sims underwrites non-rated bonds to finance facility for the developmentally disabled

Earlier this year, Sims closed on an $11,150,000 non-rated tax-exempt bond financing for Nassau Care Centers, an affiliate of The Guardian Foundation, Inc., a non-profit Atlanta-based owner and operator of a variety of nursing homes and other health care facilities in the eastern United States. This was Sims’ second financing for Guardian; in 2001, Sims structured and underwrote the financing for acquisition by an affiliate of Guardian of three existing care facilities and twelve group homes for the developmentally disabled in Florida (GF/Orlando, Inc.).

Amelia Island Care Center, a 70-bed intermediate care facility for the developmentally disabled, was acquired by Guardian in 1993 and is located in a former nursing home on Amelia Island, Florida. Because of its location close to the Atlantic Ocean, the increasing cost of maintenance and operation of the building and the desire to improve the quality of life for residents, it was determined to relocate the community to an inland location. AICC identified and subsequently acquired three sites in Nassau County. Each site will include three eight-bed group homes; one will also include administrative, storage and garage facilities.

Because AICC must continue to operate at its existing location until construction is complete, a new Guardian affiliate, Nassau Care Centers, Inc., was formed as a non-profit corporation which will ultimately own and operate the replacement facilities; Nassau and AICC jointly comprise the borrower for the 2008 bonds.

A challenge in the financing was the appearance before closing of a problem with the title for one of the properties, which would take time to resolve, although construction pricing and timing required a start early in 2008; any delay could result in an increase in construction pricing. After consultation with Sims and negotiation with the prospective purchaser of the bonds, it was determined to exclude that property from the collateral and to fund the related construction cost into an escrow account to be released when the title issue is resolved, at which time the property will become part of the trust estate, allowing construction on the two remaining sites to begin immediately.