11-14-2018 Council Packet - Laserfiche WebLink

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11116805v1 MEMORANDUM BY EMAIL TO: Chris Heineman, City of Little Canada City Administrator FROM: Catherine J. Courtney DATE: September 21, 2018 RE: Request from Presbyterian Homes for the City to Act as Conduit Issuer The City of Little Canada has received a request from Presbyterian Homes (the “Borrower”) that the City act as the conduit issuer for two bond issuances – one in 2018 and one in 2019 – for a project located in the City of Roseville. The issue in 2018 would be approximately $10,000,000 to $11,000,000 and would be used to demolish the Langton Place care center in Roseville and construct a new 50-bed care center in its place. The issue in 2019 would be approximately $35,000,000 for the purpose of refinancing the 2018 issue and to construct a town center and adjacent 80-unit senior housing facility. This expanded Langton Place campus will be located on County Road D in Roseville. The Borrower would like the ability, should the 2018 issue not exceed $10,000,000, to designate the 2018 Bonds as bank-qualified. It also would prefer to use a single issuer, rather than two. The issuance of the 2019 Bonds would mean that the issuer could not issue its own bank-qualified bonds (although it could still issue non-bank-qualified bonds). Roseville expects to issue bonds for its own purposes in 2019 that it wants to designate as bank-qualified. Therefore, Roseville prefers not to act as the conduit issuer in this transaction. It is willing to give host approval and allow another city to act as issuer. It is my understanding that the City has not issued any governmental or other 501(c)(3) bonds in 2018 and, therefore, would be able to designate the 2018 Bonds as bank-qualified, should they not exceed $10,000,000. As noted, the issuance of the 2019 Bonds would eliminate the City’s ability to designate its own governmental bonds (or another 501(c)(3)’s bonds) as bank-qualified in 2019. It is my understanding that the City currently does not have plans to issue any such bonds in 2019, although it could issue bonds that do not necessitate designation as bank-qualified. The City has acted as conduit issuer for the Borrower in other transactions in the past. Most recently in 2014. The City would receive an issuer’s fee of ¼ of 1% of approximately $35,000,000, for a total of approximately $87,500.