PRESCOTT VALLEY CHARTER 2024 - SUMMARY LETTER.PDF
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Squire Patton Boggs (US) LLP 2325 E. Camelback Road, Suite 700 Phoenix, Arizona 85016 O +1 602 528 4000 F +1 602 253 8129 squirepattonboggs.com 1099362033\1\ November 16, 2023 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $17,000,000 – The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Social Bonds – Prescott Valley Charter School Project), Series 2024 Ladies and Gentlemen: At the Board of Directors’ meeting of The Industrial Development Authority of the County of Maricopa (the “Authority”) on December 5, 2023, the Authority Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the bonds described above (the “2024 Bonds”). This letter provides a summary of the proposed financing. 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”). THE APPLICANT/BORROWER The Applicant/Borrower, Prescott Valley Charter School (“Borrower”) 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 “Code”). The Borrower operates a charter school known as “Prescott Valley School” (the “School”) established under Arizona Revised Statutes Title 15, Chapter 1, Article 8, as amended (the “Charter School Act”). THE PROJECT The Borrower will use the proceeds of the 2024 Bonds to finance or refinance the costs of acquiring, constructing, improving, equipping and operating, as applicable, (i) charter school facilities located at 9451 East Lorna Lane, 9500 East Lorna Lane and 9520 East Lorna Lane in Prescott Valley, Arizona (collectively, the “Lorna Lane Campus”), and (ii) charter school facilities located at 9030 East Florentine Road in Prescott Valley, Arizona (the “Florentine Road Campus” and, together with the Lorna Board of Supervisors Board of Directors November 16, 2023 Page 2 1099362033\1\ Lane Campus, the “Facilities”). The Facilities will be owned and operated by the Borrower for use in connection with its charter school operations. 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 2024 Bonds. TAX EXEMPT FINANCING On or prior to closing, Maricopa IDA 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 2024 Bonds will be exempt from federal and State income taxes. FINANCING PARTICIPANTS The major participants in the financing are as follows: Issuer: The Industrial Development Authority of the County of Maricopa Issuer/Bond Counsel: Squire Patton Boggs (US) LLP Borrower: Prescott Valley Charter School Applicant/Borrower Counsel: Warren Charter Law, PLC Underwriter: RBC Capital Markets, LLC Underwriter’s Counsel: Ballard Spahr LLP Trustee: U.S. Bank Trust Company, National Association PRINCIPAL FINANCING DOCUMENTS Document Parties Indenture of Trust Authority and Trustee Loan Agreement Authority and Borrower Series 2024 Promissory Note Borrower Deed(s) of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing Borrower Limited Offering Memorandum Borrower Continuing Disclosure Undertaking Borrower Tax Certificate and Agreement Authority and Borrower Board of Supervisors Board of Directors November 16, 2023 Page 3 1099362033\1\ Bond Purchase Agreement Authority, Borrower and Underwriter PLAN OF FINANCING The Authority will issue the 2024 Bonds under and pursuant to the terms and provisions of the Indenture of Trust in one or more tax exempt and taxable series in an aggregate principal amount of not to exceed $17.000.000. The proceeds from the sale of the 2024 Bonds will be loaned by the Authority to the Borrower pursuant to the terms of 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 2024 Bonds on their respective due dates under the Series 2024 Promissory Note. The Series 2024 Promissory Notes will be secured by a pledge of the Pledged Revenues, including state payments derived from operation of the School, and a first-position lien and security interest on the Borrower’s fee title interest in the Facilities pursuant to the Deed(s) of Trust. The 2024 Bonds will be sold pursuant to a Bond Purchase Agreement between the Authority and the Underwriter. The 2024 Bonds will not receive a rating from any rating agency. The 2024 Bonds will be offered by the Underwriter for sale in a limited public offering pursuant to the Limited Offering Memorandum. Finally, the 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 2024 Bonds. FINAL APPROVAL At the Authority Board meeting on December 5, 2023, the Authority Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the 2024 Bonds and related matters. BOARD OF SUPERVISORS APPROVAL Under the provisions of A.R.S. § 35-721.B., the proceedings under which the 2024 Bonds are to be issued by Authority require the approval of the Maricopa County Board of Supervisors. The Maricopa County Board of Supervisors is being requested, at its meeting on December 6, 2023, to act as required by law to adopt a resolution approving the proceedings for the issuance of the 2024 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 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 or any of its obligations shall be construed to constitute an indebtedness of Maricopa County within the meaning of any constitutional or statutory provision. Board of Supervisors Board of Directors November 16, 2023 Page 4 1099362033\1\ LEGAL COUNSEL RECOMMENDATION As bond counsel and legal counsel to the Authority, we have reviewed drafts of the principal financing documents and based upon our review of such and our review of the proceedings to date relating to the proposed issuance of the 2024 Bonds, we believe 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 and Maricopa County Board of Supervisors to act upon, and that the Resolution of the Authority Board authorizing the issuance and sale of the 2024 Bonds and related matters and the Resolution of the Maricopa County Board of Supervisors approving the proceedings under which the 2024 Bonds are to be issued and related matters, are in form and substance acceptable for adoption.