The Oconee County Industrial Development Authority on Wednesday issued $127.8 million in tax-exempt revenue bonds for construction of Presbyterian Village Athens on U.S. 441 at Hog Mountain Road.
The issuance of the bonds followed a Nov. 15 ruling by Oconee County Superior Court Judge Lawton E. Stephens that the Authority had properly entered into an agreement with Westminster Presbyterian Homes Inc. of Quitman to pay off the bonds.
Stephens ruled that the bonds are "limited obligations" payable solely by Westminster Presbyterian Homes Inc. or by proceeds of the bonds themselves and that the bonds do not obligate the spending of any state or county tax revenue.
The Quitman company plans to use the revenue from the bonds to construct a continuing care retirement community consisting of cottages, villas, apartment homes and a health center.
The county issued building permits last week for the health center and for the apartment homes.
Construction of the health center is expected to be completed by August of 2020, while the apartment homes should be completed by April of 2020, according to the permits issued by the county Planning and Code Enforcement Department.
According to documents prepared for the issuance of the bonds, the $127,840,000 in tax-exempt bonds will be part of $147,840,000 in financing for Presbyterian Village Athens.
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An addition $3.8 million will come from fundraising, $10 million will come from entrance fee deposits, and $5 million will come from a loan from Presbyterian Homes of Georgia to the project.
The bonds are broken into five series, with $42.8 million issued in bonds that will retire in 2053, $10 million in bonds that will retire in 2028, $40 million in bonds that come due in 2021, and $35 million in bonds due in 2022.
Jerry Peterson, bond counsel for Presbyterian Village Athens, told me in a telephone conversation yesterday that the United States Department of Agriculture has agreed to provide $40 million in financing that will be used to retire the $40 million in bonds that will come due in 2021. The USDA funding is for the health center.
Entrance fees will be used to retire the $35 million in bonds that come due in 2022, he said.
Peterson said the $35 million in bonds were purchased by SunTrust Bank, the $40 million in bonds were purchased by Synovus Financial Corporation, and the remaining bonds were issued to the general public.
The bond documents, provided to me by Oconee County Board of Commissioners Chair John Daniell, list $129,589,120 in construction and equipment costs for Presbyterian Village Athens.
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An additional $12,485,183 is budgeted for interest costs during construction.
The documents show $3,763,060 in underwriting, banking and professional expenses associated with the project financing.
The final cost is working capital, listed at $2,002,635.
Total cost of the project is $147,840,000--the same amount as the funding.
The state of Georgia filed suit against the Oconee County Industrial Development Authority and Westminster Presbyterian Homes Inc. on Oct. 24, or two days after the Authority voted to sell the bonds for Presbyterian Village Athens.
The review and ruling by the Superior Court is a required part of the bond sales.
Stephens, as expected, ruled that the "The Bonds do not constitute a debt of the State of Georgia or Oconee County, and do not directly, indirectly, or contingently obligate said State or County to levy or to pledge any form of taxation whatsoever for the payment of the Bonds."
The judge ruled that the bonds are payable as specified by the loan agreement between the Authority and Westminster Presbyterian Homes.
The bonds can be retired by payments from Westminster Presbyterian Homes to the Authority or from the bonds themselves.
The county issued two building permits for Presbyterian Village Athens on Dec. 14.
One was for a three-story apartment complex with 71 units.
Total cost for the 156,986 square foot building was listed in the permit as $25.2 million.
The other was for a three-story building that will include memory care units, an indoor pool, an auditorium, a chapel, a commercial kitchen, and exercise rooms.
Total cost for the 171,499 square foot building, which is the health center, was listed as $41.1 million.
The permits show that the county has set sewer capacity for the entire project at 67,474 gallons per day, and Presbyterian Homes of Georgia paid $641,003 to the county in 2016 to hold that capacity.
Westminster Presbyterian Homes paid $40,745 to the county on Oct. 4 of 2018 in fees for future water service.
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