Georgia Bulletin

The Newspaper of the Catholic Archdiocese of Atlanta


Project Financed With Tax-Exempt Bonds

By GRETCHEN KEISER,Staff Writer | Published December 15, 2005

Approximately $48.5 million in tax-exempt bonds were sold to finance the St. George Village project, Gary Meader, chief financial officer of the archdiocese, said Dec 12.

St. George Village, a continuing care retirement community, officially opened Nov. 1. It is fully reserved in its independent living units and has started a waiting list.

Explaining the financing, he said the Archdiocese of Atlanta guaranteed the issuance of the bonds because he believed this guarantee provided the strongest financial base to launch the project.

When first proposed in 2001, an article in The Georgia Bulletin explained the financing of the Catholic continuing care retirement community as not including a bond guarantee by the archdiocese.

The guarantee by the archdiocese is for a defined period of time only, Meader said. He is confident that the timeline will be met early because of the success of St. George Village.

“When we meet certain occupancy and financial ratios, our guarantee drops off,” Meader said. “I think it will be within 18 months to two years.”

One requirement is that $24 million of the bonds will be retired by 2008, he said, and he expects to accomplish that in 2006.

“We are going to retire $10 million (in bonds) on Jan. 3, 2006,” he said. “I hope to retire $14 million more by June 30, 2006 … We are on track to pay back $24 million by June of ’06 so that is way ahead of schedule.”

He pointed out that the funds to retire the bonds are coming entirely from the deposits put down by the residents of St. George Village to secure a place in the facility.

“Those funds are coming out of the residents’ deposits. No archdiocesan funds are being used to pay them,” he said.

After the $24 million in bonds is retired in 2006, he said, the remainder of the 30-year bonds will be retired out of the cash flow of St. George Village on a bond-retirement schedule for the life of the bonds.

Had St. George Village been required to finance the project without the guarantee of the archdiocese, it would have greatly increased the cost of financing, Meader said.

With the guarantee “it probably reduced the financing cost by at least $1 million. It got (St. George Village) off to a firmer start.”

Catholic Education of North Georgia, Inc., which owned the site, sold the land to St. George Village and CENG will be receiving principal and interest payments on the loan for the land, Meader said.

The archdiocese has purchased 10 independent living units at St. George Village for retired priests of the archdiocese with funds from the “Building the Church of Tomorrow” capital campaign. The priests themselves will pay the monthly maintenance fee, which will be lower than the fee paid by other residents in the independent living area, Meader said.

However, if any of the priests eventually move into the assisted living and skilled nursing areas they will pay the regular fee, he said.

“If they are unable to handle their fee, the archdiocese will subsidize their costs as we do now for priests in skilled nursing and assisted living facilities elsewhere,” he said. “It is nothing unusual. It is just what we do elsewhere.”

Meader said St. George Village has clearly combined a visionary dream with exceptional timing and location.

“This thing has exceeded our expectations and those of the firms that did the feasibility studies. As one example, they assumed a 30-month fill-up period and it looks like we will achieve that by July of 2006, which would be nine months,” he said.

“It has exceeded our expectations. Basically we are running 20 months ahead of our feasibility studies. There was a need and we built it at the right time and in the right place.”