HomeMy WebLinkAbout4G, Approval to Redeem & Prepay Revenue Bonds Issued by the City of Arden Hills�Rp HILLS
Request for Council Action
Prepared By: Sue Iverson,
Finance Director /Treasurer
Budgeted Amount:
N/A
Actual Amount:
N/A
Council Meeting Date: November 15, 2010
Approval to Redeem and Prepay Revenue Bonds Issued by the City of Arden Hills
(Conduit Debt Presbyterian Homes, Resolution 2010 -060)
Funding Source:
N/A
Recommendation:
1. Motion to adopt Resolution 2010 -060, a resolution approving the issuance of
revenue refunding bonds by the City of Bloomington, Minnesota under Minnesota
Statutes, Sections 469.152 through 469.1651 and the issuance of revenue refunding
bonds by the City of Little Canada, Minnesota under Minnesota Statutes, Chapter
462C to redeem and prepay revenue bonds issued by the City of Arden Hills.
Supporting Documents:
1. See the attached memo from Sue Iverson dated November 15, 2010.
2. Letter from Julie Eddington, City Bond Counsel Kennedy Graven, dated November
9, 2010.
3. Resolution 2010 -060.
DATE: November 15, 2010
A..WT HILLS
MEMORANDUM
TO: Honorable Mayor and City Council Members
Patrick Klaers, City Administrator
FROM: Sue Iverson, Finance Director/Treasurer
SUBJECT: Approval to Redeem and Prepay Revenues Bonds Issued by the City
of Arden Hills
Background
The City had 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 was required as the proceeds of these
bonds were to 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 2001 A; 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.
Current Discussion
The Bonds to be issued by the City of Bloomington have now been restructured and
Little Canada is issuing refunding bonds on the portion of the debt in Little Canada,
therefore a public hearing is no longer required by the City of Arden Hills. Current
resources are being used to pay the remaining principal balance related to the McKnight
Care Center in Arden Hills, but approval to redeem and prepay the revenue bonds issued
by the City of Arden Hills is still needed.
Our Bond Counsel has reviewed this request and attached is a letter describing the project
refundings and their legal opinion for your review.
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 approving the issuance of Revenue Refunding Bonds by the City of
Bloomington, Minnesota under Minnesota Statutes, Sections 469.152 through 469.1651
and the Issuance of Revenue Refunding Bonds by the City of Little Canada, Minnesota
under Minnesota Statutes Chapter 462C to Redeem and Prepay Revenue Bonds Issued by
the City of Arden Hills.
City Council Meeting
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Attachment A
Letter from Julie Eddington
November 9, 2010
Sue Iverson
Finance Director
City of Arden Hills
1245 I-Iwy 96 West
Arden Hilt, Minnesota 55112
Dear Ms. Iverson,
Offices in
Minneapolis
Saint Paul
St. Cloud
470 U.S. Bank Pkza
200 South Sixth Street
Minneal)t)lis, MN 55
(612) 337-93O teleplimie
(612) 337-9310 fax
%SAVVY. ke tied y -g rave n .co m
Affirmative Action, Equal Opportunity Employer
JULIE A. EDDINGTON
Attorney at Law
Direct Dial (612) 337-9213
Email: jeddington@kennecly-graven.com
Re: Consent to Refunding of $18,605,000 City of Arden Hills Health Care and Housing
Revenue Refunding Bonds, Series 1999A
As you know, the City of Arden Hilis ("Arden flills") issued its I-lealth Care and 1-lousing
Revenue Refunding Bonds, Series 1999A (the "Series I999A Bonds"), on September 30, 1999, in
the original aggregate principal amount of $18,605,000, The proceeds of the Series 1999A Bonds
were used to refinance an 86-unit assisted living facility (the "Bloomington Facility") located in the
City of Bloomington, Minnesota ("Bloomington") and refinance a 93-unit elderly independent living
facility (the "Little Canada Facility") located in City of Little Canada, Minnesota ("Little Canada").
Gideon Pond Commons, LLC, a Minnesota nonprofit limited liability company, whose the
sole member is Presbyterian I-Iomes Bloomington Care Center, Inc. (the "Borrower") has requested
that Bloornin.gton issue its Senior Housing Refunding Revenue Bonds (Gideon Pond Commons,
LLC Project), Series 2010 (the "Bloomington Bonds"), in a principal amount of up to $19,000,000,
under Minnesota Statutes, Sections 469.152-469.1651, as amended and Minnesota Statutes, Chapter
462C, as amended. A portion of the proceeds of the Bloomington Bonds are proposed to be used to
refund the portion of the Series 1999A Bonds that refinanced the Bloomington Facility.
PHS/Maytield, LLC, a Minnesota nonprofit limited liability company, whose the sole
member is Presbyterian I-Iomes I-lousing and Assisted Living, Inc., has requested that Little Canada
issue its Senior I-Iousing Revenue Refunding Bonds (PHS Mayfield, LLC Project), Series 2010 (the
"Little Canada Bonds") in a principal amount of up to $6,000,000 under Minnesota Statutes, Chapter
462C, as amended. The proceeds of the Little Canada Bonds are proposed to be used to refund the
portion of the Series 1999A Bonds that refinanced the Little Canada Facility,
Presbyterian Homes originally requested that Arden Hills conduct a public hearing regarding
the Bloornington Bonds on November 29, 2010 to provide host approval for the Bloomington Bonds.
Subsequent to that request, the Bloomington Bonds were restructured and due to that restructuring,
no public hearing is required.
At the meeting on Monday, November 15, 2010, the City is asked to consider and approve
the attached resolution providing consent to the issuance of the Bloomington Bonds and the Little
Canada Bonds to refund and prepay the outstanding principal amount of the Series 1999A
The Bloomington Bonds and the Little Canada Bonds will be issued as revenue obligations.
The Bloomington Bonds will not be an obligation of Bloomington or Arden Hills and the Little
Canada Bonds will not be an obligation of Little Canada or Arden 1-lilis. The principal of and
interest on the Bloomington Bonds and the Little Canada will be payable solely from revenues
pledged to those bonds. The Bloomington. Bonds and the Little Canada Bonds will not constitute a
general or moral obligation of Arden Hills and will not be secured by the full faith and credit or
taxing powers of Arden Hills. Additionally, the issuance of the Bloomington Bonds and the Little
Canada 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 GRAVEN, CHARTERED
Attachment B
Resolution 2010 -060
H
CITY OF ARDEN HILLS,
MINNESOTA
RESOLUTION NO. 2010-060
RESOLUTION APPROVING THE ISSUANCE OF REVENUE
REFUNDING BONDS BY THE CITY OF BLOOMINGTON,
MINNESOTA UNDER MINNESOTA STATUTES, SECTIONS
469.152 THROUGH 469.1651 AND THE ISSUANCE OF
REVENUE REFUNDING BONDS BY THE CITY OF LITTLE
CANADA, MINNESOTA UNDER MINNESOTA STATUTES,
CHAPTER 462C TO REDEEM AND PREPAY REVENUE BONDS
ISSUED BY THE CITY OF ARDEN HILLS
BE IT RESOLVED by the City Council (the "Council of the City of Arden Hills, Minnesota
"Arden Hills as follows:
WHEREAS, Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Municipal
Development 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, Minnesota Statutes, Chapter 462C, as amended (the "Housing Act authorizes
municipalities to issue and sell revenue bonds and lend the proceeds thereof to an organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code for the purpose of
providing financing for the acquisition of multifamily housing developments authorized thereby;
WHEREAS, at the request of Presbyterian Homes of Arden Hills, Inc., a Minnesota nonprofit
corporation, Arden Hills previously issued its Health Care and Housing Revenue Refunding Bonds,
Series 1999A, on September 30, 1999, in the original aggregate principal amount of $18,605,000 (the
"Series 1999A Bonds 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 The 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, Gideon Pond Commons, LLC, a Minnesota nonprofit limited liability company, the
sole member of which is Presbyterian Homes Bloomington Care Center, Inc. (the "Borrower has
requested that Bloomington issue its Senior Housing Refunding Revenue Bonds (Gideon Pond Commons,
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LLC Project), Series 2010 (the "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 (ii) the Variable Rate Demand Health Care
Revenue Refunding Bonds (Presbyterian Homes Care Centers, Inc. Project), Series 2002, 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, a Minnesota nonprofit limited liability company, the sole
member of which is Presbyterian Homes Housing and Assisted Living, Inc., has requested that Little
Canada issue its Senior Housing Revenue Refunding Bonds (PHS/Mayfield, LLC 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, pursuant to Section 469.155, subd. 12 of the Municipal Development Act, a
municipality may issue revenue bonds under the Municipal Development Act to refund, in whole or in
part, bonds previously issued by any other municipality on behalf of an organization described in section
501(c)(3) of the Code, but only with the consent of the original issuer of such bonds; and
WHEREAS, pursuant to Section 462C.07 of the Housing Act and Minnesota Statutes, Section
462A.08, a municipality may issue revenue bonds under the Housing Act to refund, in whole or in part,
bonds previously issued by any other municipality, but only with the consent of the original issuer of such
bonds; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ARDEN
HILLS, MINNESOTA:
1. The issuance of the Bloomington Bonds by Bloomington pursuant to the Municipal
Development Act for the purpose of redeeming and prepaying a portion of the Series 1999A Bonds issued
by Arden Hills is hereby approved.
2. The issuance of the Little Canada Bonds by Little Canada pursuant to the Housing Act
for the purpose of redeeming and prepaying a portion of the Series 1999A Bonds issued by Arden Hills is
hereby approved.
3. The Bloomington Bonds will constitute a revenue obligation secured solely by the
security pledged by the Borrower, including a mortgage on and the revenues derived from the operation
of, one of the projects refinanced with the proceeds of the Bloomington Bonds, revenues derived from the
operation of another project owned by the Borrower, and other security provided by the Borrower. The
Bloomington Bonds will not constitute a general or moral obligation of Bloomington or Arden Hills, or
be secured by any taxing power of Bloomington or Arden Hills.
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4. The Little Canada Bonds will constitute a revenue obligation secured solely by the
projects refinanced with the proceeds of the Little Canada Bonds, revenues derived from the operation of
said projects, and other security provided by the Borrower. The Little Canada Bonds will not constitute a
general or moral obligation of Little Canada or Arden Hills, or be secured by any taxing power of Little
Canada or Arden Hills.
5. The Borrower will, upon demand, reimburse Arden Hills for costs paid or incurred by
Arden Hills in connection with this resolution.
Adopted by the City Council of the City of Arden Hills on this 15th day of November, 2010.
Attest:
Patrick Klaers, City Administrator /Clerk
Stan Harpstead, Mayor
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