Memo Refunding Elderly Housing Care
. C I TV 0 F HOP K I NS
MEMORANDUM
DATE: November 9, 1993
TO: Honorable Mayor and city council
FROM: ~ Jim Kerrigan, Director Planning & Economic Development
SUBJECT: REFUNDING ELDERLY HOUSING CARE REVENUE BONDS,
ST. THERESE CARE CENTER
In 1986 the city of Hopkins facilitated the sale of $15 million
in housing revenue bonds to finance the construction of the st.
Therese building in south Hopkins. This project is a 227 unit
senior rental housing project located at 1011 Feltl Court.
In the first three years of operation the project experienced low
occupancy rates. As a result of insufficient revenues, st.
. Therese defaulted on payment to the bond holders. In 1990 the
corporation filed bankruptcy under Chapter 11. In 1992 the
bankruptcy court approved a plan of reorganization for the
corporation to settle debt with respect to the bonds.
Pursuant to the reorganization plan, the corporation is required
to seek tax exempt refinancing of the existing bonds. By
undertaking a refinancing they will be able to take advantage of
lower interest rates within the market. The proceeds from this
issue will then be used to repay existing bond holders a portion
of the outstanding debt due them in accordance with the
reorganization plan.
The refunding revenue bond issue will be in an amount not to
exceed $10.5 million. In order to facilitate the sale of this
bond it is proposed that a public hearing be held on Tuesday,
December 7 at 7:30 p.m. From a timing perspective the Council
needs to order this hearing at their November 16 meeting.
JK11093A
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