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Approving the proposed issuance of conduit revenue bonds by the Housing and Redevelopment Authority for The Higher Ground Academy Charter School Project, 1381 Marshall Avenue, under Minnesota Statutes, Sections 469.152 through 469.1655 (District 13 Ward 1).
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(a) Under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152-469.1655, as amended (the “Act”) each housing and redevelopment authority in the State of Minnesota, including the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the “HRA”), is authorized to issue revenue bonds to finance or refinance, in whole or in part, the costs of the acquisition, construction, improvement, or extension of revenue producing enterprises, whether or not operated for profit; and
(b) The HRA has received a proposal from Higher Ground Building Company, a Minnesota nonprofit corporation (the “Borrower”), that the HRA undertake a project to finance the Project hereinafter described, pursuant to the Act, through the issuance of taxable and tax exempt conduit revenue bonds in one or more series in an estimated aggregate principal amount not to exceed $13,500,000 (the “Bonds”); and
(c) The project to be financed by the Bonds is to (i) refund the HRA’s Lease Revenue Refunding Bonds (Higher Ground Academy Project), Series 2013A which previously (a) refunded the HRA’s Lease Revenue Bonds (Higher Ground Academy Project), Series 2004 which previously financed the existing school facility at 1381 Marshall Avenue (the “School Facility”) in the City of Saint Paul, Minnesota (the “City”) operated by The Higher Ground Academy, a Minnesota nonprofit corporation and charter school (the “School”); (b) refunded the HRA’s Lease Revenue Bonds (Higher Ground Academy Project), Series 2009 which previously financed the School Facility; and (c) financed the acquisition and installation in the School Facility of equipment for two Science, Technology, Engineering and Mathematics laboratories; (ii) finance capital improvements to the School Facility; (iii) fund a debt service reserve fund; (iv) pay a portion of the interest on the Bonds; and (v) pay a portion of the costs of issuing the Bonds, if necessary (the “Project”); and
(d) The Project will be owned by the Borrower and will be leased to and operated by the School; and
(e) The proposal calls for the HRA to loan the proceeds realized upon the issuance and delivery of the Bonds to the Borrower pursuant to a loan agreement wherein the Borrower will be obligated to pay all costs and expenses of the HRA and the City incident to the issuance of the Bonds; and
(f) A public hearing on the proposal to undertake and finance the Project was held on November 9, 2022 by the HRA at a regularly scheduled meeting of the Board of Commissioners of the HRA following duly published notice, at which time a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing; and
(g) Following the public hearing, the HRA adopted a resolution providing approval to the issuance of the Bonds by the HRA subject to the approval of the City Council; and
(h) No public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota, as follows:
1. The City hereby approves the charter school project as a revenue producing enterprise, described above, to be undertaken by the Borrower pursuant to the Borrower’s specifications, pursuant to the Act.
2. On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes a revenue producing enterprise within the meaning of the Act; that the availability of the financing under the Act and the willingness of the City to furnish such financing will be a substantial inducement to the Borrower to undertake the Project, and that the effect of the Project, if undertaken, will be to provide charter school facilities to residents of the City, and to promote more intensive development and use of land within the City.
3. The Project, by the issuance of the Bonds, is hereby approved by the City subject to final approval by the Borrower and the purchaser of the Bonds as to ultimate details of the financing of the Project.
4. The Borrower has agreed and it is hereby determined that any and all costs incurred by the City or the HRA in connection with the financing of the Project whether or not the Project is carried to completion and whether or not approved by HRA will be paid by the Borrower.
5. Kennedy & Graven, Chartered, as bond counsel, and such financial institutions as may be selected by Borrower, with the consent of the HRA, are authorized to assist in the preparation and review of necessary documents relating to the Project and the financing program therefor, to consult with the City Attorney, Borrower and the purchaser of the Bonds as to the maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the necessary documents and submit such documents to the HRA for final approval.
6. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City or the HRA except the revenue and proceeds pledged to the payment thereof, nor shall the City or the HRA be subject to any liability thereon. The holders of the Bonds shall never have the right to compel any exercise of the taxing power of the City or the HRA to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereon against any property of the City or the HRA. The Bonds shall recite in substance that the Bonds, including the interest thereon, are payable solely from the revenue and proceeds pledged to the payment hereof. The Bonds shall not constitute a debt of the City or the HRA within the meaning of any constitutional or statutory limitation.
7. In anticipation of the issuance of the Bonds to finance all or a portion of the Project, and in order that completion of the Project pursuant to the Borrower’s specifications will not be unduly delayed when approved, the Borrower is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, as the Borrower considers necessary, including the use of interim, short-term financing, subject to reimbursement from the proceeds of the Bonds if and when delivered but otherwise without liability on the part of the City or the HRA.
8. The City’s PED Director, staff and legal counsel are hereby authorized and directed to take all actions necessary to implement this Resolution.