, 1986, as amended by that certain First Amendment to Loan Origination and
Servicing Agreement dated as of June 1, 1989 and that certain Second Amendment to Loan
Origination and Servicing Agreement dated as of March 1, 1997 (collectively, the "Original Loan
Agreement"), pursuant to which the Issuer agreed to use the proceeds of the Bonds to make a
loan (the "Developer Loan") to Village Partnership, a California general partnership (the
"Developer"), to finance the cost of acquiring, constructing and improving a multifamily
residential project located within the City of Huntington Beach, commonly known as Huntington
Village Apartments (the "Project"); and
Pursuant to the Second Supplemental Trust Indenture and the Second Amendment to
Loan Origination and Servicing Agreement (collectively, the "1997 Amendments"), (i) there is a
single Bond currently outstanding in the principal amount of $4,895,000, which is currently
owned by a single Bondowner, Principal Commercial Advisors, Inc. (the "Existing
Bondowner"), (ii) the Bonds are currently outstanding with no credit enhancement, and (iii) the
Bonds bear interest at the rate specified in Section 5 of the Second Supplemental Trust Indenture
through April 30, 1999; and
Pursuant to the 1997 Amendments, the Bonds are subject to mandatory tender for
purchase on April 30, 1999 unless, prior to March 31, 1999, the Developer notifies the City, the
Bondholder, the Trustee and the Remarketing Agent (as defined in the Original Indenture) of its
intent to either redeem the Bonds in whole on April 30, 1999 or to remarket the Bonds with
credit enhancement as set forth in Section 211 of the Original Indenture; and
The Developer has asked the City for another two-year period during which the Bonds
would be owned by a single Bondholder, Principal Commercial Acceptance, LLC (the "New
Bondholder"), there would be no credit enhancement of the Bonds, and the Bonds would bear
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interest at a rate specified in a Third Supplemental Trust Indenture, dated as of March 1, 1999
(the "Third Supplemental Trust Indenture"); and
Concurrently with execution and delivery of the Third Supplemental Trust Indenture, and
for the purpose of remaining consistent with the Third Supplemental Trust Indenture, the
Original Loan Agreement would be amended by that certain Third Amendment to Loan
Origination and Servicing Agreement, dated as of March 1, 1999 (the "Third Amendment to
Loan Agreement"); and
All things necessary to make the Third Supplemental Indenture of Trust and the Third
Amendment to Loan Agreement valid,binding and effective have, in all respects, occurred;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH AS FOLLOWS:
SECTION 1. Third Supplemental Indenture. The Third Supplemental Indenture
between the Issuer and the Trustee, in the form presented to this meeting, is hereby approved.
The City Administrator or the Director of Administrative Services of the Issuer (the "Designated
Officers") are, and each of them acting alone is, hereby authorized and directed, for and in the
name and on behalf of the Issuer, to execute and deliver the Third Supplemental Indenture, and
the City Clerk is hereby authorized and directed, for and in the name of and on behalf of the
Issuer, to attest the Designated Officer's signature on the Third Supplemental Indenture, in
substantially said form, with such additions thereto or changes therein as are recommended or
approved by such officers upon consultation with bond counsel to the Issuer, including such
additions or changes as are necessary or advisable in accordance with Section 5 hereof, the
approval of such additions or changes to be conclusively evidence by the execution and delivery
by the Issuer of the Third Supplemental Indenture.
SECTION 2. Third Amendment to Loan Agreement. The Third Amendment to Loan
Agreement, among the Issuer, the Developer and the Trustee, in the form presented to this
meeting, is hereby approved. The Designated Officers are, and each of them acting alone is,
hereby authorized and directed, for and in the name and on behalf of the Issuer, to execute and
deliver the Third Amendment to Loan Agreement, and the City Clerk is hereby authorized and
directed, for and in the name of and on behalf of the Issuer, to attest the Designated Officer's
signature on the Third Amendment to Loan Agreement, in substantially said form, with such
additions thereto or changes therein as are recommended or approved by such officers upon
consultation with bond counsel to the Issuer, including such additions or changes as are
necessary or advisable in accordance with Section 5 hereof, the approval of such additions or
changes to be conclusively evidence by the execution and delivery by the Issuer of the Third
Amendment to Loan Agreement.
SECTION 3. Approval of Bondholder. Principal Commercial Advisors, Inc., the
current sole owner of the Bonds, has requested the City's consent to the ownership of the Bonds
by Principal Commercial Acceptance, LLC. The City hereby consents to the ownership of the
Bonds from the effective date of the Third Supplemental Indenture and the Third Amendment to
Loan Agreement by Principal Commercial Acceptance,LLC.
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SECTION 4. Direction to Change Name of Bonds. The City hereby directs that the
name of the Bonds be changed to "City of Huntington Beach Multifamily Housing Revenue
Bonds (Village Partnership Project), 1986 A" to eliminate any reference to Mercury Savings and
Loan Association, which originally provided credit enhancement for the Bonds but is no longer
in existence.
SECTION 5. Official Action. The Designated Officers, any and all other officials of
the Issuer or such other person designated by the Issuer are hereby directed, for and on behalf of
the Issuer, to do any and all things and take any and all actions, including, without limitation, the
execution and delivery of any and all amendments or supplements to the documents executed and
delivered by the Issuer in connection with the issuance of the Bonds, including but not limited to,
any supplements or amendments to the Original Indenture and the Original Loan Agreement, any
and all assignments, certificates, agreements, notices, consents, instruments of conveyance and
other documents, which they, or any of them, on the advice of bond counsel to the Issuer, may
deem necessary or advisable in order to effect the supplement to the Original Indenture and the
Original Loan Agreement, as provided herein, and any and all assignments, certificates,
agreements, notices, consents, instruments of conveyance and other documents which may be
required in connection with the purchase of all, or a portion, of the Bonds, at the time of
execution and delivery of the above-referenced amendments or at such later date in lieu of
redemption, which they, or any of them, on the advice of bond counsel to the Issuer, may deem
necessary or advisable in connection with the amendments of the Original Indenture and the
Original Loan Agreement, as provided herein.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof on the 15th day of Marck , 1999.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk C �e
REVIEWED AND APPROVED: INITIATED AND APPROVED:
City Agministrator Dirleinr of Administrative Services
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Res. No.99-20
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of
the City of Huntington Beach, and ex-officio Clerk of the City Council of said City,
do hereby certify that the whole number of members of the City Council of the City
of Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on the 15th day of March, 1999 by the following
vote:
AYES: Bauer, Garofalo, Green, Dettloff, Harman, Sullivan
NOES: None
ABSENT: Julien
ABSTAIN: None
City Clerk and ex.-of C#Erk of the
City Council of the City of Huntington
Beach, California