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Essex County approves ECIA bond financing of up to $13 million to refinance North Star Academy building
Summary
The Board approved an Essex County Improvement Authority plan to issue charter‑school revenue bonds not to exceed $13 million and loan proceeds to NSA Central Avenue LLC to refinance 2009 bonds on a Central Avenue Newark school; commissioners confirmed local finance board approval and recorded one member 'present, not voting'.
The Essex County Board of County Commissioners on Wednesday approved a plan by the Essex County Improvement Authority to issue charter school revenue bonds in an amount not to exceed $13,000,000 and loan the proceeds to NSA Central Avenue LLC to refinance bonds issued in 2009 for a charter school building on Central Avenue in Newark.
Tricia Gasparine, bond counsel for the authority, told the board the proceeds would refinance a balloon payment coming due in December and that the bonds “will be payable solely from loan payments to be received from the borrower” and secured by a mortgage on the charter school. She said the conduit financing would not constitute county debt.
Sam Messer, senior regional director for North Star Charter School, said North Star is chartered as a single school with 14 campuses serving more than 6,500 students in Newark and described the network’s long presence in the city.
Commissioner Frank McInerney, who said he had reviewed financial statements for the entities involved, recommended approval and characterized the transaction as “a financially prudent deal.” Commissioners also asked staff whether the local finance board had already approved the financing; Gasparine said the local finance board granted approval on Sept. 11 and that the ECIA approved the bond resolution the day before the county meeting.
Commissioner Luciano moved the resolution and Commissioner Mercado seconded. On roll call the board recorded Commissioner Gill absent; Commissioners Luciano, Mercado, Murray Thomas, Sebel, Sermons, Vice President Cooper and President Palmeiras voted yes. Commissioner Richardson was recorded as present but not voting. The resolution carried.
The county record shows the ECIA will lend bond proceeds to NSA Central Avenue LLC, and that lease payments from North Star Academy Charter School of Newark Inc. are expected to pay debt service; county staff said the bonds are conduit financing that do not appear on the county’s balance sheet. The board did not require the county to guarantee repayment.
Next steps: staff will complete the ministerial steps needed to issue the ECIA bonds and finalize loan documents; the refinancing is intended to address the scheduled balloon payment in December.
