04-14-2021 Council Packet - Laserfiche WebLink

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DRAFT 04/07/2021 4850-0164-3482\4 PRELIMINARY OFFICIAL STATEMENT DATED ________________ __, 2021 NEW ISSUE NOT RATED In the opinion of Taft Stettinius & Hollister LLP, bond counsel, under existing laws, regulations, rulings, and decisions, and assuming continuing compliance with all requirements of the Internal Revenue Code of 1986, as amended, interest on the Series 2021D Bonds is excludable from gross income for federal income tax purposes and from taxable net income of individuals, estates, and trusts for Minnesota income tax purposes. Interest on the Series 2021D Bonds is subject to the Minnesota franchise tax measured by income and imposed on corporations and financial institutions. Interest on the Series 2021D Bonds is not an item of tax preference for purposes of determining the federal alternative minimum taxes, and for purposes of determining the Minnesota alternative minimum tax imposed on individuals, estates and trusts. No opinion will be expressed by bond counsel regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Series 2021D Bonds or arising with respect to the ownership of the Series 2021D Bonds. Bond counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on the Series 2021D Bonds. See “TAX EXEMPTION” and “OTHER TAX CONSIDERATIONS” herein. [TO BE UPDATED BY BOND COUNSEL] $[7,550,000]* City of Little Canada, Minnesota Subordinate Senior Housing and Healthcare Revenue Bonds (New Harmony Project) Series 2021D Dated: Date of Delivery Due: As shown on the inside front cover The above-referenced obligations (the “Series 2021D Bonds”) are limited obligations of the City of Little Canada, Minnesota (the “Issuer”) and do not constitute general obligations or a debt, liability, or pledge of the full faith and credit of the Issuer, the City of Maplewood, Minnesota, or the State of Minnesota or of any political subdivision or agency thereof. The Series 2021D Bonds are not secured by or payable from any taxes, revenues or assets of the Issuer except for the Issuer’s interest in the Loan Agreement and amounts held pursuant to the Indenture. Undefined capitalized terms used on this cover are defined in the text hereof or in Appendix D hereto. Pursuant to the Loan Agreement, all proceeds of the Series 2021D Bonds will be loaned by the Issuer to New Harmony Care Center, Inc., a Minnesota nonprofit corporation (the “Corporation”), whose sole member is Elim Care, Inc., a Minnesota nonprofit corporation. Proceeds of the Series 2021D Bonds will be used to (1) finance the acquisition, construction, and equipping of a new senior healthcare and housing facility, including approximately 48 skilled nursing beds, 16 transitional skilled nursing beds, 35 independent apartment units, 36 assisted living apartment units, 14 memory care apartment units, and 12 care suite apartment units, to be located at 1534 County Road C East in the City of Maplewood, Minnesota (as further described herein, the “Project”), (2) fund a debt service reserve fund for the Series 2021D Bonds, (3) pay capitalized interest on the Series 2021D Bonds and (4) pay costs of issuing the Series 2021D Bonds. See “SOURCES AND USES OF FUNDS” herein. The Senior Notes described herein are senior in payment to the Series 2021D Bonds, and are secured by senior mortgages on the Project. Under the Indenture, an Event of Default with respect to the Series 2021D Bonds is not an event of default with respect to the Senior Notes. As long as the Senior Notes are outstanding, the Series 2021D Bonds cannot be accelerated upon an Event of Default. [No payments can be made by the Corporation with respect to the Series 2021D Bonds unless it is current on its payments and is in compliance with its covenants relating to the Senior Notes.] The Trustee, the Corporation, Elim Care, Inc. (the “Guarantor”) and Bremer Bank, National Association (the “Senior Lender”), will enter into a Subordination and Intercreditor Agreement relating to the rights and priority of security interests of the Senior Lender and the Trustee. See “SECURITY FOR THE SERIES 2021D BONDS” herein. The Series 2021D Bonds will be payable solely from the moneys held for the payment thereof by U.S. Bank National Association, as trustee (the “Trustee”), or its successors, under the Indenture, including Loan Repayments required to be made under the Loan Agreement by the Corporation. Subject to the terms of the Subordination and Intercreditor Agreement, the Series 2021D Bonds will also be secured by the Subordinate Mortgage on the Project.and a Guaranty Agreement of Elim Care, Inc. An investment in the Series 2021D Bonds is subject to a significant degree of risk. See “BONDHOLDERS’ RISKS” herein. The Series 2021D Bonds will be issued as fully registered bonds in denominations of $25,000 or any greater integral multiple thereof. Principal of the Series 2021D Bonds is payable semiannually on each June 1 and December 1, commencing [December 1, 2023], and interest on the Series 2021D Bonds is payable semiannually on each June 1 and December 1, commencing [December 1, 2021], by check or draft mailed to the persons shown as the registered owners of the Series 2021D Bonds on the fifteenth day of the month preceding each payment date. The Series 2021D Bonds are issuable in book-entry form only. The Series 2021D Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), to whom all payments and notices with respect to the Series 2021D Bonds will be made. As long as the Series 2021D Bonds are so registered, purchasers of the Series 2021D Bonds will not receive actual bond certificates. Instead, purchasers will become the beneficial owners of such Series 2021D Bonds, with such ownership (including ownership for all tax purposes) evidenced solely in the book-entry system records maintained by DTC and certain Direct Participants and Indirect Participants (each as defined herein) who participate with DTC in maintaining the book-entry system. While the Series 2021D Bonds are in book-entry form, the Issuer may treat DTC as the sole owner of such Series 2021D Bonds for all purposes. Purchasers of Series 2021D Bonds in book-entry form will be entitled to receive payments, notices and transfers with respect to such Series 2021D Bonds only in accordance with procedures provided for by DTC and the participants through the book- entry system, for which the Issuer assumes no responsibility. The Series 2021D Bonds are subject to redemption and prepayment as described herein under “THE SERIES 2021D BONDS –Redemption Prior to Maturity” herein. The Series 2021D Bonds are offered, subject to prior sale, when, as and if accepted by the Northland Securities, Inc. (the “Underwriter”) and subject to an opinion as to validity and tax exemption by Taft Stettinius & Hollister LLP, Minneapolis, Minnesota, bond counsel, the approval of certain matters by Taft Stettinius & Hollister LLP, Minneapolis, Minnesota, as counsel to the Corporation and Guarantor, the approval of certain matters by Dorsey & Whitney LLP, Minneapolis, Minnesota, as counsel to the Underwriter, and certain other conditions. It is expected that delivery of the Series 2021D Bonds will be made on or about [____________], 2021, against payment therefor, through the facilities of DTC in New York, New York. Subject to applicable securities laws and prevailing market conditions, the Underwriter intends, but is not obligated, to effect secondary market trading in the Series 2021D Bonds. For information with respect to the Underwriter, see “UNDERWRITING” herein. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.