The Apple Valley City Council voted 4-1 on April 10 to adopt a resolution approving private-activity bonds to finance an expansion at the Cobblestone Lake Presbyterian Homes facility, a project the applicant says will add 75 independent-living units, 58 assisted-living units and 20 memory-care units.

City staff described the financing tool as "private activity bonds" or conduit debt issued through the city where repayment is secured by the project's revenues and mortgage rather than by the city. Ron, a city staffer who introduced the item, said the city is not obligated to repay the bonds.

Peter (Pete) Gregory, in-house counsel for Presbyterian Homes, told the council the project responds to local demand: after two earlier phases, the organization's independent-living apartments are "99% occupied." He said the proposed third phase will meet a "very real need for senior housing."

Council members debated the broader policy question of whether the city should continue to issue conduit tax-exempt financing for private projects. Council member Rendell (identified in the meeting as raising policy concerns) and others said the city should schedule a separate policy discussion about continuing the practice and its implications for municipal tax-exempt bond treatment at the federal level. Council members also noted that previous city-financed conduit bonds had been used for local senior housing and other projects in past years.

A motion to adopt the "second amended and restated housing program and issuance and sale of senior housing revenue bond series 2025" carried 4 to 1. City staff reiterated in the meeting record that the bonds are payable only from the borrower's revenues and are backed by the facility's mortgage; the city is not financially liable for repayment.

Ending: Council members asked staff to schedule a policy discussion about the city
pproach to conduit financing at a future informal meeting. The bond resolution was adopted and staff will proceed with the formal issuance steps on the timetable described by bond counsel and applicant representatives.