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<br />management to control expenses during periods of inflation, changes in government involvement in and regulation of,
<br />skilled nursing care, assisted living and memory care facilities, changes in local real estate taxes and zoning
<br />restrictions, and competition from other skilled nursing, independent living, assisted living and memory care facilities.
<br />Other conditions which may affect future revenues and expenses of the Corporation include the inability to maintain
<br />adequate occupancy levels due to inadequate demand for beds, requirements with respect to the maintenance of the
<br />tax-exempt status of the Corporation, noncompetitive physical facilities, inferior management or maintenance,
<br />noncompetitive rates or services, delays in receiving payments or reductions in payments from third party payors,
<br />disadvantageous general or local economic conditions, imposition of property taxes, inability to control expenses, and
<br />other factors.
<br />The payment of debt service on the Series 2021D Bonds is, among other things, dependent upon the
<br />Corporation’s ability to maintain occupancy of the Project and charge and collect rates and rents which are sufficient
<br />to pay operating expenses of the Project, debt service requirements with respect to the Series 2021D Bonds and to
<br />fund necessary reserves as required under the Indenture. Occupancy levels will depend principally upon the
<br />desirability of the Project as skilled nursing, independent living, assisted living and memory care facilities, taking into
<br />account factors such as location, physical condition and amenities. See Appendix A: “THE CORPORATION, THE
<br />PROJECT AND THE GUARANTOR” for a description of the Project.
<br />Limited Repayment Obligations of the Corporation; Security for Repayment
<br />The Series 2021D Bonds are special and limited obligations of the Issuer, payable solely from and secured
<br />exclusively by the funds pledged thereto, including the Loan Repayments, and other security described herein. There
<br />can be no assurance that Loan Repayments and amounts derived from the security for the Series 2021D Bonds will
<br />be sufficient to repay the Corporation’s obligations with respect to the Series 2021D Bonds.
<br />Subject to the terms of the Subordination and Intercreditor Agreement, the Series 2021D Bonds will be
<br />secured by certain amounts held by the Trustee pursuant to the Indenture, including the Reserve Fund, the Guaranty,
<br />the Subordinate Mortgage and assignments of architect and construction contracts relating to the Project. The Series
<br />2021D Bonds are limited obligations of the Issuer and do not constitute general obligations or a debt, liability, or
<br />pledge of the full faith and credit of the Issuer, the City of Maplewood, Minnesota (the “Host City”), the State of
<br />Minnesota or of any political subdivision or agency thereof. The Series 2021D Bonds are not secured by or payable
<br />from any taxes, revenues or assets of the Issuer except for the Issuer’s interest in the Loan Agreement and amounts
<br />held pursuant to the Indenture as described herein. See “SECURITY FOR THE SERIES 2021D BONDS.”
<br />Lack of Marketability for the Series 2021D Bonds; Lack of Rating
<br />The Series 2021D Bonds are not rated. When any Bondholder attempts to resell its Series 2021D Bonds, this
<br />absence of a rating could adversely affect the market price and marketability thereof. There can be no assurance that
<br />there will be a secondary market for the Series 2021D Bonds, and the absence of such a market for the Series 2021D
<br />Bonds could result in investors not being able to resell the Series 2021D Bonds should they need to do so, or wish to
<br />do so.
<br />No rating as to the creditworthiness of the Series 2021D Bonds has been requested from any organization
<br />engaged in the business of publishing such ratings. Typically, unrated bonds lack liquidity in the secondary market in
<br />comparison with rated bonds. As a result of the foregoing, the Series 2021D Bonds are believed to bear interest at
<br />higher rates than would prevail for bonds with comparable maturities and redemption provisions that have investment
<br />grade credit ratings. Series 2021D Bonds should not be purchased by any investor who, because of financial condition,
<br />investment policies or otherwise, does not desire to assume, or have the ability to bear, the risks inherent in an
<br />investment in the Series 2021D Bonds.
<br />Potential Impact of COVID-19
<br />IT IS IMPOSSIBLE TO PREDICT THE FUTURE IMPACT OF COVID-19 ON THE OPERATIONS OR
<br />FINANCIAL PERFORMANCE OF THE CORPORATION OR THE GUARANTOR. THE RISKS DISCUSSED IN
<br />THIS OFFICIAL STATEMENT MAY BE EXACERBATED BY OR MATERIALLY IMPACTED AS A RESULT
<br />OF COVID-19, AND NEW RISKS MAY ARISE AS A RESULT OF COVID-19 OR SIMILAR OUTBREAKS OF
<br />INFECTIOUS DISEASE. THIS SECTION DESCRIBES RISKS RELATING TO COVID-19 WITHOUT TAKING
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