Woodbury Council approves up-to $60 million tax-exempt conduit bonds for Math and Science Academy campus

The Woodbury City Council voted to approve a city resolution authorizing up to $60,000,000 in tax-exempt conduit revenue bonds to finance land acquisition, construction of a new Math and Science Academy upper campus at 9025 Bailey Road and renovation of an existing building that the applicant plans to convert to an elementary school.

The bond issuance uses the city’s conduit financing authority so the borrower — MSA Building Company and Math and Science Academy — will sell tax-exempt bonds to investors. City staff and bond counsel told the council the city will not be legally responsible for debt-service payments; the applicant will pay issuance costs and a city fee estimated at about $75,000 that, per staff, will go to the city’s general fund.

City staff presented the proposal and recommended adoption of the attached bond resolution. Janelle (city staff member) described the requested uses: acquisition of the site at 9025 Bailey Road, construction of the new upper campus building, renovation of an existing building (which will require a separate amended conditional use permit), and payment of issuance costs. Bond counsel Sofia Leike explained the legal structure: issuance under federal tax code section 145 as conduit revenue bonds and a not-to-exceed principal amount of $60,000,000. Leike said the city is required to hold a public hearing before adopting the resolution and noted the offering documents will include the borrower’s financial information rather than the city’s since the bonds are conduit in nature. Leike said the parties expected to continue negotiating transaction terms and to close the bond transaction in late March.

Council members asked clarifying questions about the city’s exposure, the fee destination, and whether the issuance would affect the city’s ability to issue bank-qualified debt. Staff and bond counsel told council members the city would incur no obligation for the bonds, the fee would typically be deposited to the general fund unless the council enacted a budget amendment to direct it elsewhere, and the size of the issuance places it in a non-bank-qualified category, which staff said would not affect other planned non-bank-qualified issuances.

A motion to adopt the resolution moved and was seconded; the council approved the resolution by roll-call vote: Council member Wilson — Aye; Council member Santini — Aye; Council member Stafford — Aye; Mayor Burt — Aye. The council’s recorded motion identified the resolution on the record as "resolution 25 535" (as spoken during the meeting). Council members and city staff indicated closing of the bond transaction was anticipated in late March.

The city’s action is strictly a conduit financing approval; no additional council action on the amended conditional use permit for converting the existing building to an elementary school was taken at the meeting.