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HomeMy WebLinkAbout2008-03-03_CALVIN CHRISTIAN SCHOOL REVENUE BONDS)))(DORSEY DORSEY & WH!TNEY LLP MEMORANDUM TO: Board of Commissioners of the Edina Housing and Redevelopment Authority Gordon Hughes, Executive Director FROM: Jerome P. Gilligan DATE: January 30, 2008 RE: Proposed Issuance of a Revenue Note for Calvin Christian School of Minneapolis The Edina Housing and Redevelopment Authority (the "HRA ") has received a request from Calvin Christian School of Minneapolis ( "CCS ") that the HRA issue a revenue note under Minnesota Statutes, Chapter 469.152 to 469.165, the proceeds of which will be loaned by the HRA to CCS and used to finance the expansion and renovation of CCS's existing campus located at 4015 Inglewood Avenue South in the City of Edina (the "City ") including the construction of an approximately 8,600 square foot addition to the existing main school building and a 1,075 square foot addition to another building, together with the acquisition and installation of equipment and furnishings, if any. The main building addition will provide a new lobby, a new media center which includes a library, computer lab, office and conference room, and an office suite, including a reception area, two administrative offices, a small conference room, a nursing office, a workroom and restrooms, and the addition to the other building involves a new entryway, a hallway and restrooms. CCS has requested that the HRA Board of Commissioners hold a public hearing on the issuance of the revenue note at its March 3`d meeting. The note is proposed to be issued in a principal amount of up to $1,500,000 and the purchaser of the note will be Anchor Bank Woodbury. The reason that the HRA rather than the City is being requested to issue the note is in order that the note can be "bank qualified" under Section 265(b) of the Internal Revenue Code of 1986, as amended. Having the note bank qualified allows a bank to own the note and receive the tax - exempt interest thereon without losing an interest deduction. The HRA and the City may issue bank qualified bonds if such entity and any subordinate entities will not issue more than $10 million of tax - exempt bonds in a calendar year. At this time it is anticipated that the City will issue bonds in excess of $10 million in 2008, so if the City were to issue the note it could not be bank qualified. However, the HRA does not expect to issue any tax - exempt obligations in 2008 and the City's tax - exempt bonds are not taken into account in determining whether the HRA is eligible to issue bank qualified bonds. The debt service on the note will be payable solely from payments to be made by CCS, and the HRA will not have any liability with respect to the note. CCS will pay all HRA expenses with respect to the note and upon issuance of the note will pay the HRA a fee in accordance with the City's policy for the issuance of revenue bonds (1/2/ of 1 % of the original principal amount of the note). If the HRA wishes at this time to proceed with the proposed financing the first step is to adopt a resolution calling for a public hearing. DORSEY & WHITNEY LL° ( ))) OORSEY Representatives from CCS will attend the February 4th Board of Commissioner's meeting to respond to any questions concerning the proposed financing. If the Board of Commissioners wishes to proceed with the issuance of the proposed note following the public hearing, it would then adopt the resolution approving the issuance of the note. In addition, the City Council will need to approve the issuance of the note. The calling for a public hearing on the proposed issuance of the note does not in any manner obligate or commit the HRA to issue the note. 2 DORSEY d WHITNEY LLB• Deb Mangen From: Gordon Hughes Sent: Thursday, February 21, 2008 1:48 PM To: Deb Mangen Subject: FW: Calvin Christian Home Attachments: DEED Application.doc; Comprehensive Statement.doc From: Nutzmann, Cathy [mailto:Nutzmann.Cathy @dorsey.com] Sent: Thursday, February 21, 2008 12:07 PM To: Gordon Hughes Cc: Heide, Richard; Aaseng, Lenore Subject: Calvin Christian Home Gordon - Pursuant to our telephone conversation yesterday, attached are the DEED Application and Comprehensive Statement with respect to the above matter for execution by you and the Mayor. You should print and sign 2 copies of each of these documents. In addition, please provide us with a copy of the Affidavit of Publication of the Notice of Public Hearing published in the Edina Sun Current on February 14 as well as certified copies of the following resolutions: 1. Resolution Calling the Public Hearing adopted Feb. 4 by the HRA; 2. Bond Resolution adopted March 3 by the HRA; and 3. City Council Authorizing Resolution adopted March 3. As I mentioned to you, I will be on vacation beginning next week through March 7th. Please provide the executed DEED Application and Comprehensive Statement along with the items listed above to my co- worker, Lenore Aaseng by March 5th. Lenore can be reached at 612- 340 -2869 if you have questions. Thank you Cathy Nutzmann Senior Paralegal ..... ............................... DORSEY & WHITNEY LLP Suite 1500, 50 South Sixth Street Minneapolis, MN 55402 -1498 P: 612.340.2963 F: 612.340.2643 ..... ............................... CONFIDENTIAL COMMUNICATION E -mails from this firm normally contain confidential and privileged material, and are for the sole use of the intended recipient. Use or distribution by an unintended recipient is prohibited, and may be a violation of law. If you believe that you received this e-mail in error, please do not read this e-mail or any attached items. Please delete the e-mail and all attachments, including any copies thereof, and inform the sender that you have deleted the e-mail, all attachments and any copies thereof. Thank you. <<DEED Application.doc>> <<Comprehensive Statement.doc>> 2/21/2008 Revised August 2003 STATE OF MINNESOTA MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT BUSINESS AND COMMUNITY DEVELOPMENT DIVISION APPLICATION FOR APPROVAL OF INDUSTRIAL DEVELOPMENT BOND PROJECT PURSUANT TO MINNESOTA STATUTES, SECTION 469.152 THROUGH 469.165 (Please submit this form in duplicate - all supporting data in single copy only) Date: March 3, 2008 The governing body of the Edina Housing and Redevelopment Authority, Minnesota, hereby applies to the Minnesota Department of Employment and Economic Development (Department) for approval of a proposed Industrial Development Bond issue as required by Minn. Stat. § 469.152 - 469.165. Address of issuer: 4801 West 50th Street, Edina, Minnesota 424, Attn: Gordon L. Hughes, Executive Director, Telephone: (952) 826 -0401 Fax: (952) 826 -0390 We have entered into preliminary discussions with: Firm: Calvin Christian School of Mnneapolis Attorney: Fred Keuppers, Esq. Address: 4015 Inglewood Avenue South Address: 101 East Fifth Street, Suite 800 City: Minneapoils State: MN Zip 55416 City: St. Paul State: MN Zip 55101 Name of Project: Revenue Note (Calvin Christian School of Minneapolis Project) This firm is engaged primarily in (nature of business): Private elementary and secondary education The proceeds from the sale of the Industrial Development Bonds will be used to (describe the project): Construction of an approximately 8,600 square foot addition to the existing main school building and a 1,075 square foot addition to another building, together with the acquisition and installation of equipment and furnishings, if any. The main building addition will provide a new lobby, a new media center which includes a librM, computer lab, office and conference room, and an office suite, including a reception area_, two administrative offices, a small conference room, a nursing office, a workroom and restrooms, and the addition to the other building involves a new entryway, a hallway and restrooms Address of Project: 4015 Inglewood Avenue South, Edina, Minnesota Acquisition of land and building: New construction: Demolition and site preparation: Acquisition and Installation of Equipment: Fees: Architectural, engineering, inspection, fiscal, legal, administration, or printing: Construction Interest: Initial Bond Reserve: Contingencies: Other: Total: 1,470,000.00 0 0, 30,000.00 0 0 0 $1,500,000.00 Construction will begin on or about December 17, 2007, and will be complete on or about August t 15, 2008. When completed, there will be approximately -0- new jobs created by the project at an annual payroll of approximately $ -0- , based upon currently prevailing wages. (If applicable) There are 75 existing jobs provided by business.. (If applicable) There will be -0- jobs created by construction of the project. Number of hours N/A_. Average wage level N/A Repayment of the proposed issue will be amortized over a period of 20 years. The following exhibits are furnished with this application and are incorporated herein by reference: 1. An opinion of bond counsel that the proposal constitutes a project under Minn. Stat. § 469.153, subd. 2. 2. A copy of the resolution by the governing body of the issuer giving preliminary approval for the issuance of its revenue bonds and stating that the project, except for a project under Minn. Stat. § 469.153, subd. 2(g) or 0) would not be undertaken but for the availability of Industrial Development Bond financing. 3. A comprehensive statement by the municipality indicating how the project satisfies the public or purpose and policies of Minn. Stat.§ 469.152 - 469.165. 4. A letter of intent to purchase the bond issue or a letter confirming the feasibility of the project from a financial standpoint. 5. A statement signed by the principal representative of the issuing authority to the effect that upon entering into the revenue agreement, the information required by Minn. Stat. § 469.154, subd. 5 will be submitted to the Department (not applicable to projects under Minn. Stat. § 469.153, subd. 2(g) or 0). 6. A statement signed by the principal representative of the issuing authority that the project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 7. A statement signed by a representative of the issuing authority that a public hearing was conducted pursuant to Minn. Stat. § 469.154, subd. 4. The statement shall include the date, time and place of the meeting and certify that a draft copy of this application with all attachments was available for public inspection and that al interested parties were afforded an opportunity to express their views. 8. Copies of notice(s) as published which indicate the date(s) of publication and the newspaper(s) in which the notice(s) were published. 9. Provide a plan for compliance of employment preference of economically disadvantaged or unemployed individuals. (See Minn. Stat. § 469.154, subd. 7.) Bondapplication08O5O3.wpd -2- We, the undersigned, are duly elected representatives of the Edina Housing and Redevelopment Authori1y Minnesota and solicit your approval of this project at your earliest convenience so that we may carry it to a final conclusion. Signed by: (Principal Officers or Representatives of Issuing Authority; type or print official's name on the line. to the left of the signature line. Thank you.) James B. Hovland Title: HRA Chair Signature Gordon L. Hughes Title: Executive Director Signature This approval shall not deemed to be an approval by the Department of the State of the feasibility of the project or the terms of the revenue agreement to be executed or the bonds to be issued therefor. Authorized Signature, Minnesota Department of Employment and Economic Development Date of Approval Please return to: Minnesota Department of Employment and Economic Development Paul A. Moe, Director - Office of Business Finance 500 Metro Square Building 121 Seventh Place East St. Paul, Minnesota 55101 -2146 Phone: 651-297-1391 Fax: 651-296-5287 Bondapplication08O5O3.wpd -3- 4818-4290- 6882 \1 Deb Mangen From: Gordon Hughes Sent: Tuesday, February 12, 2008 2:48 PM To: Deb Mangen Subject: FW: Calvin Christian School Can you print and keep on file per Cathy's instructions? From: Nutzmann, Cathy [mailto:Nutzmann.Cathy @dorsey.com] Sent: Tuesday, February 12, 2008 2:44 PM To: Gordon Hughes Cc: dfreeman @calvinchristian.org; fkueppers @kuepperslaw.com; todd_nelson @anchorlink.com; mhealthcap @aol.com; chris @analawfirm.com; Heide, Richard Subject: Calvin Christian School Gordon - Attached is a proposed form of Application to the Minnesota Department of Employment and Economic Development along with forms of the attachments to the application. This Application and attachments are to be on file with the HRA once the Notice of Public Hearing is published on Thursday. I will forward forms of the Bond Resolution and City approval resolution under separate cover. If you have any questions, please feel free to contact Dick Heide or me. Cathy Nutzmann Senior Paralegal ..... ............................... DORSEY & WHITNEY LLP Suite 1500, 50 South Sixth Street Minneapolis; MN 55402 -1498 P: 612.340.2963 F: 612.340.2643 ..... ............................... CONFIDENTIAL COMMUNICATION E -mails from this firm normally contain confidential and privileged material, and are for the sole use of the intended recipient. Use or distribution by an unintended recipient is prohibited; and may be a violation of law. If you believe that you received this e-mail in error, please do not read this e-mail or any attached items. Please delete the e-mail and all attachments, including any copies thereof, and inform the sender that you have deleted the a -mail, all attachments and any copies thereof. Thank you <<DEED Application.doc>> <<Feasibilty Letter.doc>> <<Preliminary BC Opinion.doc>> <<Comprehensive Statement.doc>> <<Employment Preference Letter.doc>> 2/28/2008 STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) Richard Hendrickson, being duly sworn on an oath; states or affirms that he is the Chief Financial Officer of the newspaper(s) known as Edina Sun- Current and has full knowledge of the facts stated below: (A) The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provid- ed by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended. (B) The printed public notice that is attached was published in said newspaper(s) once each week, for one successive week(s); it was first published on Thurs- day, the 14 day of February 2008,;and was thereafter printed and published on every Thursday to and in- cluding Thursday, the ____ day of 2008; and printed below is a copy of the lower case alpha- bet from A to Z, both inclusive, which is hereby acknowledged as being the size and kind of type used in the composition and publication of the notice: abcdefg hijklmnopgrstuvwxyz • Subscribed and sworn to or affirmed before me on this 14 day of February 2008. / Notary Public MARY ANN CARLSON NOTARY PUBLIC — MINNESOTA MY COMMISSION EXPIRES 1-31-09 j City of Edina (Official Publication) NOTICE OF PUBLIC HEARING ON A PROJECT AND THE PROPOSED ISSUANCE BY THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY OF A REVENUE NOTE TO PROVIDE FINANCING FOR THE PROJECT, IN A PRINCIPAL AMOUNT.NOT,TO EXCEED $1,500;000, ATTHE REQUEST OF CALVIN CHRISTIAN SCHOOL OF.'MINNEAPOLIS NOTICE IS HEREBY. GIVEN that.a public hearing shall be conducted by the Board of Commissioners of the Edina Housing. and Redevelopment 'Authority (the "Is- suer"), on a proposal that it issue its Revenue Note, in a principal amount not to exceed $1,500,000 (the "Note "), and on a project (the 'Project") to be financed thereby, pur- suant to Minnesota Statutes, Sections 469.152 to 469.1651, as amended.(the "Act "), all at the request of Calvin Christian' School of Minneapolis, a Minnesota non- profit corporation (the "Corporation"). The hearing will be held at City.Hall, located at 4801 West 50th Street,' Edina, Minnesota, on Monday,' March 3, 2008, at 7:00 o'clock p.m. The proposed Project to be financed by the Note con- sists of the expansion and renovation of the Corporation's existing campus located in the City of,Edina, including the construction of an approximately 8,600 squal6e foot addi- tion to the existing, main school building and.a.1,075 square foot addition3o another building, and the acquisi- tion and installation of_equipmeit and.furnishings, if any. The main building addition will provide a new lobby, anew media center which includes a library, computer lab, office and conference room, and an office suite;' including a re- ception -area, two administrative offices, a small confer- ence room, a nursing' office, a workroom and restrooms, and the addition to the *other building involves a new en- tryway, a hallway and restrooms. The address of the Pro- ject to be financed by the Note is 4015 Inglewood Avenue South, Edina, Minnesota. The Project is to be owned and operated by the Corporation. The proceeds of the Note will be loaned by the'Issuer to the Corporation to provide financing for the Project, and the Corporation will agree to repay the loan at times and in amounts sufficient to pro- vide for payment in.full'of the Note when due. At said time and place the`Board of Commissioners shall give all par- ties who appear an opportunity to express their views with respect to the Project and the issuance of the Note. Writ- ten comments will be accepted at the principal offices of the Issuer until the time of hearing. A draft copy of the pro- posed Application to the Minnesota Department of Em- ployment and Economic Development for approval of the Project, together with all attachments and exhibits there- to, shall be available for public inspection following the publication of this notice at the office of the Executive Di- rector of the Issuer in City Hall during normal business hours, 7:30 o'clock a.m. to 4:00 o'clock p.m. on normal business days. February 6, 2008. By /s/ Gordon L. Hughes Its Executive Director (Feb. 14, 2008) dl -HRA PHN- Calvin Christian School ff • COMPREHENSIVE STATEMENT The undersigned, being the duly qualified and acting Executive Director of the Edina Housing and Redevelopment Authority (the "Authority "), DO HEREBY CERTIFY on behalf of the Authority that the governing body of the Authority (the "Board of Commissioners ") has been provided by representatives of Calvin Christian School of Minneapolis, a Minnesota nonprofit corporation (the `Borrower "), with certain information concerning the proposed issuance of a revenue note by the Authority under Minnesota Statutes, Sections 469.152 through 469.165 1, as amended (the "Act "). On the basis of such information, the City Council, by resolution adopted March 3, 2008, has given approval to the proposed issuance of a revenue note of the Authority, in a principal amount not to exceed $1,500,000, under the Act (the "Note "). The following are factors considered by the Board of Commissioners in determining to give approval to the issuance of the Note: 1. The proposed project consists generally of the expansion and renovation of the Borrower's existing campus, including the construction of an approximately 8,600 square foot addition to the existing main school building and a 1,075 square foot addition to another building, together with the acquisition and installation of equipment and furnishings, if any (the "Project "). The main building addition will provide a new lobby, a new media center which includes a library, computer lab, office and conference room, and an office suite, including a reception area, two administrative offices, a small conference room, a nursing office, a workroom and restrooms, and the addition to the other building involves a new entryway, a hallway and restrooms. The Project is located at located at 4015 Inglewood Avenue South in the City of Edina. 2. The Project constitutes a "project" within the meaning of Minnesota Statutes, Section 469.153, subdivision 2(d). 3. The Project will promote the public purposes and legislative objectives of the Act by the promotion of economically sound industry through governmental action to prevent, so far as possible, the emergence of blighted lands and areas of chronic unemployment and by the provision of employment opportunities to individuals who are unemployed or who are economically disadvantaged, and by the enhancement of educational services and facilities to residents of the Authority and other members of the community. 4. Representatives of the Borrower estimate that approximately 75 persons will be employed at the Project, and the Project will thereby help enhance employment opportunities for residents of the City of Edina and the surrounding area. 5. The Authority will provide the Minnesota Department of Employment and Economic Development (the "Department ") with the information required by Minnesota Statutes, Section 469.154, Subdivision 5, upon entering into a revenue agreement with the Borrower, and the information required by Minnesota Statutes, Section 469.154, Subdivision 7, as required. 6. The project to be financed by the Note does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 7. A public hearing on the proposal to issue the Note was conducted pursuant to Minnesota Statutes, Section 469.154, Subdivision 4, and Section 147(f) of the Internal Revenue Code of 1986, as amended, on March 3, 2008 at 7:00 p.m., at the City Hall, at which public hearing all interested parties were afforded an opportunity to express their views. A draft copy F) 4 of the application to the Department, with all attachments, was available for public inspection following publication of notice of the public hearing. Dated: March 3, 2007. 4821- 6167- 3986 \1 EDINA HOUSING AND REDEVELOPMENT AUTHORITY an Executive Director March 3, 2008 Commissioner Minnesota Department of Employment and Economic Development 332 Minnesota Street Suite E200 St. Paul, MN 55101 Re: Proposed Edina Housing and Redevelopment Authority, Minnesota Revenue Note (Calvin Christian School in Minneapolis Project) Dear Sir or Madam: We have reviewed a resolution adopted by the governing body of the Edina Housing and Redevelopment Authority (the "Authority "), on March 3, 2008 (the "Resolution "), relating to the issuance by the Authority of its revenue note under Minnesota Statutes, Sections 469.152 through 469.165 1, at the request of Calvin Christian School of Minneapolis, a Minnesota nonprofit corporation (the "Borrower ") to finance the expansion and renovation of the Borrower's existing campus, including the construction of an approximately 8,600 square foot addition to the existing main school building. and a 1,075 square foot addition to another building, together with the acquisition and installation of equipment and furnishings, if any (the "Project "). The main building addition will provide a new lobby, a new media center which includes a library, computer lab, office and conference room, and an office suite, including a reception area, two administrative offices, a small conference room, a nursing office, a workroom and restrooms, and the addition to the other building involves a new entryway, a hallway and restrooms. On the basis of our review of the Resolution and preliminary discussions with representatives of the Borrower as to the nature of the Project and the proposed financing thereof, it.is presently our opinion that (i) the Project constitutes a "project" within the meaning of Minnesota Statutes, Section 469.153, Subdivision 2(d), and (ii) the Authority is authorized, assuming further proceedings are taken in accordance with the provisions of Sections 469.152 through 469.1651 and any other applicable law, to issue its revenue note as authorized by the Resolution. Very truly yours, DORSEY & WHITNEY LLP M. 4844 -6015- 2578 \1 Richard A. Helde [Draft of compliance of employment preference letter] March 3, 2008 Board of Commissioners and Executive Director Edina Housing and Redevelopment Authority City Hall Edina, Minnesota 55424 Re: Proposed Revenue Note (Calvin Christian School of Minneapolis Project) Edina Housing and Redevelopment Authority, Minnesota Plan of Compliance with Minnesota Statutes, Section 469.154, Subdivision 7 Ladies and Gentlemen: This letter is intended to satisfy the requirements of item 9 of the Application For Approval of Industrial Development Bond Project to be filed by the Edina Housing and Redevelopment Authority (the "Authority "), with the Minnesota Department of Employment and Economic Development in connection with the project to be financed with the above - referenced revenue note, and may be attached as an exhibit to said Application. It is the plan and intent of Calvin Christian School of Minneapolis, a Minnesota nonprofit corporation (the. "Borrower"), to comply with the provisions of Minnesota Statutes,. Section 469.154, Subdivision 7, and, upon request, to assist and cooperate with the Authority in complying with those reporting requirements of said Subdivision 7 which may be applicable to the Authority. Nothing herein contained shall be construed so as to impose any obligation or requirement on the Borrower or the Authority which is not otherwise imposed by said Subdivision 7. Very truly yours, CALVIN CHRISTIAN SCHOOL OF MINNEAPOLIS LM 4817 - 2546- 6370 \1 Its [Letterhead of MHC] [Draft of Feasibility Letter] March 3, 2008 Board of Commissioners and Executive Director Edina Housing and Redevelopment Authority City Hall Edina, Minnesota 55424 Re: Proposed Revenue Note (Calvin Christian School of Minneapolis Project) Edina Housing and Redevelopment Authority, Minnesota Ladies and Gentlemen: At the request of Calvin Christian School of Minneapolis, a Minnesota nonprofit corporation (the "Borrower "), we have conducted a study of the preliminary economic feasibility of the proposal that Edina Housing and Redevelopment Authority (the "Authority") issue the above- referenced revenue note under the provisions of Minnesota Statutes, Section 469.152 through 469.165 1, to finance, in whole or in part, a project (the "Project ") of the Borrower. Our study has led us to conclude that, on the basis of current financial conditions, the Project is feasible from a financial standpoint. Subject to agreement between the parties on the final terms of the proposed revenue note and market conditions at the time of issuance, we propose to purchase the revenue note to be issued by the Authority. We understand a copy of this letter will be forwarded by the Authority to the Minnesota Department of Employment and Economic Development to serve as the feasibility letter required by the Department. Very truly yours, MHC By Its 4831-51464194\1