WOODSTOCK — Members of the town’s Economic Development Authority on Thursday unanimously approved allowing Shenandoah University to change some of the terms of its educational facilities revenue bond.
The university and the EDA had entered into the bond agreement in 2017.
Shenandoah University used the bond to purchase a building from Valley Health Medical Center for its Health Professionals Building, said Bob Keasler, vice president of administration and finance for Shenandoah University.
In order to issue tax-exempt bonds under federal tax laws, Shenandoah University has to use a government entity, which is known as a “conduit issuer.”
The university has used the Woodstock EDA, Clarke County Industrial Development Authority, and the Mount Jackson EDA to name a few.
The EDA is merely the “conduit issuer” under federal tax laws and state law, but the university is the “conduit borrower” that is borrowing from a bank and making the debt payments, said Daniel Lauro, counsel to the Woodstock EDA and bond counsel to the Town of Woodstock.
The liability for the payments falls on the “conduit borrower,” meaning there is no risk to entities who act as the “conduit issuer, he said. Communities typically make money, such as an agreed-upon fee, for acting as the “conduit issuer.”
The modifications approved Wednesday will have no effect on the EDA, but the EDA’s consent was needed for the modifications given its status as “conduit issuer,” Lauro said. Most of the modifications have to deal with terms regarding interest and extending the time frame before the bank could call for repayment.
Woodstock EDA members also approved releasing $2,250 to owners of the property at 130 W. Court St.
The building is owned by Koleman Properties, which, through Nancy Bowers, applied for the grant in the amount of $8,250.
This is the remainder of the grant approved last month from the facade improvement program. The EDA paid out $6,000 but had to wait to pay out the remaining amount until the town budget passed and the EDA received more funding. The town approved its 2019-2020 budget on Tuesday.