HRA Meeting Date: May 1, 2025
To: Housing and Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Brenda Angelstad, Finance Director
Title
Reissuance of Senior Housing Revenue Refunding Note (Northfield Retirement Community Project), Series 2013B.
Body
Action Requested:
HRA to approve the attached HRA Resolution - Approving Amendments to the Senior Housing Revenue Refunding Note (Northfield Retirement Community Project, Attachment No. 1), Series 2013B and Authorizing the Reissuance Thereof.
Summary Report:
The City has approved different conduit debt issues over the years. Conduit debt provides tax exempt financing to private entities and nonprofit organization for commercial and industrial facilities, health care, multi-family residential housing projects for low- and moderate-income persons and elderly persons. The City is authorized to issue this type of debt under Minnesota Statutes, Chapter 462C (the “Housing Act”) and Chapter 469.152 through 469.1651 (the “Industrial Development Act”). The City is not responsible for the debt; it simply provides a means (conduit) of providing tax exempt financing for these purposes.
On June 27, 2013, the Housing and Redevelopment Authority (HRA) of Northfield issued a $10 million Senior Housing Revenue Refunding Note (Series 2013B) to finance a loan to Northfield Care Center, Inc. and Northfield ParkView, Inc., both nonprofit organizations. The loan was formalized through a Loan Agreement. The HRA assigned its rights under this agreement to Choice Financial Group (formerly Venture Bank) through a Pledge Agreement, giving the bank rights to loan payments and other related terms.
Vivie Senior Living of Northfield LLC, whose sole member is Vivie (formerly known as KNWM), a Minnesota nonprofit corporation, is acquiring the Project from the Original Borrowers. As part of the transaction, Vivie will assume all of the Original Borrowers’ obligations under the Loan Agreement, Pledge Agreement, and the Series 2013B Note through a Master Assignment and Assumption Agreement and other related documents required by the Lender and the Borrower. These documents, collectively referred to as the Amendments, will result in the reissuance of the Series 2013B Note for federal tax purposes under Section 1.1001-3 of the Treasury Regulations. Although this transaction does not involve the issuance of a new bond, the Series 2013B Note will be treated as if it has been refunded as of the effective date of the Amendments for tax purposes.
In addition, as required by the Section 147(f) of the Code, the City Council will hold a public hearing on May 6, 2025 and thereafter consider a resolution approving the Amendments.
Attachment No. 2 - Memorandum from Jenny Boulton and Gina Fiorini, Bond Counsel.
Alternative Options:
N/A
Financial Impacts:
No impact to the City of Northfield.
Tentative Timelines:
May 1, 2025 - HRA approves amendments to Senior Housing Revenue Refunding Note
May 6, 2025 - City Council to hold Public Hearing, then approves amendments
June 1, 2025 - Closing on Financing