TITLE
Title
PUBLIC HEARING: APPROVAL OF $34,000,000 IN STUDENT HOUSING REVENUE BONDS (AGGIE APARTMENT LIFE HOLDING CORPORATION II, LLC)
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SPONSOR
Sponsor
Brandon K. Lewisohn, Attorney, Parker Poe
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BACKGROUND
Background
The Public Finance Authority (PFA) is a governmental unit of the State of Wisconsin created for the purpose of issuing tax-exempt and taxable conduit bonds for public and private entities nationwide. PFA is sponsored by the National Association of Counties, the National League of Cities, the Wisconsin Counties Association and the League of Wisconsin Municipalities. Any debt issued is not debt of the County or PFA, but rather is payable solely from debt service payments received from the borrowing entity.
PFA has been requested to issue student housing revenue bonds in an aggregate principal amount not to exceed $34,000,000 to Aggie Apartment Life Holding Corporation II, LLC to finance the acquisition of two student housing facilities, University Landing and University Pointe, formerly known as University Park, adjacent to the Campus of North Carolina Agricultural and Technical State University. Additionally, a portion of the bond proceeds will be used to finance or refinance certain obligations incurred by Aggie Apartment Life Holding Corporation, LLC, incurred for the benefit of its sole member, the North Carolina A&T Real Estate Foundation, Inc, which refinanced a warehouse facility owned by the Foundation. Finally, the student housing revenue bonds will be used to: reimburse the borrower for payment of costs in connection with these projects, fund a debt service reserve account for the benefit of the owners of the bonds, and pay certain expenses incurred in connection with the authorization and issuance of the bonds. Please reference the following resolution for a full description of the projects to be financed or refinanced.
Federal tax law requires that tax exempt bonds issued to finance or, in certain circumstances, refinance facilities owned by nonprofit organizations be approved by the elected legislative body (or highest elected representative) of the governmental unit that has jurisdiction over the area in which the facility is to be located. Prior to this approval, Internal Revenue Code Section 147(f) requires that a public hearing be held, at which hearing the public is given the opportunity to comment on the projects.
Because the proceeds of the bonds will be used to finance and refinance projects located in Guilford County, the Board of Commissioners is the appropriate governing body to approve the use of tax-exempt bonds to finance and refinance the projects, for the purposes of Section 147(f) of the Internal Revenue Code.
Neither the PFA, nor the County, will have any liability whatsoever for the payment of principal or interest on the bonds. Aggie Apartment Life Holding Corporation II, LLC will be responsible for repayment of the bonds. The bonds will not be deemed to constitute a debt of the County or a pledge of the faith and credit of the County, and will not affect its debt ratios or legal debt limit. Because no taxes or other revenues of the County are pledged to pay these bonds, County staff have made no financial analysis of the bonds and the County has no responsibility, whatsoever.
The notice of public hearing was published on the Guilford County Electronic Legal Notices website on September 23, 2024. The form of the resolution to be adopted is listed below.
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RESOLUTION
Resolution
RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF GUILFORD, NORTH CAROLINA, APPROVING THE ISSUANCE BY THE PUBLIC FINANCE AUTHORITY OF ITS STUDENT HOUSING REVENUE BONDS IN ONE OR MORE SERIES IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $34,000,000
WHEREAS, Aggie Apartment Life Holding Corporation II, LLC, a limited liability company duly organized under the laws of the State of North Carolina has requested that the Public Finance Authority, a public authority existing under the laws of the State of Wisconsin (the “Authority”), issue its student housing revenue bonds (the “Bonds”), in one or more series in an aggregate principal amount not to exceed $34,000,000, to (a) finance the acquisition of two student housing facilities known as University Landing and University Pointe, formerly known as University Park, adjacent to the campus of North Carolina Agricultural and Technical State University (the “Student Housing Projects”), (b) finance or refinance certain obligations incurred by Aggie Apartment Life Holding Corporation, LLC, incurred for the benefit of its sole member, The North Carolina A&T Real Estate Foundation, Inc. (the “Foundation”), a North Carolina nonprofit corporation described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), which refinanced a warehouse facility owned by the Foundation (the “Warehouse Facility” and together with the Student Housing Projects, the “Projects”), (c) reimburse the Borrower for the payment of certain costs in connection with the Projects, (d) fund a debt service reserve account for the benefit of the owners of the Bonds, and (e) pay certain expenses incurred in connection with the authorization and issuance of the Bonds (collectively, the “Bond Project”);
WHEREAS, the Projects financed and refinanced by the Bonds to be refunded include: (a) the acquisition of (i) University Landing, a student housing facility consisting of 82 two-bedroom units and 30 three-bedroom units in seven buildings for a total of 112 units and 254 beds on approximately 29.02 acres, and (ii) University Pointe, a student housing facility consisting of 24 four-bedroom units in two buildings for a total of 96 beds on approximately 1.59 acres and (b) the acquisition of the Warehouse Facility located in the vicinity of the North Carolina Agricultural and Technical State University campus;
WHEREAS, all of the facilities to be financed or refinanced with the proceeds of the Bonds are or will be owned and operated by the Borrower or the Foundation and are located as follows: (a) University Landing at 1600 East Washington Street, Greensboro, NC 27401, (b) University Pointe at 702-704 East Lindsay Street, Greensboro, NC 27401 and (c) the Warehouse Facility at 1029 Winston Street, Greensboro, NC 27405;
WHEREAS, the Projects will be owned and operated by the Borrower or the Foundation. The proceeds of the Bonds will be used by the Borrower to finance and refinance the Projects and the Bond Project;
WHEREAS, pursuant to Section 147(f) of the Code, prior to their issuance, the Bonds are required to be approved by the “applicable elected representative” of a governmental unit having jurisdiction over the area in which the Projects are located, after a public hearing held following reasonable public notice;
WHEREAS, the Board is the “applicable elected representative” of the County for the Projects located within the County;
WHEREAS, the Borrower has requested that the Board approve the Authority’s issuance of the Bonds and the financing of the Projects located within the County in order to satisfy the requirements of Section 147(f) of the Code;
WHEREAS, pursuant to Section 66.0304(11)(a) of the Wisconsin Statutes, prior to their issuance, bonds issued by the Authority must be approved by the governing body or highest ranking executive or administrator of the political jurisdiction within whose boundaries the project is to be located;
WHEREAS, the Board, following notice duly given in the form attached hereto as Exhibit A (the “TEFRA Notice”), held a public hearing today regarding the Authority’s issuance of the Bonds and the financing of the Projects and now desires to approve the Authority’s issuance of the Bonds and the financing and refinancing of the Projects in accordance with the Code;
BE IT RESOLVED by the Board as follows:
Section 1. Pursuant to and in satisfaction of the requirements of Section 147(f) of the Code and in accordance with to Section 66.0304(11)(a) of the Wisconsin Statutes, the Board hereby approves (a) the Authority’s issuance of the Bonds in an aggregate principal amount not to exceed $34,000,000 and (b) the financing and refinancing of the Projects located in the County.
Section 2. The County has no responsibility for the payment of the principal of or interest on the Bonds or for any costs incurred by the Borrower with respect to the Bonds or the Projects.
Section 3. This resolution is effective immediately on its passage.
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BUDGET IMPACT
Budget Impact
NO ADDITIONAL COUNTY FUNDS REQUIRED
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REQUESTED ACTION
Requested Action
Hold a public hearing on the proposed issuance of not to exceed $34,000,000 in student housing revenue bonds to be issued by the Public Finance Authority of Wisconsin for the following purposes: (a) to finance the acquisition of two (2) student housing facilities known as University Landing and University Pointe, formerly known as University Park, adjacent to the campus of NC A&T State University; (b) to finance or refinance certain obligations incurred by Aggie Apartment Life Holding Corporation II, LLC, incurred for the benefit of its sole member, the North Carolina A&T Real Estate Foundation, Inc., which refinanced a warehouse facility owned by the Foundation; (c) to reimburse the borrower for the payment of certain costs in connection with student housing projects; (d) to fund a debt service reserve account for the benefit of the owners of the bonds; and (e) to pay certain expenses incurred in connection with the authorization and issuance of the bonds. At the conclusion of the public hearing, the Board is requested to adopt the previously referenced resolution, which finds:
That the $34,000,000 in student housing revenue bonds do not constitute a debt of the County; nor require a tax levy or a pledge of the faith and credit of the County; nor will the bonds affect the County's debt ratios or legal debt limit; and
That the County has made no financial analysis of the bonds or projects financed; and approves, solely for the purpose of meeting the requirements of Section 147(f) of the Internal Revenue Code and in accordance with Section 66.0304(11)(a) of Wisconsin Statutes, the Public Finance Authority's issuance of student housing revenue bonds in an aggregate principal amount not to exceed $34,000,000 and the financing and refinancing of projects located in Guilford County for the benefit of Aggie Apartment Life Holding Corporation II, LLC.
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