DESERT VIEW 2025 - SUMMARY LETTER.PDF
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8687 East Via de Ventura, Suite 306 Scottsdale, Arizona 85258 www.mcida.com June 5, 2025 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $22,000,000 The Industrial Development Authority of the County of Maricopa Charter School Revenue Bonds and/or Charter School Revenue Refunding Bonds (Desert View Middle School Project), Series 2025 Ladies and Gentlemen: At the meeting of the Board of Directors (the “Board”) of The Industrial Development Authority of the County of Maricopa (the “Authority”) on June 10, 2025, the Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Bonds described above (the “Bonds”). This letter provides a summary of the proposed financing. AUTHORITY The Authority is an Arizona nonprofit corporation designated by law as a political subdivision of the State of Arizona. The Authority was formed with the permission of Maricopa County, Arizona (“Maricopa County”), and incorporated under and pursuant to the Arizona Industrial Development Financing Act, Title 35, Chapter 5, Arizona Revised Statutes, as amended (the “Act”). APPLICANT/BORROWER The Applicant/Borrower, Carpe Diem Collegiate High School (d/b/a Carpe Diem Academy) (the “Borrower”), an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), operates a charter school known as “Desert View Middle School” that currently serves students in grades 6 through 8 (the “School”) established under Arizona Revised Statutes Title 15, Chapter 1, Article 8, as amended. PROJECT The Authority will loan the proceeds of the Bonds to the Borrower to finance or refinance all or a portion of the costs of acquiring, constructing, improving and equipping, as applicable, (i) charter school facilities located at 3777 West 22nd Lane, Yuma, Arizona (the “Series 2006 Facilities”) by refunding prior charter school revenue bonds and (ii) buildings and related amenities located at the southeast corner of West 16th Street and Avenue C, in Yuma, Arizona (the “Series 2025 Facilities”) (collectively, the “Project”). When construction of the Series 2025 Facilities is complete, the School will be relocated from the Series 2006 Facilities into the new Series 2025 Facilities. Board of Supervisors Board of Directors June 5, 2025 Page 2 NOTIFICATION TO ARIZONA ATTORNEY GENERAL As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the Authority will notify the Arizona Attorney General of its intention to issue the Bonds. FINANCING PARTICIPANTS The major financing participants, in addition to the Authority, are as follows: Applicant/Borrower: Carpe Diem Collegiate High School Borrower’s Counsel: Gilmore & Bell, P.C. Underwriter/Disclosure Counsel: Casey Parrot LLC Bond Counsel: Squire Patton Boggs (US) LLP Underwriter: D.A. Davidson & Co. Trustee: BOKF, NA PRINCIPAL FINANCING DOCUMENTS Document Parties Indenture, including the initial forms of the Series 2025 Bonds Authority and Trustee Loan Agreement, including the form of the Promissory Note Authority and Borrower Deed of Trust Borrower Bond Purchase Agreement Authority, Borrower and Underwriter Preliminary Limited Offering Memorandum Borrower PLAN OF FINANCING The Authority will issue one or more series of Bonds under and pursuant to the terms and provisions of one or more indentures of trust in the aggregate principal amount not to exceed $22,000,000. The proceeds from the sale of the Bonds will be loaned by the Authority to the Borrower pursuant to the terms of the one or more loan agreements. The Borrower will enter into the loan agreements to evidence the obligations of the Borrower to make loan repayments in amounts necessary to pay the principal and interest on the Bonds. The Bonds will be secured by the deed of trust granting the Trustee a first lien on and security interest in the Series 2025 Facilities. The Bonds will be sold by the Underwriter pursuant to the bond purchase agreement. The Underwriter will distribute to investors a Preliminary Limited Offering Memorandum, which, together with certain changes thereto, will become the final Limited Offering Memorandum, relating to the Bonds and the Project. Board of Supervisors Board of Directors June 5, 2025 Page 3 A tax certificate and agreement will be executed by the Authority and Borrower to evidence various representations and agreements aimed at establishing and preserving the tax-exempt status of the Bonds. On or prior to closing the Authority will receive an opinion from Bond Counsel to the effect that interest on any tax-exempt Bonds will be exempt from federal and State income taxes. FINAL APPROVAL At its meeting on June 10, 2025, the Authority Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Bonds and related matters. A form of the Authority Board’s resolution is attached hereto. BOARD OF SUPERVISORS APPROVAL Under the provisions of A.R.S. § 35-721.B., the Bonds to be issued by the Authority require the approval of the Maricopa County Board of Supervisors. The Maricopa County Board of Supervisors is being requested, at its meeting on June 25, 2025, to act as required by law to adopt a resolution approving the issuance of the Bonds under the Act. Under the provisions of the Act, specifically A.R.S. § 35-742, Maricopa County is not in any event liable for the payment of principal or interest on any bonds, notes or other obligations issued by the Authority or for the performance of any pledge, mortgage, obligation or agreement of any kind undertaken by the Authority, and none of the bonds, notes or other obligations, or any of its obligations thereunder, shall be construed to constitute an indebtedness of Maricopa County within the meaning of any constitutional or statutory provision. TRANSACTION CLOSING If the required approvals of the Authority Board and the Maricopa County Board of Supervisors are received, it is currently anticipated that the Bonds will be issued in July, 2025. LEGAL COUNSEL RECOMMENDATION General Counsel to the Authority has reviewed drafts of the principal financing documents and, based upon her review of such and her review of the proceedings of the Authority to date relating to the proposed issuance of the Bonds, she believes the principal financing documents are now in substantially final form, adequately meet the requirements of the Act, and are in both form and substance acceptable for the Authority Board to act upon, and that the Resolution of the Authority Board authorizing the issuance and sale of the Bonds and related matters and the Resolution of the Maricopa County Board of Supervisors approving the Bonds to be issued and related matters, are in form and substance acceptable for adoption. 1104447276\4\AMERICAS A RESOLUTION OF THE BOARD OF DIRECTORS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA AUTHORIZING THE ISSUANCE AND SALE OF ONE OR MORE SERIES OF ITS TAX-EXEMPT AND/OR TAXABLE CHARTER SCHOOL REVENUE BONDS AND/OR CHARTER SCHOOL REVENUE REFUNDING BONDS (DESERT VIEW MIDDLE SCHOOL PROJECT), SERIES 2025, IN AN AGGREGATE ORIGINAL PRINCIPAL AMOUNT OF NOT TO EXCEED $22,000,000 AND RELATED MATTERS WHEREAS, The Industrial Development Authority of the County of Maricopa (the “Authority”) is an Arizona nonprofit corporation designated as a political subdivision of the State of Arizona (the “State”), incorporated with the approval of Maricopa County, Arizona (the “County”), pursuant to the provisions of the Constitution and laws of the State and under the Industrial Development Financing Act, Arizona Revised Statutes §§ 35-701 et seq, as amended (the “Act”); and WHEREAS, the Authority is authorized and empowered, among other things, to issue revenue bonds for the purposes set forth in the Act, including the making of secured and unsecured loans to finance or refinance the acquisition, construction, improvement, equipping or operating of a “project” (as defined in the Act), whenever the Board of Directors of the Authority (the “Board of Directors”) finds such loans to further advance the public interest and to refund outstanding obligations incurred by an enterprise to finance the cost of a project when the Board of Directors finds that the refinancing is in the public interest; and WHEREAS, Carpe Diem Collegiate High School (d/b/a Carpe Diem Academy) (the “Borrower”), an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), operates a charter school known as “Desert View Middle School” that currently serves students in grades 6 through 8 (the “School”) established under Arizona Revised Statutes Title 15, Chapter 1, Article 8, as amended; and WHEREAS, the Borrower previously borrowed the proceeds of $3,640,000 aggregate original principal amount The Industrial Development Authority of the County of Pima Charter School Revenue Bonds (Carpe Diem Collegiate High School Project), Series 2006 (the “Series 2006 Bonds”) to, among other things, finance or refinance the costs of acquiring, constructing, improving and equipping, as applicable, charter school facilities located at 3777 West 22nd Lane, Yuma, Arizona (the “Series 2006 Facilities”), which are currently used by the Borrower in connection with operation of the School; and WHEREAS, the Borrower plans to acquire, construct, improve and equip, as applicable, land, buildings and related amenities located at the southeast corner of West 16th Street and Avenue C in Yuma, Arizona (the “Series 2025 Facilities”), for use by the Borrower in connection with operation of the School; and WHEREAS, the Borrower has requested that the Authority issue its revenue bonds for the purpose of assisting the Borrower in financing or refinancing, as applicable, all or a portion of the costs of acquiring, constructing, improving and equipping, as applicable, the Series 2006 Facilities and the Series 2025 Facilities; and WHEREAS, in furtherance of the purposes and interests of the Authority under the Act, the Authority proposes to issue one or more series of its tax-exempt and/or taxable Charter School Revenue 2 1104447276\4\AMERICAS Bonds and/or Charter School Revenue Refunding Bonds (Desert View Middle School Project), Series 2025 (the “Series 2025 Bonds”), in an aggregate original principal amount of not to exceed $22,000,000, the proceeds of which will be loaned, in one or more loans, to the Borrower to (i) finance or refinance, as applicable, all or a portion of the costs of acquiring, constructing, improving and equipping, as applicable, the Series 2006 Facilities, by refunding the Series 2006 Bonds, and the Series 2025 Facilities; (ii) pay capitalized interest on a portion of the Series 2025 Bonds; (iii) fund any required reserve funds, and (iv) pay expenses relating to issuance of the Series 2025 Bonds (collectively, the “Series 2025 Project”); and WHEREAS, the Series 2025 Bonds will be issued pursuant to one or more indentures of trust (individually or collectively, the “Indenture”), between the Authority and BOKF, NA, as trustee (the “Trustee”), and the proceeds of the Series 2025 Bonds will be loaned to the Borrower pursuant to one or more loan agreements (individually or collectively, the “Loan Agreement”), between the Authority and the Borrower; and WHEREAS, the Series 2025 Bonds will be payable from the trust estate established under the Indenture, which will include, among other things, (a) payments of principal of and interest on one or more promissory notes to be executed by the Borrower (individually or collectively, the “Promissory Note”) and assigned to the Trustee, (b) a Deed of Trust, Security Agreement, Assignment of Rents and Leases, and Fixture Filing to be executed by the Borrower, granting the Trustee a first priority lien on and security interest in the Borrower’s fee interest in the Series 2025 Facilities (the “Deed of Trust”), and (c) certain funds established under the Indenture and held by the Trustee; and WHEREAS, the Series 2025 Bonds will be sold by D.A. Davidson & Co., as underwriter (the “Underwriter”), pursuant to one or more bond purchase agreements (individually or collectively, the “Bond Purchase Agreement”), among the Authority, the Borrower and the Underwriter, and the Underwriter will distribute to investors one or more preliminary limited offering memoranda (individually or collectively, the “Preliminary Limited Offering Memorandum”), which, together with certain changes thereto, will become the final limited offering memorandum or final limited offering memoranda, relating to the Series 2025 Bonds and describing the transaction (individually or collectively, the “Limited Offering Memorandum”); and WHEREAS, there have been prepared and presented to the Board of Directors of the Authority substantially final forms of the following documents which the Authority proposes to approve or authorize (collectively, the “Documents”): (a) the Indenture, including the initial forms of the Series 2025 Bonds; (b) the Loan Agreement, including the form of the Promissory Note; (c) the Deed of Trust; (d) the Bond Purchase Agreement; and (e) the Preliminary Limited Offering Memorandum. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of The Industrial Development Authority of the County of Maricopa, as follows: Section 1. Ratification of Actions. All actions (not inconsistent with the provisions of this Resolution) heretofore taken by or at the direction of the Authority and its directors, officers, counsel, 3 1104447276\4\AMERICAS advisors, or agents directed toward the issuance and sale of the Series 2025 Bonds, are hereby approved and ratified. Section 2. Findings. The Board of Directors finds and determines that the issuance of the Series 2025 Bonds and the making of one or more loans to the Borrower for the purpose of financing and/or refinancing all or a portion of the cost of the Series 2025 Project and the costs and expenses incidental thereto, are in furtherance of the purposes and interests of the Authority and the Act and are in the public interest, and that the Series 2025 Project will constitute a “project” within the meaning of the Act. Section 3. Authorization and Terms of Series 2025 Bonds. The Series 2025 Bonds, which shall be named as set forth herein or as otherwise set forth in the Indenture, are hereby approved and authorized to be issued pursuant to a plan of finance in an aggregate principal amount of not to exceed $22,000,000, in one or more series, to be dated, to mature (no later than 40 years after their date of issuance), to bear interest (not in any event to exceed 10.0 percent per year), to be subject to redemption, to be payable as to principal and interest, and with such other terms, all as provided in the executed Indenture and the Bond Purchase Agreement. Section 4. Special Limited Obligations. The Series 2025 Bonds shall be payable solely from the property held and receipts and revenues received by or on behalf of the Authority pursuant to the Indenture and the Loan Agreement. Nothing contained in (a) this Resolution, (b) the Documents, or (c) any other agreement, certificate, document, or instrument executed in connection with the issuance of any of the Series 2025 Bonds shall be construed as obligating the Authority (except as a special limited obligation to the extent provided in such documents or instruments), or obligating the County or the State, to pay the principal of or premium, if any, or interest on the Series 2025 Bonds, or as incurring a charge upon the general credit of the Authority, the County or the State, nor shall the breach of any agreement contemplated by this Resolution, the Documents, or any other instrument or documents executed in connection herewith or therewith impose any charge upon the general credit of the Authority, the County or the State. The Authority has no taxing power. Section 5. Other Bonds. Prior to the issuance of the Series 2025 Bonds, the Authority has or will have issued, and subsequent to the issuance of the Series 2025 Bonds, the Authority may issue, bonds in connection with the financing of other projects (the “Other Bonds”). Any pledge, mortgage, or assignment made in connection with the Other Bonds shall be protected, and any funds pledged or assigned for payment of principal of or premium, if any, or interest on the Other Bonds shall not be used for the payment of principal of or premium, if any, or interest on the Series 2025 Bonds. Any pledge, mortgage, or assignment made in connection with the Series 2025 Bonds shall be protected, and no funds pledged or assigned for the payment of the Series 2025 Bonds shall be used for the payment of principal of or premium, if any, or interest on the Other Bonds. Section 6. Conditions. The Series 2025 Bonds shall not be issued unless and until: (a) The Board of Supervisors of the County has approved the issuance of the Series 2025 Bonds. (b) The Arizona Attorney General does not disapprove the issuance of the Series 2025 Bonds in the manner contemplated by Arizona Revised Statutes § 35-721. (c) All requirements of the Code applicable to the Series 2025 Bonds must be satisfied prior to closing. 4 1104447276\4\AMERICAS (d) On or prior to closing, the Authority shall receive an opinion from Squire Patton Boggs (US) LLP, as bond counsel (the “Bond Counsel”), in a form acceptable to the Authority, to the effect that interest on any tax-exempt series of the Series 2025 Bonds will be exempt from federal and State income taxes. (e) On or prior to closing, the Borrower shall deliver an opinion or opinions, addressed and in form acceptable to the Authority, to the effect that any offering materials distributed in connection with the offer and sale of the Series 2025 Bonds are correct and complete in all material respects, and do not contain any untrue statements of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (f) If the Series 2025 Bonds are to be offered publicly, the Authority must either (i) receive evidence of an investment grade rating on the Series 2025 Bonds from a nationally recognized rating agency or (ii) receive investment letters from the initial purchaser(s) (or the equivalent representations from the Underwriter) in form and substance satisfactory to the Authority’s legal counsel and any subsequent transfers of the Series 2025 Bonds must be limited to “accredited investors” within the meaning of Rule 501 of Regulation D or “qualified institutional buyers” within the meaning of Rule 144A, promulgated under the Securities Act. (g) The Authority, its officers and directors, and the County, must be provided with full indemnification in connection with the issuance and sale of the Series 2025 Bonds, in form and substance satisfactory to the Authority’s legal counsel, from a credit-worthy source acceptable to the Authority. (h) Legal counsel to the Authority must receive such documents, legal opinions, certificates and other proceedings as are necessary and advisable to evidence compliance by the Borrower, the Underwriter and other financing participants with the Authority’s policies and procedures and applicable federal and State laws. (i) Prior to closing, the Borrower shall make arrangements satisfactory to the Authority as to the payment of the Authority’s administrative fee. (j) Prior to closing, the Borrower must submit final copies of all the required legal opinions, certificates, documents and other proceedings required herein. All legal opinions, certificates, documents and other proceedings will be in compliance with the provisions hereof only if they are in all material respects satisfactory to the Authority’s legal counsel as to which the legal counsel shall act reasonably. Section 7. Authority Documents; Authority’s Signatures; Additional Documents. The forms, terms, and provisions of each of the Documents, in the forms of such Documents (including the exhibits thereto) presented to this meeting, are hereby approved, with such insertions, deletions, and changes as are approved by the officers authorized to execute the Documents (which approval will be conclusively established by their execution and/or delivery thereof). Upon satisfaction of the conditions set forth in Section 6 hereof, the Authority’s President, Vice President, Secretary/Treasurer and Executive Director of the Authority (each an “Authorized Officer”) are each hereby authorized to execute and deliver each of the Documents and any and all additional agreements, certificates, documents and other instruments, in forms satisfactory to the Authority’s legal counsel, to carry out the purposes and intent of this Resolution or relating to the issuance of the Series 2025 Bonds, including a tax certificate and any and all documents required under the Code or the Act, or, with respect to any of the Documents not calling for execution by the Authority, to deliver such Documents, with respect to any one or more series of the Series 2025 Bonds. From and after the execution and/or delivery of 5 1104447276\4\AMERICAS each of the Documents, the Authorized Officers, the agents and the employees of the Authority are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents, certificates and assignments as may be necessary to carry out and comply with the provisions of each of the Documents (as executed and delivered), including from time to time, to execute, on behalf of the Authority any subsequent amendments, waivers or consents entered into or given in accordance with the Documents. Section 8. Sale of Series 2025 Bonds; Authentication. The sale of the Series 2025 Bonds to the Underwriter pursuant to the terms and provisions of the Bond Purchase Agreement is hereby authorized and approved and each Authorized Officer is hereby authorized to execute and deliver the Bond Purchase Agreement. Any Authorized Officer is hereby authorized to execute and deliver to the Trustee a written order of the Authority for the authentication and delivery of the Series 2025 Bonds by the Trustee to the Underwriter. Section 9. Further Actions. The Authorized Officers, the agents and the employees of the Authority, upon satisfaction of the conditions set forth in Section 6 hereof, shall take all action necessary or reasonably required to carry out, give effect to and consummate the transactions contemplated hereby, including without limitation, the execution and delivery of the closing and other documents required to be delivered in connection with the issuance, sale and delivery of the Series 2025 Bonds. Section 10. Open Meeting Laws. It is found and determined that all formal actions of the Authority and its Board of Directors concerning and relating to the adoption of this Resolution were adopted in an open meeting and that all deliberations that resulted in those formal actions were in meetings open to the public, in compliance with all legal requirements of the State and the Authority. Section 11. Limited Offering Memorandum. The lawful use and distribution by the Underwriter of the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum relating to the original issuance of the Series 2025 Bonds and any amendments thereof or supplements thereto, are hereby authorized. Except for information contained in the Preliminary Limited Offering Memorandum and Limited Offering Memorandum under the headings “THE ISSUER” and “LITIGATION – The Issuer,” as such information relates to the Authority, the Authority has not confirmed, and assumes no responsibility for, the accuracy, sufficiency or fairness of any statements in the Preliminary Limited Offering Memorandum and Limited Offering Memorandum or any amendments thereof or supplements thereto, or in any reports, financial information, offering or disclosure documents or other information relating to the Series 2025 Project, the Borrower, or the history, businesses, properties, organization, management, financial condition, market area or any other matter relating to the Borrower, the Series 2025 Project or otherwise contained in the Preliminary Limited Offering Memorandum and Limited Offering Memorandum. Section 12. Irrepealability. After the Series 2025 Bonds are delivered by the Authority to the Underwriter upon receipt of payment therefor, this Resolution shall be and remain irrepealable until the Series 2025 Bonds and interest thereon shall have been fully paid, canceled, and discharged. Section 13. No Personal Liability. The Authorized Officers, members of the Board of Directors and any employee or agent of the Authority shall not be subject to any personal liability or accountability by reason of the issuance of the Series 2025 Bonds. The liability of the Authority with respect to the Documents, or any other document executed in connection with the transactions contemplated hereby, shall be limited as provided in the Act and the Documents. 6 1104447276\4\AMERICAS Section 14. Severability. If any section, paragraph, clause, or provision of this Resolution shall, for any reason, be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause, or provision shall not affect any of the remaining provisions of this Resolution. Section 15. Waiver. Any provisions of the Authority’s Bylaws, procedural guidelines, or prior resolutions inconsistent herewith are waived to the extent only of such inconsistency. This waiver shall not be construed as repealing any such Bylaws, procedural guidelines, or resolution or any part thereof. Section 16. Headings. Subject headings included in this Resolution are included for purpose of convenience only and shall not affect the construction or interpretation of any of its provisions. Section 17. Notice. Notice of Arizona Revised Statutes Section 38-511 is hereby given. The provisions of that statute by this reference are incorporated herein to the extent of applicability to matters contained herein under the laws of the State. Section 18. Resolution Not to be Construed as Providing Advice Concerning Municipal Securities. None of this Resolution, any of the Documents or any action taken by the Authority, any member of the Board of Directors, the Executive Director or the Authority’s legal counsel in connection with issuance of the Series 2025 Bonds is intended to provide, and shall not be construed as providing, advice of any kind to the Borrower with respect to the issuance of the Series 2025 Bonds for purposes of 15 United States Code Section 78o-4(e)(4)(A)(i). The Authority is a conduit issuer and none of the Authorized Officers, the Board of Directors, the Authority’s employees or the Authority’s legal counsel is acting or will act as a municipal advisor, financial advisor or fiduciary to any party involved in the issuance of the Series 2025 Bonds. Section 19. Effective Date. This Resolution shall be effective immediately.