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HomeMy WebLinkAbout9/20/2023 - Agendas A. CALL TO ORDER 1. Roll Call Vice Chairman Cagle B. NEW BUSINESS 1. Resolution consenting to assumption of residential care facility revenue and re-funding bonds (Richfield Living), Series 2019B Webster Day, Esq. C. CLOSED SESSION 1. It is proposed that the Authority meet in closed session pursuant to Section 2.2-3711(A)(5) of the Code of Virginia, for discussion concerning a prospective business or industry or the expansion of an existing business or industry where no previous announcement has been made of the business' or industry's intent in locating or expanding its facilities in the community. The potential location or expansion may possibly occur in the Hollins magisterial district. Vice Chairman Cagle D. ADJOURNMENT Vice Chairman Cagle E. NEXT SCHEDULED MEETING October 5, 2023 AGENDA The Economic Development Authority of Roanoke County Wednesday, September 20 at 9:00 a.m. ECONOMIC DEVELOPMENT AUTHORITY OF ROANOKE COUNTY, VIRGINIA Joint Request Regarding Assignment and Assumption of Series 2019 Bond Documents Richfield Living and Friendship Foundation provide the following briefing points in connection with their joint request that the Economic Development Authority of Roanoke County, Virginia (“EDA”), consent to the assignment to, and assumption by, Friendship Foundation of Richfield Living’s obligations under its Series 2019 financing through the EDA. • Richfield Living (“Richfield”) owns and operates senior living facilities in the County, near Salem, as well as in Roanoke City. • Richfield financed/refinanced the County facilities in 2019 with bonds (the “Series 2019 Bonds”) issued through the EDA. • Richfield financed the City facilities in 2020 with bonds issued through the City’s EDA. That transaction is not involved here. • Richfield has determined to sell its County and City facilities to unrelated third parties. In the case of the County facilities, the purchaser is Friendship Foundation (“Friendship”), a nonprofit Virginia nonstock corporation. • Similar to Richfield, Friendship provides a wide array of senior services including independent and assisted living, memory-support, skilled nursing, and rehabilitative care. Friendship’s principal senior living facilities are located in the County (Friendship South, 5647 Starkey Rd.), Roanoke City (Friendship North, 367 Hershberger Rd.), and the City of Salem (Friendship Salem Terrace, 1851 Harrogate Dr.). • Friendship and Richfield have entered into a purchase agreement for the County-facilities and are working towards closing on the transaction on or about October 1, 2023. • As part of the transaction, Friendship intends to assume certain Richfield Series 2019 indebtedness, and the Series 2019 bondholders, acting in concert with the bond trustee, have agreed to this debt assumption. • At the meeting currently scheduled for September 20, 2023, the EDA will be requested to consent to this transfer of the County-facilities and related debt assumption, as and to the extent required by the Series 2019 bond documents. • The assumption will not disturb existing provisions of the underlying documents with respect to the annual fee paid to the EDA, the EDA’s consent rights, or the borrower’s indemnification obligations, which will become binding upon Friendship following the assumption and assignment. Friendship and Richfield join in requesting that the EDA approve the consent resolution as and to the extent required by the underlying Series 2019 bond documents -1- ECONOMIC DEVELOPMENT AUTHORITY OF ROANOKE COUNTY, VIRGINIA RESOLUTION CONSENTING TO ASSUMPTION OF RESIDENTIAL CARE FACILITY REVENUE AND RE- FUNDING BONDS (RICHFIELD LIVING), SERIES 2019 WHEREAS, pursuant to a Bond Trust Indenture, dated as of April 1, 2019 (the “Original Indenture”), between the Economic Development Authority of Roanoke County, Virginia (the “Issuer”), and UMB Bank, National Association (successor to Wilmington Trust, National Association), as bond trustee (the “Bond Trustee”), the Issuer issued its $93,520,000 Residential Care Facility Revenue and Refunding Bonds (Richfield Living), Series 2019 (the “Series 2019 Bonds”), and used the proceeds to make a loan (the “Loan”) to Richfield Living, a nonprofit Virginia nonstock corporation (the “Original Borrower”), pursuant to that certain Loan Agreement, dated as of April 1, 2019 (the “Original Series 2019 Loan Agreement”), between the Issuer and the Original Borrower; WHEREAS, the Original Borrower entered into that certain Master Trust Indenture, dated as of April 1, 2019 (as altered, amended, modified or supplemented from time to time, the “Master Indenture”), among UMB Bank, National Association (successor to Wilmington Trust, National Association), as master trustee (the “Master Trustee”), and an obligated group (the “Richfield Obligated Group”), originally consisting of the Original Borrower and Richfield Foundation, a nonprofit Virginia nonstock corporation (“Richfield Foundation”); WHEREAS, to evidence its obligation to make payments pursuant to the Original Series 2019 Loan Agreement to repay the Loan, the Original Borrower executed that certain Promissory Note designated the Series 2019 Obligation, dated April 24, 2019, made payable to the Issuer and endorsed by the Issuer to the Bond Trustee, in the aggregate principal amount of $93,520,000 (the “Series 2019 Obligation”); WHEREAS, the Series 2019 Bonds are limited obligations of the Issuer and (except to the extent that payment thereof may be made from the proceeds of the sale of the Series 2019 Bonds or any investment income therefrom) are payable solely from the revenues received pursuant to the Series 2019 Obligation, issued under the Master Indenture, as supplemented by a Supplemental Indenture for Series 2019 Bond Obligation, dated as of April 1, 2019 (the “Series 2019 Supplement”), between the Richfield Obligated Group and the Master Trustee; WHEREAS, the Original Borrower used the proceeds of the Series 2019 Bonds to, among other things, (1) refinance certain debt previously incurred by the Original Borrower to acquire, construct and equip capital improvements at its senior living community known as “Richfield Living” (the “Community”) in Roanoke County, Virginia (the “County”), (2) finance the acquisition, construction, demolition, renovation, and equipping of various buildings at the Community, including the construction of new independent living units, the reconfiguration of a transitional care facility, and a replacement nursing facility, (3) fund a debt service reserve fund for the Series 2019 Bonds, and (4) finance funded interest, working capital, and costs of issuance incurred in connection with the foregoing projects and the costs of issuance of the Series 2019 Bonds; -2- WHEREAS, the Series 2019 Obligation is secured by a security interest in certain real and personal property of the Richfield Obligated Group pursuant to an Amended and Restated Deed of Trust, Assignment and Security Agreement, dated as of January 1, 2020 (the “Richfield Deed of Trust,” amending and restating that certain Deed of Trust, Assignment and Security Agreement, dated as of April 1, 2019), made by the Original Borrower to the trustees named therein for the benefit of the Master Trustee, and pursuant to the Richfield Deed of Trust, the Original Borrower has (A) conveyed a first mortgage lien on (i) the majority of the real property on which the Community is located, together with the related land, buildings, improvements and fixtures thereon, subject to “Permitted Liens” (as defined in the Master Indenture), and (B) granted a first priority security interest in the “Equipment” (as defined in the Master Indenture), subject to the right of the Richfield Obligated Group to transfer certain Equipment free of the security interest created by the Richfield Deed of Trust under certain circumstances; WHEREAS, the Original Borrower has represented to the Issuer that due to decreasing net revenues available to the Richfield Obligated Group and the occurrence of various defaults by the Original Borrower under the “Financing Instruments” (as defined in the Original Series 2019 Loan Agreement), the Original Borrower, with the consent and approval of the Bond Trustee and the Master Trustee (in consultation with the holders of the Series 2019 Bonds), has determined to discontinue its operations at the Community and to sell or convey its interest in the Community to Friendship Foundation, a nonprofit Virginia nonstock corporation (the “Successor Borrower”) under the terms and conditions and as set forth in that certain “Asset Purchase Agreement” between the Original Borrower and the Successor Borrower dated July 20, 2023; WHEREAS, pursuant to Section 5.2 of the Original Series 2019 Loan Agreement, the Original Borrower agreed that it will not, among other things, transfer to another corporation all or substantially all of its assets and thereafter dissolve except as provided under Section 3.09 of the Master Indenture; WHEREAS, Richfield Foundation has withdrawn from the Richfield Obligated Group, and the Original Borrower presently is the only member thereof; and WHEREAS, the Original Borrower and the Successor Borrower have requested that the Issuer, to the extent required by the several Financing Instruments for the Series 2019 Bonds, consent to (a) the conveyance of the Original Borrower’s interest in the Community to the Successor Borrower and (b) the assignment to, and assumption by, the Successor Borrower of the Original Borrower’s rights, benefits and obligations in, to and under the Master Indenture, the Original Series 2019 Loan Agreement, the Series 2019 Supplement, the Series 2019 Obligation and the other Financing Instruments (collectively, the “Transaction”); NOW, THEREFORE, BE IT RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY OF ROANOKE COUNTY, VIRGINIA: -3- 1. Based on the representations of the Original Borrower and Successor Borrower, the Issuer finds and determines that the Transaction will be in the public interest and will promote the commerce, safety, health, welfare, convenience or prosperity of the Commonwealth and the County, and their inhabitants and in particular will promote the provision of health care facilities and other facilities for the residence and care of the aged in accordance with their special needs. 2. The Issuer consents to the Transaction, solely to the extent the several Financing Instruments for the Series 2019 Bonds make the Issuer’s consent a condition to or requirement for the Transaction. Nothing in this resolution is intended by the Issuer to be an endorsement to current or prospective owners of the Series 2019 Bonds or any other persons of the creditworthiness of the Community or the Successor Borrower or, except as expressly stated in this resolution, the appropriateness of the Transaction. 3. The Chairman or Vice Chairman of the Issuer, either of whom may act, are each hereby authorized and directed to execute a written consent to an Assignment and Assumption Agreement (the “Assignment”), between the Original Borrower and the Successor Borrower, to evidence the Issuer’s consent as set forth above. The Assignment will provide that the Issuer is a direct beneficiary of the Successor Borrower’s obligations under the Assignment , to the same effect as set forth in the Financing Instruments for the Series 2019 Bonds, mutatis mutandis. 4. Each officer of the Issuer is authorized to execute and deliver on behalf of the Issuer such further instruments, documents or certificates, and to do and perform such other things and acts, as they may deem necessary or appropriate to carry out the transactions authorized by this Resolution, and all of the foregoing previously done or performed by such officers of the Issuer are in all respects approved, ratified and confirmed. 5. All costs and expenses of the Issuer, including the fees and expenses of its counsel, in connection with the Transaction shall be paid promptly by the Successor Borrower. Following the execution and delivery of the Assignment, the Successor Borrower shall continue to pay the Issuer’s annual administrative fee in the amounts required by the Original Series 2019 Loan Agreement. 6. Upon execution of the Assignment, the Series 2019 Bonds will be limited obligations of the Issuer payable solely from the revenues and receipts derived by the Issuer from the Successor Borrower, including funds of the Successor Borrower that are pledged to payment of the Series 2019 Bonds. Neither the faith and credit nor the taxing power of the Commonwealth or any political subdivision thereof, including the County and the Issuer, will be pledged to the payment of the principal of, premium, if any, or interest on the Series 2019 Bonds, or other costs incident thereto. No covenant, condition or agreement in the Series 2019 Bonds, or in any financing instrument executed and delivered in connection therewith shall be deemed to be a covenant, agreement or obligation of any past, present or future director, officer, employee or agent of the Issuer in his or her individual capacity, and neither the directors of the Issuer nor any officer or employee thereof that executed the Series 2019 Bonds, or any other financing document or instrument shall be personally liable thereon or subject to any personal liability or accountability by reason of the execution thereof. The Original Series 2019 Loan Agreement provides that the Successor Borrower shall indemnify and save harmless the Issuer, its officers, directors, employees -4- and agents from and against all liabilities, obligations, claims, damages, penalties, fines, losses, costs and expenses in any way connected with the Series 2019 Bonds. 7. All other acts of the officers of the Issuer which are in conformity with the purposes and intent of this Resolution are approved and confirmed. 8. This Resolution takes effect immediately upon adoption. -5- CERTIFICATE The undersigned Secretary of the Economic Development Authority of the Roanoke County, Virginia (the “Authority”), hereby certifies that the foregoing is a true, correct and complete copy of a resolution adopted by a majority of the Directors of the Authority at a meeting duly called and held on September 20, 2023, in accordance with law, and that such resolution has not been repealed, revoked, rescinded or amended but is in full force and effect on the date hereof. WITNESS the following signature and seal of the Authority as of __________ ___, 2023. Secretary [SEAL]