Loading...
HomeMy WebLinkAboutItem 17 - Faith Christian Loan RefinancingMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BRUNO RUMBELOW, CITY MANAGER 1 MEETING DATE: JULY 21, 2015 SUBJECT: A RESOLUTION RELATING TO APPROVING A REFINANCING BY THE CRAWFORD EDUCATION FACILITIES CORPORATION FOR THE BENEFIT OF FAITH CHRISTIAN SCHOOL RECOMMENDATION: City Council to consider a resolution relative to approval of a loan refinancing by the Crawford Education Facilities Corporation for the benefit of Faith Christian School. This item is on the agenda due to a request from Faith Christian School. The school is planning for the refinancing of a loan(s) issued for the construction of new school facilities; acquisition of existing facilities; and, refinancing certain loans. The refinancing vehicle is to be a loan from the Crawford Education Facilities Corporation. Since the project is located in Grapevine, Section 147(f) of the Internal Revenue Code requires the City to approve the project. Attached is a letter from McGuire Woods L.L.P., bond counsel for the project requesting approval by the City Council. Staff recommends approval. GJ/gwl July 15, 2015 (10:OOAM) McGuireWoods LLP JPMorgan Chase Tower 600 Travis Street Suite 7500 Houston, TX 77002-2906 Phone: 713.571.9191 Fax: 713.571.9652 www.mcguirewoods.com July 9, 2015 Honorable Mayor William D. Tate and City Council City of Grapevine P.O. Box 95104 Grapevine, Texas 76099 Re: Financing Transaction far Faith Christian School Dear Mayor Tate and City Council: We are bond counsel for a loan in the maximum amount of $11,000,000 from Compass Mortgage Corporation, an affiliate of Compass Bank, to Faith Christian School facilitated by the Newark Cultural Education Facilities Finance Corporation. The loan will be used to refinance the construction of a new school building and athletic facility, and certain loans used to acquire land and the existing school building. Because the facilities being financed are located within the City of Grapevine, section 147(f), Internal Revenue Code, requires that, in order for the loan to be tax-exempt, the governing body of the City must approve the loan after a public hearing is held regarding the financed project. The public hearing was held at 10:00 a.m. on July 8, 2015 at Faith Christian School. We are respectfully requesting that the City Council consent to the transaction. The City of Grapevine is not being asked to undertake any financial obligation. The loan will not be a debt or liability of the City of Grapevine, Texas. The consent being requested herein is only for the purposes of complying with the federal tax law regarding tax-exempt obligations. The City of Grapevine previously approved a $13,000,000 tax-exempt loan from Compass Mortgage Corporation to Faith Christian School on June 19, 2007. The transaction is scheduled to close on July 31, 2015. Enclosed please find the Resolution of the City Council to be considered at its July 21, 2015 meeting which provides for the City of Grapevine's consent to the transaction. We greatly appreciate your assistance in this matter. Please call me if we can provide any further information or can assist you in connection with this request for consent. Sincerely, /oangFu Atlanta I Austin I Baltimore I Brussels I Charlotte I Charlottesville) Chicago I Dallas j Houston I Jacksonville J London Los Angeles I New fork I Norfolk I Pittsburgh I Raleigh I R(chmond ( Tysons Corner I Washington, D.C. ( Wilmington FAX As no CLASSIFIED r —�__ ADVERTISING r j j0 808 Throckmorton St. Fort Worth, Texas 76102 11raTelegrim Printed by: cjrspez Ad #: 33450861 817-390-7400 on: am $17-390-7520 FaX on: Tuesday, Jun 23, 2015 _ Account information in - Phone # { (832) 255-6324 Name: i MCGUIRE WOODS LLP Address: 600 TRAVIS STREET ST 7500 HOUSTON TX 77002-2906 Acct #:I 2556324MCGU Client Placed By:': marilyn Fax #: Ad Copy: NOTICE OF PUBLIC HEARING Notice is hereby given that the Newark Cultural Education Facili- ties Finance Corporation (the 'Corporation') a nonprofit corpo- ration create) by the City of Newark, Texas pursuant to Article 1528m, Vemonks Texas Civil Statutes, will hold a public hearing on July 8, 2015, commencing at 10:00 a.m. Drama Room, Faith Christian Srchool, 730 E. Worth Avenue, Grapevine, Texas 76051�, to provide an opportunity for all Interested persons to be heard with respect to a proposed loan from Compass Mortgage Corporation (the 6Lender') to the Corporation in the maximum amount of 11,000,000, and a proposed loan rom the Corporation to Faith Christian School Inc. (the 66or- and among the Corporation, the Lender and the Borrower. The Loans are being made for the purpose of refinancing the cost of ac4uirin0, constructing, renovating, and equippping educational facilities and fadiities Incidental, subordi- nate, or related thereto or appro- priate in connection therewith, including (A) the construction of (1) an approximate 98,393 square foot two-story Upper school building contain classrooms, labs and offices; and (it) an approximate 28,000 square foot two story Kas 76051; and (B) (1) 10.4418 acres per School; (11) and an tousi uA) ana us) are couectrvely, the 61oroject6). A portion of the proceeds of the Loans will be used to ay certain expenses In con- nection with the issuance of the Loans. The Project is, or will be, owned by the Borrower. The Loans are not payable out of taxes and are secured by and payable solely from funds provided by the Bor- rower. All Interested persons are invited to attend the hearing to express their Ad , information Classiflcation:1 Legal Notices Publicationwi Full Run Daily 1 n i Start Dated: i 06-2415 Size:+ 1 x 76.000 is Stop Date:; 05.2415 Bin Sizer 76.00 lines-6.5pt Insertions:! 1 .� Rate Code:; Legal Notices Ad #:� 33450861 r Taken By- ;Christine Lopez Ad Type: Uner Ad _ --- Page 1 --- Amount Due: $1,363.71 CLASSIFIED r' r' (' (' 808 Throckmodon St ADVERTISING .1 r Fort Worth, Texas f b102 Sidin Printed by: ctopez Ad #: 33450861 817-390-7400 legrim at 10:27 am 817-390-7520 Fax on: Tuesday, Jun 23, 2015 views, both orally and In writing, with respect to the Loans and the ProjectAny interested persons un- able to attend the heart may submit their views In wring to McGulreWoods LLP, Attn: Hoang Vu, 660 Travis Street, Suite 7500, Houston, Texas 77062, prior to the date scheduled for the hearing. faxl.t --- Page 2--- RESOLUTION NO. &FiR0A-?JCrNo, •� . • ,. .' '. L • ..• , �, WHEREAS, the Newark Education Facilities Finance Corporation ("Corporation") created by the City of Crawford, Texas, will make a loan in an amount not to exceed $11,000,000 (the "Loan") pursuant to a construction loan agreement among the Corporation, Compass Mortgage Corporation, an affiliate of Compass Bank (the "Lender") and Faith Christian School Inc. (the "Borrower") as provided under Chapter 53A, Texas Education Code, as amended, for the purpose of refinancing the cost of acquiring, constructing, renovating, and equipping educational facilities and facilities incidental, subordinate, or related thereto or appropriate in connection therewith, including (A) the construction of (i) an approximate 98,393 square foot two-story Upper School building containing classrooms, labs and offices; and (ii) an approximate 28,000 square foot two story athletic facility containing gymnasium and locker rooms; all located at 729 East Dallas Road, Grapevine, Texas 76051; and (B) the acquisition of (i) 10.4418 acres of land for the Upper School; (ii) the existing school building, an approximate 101,758 square foot one-story building containing classrooms, labs and offices and (iii) the field house, an approximate 4,392 square foot one-story building containing athletic facilities; all located at 730 East Worth Avenue, Grapevine, Texas 76051 ((A) and (B) are collectively, the "Project"). A portion of the proceeds of the Loan will be used to pay certain expenses in connection with the issuance of the Loan; and WHEREAS, section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code") requires that the issuance of any qualified 501(c)(3) obligations be approved by either the governing body of the City or the chief elected executive officer of the City after a public hearing following reasonable public notice; WHEREAS, attached hereto as Exhibit "A" is a Notice of Public Hearing (the "Public Notice") which was published in a newspaper of general circulation in the City as required by section 147(f) of the Code which public hearing was conducted by the Corporation. ROW, THEREFORE,• • OF OF 'A Section 1. That all matters stated in the above preamble are true and correct and are incorporated herein as if copied in their entirety. Section 2. That the City hereby specifically approves the Loan and the Project solely for the purpose of satisfying the requirements of section 147(f) of the Code and for no other purpose and is not to be construed as an undertaking by the City. The Loan shall not constitute a liability, an indebtedness or obligation of the City nor shall any of the assets of the City be pledged to the payment of the Loans. Section 3. That this resolution shall take effect from and after the date of its passage. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS on this the 21st day of July, 2015. ATTEST: FWAMZTMTD� �69 �WA RES. NO. 2 Notice is hereby given that the Newark Cultural Education Facilities Finance Corporation (the "Corporation"), a nonprofit corporation created by the City of Newark, Texas pursuant to Article 1528m, Vernon's Texas Civil Statutes, will hold a public hearing on July 8, 2015, commencing at 10:00a.m., Drama Room, Faith Christian School, 730 E. Worth Avenue, Grapevine, Texas 76051, to provide an opportunity for all interested persons to be heard with respect to a proposed loan from Compass Mortgage Corporation (the "Lender") to the Corporation in the maximum amount of $11,000,000, and a proposed loan from the Corporation to Faith Christian School Inc. (the "Borrower") in the same amount (collectively, the "Loans"); all pursuant to a Loan Agreement by and among the Corporation, the Lender and the Borrower. The Loans are being made for the purpose of refinancing the cost of acquiring, constructing, renovating, and equipping educational facilities and facilities incidental, subordinate, or related thereto or appropriate in connection therewith, including (A) the construction of (i) an approximate 98,393 square foot two-story Upper School building containing classrooms, labs and offices; and (ii) an approximate 28,000 square foot two-story athletic facility containing gymnasium and locker rooms; all located at 729 E. Dallas Road, Grapevine, Texas 76051; and (B) the acquisition of (i) 10.4418 acres of land for the Upper School; (ii) the existing school building, an approximate 101,758 square foot one-story building containing classrooms, labs and offices and (iii) the field house, an approximate 4,392 square foot one-story building containing athletic facilities; all located at 730 E. Worth Avenue, Grapevine, Texas 76051 ((A) and (B) are collectively, the "Project"). A portion of the proceeds of the Loans will be used to pay certain expenses in connection with the issuance of the Loans. The Project is, or will be, owned by the Borrower. The Loans are not payable out of taxes and are secured by and payable solely from funds provided by the Borrower. All interested persons are invited to attend the hearing to express their views, both orally and in writing, with respect to the Loans and the Project. Any interested persons unable to attend the hearing may submit their views in writing to McGuireWoods LLP, Attn: Hoang Vu, 600 Travis Street, Suite 7500, Houston, Texas 77002, prior to the date scheduled for the hearing.