Number
130653
Version
SUBSTITUTE 3
Reference
Sponsor
ALD. HINES
Title
Substitute resolution approving the issuance of revenue bonds by the Public Finance Authority for the benefit of HOPE Christian Schools to finance a project consisting of 3 elementary schools located in the City of Milwaukee in the 15th, 1st and 6th Aldermanic Districts.
Analysis
The Public Finance Authority is a public body corporate and politic created by the State of Wisconsin pursuant to the provisions of ss. 66.0301, 66.0303 and 66.0304, Wis. Stats., with the authority to issue conduit revenue bonds to finance projects with the approval of the political subdivision in which the project is located. This resolution constitutes City approval of the issuance of conduit revenue bonds by the Public Finance Authority for the HOPE Christian Schools project. City approval of the project and the issuance of the bonds shall not give rise to a debt or pecuniary liability or a legal or moral obligation of the City for any reason whatsoever.
Body
Whereas, The Public Finance Authority ("PFA") is a unit of government and body corporate and politic of the State of Wisconsin created pursuant to the provisions of ss. 66.0301, 66.0303 and 66.0304, Wis. Stats., commonly known as the "Joint Exercise of Powers Law" (as amended, the "Act") and an Amended and Restated Joint Exercise of Powers Agreement, dated September 28, 2010 (the "Joint Exercise Agreement"); and the PFA is authorized and empowered under the Act and by the Joint Exercise Agreement to, among other things, issue bonds, notes or other evidences of indebtedness in connection with, and to make loans to assist in the financing of, "projects" located inside and outside of the State of Wisconsin; and
Whereas, Educational Enterprises, Inc. ("EEI") is a Wisconsin nonprofit corporation and the sole member of EEI Real Estate Holdings: Prima, LLC, EEI Real Estate Holdings: Fortis, LLC and EEI Real Estate Holdings: Semper, LLC, each of which is a Wisconsin limited liability company (collectively referred to herein as the "Borrowers"); and EEI also is the sole member of HOPE Christian Schools, Inc. a Wisconsin nonprofit corporation which is the sole member of HOPE Christian Schools: Prima, LLC, HOPE Christian Schools: Fortis, LLC and HOPE Christian Schools: Semper, LLC, each of which is a Wisconsin limited liability company (collectively referred to herein as the "School Companies"); and
Whereas, Through the above-described network of "subsidiaries," EEI manages and operates 3 private schools known as "HOPE Christian Schools: Prima," "HOPE Christian Schools: Fortis" and "HOPE Christian Schools: Semper" (collectively, the "Schools"); and
Whereas, EEI, through the Borrowers, wishes to finance and refinance, as applicable, the acquisition, construction, renovation, equipping and/or improvement of land and a building located at 2345 North 25th Street in the City of Milwaukee, land and a building located at 3601 North Port Washington Avenue in the City of Milwaukee, and land and a building located at 3040 West Capitol Drive in the City of Milwaukee" (collectively, the "Project"), which land and buildings are or will be owned by the respective Borrowers and leased to the respective School Companies for use in connection with the operation of the respective Schools; and
Whereas, EEI, through the Borrowers, is requesting the assistance of the PFA in financing and refinancing, as applicable, the Project through the issuance by the PFA of its bonds to be designated "Education Revenue Bonds (HOPE Christian Schools Project), Series 2013" in an amount not to exceed $18,000,000 (the "Bonds"); and
Whereas, Section 66.0304(11)(a) of the Act provides that the PFA may not issue bonds to finance a capital improvement project in the State of Wisconsin unless all of the political subdivisions within whose boundaries the project is to be located have approved the financing of the project, and further provides that in cities of the 1st class such approval may only be given by the governing body of such city, and the PFA has requested such approval from the Common Council; and
Whereas, Pursuant to the Act and the Joint Exercise Agreement bonds issued by the PFA are limited obligations of the PFA payable solely from funds pledged for their payment in accordance with the related bond indenture and neither the members of the PFA nor the State of Wisconsin or any political subdivision thereof or any political subdivision approving the issuance of the bonds, including the City of Milwaukee, shall be obligated to pay the principal of, premium, if any, or interest thereon or any costs incidental thereto; and
Whereas, The Bonds or a portion thereof will be "private activity bonds" and "qualified 501(c)(3) bonds" for purposes of the Internal Revenue Code of 1986 (the "Code"); and pursuant to Code Section 147(f), prior to their issuance, the Bonds are required to be approved by (i) the PFA as the governmental unit issuing the Bonds; and (ii) the "applicable elected representative" of a governmental unit having jurisdiction over the area in which the Project is located, in each case after a public hearing regarding the financing of the Project and the issuance of the Bonds (commonly known as a "TEFRA Hearing") held following reasonable public notice (commonly known as a "TEFRA Notice"); and
Whereas, City staff will administratively undertake the issuance of a TEFRA Notice, in a form to be approved by the Office of the City Attorney, and the conduct TEFRA Hearing; and
Whereas, Subject to satisfactory completion of the TEFRA Hearing and a report of the proceedings thereto, the Borrowers expect to request the Mayor, as the "applicable elected representative" of the City of Milwaukee to approve the Bonds and the financing of the Project for purposes of Code Section 147(f); and
Whereas, The Borrowers have agreed to enter into a customary agreement to utilize best efforts to reach a goal of 25% SBE participation for construction of the Project and a customary PILOT Agreement for the HOPE Christian Schools: Prima facility; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee as follows:
1. The financing of the Project by the PFA through the issuance of the Bonds is approved for purposes of s. 66.0304(11)(a) of the Act.
2. The conduct of the TEFRA Hearing is approved.
3. The publication TEFRA Notice as described above, in a form approved by the Office of the City Attorney, is approved.
4. The Bonds, when and if issued, shall not constitute a debt or pecuniary liability, or a legal or moral obligation, of the City of Milwaukee for any reason whatsoever.
5. The Small Business Enterprise Agreement (HOPE Christian Schools Project) and the PILOT Agreement is hereby approved and the proper City officers are authorized and directed to execute and deliver the agreements on behalf of the City.
Requestor
City Attorney
Drafter
TOG:mll
October 10, 2013
196650
1055-2013-2386
LRB149426-3
Teodros W. Medhin:lp
10/10/2013