By Jimmy Isaac
Certified Retirement Community Advisory Board members this week might start to create a nonprofit corporation in hopes that it pays for a new assisted living facility in Longview’s Wildwood area.
In their regular meeting, scheduled for 4 p.m. Thursday, April 5, at City Hall, 300 W. Cotton Street, the board will consider city staff’s recommendation that Longview create a cultural education facilities finance corporation. The idea is to use the corporation’s state-given ability to acquire property and finance projects without obligating tax dollars or state funds.
The process results in lower interest rates for the borrower, because investors are exempt from paying taxes on the interest gained from the bonds.
“The goal is to allow for a mechanism by which certain projects can utilize tax-free bonds, as allowed by the state legislature,” Longview city spokesman Shawn Hara said. “In the immediate future, there is a potential new assisted living facility that would like to access that form of financing.”
Developers are planning a 64-unit assisted living facility on Lago Trail near the intersection of Bill Owens and H.G. Mosley parkways.
Cultural education facilities finance corporations have existed in Texas since 1985 to promote new and expanded cultural and community facilities that benefit the health, education or general welfare of Texans.
This past summer, state lawmakers passed and Gov. Rick Perry signed House Bill 1263. The law allows nonprofits that meet strict local control guidelines to finance projects through the bond market without obligating tax dollars or state funds. It provides such corporations with the power to acquire, purchase, lease, mortgage and convey property, as well as borrow and lend money for its corporate purposes.
HB 1263’s authors, State Sen. Eddie Lucio Jr., D-Brownsville, and State Rep. Burt Solomons, R-Carrollton, said in a May 2011 analysis of the bill that they wanted to level the playing field for qualified Texas nonprofit groups to make bond financing or projects accessible and affordable. Groups that Lucio and Solomons mentioned included health or social organizations such as Boy Scouts of America and the American Heart Association.
HB 1263 took effect Sept. 1. Texas law already allowed cities and counties to establish finance corporations for a variety of purposes, including financing senior care facilities. Baptist Community Services, an Amarillo-based nonprofit associated with the Baptist General Convention of Texas, sought to borrow $25 million in 2010 from the city of Splendora’s cultural education facilities finance corporation. The money was to be used to refinance about $19 million in debt incurred during the remodeling of Amarillo-area assisted living and skilled nursing centers, according to Amarillo.com.
State law allows Splendora to exercise its borrowing and lending rights beyond its city limits because Splendora is located in a county of at least 400,000 people (Montgomery County). Though Gregg County has fewer than 400,000 residents, Longview will be allowed to participate in projects outside the city with the new law, Hara said.
If the Certified Retirement Community Advisory Board approves the recommendation, it would be forwarded to the City Council for final approval.
Advisory board members must also consider whether Longview will reapply to the Texas Department of Agriculture for continuation of its status as a Certified Retirement Community in Texas.
The city earned the certification in January 2008. It is part of a statewide program to attract retirees.c