Ziegler closed a $72 million Series 2025 bond financing for the benefit of Air Force Enlisted Village, Inc., a Florida not-for-profit organization. The obligor was established in 1968 at the direction of the United States Air Force to house widows of enlisted veterans of the Air Force and currently, if space is available, retired enlisted Air Force couples, single Air Force retirees, enlisted retirees from other branches of the armed services and spouses of enlisted members who die or who were killed on active duty or active-duty members when tragedy or disaster strikes.
In 1975, the organization purchased its first seniors housing community and within a few years, local leaders, politicians and elected officials worked with the United States Congress to authorize the purchase of 125 acres of land from the United States Air Force. With the assistance of Bob Hope, the obligor raised money to purchase land and construct 256 independent living units known as Bob Hope Village. The obligor now owns/operates the community that sits on 130 acres in Shalimar, Florida, named Air Force Enlisted Village. Its first community was sold in 2013 with the proceeds used to construct 96 additional independent living units in Shalimar.
The community is near Eglin Air Force Base and Hurlburt Field. These two installations, along with Tyndall Air Force Base in Panama City, Naval Air Station Pensacola and Camp Bull Simons, have a significant economic impact and military presence near the community, which consists of six independent living villages that make up Bob Hope Village and an assisted living community built in 2005 called Hawthorn House.
Bob Hope Village opened the first four villages in 1985 and, with the expansion of two other villages, there are currently 408 rental independent living apartments, 48 assisted living units and 16 memory care units in Hawthorn House. There are no skilled nursing beds and it offers only rental contracts with the payment of a monthly service fee. The wait list consists of over 190 individuals/couples.
The proceeds of the Series 2025 bonds, together with other available funds, will be used for the purpose of refunding the Series 2018A/B notes that are held by a bank and are in the approximate amount of $35.2 million. They will also be used to fund the construction of village seven, which is planned to comprise 51 independent living units. The Series 2025 bonds are non-rated and are structured as tax-exempt, long-term fixed rate bonds.
Ziegler has had a long-standing relationship with the Air Force Enlisted Village, with this being their first issuance of fixed-rate, tax-exempt bonds.
Ziegler also closed Channing House’s $36.12 million Series 2025AB bonds through the California Municipal Finance Authority. Channing House is a California not-for-profit public benefit corporation and an organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
The borrower owns and operates a life plan retirement community, Channing House, located on one acre of real property in Palo Alto, California, approximately 25 miles south of San Francisco. It consists of an 11 story, 330,000 square-foot building with 173 residential living units and 12 assisted living units, plus a two-story, 48,000 square-foot building known as the Russel V.A. Lee Health Building located adjacent to the main tower, which contains 27 assisted living beds and 26 skilled nursing beds.
In July, the borrower executed a purchase and sale agreement for a 13-unit residential living complex in Palo Alto with plans to convert the property into new entrance fee residential living accommodations. It two-building complex is located approximately two blocks from the existing Channing House location.
This transaction marks Channing House’s third financing with Ziegler. The bonds are insured through the Cal-Mortgage program and are rated “AA-” by S&P Global. The 2025 bonds are Federally Taxable but exempt from State of California income tax. The 2025A bonds are structured for level annual debt service through May 15, 2055, and are subject to optional redemption at par on May 15, 2035, with a Make-Whole call feature leading up to the optional redemption date. The 2025B bonds are Taxable Mandatory Paydown Securities (TMPSSM) and are expected to be redeemed at ~46% occupancy of the property purchased in July.
Proceeds of the bonds will be used to finance the costs of purchasing the new community and certain related capital improvements, pay the insurance premium to the Cal-Mortgage insurance premium program, fund a debt service reserve fund, and pay certain of the costs of issuance of the bonds.
