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REQUEST FOR COUNCIL ACTION Date:October 12, 2020 Item No.: 7.a Department Approval City Manager Approval Item Description: Public Hearing to Consider Adopting a Resolution Providing Host Approval of Senior Living Tax-exempt Revenue Bonds for State Holdings of Minnesota. 1 B ACKGROUND 2 Under Federal and State Statutes, municipalities are authorized to pledge their bond issuance authority to 3 non-profit groups for the benefit of multi-family and assisted-living housing facilities, including 4 corporate offices of said groups. If a municipality expects to issue or receive tax-exempt bond proceeds, 5 either directly or indirectly through a separate entity, it’srequiredby federal law to hold a public hearing 6 and formally approve the use of tax-exempt monies in the City. 7 8 The purpose of the public hearing is to allow for public comment on the proceeds to be expended. No 9 special action is required by Council at the hearing. The process entails openinga public hearing, allowing 10 for public comment (if any), and closing the public hearing. 11 12 State Holdings of Minnesota, LLC, a Wyoming limited liability company (the “Borrower”), the sole 13 member of which is State Housing & Community Services Corporation, a California nonprofit public 14 benefits corporation, proposed to finance or refinance the costs of acquisition, construction and/or 15 improvement, of new and existing senior living facilities located in Roseville, and in the cities of Inver 16 Grove Heights, Little Canada, North St. Paul and Vadnais Heights. The Facility located in Roseville 17 consists of an existing 32-unit senior housing facility located at 197 County Road B2 West (the “Roseville 18 Facility”). The Roseville Facility will be owned and operated by State Holdings of Minnesota. The 19 maximum estimated principal amount of the bonds to be issued to finance the Project is $58,500,000. 20 21 The City of Deephaven has been selected by State Housing Holdings of Minnesota to issue the bonds. 22 P OLICY O BJECTIVE 23 Generally speaking, the public policy reason for City participation in these financings is to promote 24 greater investment in the City’s multi-family and assisted-living facilities than would otherwise occur by 25 market forcesalone.Allowing the bonds to be issued tax-exempt makes the bonds more attractive to 26 investors and results in lower borrowing costs compared to traditional financing methods. This in turn, 27 provides more available dollars for the proposed project. The City has consistently been approving these 28 requests for decades. 29 F INANCIAL I MPACTS 30 Not applicable. Page 1 of 2