During Monday's City Commission Meeting, commissioners deliberated on a pivotal ordinance that grants the City of Salina, Kansas the authority to issue taxable Multi-Family Bonds, Series 2023 (Cedarhurst Project). The bonds, not to exceed an aggregate principal amount of $15 million, are earmarked for the acquisition, construction, and equipping of a commercial facility. Additionally, the ordinance empowers various related documents and actions.
The background to this decision traces back to October 25, 2021, when the City Commission directed staff to kickstart the multi-family bond process. In collaboration with Dover Development of St. Louis, Missouri, the proposed project entailed a 70,000 sq. ft. assisted living center/memory care facility, featuring 58 assisted living and 22 memory care apartments. The construction timeline, initially slated for May 1, 2022, to November 1, 2023, has been successfully realized. The completed facility, known as Cedarhurst Senior Living, has met all stipulated requirements, both in terms of unit numbers and finished square footage. Cedarhurst Senior Living is poised to welcome residents in early 2024.
Due to the facility exceeding 50 units and becoming operational within three years of bond approval, it qualifies for a 10-year, 100% tax abatement. The City Commission, during the public hearing on October 25, 2021, formalized these proceedings through the adoption of Resolution No. 21-7997. This resolution deemed it advisable to issue taxable industrial revenue bonds for the purpose of acquiring, constructing, and equipping the commercial facility. It also included a sales tax exemption for construction materials.
In alignment with the October 25, 2021 decision, the bond counsel has prepared an ordinance along with associated documents, including a Trust Indenture with Security Bank of Kansas City, a Project Lease with Cedarhurst Of Salina Real Estate, LLC, a Site Lease with Cedarhurst, a Bond Purchase Agreement facilitating the sale of the Series 2023 taxable Multi-Family Bonds, and pertinent closing documents.
Importantly, the fiscal note underscores that there is no direct financial cost to the City for issuing these bonds. Furthermore, these bonds do not factor into the City's legal debt limit calculation. The issuance's future financial impact is a 100% abatement of property taxes on the property for a maximum of ten years.
The motion was approved 5-0.