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HRA hears introduction to up to $221M conduit bond request for Children’s Minnesota; St. Paul projects highlighted
Summary
At its Dec. 4 meeting the St. Paul HRA received an introduction to a proposed up-to-$221 million conduit bond issuance for Children’s Minnesota to refinance 2020 debt and fund capital projects; staff said the HRA would collect roughly $188,000 in additional fees and the proposal will return for public hearing and action next week.
The St. Paul Housing and Redevelopment Authority received an introductory presentation on Dec. 4 about a proposed conduit bond issuance for Children’s Minnesota that would refinance earlier bonds and fund new projects around the Twin Cities.
Jenny Wolfe of Planning and Economic Development explained that conduit bonds are issued by a governmental issuer to enable a nonprofit borrower to obtain tax-exempt interest rates; the HRA, as conduit issuer, would not be liable for repayment of the debt. "They are a debt, in name only of the HRA," Wolfe said, describing the standard role of a conduit issuer and noting that governmental approvals and a public hearing will be required before final action.
Staff said Children’s Minnesota seeks up to $221,000,000 in conduit bonds. Proceeds would refund the 2020 obligations and fund new spending; staff estimated about $75,000,000 is for refunding and about $147,000,000 for new projects. Early HRA estimates presented at the meeting said roughly $62,000,000 of the proposed spending would benefit St. Paul; Children’s staff later provided a line-item St. Paul breakdown that they described as roughly $81,000,000 in combined refinancing and new spending tied to the St. Paul campus, including purchase and renovation of the Garden View clinic, pharmacy clean-room renovation, emergency department work, a CT scanner purchase, and the St. Paul portion of an EPIC electronic health-record implementation.
Dr. Emily Chapman, chief medical officer for Children’s Minnesota, said the EPIC implementation is a system-wide priority and described it as a critical clinical and business platform. "EPIC is best in class," she said, adding that the St. Paul campus will continue to provide emergency, inpatient and outpatient specialty services and support regional critical care.
Jenny Wolfe said the bonds would be sold as fixed-rate tax-exempt revenue bonds underwritten by J.P. Morgan and Piper Sandler with an expected final maturity of Aug. 15, 2044. Staff estimated the extended maturity would increase HRA fees by about $188,000 versus the current fee stream. The HRA and City Council must act and the HRA will be required to hold a public hearing before any final resolution. Children’s staff said they anticipate closing on the financing early next year and completing St. Paul improvements in 2025–26.
The item was introduced for action next week and will return with formal resolutions and a public hearing.
