HomeMy WebLinkAbout4C, Call for Public Hearing for Host Approval for City of Bloomington Senior Housing Refunding Revenue BondsPg
Request for Council Action
Prepared By: Sue Iverson,
Finance Director/Treasurer
Council Meeting Date: October 25, 2010
Call for a Public Hearing for Host Approval for $19,000,000 City of Bloomington Senior
Housing Refunding Revenue Bonds (Gideon Pond Commons, LLC Project), Series 2010
(Resolution 2010-055)
Budgeted Amount:
N/A
Actual Amount:
N/A
Funding Source:
N/A
Recommendation:
1. Motion to adopt Resolution 2010-055, calling for a Public Hearing on November 29,
2010 regarding an issue of Revenue Bonds to be issued by the City of Bloomington
on behalf of one or more affiliates of Presbyterian Homes Bloomington Care Center,
Inc.
Supporting Documents:
1. See the attached memo from Sue Iverson dated October 25, 2010.
2. Letter from Julie Eddington, City Bond Counsel Kennedy Graven.
3. Resolution 2010-055.
DATE: October 25, 2010
�I�N HILLS
MEMORANDUM
TO: Honorable Mayor and City Council Members
Patrick Klaers, City Administrator
FROM: Sue Iverson, Finance Director /Treasurer
Background
SUBJECT: Host Approval for $19,000,000 City of Bloomington Conduit Debt for
Presbyterian Homes (Gideon Pond Commons, LLC Project)
The City has been requested to hold a public hearing for host approval of $19,000,000 of
Senior Housing Refunding Revenue Bonds to be issued by the City of Bloomington on
behalf of Presbyterian Homes. Host approval is required as the proceeds of these bonds
will be used to refund the City of Arden Hills Health Care and Housing Revenue
Refunding Bonds, Series 1999A; the City of Arden Hills Health Care Facility Revenue
Refunding Note (Presbyterian Homes Bloomington Care Center, Inc. Project) Series
2001A; and the City of Arden Hills Health Care Facility Revenue Refunding Note
(Presbyterian Homes Bloomington Care Center, Inc. Project), Series 2001B. A summary
of these issues is as follows:
1) City of Arden Hills Health Care and Housing Revenue Refunding Bonds,
Series 1999A: issued on September 30, 1999, in the amount of $18,605,000. The
proceeds were used to refinance an 86 -unit assisted living facility located in
Bloomington and refinance a 93 -unit elderly independent living facility located in
Little Canada. The remaining principal to be refunded is approximately
$16,000,000.
2) City of Arden Hills Health Care Facility Revenue Refunding Note
(Presbyterian Homes Bloomington Care Center, Inc. Project) Series 2001A
and City of Arden Hills Health Care Facility Revenue Refunding Note
(Presbyterian Homes Bloomington Care Center, Inc. Project), Series 2001B:
issued December 13, 2001, in the amount of $2,156,800 and $2,850,000
respectively. The proceeds were used to: acquire certain cooperative senior
housing units in the Gideon Pond Cooperative located in Bloomington; acquire an
City Council Meeting
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80 -bed skilled nursing facility located in Bloominton; and refinance capital costs
expended in conjunction with the Bloomington Care Center Project and
McKnight Care Center, a 208 -bed nursing home facility (the "McKnight Care
Center Project located at 3220 Lake Johanna Blvd. The remaining principal is
approximately $3,000,000, of which $250,000 relates to the McKnight Care
Center.
Presbyterian Homes is refunding the debt on the McKnight Care Center in order to be
able to finance the proposed renovations to its Arden Hills campus.
Our Bond Counsel has reviewed this request and attached is a letter describing the project
and their legal opinion for your review. It is requested that the City Council call for a
public hearing on November 29, 2010.
There will be representatives from our Bond Counsel and on behalf of Presbyterian
Homes at the meeting to explain the project and to answer any questions.
Council Action
Approve a resolution calling for a public hearing on November 29, 2010.
City Council Meeting
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c
Offices in
Minneapolis
Saint Paul
St. Cloud
October 21, 2010
Sue Iverson
Finance Director
City of Arden Hills
1245 Hwy 96 West
Arden Hill, Minnesota 55112
Re: Host Approval for $19,000,000 City of Bloomington Senior Housing Refunding
Revenue Bonds (Gideon Pond Commons, LLC Project), Series 2010
Dear Ms. Iverson,
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300 telephone
(612) 337-9310 fax
WWW. liwnnedy-graven.conl
Affirmative Action, Equal Opportunity Employer
JULIE A. EDDINGTOPkt
Attorney at Law
Direct Dial (612) 337-9213
Email: jeddington@lcennedy-graven.com
Gideon. Pond. Commons, LLC, the sote. -!member of which is Presbyterian Homes
Bloomington Care Center, Inc. (the "Borrower") has requested that the 'city of
(the "CV). .hof4 a public heating and provide host approval. .so that the C4 of
•:Bloomington, MinnoOta. ("Bloomington") may issue the ..above-referenced RondS a
principal -amount to .$19,0 under Mitins.Ota: Statutes, Sections 4694527-
as amended and 462C, a amended. kportion '.017.the„. of the,13OndS,.:a:te:
pito.pos.d to be titSed to refund all or a portion of bonds issued: by the 'These bonds
The City's Itio4th Care and Housing ROVOtitit. Refundiog:Bonds, .Series
1999A 1999A Bonds"), issued on .'S 30 1999; in the original
aggregate principal 'amount of $1005„00Q. The procoeds. of the SerieS. :I999A
Bonds were used to refinance an 86-unit assisted living facility Iocated in
Bloomington and refinance a 93-unit elderly 7 inOependerit living facility located in
City of Little Canada Minnesota ("Littleg. Canadal.?).. The remaining principal offbe
Series 1999A Bonds in the amount :otopproximaeb $16;000,000 will be refunded:
The Health Care Facility Revenue Refunding Note (Prosbyteti4n.
Homes Bloomington Care, Center, Inc. Project), Series 2901.A, issued on Deoelaer
13.„:2004 iri the original aggregate principal amount of $20:56$00.., and Health Care
Facility .Reveno.'.Refitoditg Note (ptebytoitiaty-HOmea.: Bloomington Care. center,
Inc; Project), Series 2001B, .:issued on Deo:ttbeit13, 2001, in the original aggregate
principal amount of $2;$50,000. The proceeds ofthe Series 2001 Notes were used
to acquire certalo cooperative senior housing units in the Gideon Pond Cooperative
located in Bloomington, .:acquire an Ogled nursing located in
Bloomington, refinance capital costs :expended in conjunction with the
Bloomington Care Center project and McKnight Care Center, a 208-lyed nur$J.I1g.
home facility (ttio. "McKnight Care Center Project") located at 3220 Lake ...Johanna
Boulevard in the City. The remaining principal of the Series 2001 Notes in the
amount of approximately $3,000,000 will be refunded. Of the remaining principal
amount, approximately $250,000 relates to the McKnight Care Center.
Presbyterian Homes is refunding the debt on the McKnight Care Center in order to
be able to finance the proposed renovations to its Arden Hills campus.
Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Treasury Regulations promulgated pursuant to Section 147(f) of the Code (the
"Regulations"), require that tax-exempt private activity bonds must be approved by each
governmental unit having jurisdiction over the area in which any facility financed with such
tax-exempt bonds is located. The Code and Regulations provide that the tax-exempt bonds
may be approved by an applicable elected representative of the governmental unit after a
public hearing following reasonable public notice.
On November 29, '2010, it is proposed that the City Council Will conduct a public
hearing 'regarding the issuance of the Bonds by Bloomington and consider the :attached
resolution 'providing host approval for the Bonds: and consent to Bloomington refunding
various bond issues financed by Arden..Iiills: In :addition,: the City of Little Canada will be
issuing bonds for the benefit of PHSIMayli LLQ, the sole member of which is
Presbyterian Hothes.:.H.Otising-and Assisted Living, Inc,. to refinance the portion of the Series
1999A Bonds that financed the Mayfield :Project in Little Canada.: The City will also be
requested to consent to the City of:Little Canada issuing bonds to refinance bonds originally
issued by the city, No public. hearing is required for this consent.
Tf host approval is granted by the City Council of the City, and Bloomington agre
to issue the Bonds, the Bond:. will be issued as a revenue -obligation of Bloomington. The
Bonds will not be an obligation of the City. The principal of and interest on the Bonds will
be payable solely 'from revenues derived from the senior housing facilities refinanced and
financed with the procopds of the Bonds. The Bonds will not constitute a general or moral
obligotion. ofthe City and will not be secured by the full faith and credit ottaxing powers of
the City:. in the event. the Project encounters :financial difficulties, no assets or revenues of
the City will be available to pay the principal of or interest on the Bonds. The issuance of
the Bonds Will not adversely impact the ability of the .City to issue bank qualified bonds in
calendar year 2010.
Please contact me if you have any questions regarding the Bonds or this financing.
KENNEDY G
CHARTERED
CITY OF ARDEN HILLS, MINNESOTA
RESOLUTION NO. 2010-055
RESOLUTION CALLING FOR A PUBLIC HEARING
REGARDING AN ISSUE OF REVENUE BONDS TO BE ISSUED
BY THE CITY OF BLOOMINGTON ON BEHALF OF ONE OR
MORE AFFILIATES OF PRESBYTERIAN HOMES
BLOOMINGTON CARE CENTER, INC.
BE IT RESOLVED by the City Council (the "Council of the City of Arden Hills, Minnesota
(the "City as follows:
WHEREAS, Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act
authorizes municipalities to issue revenue obligations to finance, in whole or in part, the costs of the
acquisition, construction, reconstruction, improvement, betterment, or extension of a project and any
related public improvements. A "project" includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, whether or not operated for profit, engaged in providing
health care services, including hospitals, nursing homes, and related medical facilities; and
WHEREAS, at the request of Presbyterian Homes of Arden Hills, Inc., a Minnesota nonprofit
corporation, the City previously issued its Health Care and Housing Revenue Refunding Bonds, Series
1999A (the "Series 1999A Bonds on September 30, 1999, in the original aggregate principal amount of
$18,605,000; and
WHEREAS, the proceeds of the Series 1999A Bonds were used to (i) refinance The Gardens,
also known as Bloomington Commons, an 86 -unit assisted living facility (the "Gardens Project located
at 10030 Newton Avenue South in the City of Bloomington, Minnesota "Bloomington and
(ii) refinance Mayfield, a 93 -unit elderly independent living facility (the "Mayfield Project located at
2850 Market Place Drive in the City of Little Canada, Minnesota "Little Canada and
WHEREAS, at the request of Presbyterian Homes Bloomington Care Center, Inc., a Minnesota
nonprofit corporation, the City previously issued its (i) Health Care Facility Revenue Refunding Note
(Presbyterian Homes Bloomington Care Center, Inc. Project), Series 2001A (the "Series 2001A Note
on December 13, 2001, in the original aggregate principal amount of $2,156,800; and (ii) Health Care
Facility Revenue Refunding Note (Presbyterian Homes Bloomington Care Center, Inc. Project), Series
2001B (the "Series 2001B Note," and collectively with the Series 2001A Note, the "Series 2001 Notes
on December 13, 2001, in the original aggregate principal amount of $2,850,000; and
WHEREAS, the proceeds of the Series 2001 Notes were used to acquire certain cooperative
senior housing units in the Gideon Pond Cooperative (the"Gideon Pond Cooperative Project located at
9901 Penn Avenue South in Bloomington, and acquire Bloomington Care Center, an 80 -bed skilled
nursing facility (the "Bloomington Care Center Project located at 401 West 95 Street in Bloomington,
and refinance capital costs expended in conjunction with the Bloomington Care Center Project and
McKnight Care Center, a 208 -bed nursing home facility (the "McKnight Care Center Project located at
3220 Lake Johanna Boulevard in the City; and
WHEREAS, Gideon Pond Commons, LLC, the sole member of which is Presbyterian Homes
Bloomington Care Center, Inc., has requested that the City of Bloomington, Minnesota issue its Senior
Housing Refunding Revenue Bonds (Gideon Pond Commons, LLC Project), Series 2010 (the
1
"Bloomington Bonds in one or more series, in the original aggregate principal amount of up to
$19,000,000; and
WHEREAS, the proceeds of the Bloomington Bonds are proposed to be used to refund all or a
portion of various bond issues, including: (i) the Series 1999A Bonds (excluding the portion of the Series
1999A Bonds used to refinance the Mayfield Project) and the Series 2001 Notes issued by the City and
described above; and (ii) the Variable Rate Demand Health Care Revenue Refunding Bonds (Presbyterian
Homes Care Centers, Inc. Project), Series 2002 (the "Series 2002 Bonds issued by the City of
Roseville, Minnesota "Roseville on September 26, 2002, in the original aggregate principal amount of
$8,950,000, the proceeds of which were used to (a) refund the outstanding principal balance of the
Housing and Health Care Facilities Revenue Refunding Bonds (Presbyterian Homes Care Centers, Inc.
Project), Series 1997, issued by Roseville in the original aggregate principal amount of $8,525,000, the
proceeds of which were used to pay for renovations to a 143-bed skilled nursing facility located at 1910
County Road D in Roseville, and (b) make capital improvements to said 143 -bed skilled nursing facility;
and
WHEREAS, PHS /Mayfield, LLC, the sole member of which is Presbyterian Homes Housing and
Assisted Living, Inc., has requested that Little Canada issue its Senior Housing Refunding Revenue
Bonds (Presbyterian Homes Mayfield Project), Series 2010 (the "Little Canada Bonds in one or more
series, in the original aggregate principal amount of up to $6,000,000; and
WHEREAS, the proceeds of the Little Canada Bonds are proposed to be used to refund the
portion of the Series 1999A Bonds that refinanced the Mayfield Project; and
WHEREAS, since a portion of the facilities proposed to be refinanced by the Bloomington Bonds
are located in the City, Section 147(0 of the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder require that, prior to the issuance of the Bloomington Bonds, this Council
approve the issuance of the Bonds by Bloomington, after conducting a public hearing thereon; and
WHEREAS, Minnesota Statutes, Section 469.155, subd. 12 requires that prior to a municipality
issuing bonds to refund bonds issued by another municipality, the consent of the municipality that issued
the bonds to be refunded must be obtained; and
WHEREAS, following the proposed public hearing, the City Council will be asked to consent to
the issuance of the Bloomington Bonds and the Little Canada Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ARDEN
HILLS, MINNESOTA:
1. A public hearing on the proposal that Bloomington issue the Bloomington Bonds to
refinance the Arden Hills Project is hereby called, and such meeting shall be held on Monday, November
15, 2010, at 7:00 P.M., at City Hall; and
2. The Finance Director shall cause notice of the public hearing, in substantially the form
attached hereto as Exhibit A, to be published in the official newspaper of the City and a newspaper of
general circulation in the City, once not less than 14 days prior to the date fixed for the public hearing.
2
Adopted by the City Council of the City of Arden Hills on this 25th day of October, 2010.
Attest:
PatrickKlaers, City Administrator /Clerk
3
Stanley Harpstead, Mayor
EXHIBIT A
Notice of Public Hearing
NOTICE OF PUBLIC HEARING BY THE CITY OF ARDEN
HILLS, MINNESOTA WITH RESPECT TO THE ISSUANCE OF
REVENUE BONDS BY THE CITY OF BLOOMINGTON FOR
THE BENEFIT OF ONE OR MORE AFFILIATES OF
PRESBYTERIAN HOMES BLOOMINGTON CARE CENTER,
INC. PURSUANT TO MINNESOTA STATUTES, SECTIONS
469.152 THROUGH 469.1651, AS AMENDED
NOTICE IS HEREBY GIVEN that the City Council (the "Council of the City of Arden Hills,
Minnesota (the "City will hold a public hearing on Monday, November 15, 2010, at or after 7:00 p.m.
at the City Council Chambers, 1245 West Highway 96, in the City for the purpose of conducting a public
hearing on a proposal that it provide consent to the City of Bloomington issuing its Senior Housing
Refunding Revenue Bonds (Gideon Pond Commons, LLC Project), Series 2010 (the "Bonds in one or
more series.
The proceeds of the Bonds will be loaned to Gideon Pond Commons, LLC, a Minnesota
nonprofit limited liability company, the sole member of which is Presbyterian Homes Bloomington Care
Center, Inc., or another affiliate of Presbyterian Homes Bloomington Care Center, Inc. (the "Borrower
and used to: (i) refund a portion of the Health Care and Housing Revenue Refunding Bonds, Series
1999A, issued by the City on September 30, 1999, in the original aggregate principal amount of
$18,605,000, the proceeds of which were used to refinance The Gardens, also known as Bloomington
Commons, an 86 -unit assisted living facility located at 10030 Newton Avenue South in Bloomington,
Minnesota; (ii) refund the Health Care Facility Revenue Refunding Note (Presbyterian Homes
Bloomington Care Center, Inc. Project), Series 2001A, issued by the City on December 13, 2001, in the
original aggregate principal amount of $2,156,800 and the Health Care Facility Revenue Refunding Note
(Presbyterian Homes Bloomington Care Center, Inc. Project), Series 2001B, issued by the City on
December 13, 2001, in the original aggregate principal amount of $2,850,000, the proceeds of which were
used to acquire certain cooperative senior housing units in the Gideon Pond Cooperative located at 9901
Penn Ave. South in Bloomington, Minnesota, and the Bloomington Care Center, an 80 -bed skilled
nursing facility located at 401 W. 95 St. in Bloomington, Minnesota, and to refinance capital costs
expended in conjunction with the Bloomington Care Center and the McKnight Care Center, a 208 -bed
nursing home facility located at 3220 Lake Johanna Boulevard in the City; (iii) refund the Variable Rate
Demand Health Care Revenue Refunding Bonds (Presbyterian Homes Care Centers, Inc. Project), Series
2002, issued by the City of Roseville, Minnesota on September 26, 2002, in the original aggregate
principal amount of $8,950,000, the proceeds of which were used to (A) refund the outstanding principal
balance of the Housing and Health Care Facilities Revenue Refunding Bonds (Presbyterian Homes Care
Centers, Inc. Project), Series 1997, issued by the City of Roseville, Minnesota in the original aggregate
principal amount of $8,525,000, the proceeds of which were used to pay for renovations to a 143 -bed
skilled nursing facility located at 1910 County Road D in Roseville, Minnesota, and (B) make capital
improvements to the 143 -bed skilled nursing facility; (iv) fund a debt service reserve fund equal to the
maximum annual debt service on the Bonds; and (v) pay the costs of issuance related to the Bonds. The
projects to be refinanced with the proceeds of the Bonds will be owned by Gideon Pond Commons, LLC,
the sole member of which is Presbyterian Homes Bloomington Care Center, Inc. or another affiliate of
Presbyterian Homes Bloomington Care Center, Inc.
Following the public hearing, the City will consider a resolution providing consent to the City of
Bloomington to issue the proposed Bonds in an original aggregate principal amount not to exceed
$19,000,000, a portion of which will refinance the facilities described above located in the City.
The Bonds will be special, limited obligations of the City of Bloomington, and the Bonds and
interest thereon will be payable solely from the revenues and assets pledged to the payment thereof. No
holder of the Bonds will ever have the right to compel any exercise of the taxing powers of the City of
Bloomington or the City of Arden Hills to pay the Bonds or the interest thereon, nor to enforce payment
against any property of the City of Bloomington or the City of Arden Hills.
BL130 -142 (JAE)
376551v2
Anyone desiring to be heard during this public hearing will be afforded an opportunity to do so.
Dated: [Date of Publication].
CITY OF ARDEN HILLS, MINNESOTA