Adopt Resolution #20-088 Calling for a Public Hearing on Consenting to the Issuance of Revenue Bonds and Authorizing the Publication of Notice of the Hearing Therefor (Suite Living Senior Care of Ramsey Project).

Purpose:  City of Falcon Heights issuance of Revenue Bonds on behalf of Hampton Properties.

Hampton Properties of Ramsey, LLC is currently constructing a 32-unit senior living facility in Ramsey known as the Suite Living Senior Care.  The city has been contacted by its legal/bond counsel (Taft Law) that they would like to refinance this project through the issuance of revenue bonds pursuant to Minnesota Statutes.

Per a memo received from Taft Law:

The City of Ramsey has received from Hampton Properties of Ramsey, LLC, whose sole member is Suburban Housing and Community Services Corporation, a California nonprofit corporation and 501(c)(3) organization, a proposal that the City of Falcon Heights, Minnesota undertake a program to assist in financing the Suite Living Senior Care in Ramsey through the issuance of revenue bonds (conduit debt).

501(c)(3) organizations cannot legally issue tax exempt bonds, but they may avail themselves of the benefits of conduit tax-exempt financing through state and local government units such as cities, towns and counties.

Hampton Properties of Ramsey, LLC proposes to finance and refinance the acquisition, construction and equipping of the 32-unit assisted living and memory care senior housing facility currently under construction in the City.  The project will be owned, operated and managed by Hampton Properties of Ramsey.

The maximum estimated principal amount of the bonds to be issued by Falcon Heights to finance the project is $8,500,000.  The borrower selected Falcon Heights due to Ramsey's expectation that the City will be issuing bank-qualified bonds for its own purposes in 2020 (PW Campus) which is limited to no more than $10 million per calendar year.

The bonds, if and when issued, will not constitute a charge, lien, or encumbrance upon any property of Ramsey or Falcon Heights, and such obligation will not be a charge against the general credit or taxing powers of Ramsey or Falcon Heights, but will be paid solely from Hampton Properties of Ramsey,LLC.

The bonds will be issued in accordance with MN Statutes, Chapter Sections 462C.  A city (Falcon Heights) may not issue bonds for a project located outside of its jurisdiction without the permission of the issuance of the bonds by the city in which the project is located.  This is commonly referred to as "host approval."  Under MN Statutes, Section 471.656, subdivision 2(2), host approval may be given for a project located in the host city, by resolution of the host city. 

Similarly, under the federal tax code, before a city can issue bonds for a project located outside of its jurisdiction, the host city (Ramsey) must give its approval.  Such approval can only be given following the holding of a public hearing.

The public hearing is proposed to be held at the June 9, 2020 City Council meeting.




 

Taft Law, (Hampton Properties bond counsel), will submit the public hearing notice for publication in the Union.  The proposed public hearing notice is attached as exhibit A with the resolution.

The city incurs no costs.  All transaction costs will be assumed by the borrower,

Recommend adoption of Resolution #20-088.  The City has no tax obligation in regards to the issuance of this debt.

Motion to Adopt Resolution #20-088 Calling for a Public Hearing on Consenting to the Issuance of Revenue Bonds and Authorizing the Publication of Notice of the Hearing Therefor (Suite Living Senior Care of Ramsey Project).