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<br />521370v1 GAF CL162-55 <br /> <br /> GINA A. FIORINI <br /> Attorney at Law <br /> Direct Dial (612) 337-9210 Email: gfiorini@kennedy-graven.com <br /> <br />April 18, 2018 <br /> <br />Sarah Cotton, Finance Director <br />City of Lino Lakes <br />600 Town Center Parkway <br />Lino Lakes, MN 55014 <br /> <br />Re: Resolution calling public hearing on granting host approval for a project to be financed with the <br />proceeds a revenue obligation to be issued by the City of Columbia Heights <br /> <br />Dear Sarah, <br /> <br />Love To Grow On, a Minnesota nonprofit corporation (the “Borrower”), operates early childhood <br />education centers in the City of Lexington and the City of Circle Pines and has proposed to consolidate both <br />centers into a new facility consisting of approximately 13,000 square feet (the “Project”) located at 6499 <br />Lakota Trail in the City of Lino Lakes (the “City”). The Borrower would like to finance the new facility <br />with tax-exempt conduit bonds in the amount of approximately $3,800,000. The City has indicated that it <br />plans to issue general obligation bonds this year and would like them to be bank-qualified bonds (this <br />designation allows banks to buy the bonds and claim the interest on the bonds as tax exempt). In order for <br />the City’s bonds to be bank-qualified, the City cannot issue more than $10,000,000 in general obligation <br />bonds or conduit bonds for a nonprofit borrower. If the City agreed to issue the conduit bonds for the <br />Borrower, the City would not be able to issue its own bonds as bank qualified. The Borrower has requested, <br />instead, that the City of Columbia Heights issue a revenue note, in one or more series, as a taxable or tax- <br />exempt obligation (the “Note”), in the maximum principal amount of $3,8000,000 in order to (i) finance the <br />acquisition, construction, and equipping of the Project; (ii) finance capitalized interest during construction of <br />the Project, if necessary; (iii) fund required reserves, if any; and (iv) pay costs of issuance of the Note. <br /> <br />In order for the City of Columbia Heights to issue the Note, the City must grant “host approval” to <br />the issuance of the Note, following a duly noticed public hearing, under Minnesota Statutes, Section 471.656, <br />and the Internal Revenue Code of 1986, as amended (the “Code”). Enclosed is a resolution for consideration <br />by the City Council on Monday, April 23, 2018, which calls for a public hearing to be conducted by the City <br />Council on Tuesday, May 29, 2018 for purposes of granting host approval to the issuance of the Note by the <br />City of Columbia Heights to finance the Project. <br /> <br /> If the City Council authorizes the City of Columbia Heights to issue the Note, the Note will be issued <br />as conduit revenue obligation of the City of Columbia Heights secured solely by the revenues derived from <br />the loan or other revenue agreements executed by the Borrower and from other security provided by the <br />Borrower. The Note will not constitute a general or moral obligation of the City or the City of Columbia <br />Heights, will not be secured by or payable from any property or assets of the City or the City of Columbia <br />Heights, and will not be secured by any taxing power of the City or the City of Columbia Heights. The Note <br />will not be subject to any debt limitation imposed on the City or the City of Columbia Heights and the