Eldridge is considering a request to become the latest Scott County municipality to help in the financing of a new senior living campus to be built in Bettendorf.
At the city's council meeting Monday night, a representative with WesleyLife and bond counsel discussed the new development and the concept of conduit bonds. The senior campus is planned by Wellspire, a partnership formed by WesleyLife and Genesis Health System.
Cristina Kuhn, a bond lawyer with Des Moines-based Dorsey, said that under Iowa code, a non-profit can obtain federally tax-exempt financing by working through a governmental issuer. Each calendar year, Iowa cities have the authority to issue up to $10 million in tax exempt debt.
The $30 million to $35 million project, now known as The Summit at Bettendorf, will be built at the southwest corner of Bettendorf's 53rd Avenue and Middle Road.
"You're coming to us to use our good name to secure these funds..." Council Member Bernie Peeters said summing up the request.
Kuhn agreed, adding that conduit financing "is an economic development tool to help them borrow money (at a lower rate) at no cost to you."
She said the city would not be responsible for repayment of the debt or any associated costs with the bond issue. In addition, she said the city could charge an issue fee to the borrower. She said a $10,000 fee would be typical on a $10 million loan.
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"The city issues the bonds and loans the money to the borrower and at the closing, you step out of the picture," she added.
Council Member Brian Dockery expressed concern that the city might need access to its tax-free bonds for some of the projects in the works. "Why should I help a different company and a different city to compete against a nursing home (Grand Haven Retirement Community) in our own community?"
Kuhn said another non-profit would be eligible to seek the city's tax exempt bond capacity next year.
Jay Willsher, the regional executive director for WesleyLife, said the project plans to break ground in about a month and will take 14 months to build. When it is completed, he said the campus will employ 104 people. and consist of about 100 independent living apartments, 32 assisted living suites and a 40-bed nursing facility.
He added that the project could serve a population that Grand Haven cannot. "The people of Eldridge could be served by it," he added.
City Administrator John Dowd said Eldridge might have used a portion of its tax exempt bond capacity this year and might only have $8 million or $9 million to loan. The council directed Dowd to determine how much capacity it has available before it votes on the proposal.
Kuhn said the City of LeClaire already has agreed to loan $10 million in conduit financing and they are talking to Riverdale and Princeton. But Bettendorf, Davenport and Scott County already have issued their limit for this year, she added.