Subject
title
Public Hearing on the Proposed Amendments to Modify Economic Development Revenue Bonds Previously Issued for the Benefit of The Village at Rockville, Inc.
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Department
Finance
Recommendation
Staff recommends that the Mayor and Council hold a public hearing on the proposed modifications to the Economic Development Revenue Bonds (Series 2012A and Series 2012B) for The Village at Rockville, Inc.
Discussion
The city previously participated in issuing economic development revenue bonds for The Village at Rockville, Inc. The project funded improvements to the senior living facility.
The Maryland Economic Development Revenue Bond Act authorizes this type of transaction. Economic development revenue bonds are tax-exempt bonds issued by a government entity to finance private-sector projects that are expected to promote public benefits - such as job creation, revitalization, or increased tax revenue. Economic development revenue bonds are not general obligations of the city. Instead, they are secured solely by revenues generated by the project being financed. The city neither backs the bonds with its credit nor pledges any public funds - it simply acts as a conduit to facilitate financing for projects that benefit the community.
The borrower, The Village at Rockville, Inc. has requested that the city enter into modifications to the original bond documents to adjust the principal payment and optional redemption dates and make other administrative modifications. If approved, the modifications will extend the maturity date by three years from 2042 to 2045. Pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended, the city is required to hold a public hearing for the purpose of apprising the residents of Rockville of the proposed modifications.
Mayor and Council History
The Mayor and Council approved economic development revenue bonds for the National Lutheran Home & Village at Rockville Project via a resolution on December 12, 2011. These bonds provided funding for improvements to the senior living facility located at 9701 Viers Drive, Rockville, MD 20850.
These economic development revenue bonds were modified under a first amendment in January 2021 following a public hearing via an executive order which was signed by Mayor Newton. The proposed amendments to modify the bonds would constitute the second amendment to the economic development revenue bonds (Series 2012A and Series 2012B).
Public Notification and Engagement
This public hearing was advertised on June 5, 2025 in the Washington Post. Community members were also provided the option of providing comments in writing.
Fiscal Impact
There is no cost to the city other than staff time, associated with the modification of the economic development revenue bonds. The Village at Rockville, Inc. will bear all of the legal costs associated with the modification of the bonds. The city does receive an annual administrative fee for each year that the bonds are outstanding, and these fees will continue to be received by the city following the modifications to the bonds.
Next Steps
Following the approval of the resolution to authorize the amendments to the economic development revenue bonds (Series 2012A and Series 2012B) bond counsel will work with the borrower to execute the amendment documents.