The Guilford County commissioners don’t do it much, but they do do it once a year or so – and it’s one of the strangest things they do as a board.
The Board of Commissioners decides on whether or not it will approve bonds that have no connection with Guilford County finances and that raise debt that the county is in no way obligated to pay back.
It’s all very complicated, having to do with a 37-year-old Wisconsin-based tax law that allows special bonds to be passed for projects and purposes all over the country.
In this case, the $34 million raised is going to be used to refinance existing housing for North Carolina A&T State University.
Brandon Lewisohn, an attorney with Parker Poe law firm in Charlotte – the firm helping with the refinancing – said this is just one step in the process.
“This is housing that’s been built,” Lewisohn said, adding that this move will change the bond-funding from taxable to tax-free.
Lewisohn said that, for the purpose of the special financing, the clients could have used the City of Greensboro since the housing is in Greensboro, but he added that the Guilford County Board of Commissioners was selected because the board is very familiar with this process.
Lewisohn will participate at the Board of Commissioners Thursday, Aug. 3 meeting via zoom, and, though the commissioners never really have a dog in these Wisconsin bond fights, they sometimes have some questions about what’s going on.
Here’s the official description of the action: “NOTICE IS HEREBY GIVEN that on August 3, 2023, a public hearing, as required by Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), will be held by the County of Guilford, North Carolina with respect to the proposed issuance by the Public Finance Authority (the “Authority”), a commission organized under and pursuant to the provisions of Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as amended, of its Student Housing Revenue Bonds (Aggie Apartment Life Holding Corporation II, LLC Project), Series 2023, in one or more series (the “Bonds”), in an amount not to exceed $34,000,000, the interest on which will be excludible from gross income for federal income tax purposes.”
The public hearing will be held in the Commissioners Meeting Room on the second floor of the Old County Court House at 301 W. Market St., Greensboro, NC 27402.
The breakdown of the funding is as follows:
- Up to $21 million to acquire University Landing (1600 E. Washington St.)
- Up to $7 million to acquire University Pointe (702-704 E. Lindsay St.)
- Up to $2 million to refinance the Warehouse (1029 Winston St).
That puts the total approximate cost of the refinancing at $30 million – and the maximum amount which can be issued for this purpose, if the commissioners approve, is $34 million.
Can someone explain, in laymen’s terms, why a County Board in NC has anything to do with WI issued bonds for a University in NC? This article provided no clarity and only left me with more questions than I had prior to reading it.
A&T is a State University. Financing is provided by the State, and ultimately with Tuition. NOT, Guilford County taxpayers.
Why would anyone refinance borrowed money when the interest rate is higher than the original rate? If the interest rate on a home is 2.5%, why would the owner look to refinance at 4.5%? In the case of this re-financing, it benefits the bond holders since the bond income is now tax-free. How old is the debt and who are the bond holders of A&T’s debt? Why would the commissioners want to help bond holders reduce their tax bill? Was this the plan from the beginning of the debt?