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John J. Fries T (602) 440-4800 Email: jfries@clarkhill.com Clark Hill 3200 North Central Avenue, Suite 1600 Phoenix, AZ 85012 T (602) 440-4800 F (602) 257-9582 265987106.v2-2/24/22 February 24, 2022 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $11,000,000 – The Industrial Development Authority of the County of Maricopa Variable Rate Revenue Bond (VOS YMCA Project), Series 2022 Ladies and Gentlemen: At the Authority Board meeting on March 8, 2022, the Authority Board will be asked to grant final approval to the financing for the VOS YMCA Project and to adopt a resolution authorizing the issuance and sale of the bond as described above (the “Bond”). This letter provides a summary of the proposed financing. THE AUTHORITY The Authority is an Arizona nonprofit corporation, formed with the permission of 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”), and the Authority is designated by law to be a political subdivision of the State of Arizona. THE APPLICANT/BORROWER The Applicant/Borrower, Valley of the Sun Young Men’s Christian Association (“VOS YMCA”), is an Arizona nonprofit corporation and a tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The VOS YMCA was formed in 1892 and is the oldest nonprofit organization in the State of Arizona. THE PROJECT The Applicant/Borrower will use the proceeds of the Bond to refinance six of its YMCA branches listed below (the “Refinanced Branches”). Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa February 24, 2022 Page 2 Chandler / Gilbert Family YMCA (Chandler) 1655 W. Frye Road Chandler, Arizona 85224 Desert Foothills Family YMCA (Foothills) 34250 N. 60th Street Scottsdale, Arizona 85266 Legacy Foundation Chris -Town YMCA (Chris-Town) 5517 N. 17th Avenue Phoenix, Arizona 85015 Scottsdale / Paradise Valley Family YMCA (Scottsdale) 6869 E. Shea Boulevard Scottsdale, Arizona 85254 Southwest Valley Family YMCA (Goodyear) 2919 N. Litchfield Road Goodyear, Arizona 85395 Watts Family Maryvale YMCA (Maryvale) 3825 N. 67th Avenue Phoenix, Arizona 85033 The proceeds of the Bonds will be used to refinance the outstanding amount of a 2016 commercial bank term loan made by KS StateBank, which was originally in the amount of $18,250,000. The Bond will be sold to KS StateBank in a private placement. As part of the consideration, the KS StateBank will receive a paydown on its existing debt of approximately $3,000,000 from other funds available to the VOS YMCA. The Bank will be granted deeds of trust on the Refinanced Branches to secure repayment of the Bond. The VOS YMCA’s remaining seven branches and 2 camps will not be involved in the financing or pledging any assets of its other branches as security. 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 the Authority’s intention to issue the Bond. FINANCING PARTICIPANTS The major participants in the financing are as follows: Issuer: The Industrial Development Authority of the County of Maricopa Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa February 24, 2022 Page 3 Issuer Counsel: Clark Hill, PLC Applicant/Borrower: Valley of the Sun Young Men’s Christian Association Existing Lender and Bond Buyer: KS StateBank Bond Counsel: Lotzar Law Firm, P.C. Applicant/Borrower Counsel: Lotzar Law Firm, P.C. Special Tax Counsel: Law Office of Perry Israel PRINCIPAL FINANCING DOCUMENTS Document Parties Financing Agreement Borrower, Authority and Bank Bond Authority Investor Letter Bank Loan and Security Agreement (the “Loan Agreement”) Bank and Borrower Deeds of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing (the “Deed of Trust”) Borrower Secured Promissory Note Borrower Tax Certificate and Agreement Authority and Borrower PLAN OF FINANCING The Bond will be issued in one or more tax exempt and taxable series in an aggregate principal amount of not to exceed $11,000,000. The Bond will be issued under and pursuant to the terms and provisions of the Financing Agreement. The proceeds from the sale of the Bond will be loaned by the Lender to the Borrower pursuant to the terms of the Loan Agreement and evidenced by the Promissory Note. Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa February 24, 2022 Page 4 The Borrower will be obligated to make loan repayments in amounts and at such times as required to pay principal and interest on the Bond on the respective due dates. The obligations of the Borrower to make periodic loan repayments as well as to perform the other obligations of the Borrower as set forth in the Loan Agreement will be secured by the Deeds of Trust that will encumber the Branches. KS StateBank is very familiar with the credit and has agreed to purchase the Bond in a private placement upon issuance of the Bond and satisfaction of the closing conditions. Finally, the Tax Certificate and Agreement will be executed by the Authority and Borrower to evidence various agreements aimed at establishing and preserving the tax-exempt status of the Bond. FINAL APPROVAL At the Authority Board meeting on March 8, 2022, the Authority Board will be asked by the Applicant/Borrower to grant final approval to the application for financing and to adopt a resolution authorizing the issuance and sale of the Bond. BOARD OF SUPERVISORS APPROVAL If the Authority Board acts to grant final approval for the financing and to adopt a resolution authorizing the issuance and sale of the Bond, the Maricopa County Board of Supervisors will be requested, at its meeting on March 9, 2022, to act as required by law to adopt a resolution approving the proceedings of the Authority for the issuance of the Bond. Under the provisions of the Act, specifically A.R.S. § 35-721.B., the proceedings under which the Bond of the Authority are to be issued require the approval of the Maricopa County Board of Supervisors for each issuance of bonds. 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 bonds issued by the Authority or for the performance by the Authority of any pledge, mortgage, obligation or agreement of any kind undertaken by the Authority and bonds of the Authority or any of its agreements or obligations shall not be construed to constitute an indebtedness of Maricopa County within the meaning of any constitution or statutory provision. Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa February 24, 2022 Page 5 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 Bond will be issued in March, 2022. At the time the Bond is issued, it is anticipated the designated Bond Counsel will deliver its written opinion to the effect the Bond have been validly issued and that as to the portion of the Bond designated as being tax-exempt, the interest on the Bond is exempt from federal and Arizona income taxation and that as to the portion of the Bond that are not designated as tax-exempt, the interest on such Bond will be exempt from Arizona income taxation. LEGAL COUNSEL RECOMMENDATION As counsel to the Authority, we believe that the financing documents and proceedings will be in substantial conformance with the policies and guidelines of the Authority in both form and substance acceptable for the Authority Board and Maricopa County Board of Supervisors to act upon and that the Resolution presented to the Authority Board relating to authorizing the issuance and sale of the Bond, and related matters, and the Resolution of the Maricopa County Board of Supervisors will be asked to adopt are in form and substance acceptable for the adoption.