INCITO SCHOOLS 2024 - SUMMARY LETTER.PDF
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8687 East Via de Ventura, Suite 306 Scottsdale, Arizona 85258 www.mcida.com September 9, 2024 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $10,000,000 The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Incito Schools Project), Series 2024 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 September 17, 2024, 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, Incito Schools (“Borrower”), is an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). The Borrower operates an Arizona public charter school known as “Incito Schools” that currently serves students in grades kindergarten through 8 pursuant to a charter contract with the Arizona State Board of Charter Schools. The Borrower has been serving Arizona students since 2013. PROJECT The Borrower will use the proceeds of the Bonds to pay a portion of the costs of acquiring, renovating, improving and equipping charter school facilities located at 877 North Sarival Avenue, Goodyear, Arizona (the “Project”). The Borrower currently leases the Project campus it will be acquiring from the landlord. The Project is in Supervisorial District No. 5. 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. Board of Supervisors Board of Directors September 9, 2024 Page 2 TAX EXEMPT FINANCING On or prior to closing, the Authority will receive an opinion from Squire Patton Boggs (US) LLP, as bond counsel, to the effect that interest on any tax-exempt series of the Bonds will be exempt from federal and State income taxes. FINANCING PARTICIPANTS The major participants in the financing are as follows: Authority: The Industrial Development Authority of the County of Maricopa Authority Counsel: General Counsel Bond Counsel: Squire Patton Boggs (US) LLP Applicant/Borrower: Incito Schools Applicant/Borrower Counsel: Warren Charter Law, PLC Underwriter: Herbert J. Sims & Co., Inc. Underwriter’s Counsel: Ice Miller Trustee: U.S. Bank Trust Company, National Association PRINCIPAL FINANCING DOCUMENTS Document Parties Indenture of Trust, with form of Bonds Authority and Trustee Loan Agreement Authority and Borrower Series 2024 Promissory Note Borrower Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing Borrower Limited Offering Memorandum Borrower Bond Purchase Agreement Authority, Borrower and Underwriter PLAN OF FINANCING The Authority will issue the Bonds under and pursuant to the terms and provisions of the Indenture of Trust in one or more tax-exempt or taxable series in the aggregate principal amount of not to exceed $10,000,000. The Authority will loan the Bond proceeds to the Borrower pursuant to the Loan Agreement. The Borrower will be obligated to make loan repayments in amounts and at such times as required to pay principal and interest on the Bonds on their due dates under the Series 2024 Promissory Note. Board of Supervisors Board of Directors September 9, 2024 Page 3 The obligations of the Borrower to make payments under the Loan Agreement will be secured by the Deed of Trust that will encumber the Project. The Bonds will be sold pursuant to a Bond Purchase Agreement between the Authority and the Underwriter. The Bonds will not receive a rating from any rating agency. The Bonds will be offered by the Underwriter for sale in a limited public offering pursuant to the Limited Offering Memorandum. Finally, a tax certificate 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. FINAL APPROVAL At its meeting on September 17, 2024, 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. 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 September 25, 2024, 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. 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.