Cloquet city officials have opted to issue a new series of housing facilities revenue refunding bonds to Housing Alternatives Development Company Cloquet's Evergreen Senior Living project.
According to the proposal submitted to city council, the Evergreen project is an integrated senior housing campus made up of the 59-unit assisted living facility Evergreen Knoll and the 24-unit senior dependent rental housing facility Evergreen Cottages. The bonds will not exceed $10 million and will mainly go toward refinancing a previous bond series issued by the city to the Evergreen project.
Under Minnesota statute, the city is permitted to issue these bonds to the project for the purpose of ensuring "an adequate supply of affordable, decent, safe and sanitary housing" within city boundaries.
Cloquet City Administrator Tim Peterson explained that the refunding bonds are essentially a way for companies like Cloquet HADC to obtain low-interest loans, and that it will not change anything for the city or its taxpayers. The city is not financially obligated toward any aspect of the bonds and annual payments from HADC will be closely monitored.
To accompany the bond, the city will also charge HADC a fee, which goes toward funding Cloquet's Economic Development Authority.
“We’ve done this a few times, and this doesn’t really change much of anything that we had existing already," Peterson said. “Generally speaking, it’s a good deal for both.”
HADC views the bond series as an opportunity to save some money during a time of low-interest rates, Paul Abzug, president of Cloquet HADC, shared during a public hearing for the bond series Tuesday, July 6. Abzug said that while there were no resident fatalities during the COVID-19 pandemic, the last year was not without its challenges, and this will help mitigate some costs.
Abzug later told the Pine Journal that the only new actions being funded by the bond series are small capital improvements like resurfacing and restricting parking lots, repairing some of exterior siding and other building repairs.
City councilors voted unanimously to approve the refunding bonds following Tuesday's public hearing, with Mayor Roger Maki calling the Evergreen facilities "a real plus for our city.” Councilor at-large Lara Wilkinson was absent.