Agenda - Council - 07/12/2022 - Laserfiche WebLink

Home

Taxability, so that tax obligations may accrue for substantial periods preceding the redemption of Series 2022 Bonds upon a Determination of Taxability. If interest on the Series 2022A Bonds should become includable in gross income for purposes of federal income taxation,the market for and value of the Series 2022A Bonds would be adversely affected. See"THE SERIES 2022 BONDS—Redemption of Series 2022 Bonds—Mandatory Redemption upon Determination of Taxability"and"TAX MATTERS"in this Official Statement. Changes in Law; Annual Appropriation; Inadequate State Payments Future changes to the Charter School Act by the State Legislature could be adverse to the financial interests of the Charter School and could adversely affect the security for the Series 2022 Bonds. There can be no assurance given that the State Legislature will not in the future amend the Charter School Act in a manner which is adverse to the interests of the registered owners of the Series 2022 Bonds. Minnesota may experience downturns in its economy and tax revenues in the future.The provisions of the Charter School Act are subject to amendment by the State Legislature, including the reduction of State funding, which could adversely affect the Charter School. STATE BUDGET CONSIDERATIONS MAY ALSO ADVERSELY AFFECT APPROPRIATIONS FOR CHARTER SCHOOL FUNDING. See "No Taxing Authority, Dependence on State Payments"above. Value of Mortgaged Property Security for the Series 2022 Bonds includes a mortgage lien on the School Facilities evidenced by the Mortgage between the Company and the Trustee.Attempts to foreclose under the Mortgage may be met with protracted litigation and/or bankruptcy proceedings, which proceedings cause delays. See "ENFORCEABILITY OF OBLIGATIONS." Thus, there can be no assurance that upon the occurrence of an Event of Default, the Trustee will be able to obtain possession of the School Facilities and generate revenue therefrom in a timely fashion. Because of the special nature, location, and other factors relating to the School Facilities,there can be no assurance that proceeds derived from the sale of the School Facilities upon default and foreclosure of the Mortgage would be sufficient to pay all amounts due in respect of the Series 2022 Bonds. Furthermore, the Mortgage contains several Permitted Encumbrances as described in the Mortgage. See "APPENDIX F — DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF DOCUMENTS—THE MORTGAGE" in this Official Statement. Construction Risks Construction or improvement of any facility is subject to the risks of cost overruns and delays due to a variety of factors including, among other things, site difficulties, labor strife, delays in and shortages of materials,weather conditions,fire and casualty.Any delay in completion of the construction of the Series 2022 Project could materially adversely affect the timely enrollment of students in the Charter School, which could affect receipt of future revenues from the School Facilities.Noncompletion of the Series 2022 Project would materially adversely affect the value of the security under the Mortgage. As discussed more fully under the heading "THE SERIES 2022 PROJECT," to reduce construction risks, the Company has entered into the Construction Contract. The Construction Contract does not cover the furniture, fixtures, and equipment to be purchased by the Company from proceeds of the Series 2022 Bonds. [TO BE CONFIRMED:to be updated upon review of GMP]] [The Construction Contract provides for liquidated damages in the event that the Series 2022 Project is not completed according to schedule.] See "THE SERIES 2022 PROJECT"in this Official Statement. 31