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<br />172607104v1 <br /> <br /> <br /> <br />Taft Stettinius & Hollister LLP / Taftlaw.com / The Modern Law Firm <br />Catherine J. Courtney <br />612.977.8765 <br />CCourtney@taftlaw.com <br />2200 IDS Center, 80 South 8th Street <br />Minneapolis, MN 55402-2210 <br />Tel: 612.977.8400 | Fax: 612.977.8650 <br />taftlaw.com <br />Affirmative Action, Equal Opportunity Employer <br /> <br />April 30, 2025 <br />VIA E-MAIL <br />Bryan Bear <br />City Administrator <br />14669 Fitzgerald Ave. N <br />Hugo, MN 55038-9301 <br /> <br />Re: Issuance of Conduit Revenue Note by the City of Hugo for Legacy Christian <br />Academy <br />Dear Mr. Bear and Coucilmembers: <br />This letter is to follow-up on discussions that we have had regarding consideration by the <br />City of Hugo, with the consent of the City of Andover, to act as issuer, in 2025, of 501(c)(3), bank- <br />qualified revenue bonds (the “Note”). The proceeds of the Note will be loaned to Legacy Christian <br />Academy (the “Borrower”), to be used to finance the acquisition of an educational facility, a <br />portion of which the Borrower currently uses for its charitable purposes, located in Andover, all <br />related to the Borrower’s activities as a private school. Taft Stettinius & Hollister LLP, formerly <br />known as Briggs and Morgan, P.A., will act as bond counsel to the City on the issuance of the <br />Note. It is anticipated that the Note will be privately placed by Northland Securities (the <br />“Placement Agent”) with a bank yet-to-be-identified (the “Bank”). <br />State and federal laws allow local government units to enter into arrangements to issue <br />bonds and loan the proceeds to nonprofit corporations to finance or refinance capital expenditures. <br />This assistance reduces borrowing costs for nonprofit corporations and enables them to provide <br />their services more cost effectively. It is a common means of obtaining necessary financing for <br />all nonprofit entities, including the providers of private school education, like the Borrower. <br />To accomplish this purpose, the City will enter into a Loan Agreement with the Borrower <br />under which the Borrower will agree to pay all principal and interest on the Note. The City will <br />assign all of its rights to payments under the Loan Agreement to the Bank. Through the operation <br />of the Loan Agreement, the City will loan the purchase price of the Note to the Borrower. The <br />City will assign its rights to payments under the Loan Agreement to the Bank by a Pledge