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REQUEST FOR COUNCIL ACTION � Date: 611112007 � Item No: 9.b f?�Hrt�x�c•n � : ��;�� } ti'�' : f �� Manager Approved: Agenda Section: � �� E L�::ri�ti�3 Tt��z Description: Consider Issuing Tax-Exempt Refunding Bonds for Presbyterian HomeslEagle Crest Inc. 11 12 1.3 Background ]� At the May 7, 2007 City Council meeting the Council set a public hearing to consider the 15 issuance of tax-exempt refunding bonds for PresbyterianHorneslEagle Crest Inc. l� I� State Statute provides for the issuance of tax-exempt bonds by municipalities for the benefit of l S housing or long-term care facilities that are deemed to be in the best interest of the City, and in . I.� which the bond issuance results in no negative fiscal impact. The bonds are considered conduit �0 debt and do not constitute a financial obligation in any part by the City. However, the City must �1 still meet all legal requirements prior to issuing any tax-exempt bonds, including holding a i � public hearing. �; �� 2� �� ,� � ��i f17 3� �I 3�. �3 3� �,5 Presbyterian Homesl�agle Crest T�c. has requested that the City provide tax-exempt financing for the purposes of refinancing existing debt for their facility located at 2925-45 Lincoln Drive in Roseville. The 36-unit multifamily housing facility provides housing, nursing, food service, and sponsored activities for persons with Alzheimer's. The total amount of refinancing is estimated to be $24 million. The City has participated in similar financing arrangements for Presbyterian �-iomes in 1993, and 1998 for this facility. Discussion Items The City Council is required to approve any issuance of tax-exempt financing by the City. The City's Bond Counsel of Briggs & Morgan, has reviewed the legal and financing agreements, and will provide an unqualified opinion as the legality of the bonds and their tax-exempt status. 3fr There is no fiscal impact on the part of the City. All costs of debt issuance will be paid by the -�? applicant. In addition, the City does not intend to issue any direct debt in 2007. As a result, this � 8 issuance will not j eopardize the "bank-qualification" Status of any new City debt issues. 3� —� The facility is currently covered under a Redevelopment Agreementthat was originally approved �] by the City in 1993. In 1998, the City entered into an Amended and Restated Development �2 Agreement, with College Properties, Inc., a Minnesota nonprofit corporation. The Developer �� desires to assign its interest in this Development Agreement to Eagle Crest Senior �-�o�szz�g, �4 LLC, a 1V�.ins��sota limited liability company. Pursuant to the Development Agreement the �� Developer must obtain the consent of the City prior to making any assignment of its interests �G under the Development Agreement and the Notes.