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Department Approval <br />l <br />REQUEST FOR COUNCIL ACTION <br />Date.- 6/30/08 <br />Item No..- I La <br />City Manager Approval <br />Item Description.- Public Hearing to Acknowledge the Expenditure of Tax-exempt Funds for <br />Presbyterian Homes. <br />I BACKGROUND <br />2 Under Federal and State Statutes,, municipalities are authorized to pledge their bond issuance authority to <br />3 non-profit groups for the benefit of multi-family and assisted-living housing facilities, including corporate <br />4 offices of said groups. If a municipality expects to issue or receive tax-exempt bond proceeds, either <br />directly or indirectly through separate establishments, it is required by federal law to hold a public hearing. <br />6 <br />"7 The City of Vadnais Heights is proceeding with the issuance of tax-exempt bonds for the benefit of <br />Presbyterian Homes' office building located at 2845 Hamline Avenue in Roseville. Presbyterian Homes is <br />9 proposing to finance a $,4. 9 million office building addition less a Presbyterian Homes $, I.0 million equity <br />I 4w. contribution,, and to redeem the $,860,,000 current office building acquisition mortgage. <br />"I'll <br />12 The purpose of the public hearing is to allow for public comment on the proceeds to be expended. No <br />-r,l <br />13 special action is required by Council at the hearing. The I ne process entails opening a public hearing, allowing <br />14 for public comment if any),, and closing the public hearing- <br />I POLICY OBJECTIVE <br />16 Generally speaking, the public policy reason for City participation in these financings is to promote greater <br />I ��7 investment in the City's multi-family and assisted-living facilities than would otherwise occur by market <br />I factors alone. Allowing the bonds to be issued tax-exempt makes the bonds more attractive to investors and <br />19 results in lower borrowing costs compared to traditional financing methods. This in turn, provides more <br />,,:-)� available dollars for the proposed project <br />ZI FINANCIAL IMPACTS <br />22 Not applicable. <br />23 STAFF RECOMMENDATION <br />24 Staff recommends the Council approve the attached resolution acknowledging the expenditure of tax- <br />25 exempt funds by Presbyterian Homes. <br />Page I of 6 <br />