Ziegler brought out the big guns for a nearly $300 million bond financing closed for Ensō Village, a to-be-built CCRC in Healdsburg, California. The Kendal Corporation, a national not-for-profit provider of senior living services, is spearheading the project, which will be a Zen-inspired community set on 16 acres in the heart of Sonoma wine country.
Kendal has planned for 221 independent living, 30 assisted living and 24 memory support units. Of the 221 IL units, 20 are low-income rental apartments for retired Buddhist teachers, and 10 are moderate-income apartments, which will all be mixed among the market-rate units on campus. Common areas and amenities will include a central lobby, multi-purpose space, a wellness center and indoor pool, library, TV/media room, Zendo meditation hall, art and activity spaces, and two distinct dining venues with outdoor spaces. Plus, there will be an organic vegetarian dining option.
We previewed the bond deal last month, when Ziegler announced it would soon issue the first ever “Green Bond” financing for a senior living development. Totaling $297 million, the bonds (split into three series) were issued through the California Public Finance Authority. The Series 2021A and 2021B Bonds are tax-exempt, while the Series 2021C Bonds are federally taxable. But all series are exempt from California State income tax.
The Series 2021A bonds were issued as tax-exempt fixed rate term bonds amortizing over 35 years. The Series 2021B-1, B-2, and B-3 bonds were issued as TEMPS-85SM, TEMPS-70SM and TEMPS-50SM bonds, expected to be redeemed at 85%, 70% and 50% occupancy of the project, respectively. The Series 2021C bonds are expected to be redeemed at 13% occupancy.
Development costs are estimated to be over $300 million, putting the per-unit cost at over $1.1 million. In addition to financing the project, the bonds will also refinance the pre-development capital, pay interest on the bonds for 33 months, fund debt service reserve funds for each series, and pay certain costs of issuance.
