HRA to consider conduit revenue bonds for Metro Deaf School; public hearing set

The St. Paul Housing and Redevelopment Authority on Tuesday heard an introduction to a request for the HRA to issue conduit revenue bonds to refinance existing debt and finance an addition at Metro Deaf School, a charter school serving pre‑K through grade 12.

Jenny Wolf, PED staff, told the board the HRA would act only as a conduit for tax‑exempt financing, and that ‘‘conduit revenue bonds are not, are not repayable by any funds of the city or the HRA and they are secured only by revenues of the borrower.’’ The proposal would allow Metro Deaf School (MetroDEF) to access tax‑exempt interest rates that lower borrowing costs while repayment would rest solely with the school and its borrowing entity.

The bond request covers two principal purposes: refinancing a portion of the HRA’s prior conduit bonds issued for the school in 2018 and financing demolition of a storage garage and construction of a 24,950‑square‑foot addition. The school is at 1125 Energy Park Drive and currently enrolls about 175 students drawn from the seven‑county metro area and western Wisconsin. School officials said the addition would add three elementary classrooms, a gym/multipurpose room, and regrade parking and main entrances to improve accessibility for students with mobility needs.

Project financing details presented to the HRA staff show a total estimated project cost of $15,108,000, including a school contribution of just over $1,000,000. The HRA said it would issue bonds in an amount not to exceed $12,500,000; the Port Authority has applied separately to issue up to $5,000,000 in bank‑qualified bonds for the same project. Raymond James is set to serve as underwriter; the HRA bonds will be sold as a public offering, will not be rated, and will be offered in minimum denominations of $100,000. The presentation listed a current outstanding balance on the school’s prior HRA bonds at about $13,800,000.

PED staff said the agency’s internal credit committee reviewed the proposal for compliance with PED sale and placement policies and that the HRA will collect a closing fee equal to one quarter of 1% of the amount issued (about $22,000 based on the principal amounts shown). Project construction and financing would also trigger compliance obligations for the borrower such as affirmative action, prevailing wage and vendor outreach requirements.

No final action was taken; HRA staff said the HRA Board must authorize issuance and hold a public hearing and the City Council must affirm the public hearing requirement and approve resolutions. Resolutions are scheduled to be considered by both bodies on Sept. 24, and MetroDEF anticipates a closing in November if approvals proceed as planned.

Dr. Susan Outlaw, executive director of Metro Deaf School, described the school’s regional enrollment and said the facility expansion would address wait lists and accessibility issues. ‘‘We have wait lists right now…this would add classroom space, a gymnasium, and a multipurpose room,’’ she said, and noted the regrading would eliminate stairs at the main entry so younger students who use wheelchairs would not need to use the high‑school entrance.

The HRA presentation emphasized that issuing conduit bonds creates no liability for the HRA or city; bond repayment and credit due diligence are the responsibility of the borrower and private lender or underwriter.

If approved, the HRA will return with required resolutions and hold the public hearing noted by staff before any bond sale moves forward.