2023 New York Laws › PBH - Public Health › Article 46 - Continuing Care Retirement Communities › 4604-A - Council Approval Required for Industrial Development Agency Financing in Connection With Continuing Care Retirement Communities.

§  4604-a. Council approval required for industrial development agency
  financing in connection with continuing care retirement communities.  1.
  No  person  seeking  financing  in  connection  with  a  continuing care
  retirement community through  an  industrial  development  agency  shall
  undertake such financing without the prior approval of the council. Upon
  approving  a  proposed  financing  pursuant to this section, the council
  shall issue a certificate of authorization to the applicant.
2. Prior to approving such financing, the council shall find that:
a. The operator has  (i)  executed  contracts  for  at  least  seventy
  percent  of  all living units and has on deposit at least ten percent of
  the entrance fees or purchase price for such  units;  or  (ii)  executed
  contracts  for  at  least  sixty  percent of all living units and has on
  deposit at least twenty-five percent of the entrance  fees  or  purchase
  price for such units.
b.  The  operator has demonstrated capability to comply fully with the
  requirements  for  a  certificate  of  authority  and  has  obtained   a
  contingent  certificate  of  authority  pursuant  to  section  forty-six
  hundred four of this article and the operator has  agreed  to  meet  the
  requirements of article eighteen-A of the general municipal law.
c. The applicant is a not-for-profit corporation as defined in section
  one  hundred  two  of  the  not-for-profit  corporation  law that is (i)
  eligible for tax-exempt financing under this section and (ii) is  exempt
  from  taxation  pursuant  to  section  501(c)(3) of the federal internal
  revenue code, and either has (i) an equity  position  in  the  community
  equivalent  to no less than fifteen percent of the amount to be financed
  in the aggregate; or (ii) covenants (A) to meet  a  ratio  of  cash  and
  investments  to  outstanding  debt  (reserve  ratio)  of  no  less  than
  twenty-five percent commencing at the end of  the  first  quarter  after
  twenty-four  months  from  the receipt of a certificate of occupancy for
  the facility,  and  (B)  to  maintain  that  reserve  ratio,  as  tested
  quarterly  based  upon  the  facility's interim financial statements and
  annually based upon audited financial statements, until  debt  reduction
  equal  to twenty-five percent of total indebtedness is accomplished; and
  (c)  to  reduce  total  debt  by  twenty-five  percent  of   the   total
  indebtedness  at the time the certificate of occupancy is received by no
  later than five years after the receipt of the certificate of occupancy.
d.  The  operator  has  submitted  in  connection  with  the  proposed
  financing  a financial feasibility study, including a financial forecast
  and market study prepared by an independent firm  nationally  recognized
  for   continuing   care   retirement   community   feasibility  studies,
  demonstrating to the satisfaction of the council the financial soundness
  of the financing. In addition, the operator has submitted an analysis of
  economic costs and benefits, including job creation and  retention,  the
  estimated  value  of  tax  exemptions  provided, the project's impact on
  local  businesses  and  the  availability  and   comparative   cost   of
  alternative  financing  sources.  Such  analysis shall be prepared by an
  independent entity.
e. The operator will  establish  and  maintain  a  fully  funded  debt
  service  reserve  equal  to  the  sum  of  maximum  annual  debt service
  (interest  plus  annual  scheduled  principal  payments,  not  including
  balloon  maturities,  if  any)  on  bonds  authorized  thereby  having a
  maturity of ten years or less, plus the maximum annual debt  service  on
  bonds  authorized  thereby  having a maturity of greater than ten years,
  provided, however, that in the case of tax-exempt bond issues, such debt
  service reserve shall not exceed the maximum amount permitted by federal
  tax law.
f. The operator will provide  for  such  remedies  or  limitations  of
  remedies  of  bondholders  as  may be required by or consistent with the

  provisions of this article and any regulations in existence at the  time
  of the issuance promulgated thereunder.
g.  Unless  all  residents or continuing care at home contract holders
  have  life  care  contracts,  the  operator  has  adequately  made   the
  assurances  required  by  subdivision  two  of section forty-six hundred
  twenty-four of this article and has agreed to fund the liability in  the
  event  that such resident's or contract holder's assets are insufficient
  to pay for nursing facility services for a one year period.
3. In addition, an operator which is subject to the provisions of this
  section shall:
a. provide the council or its designee with  notice  of  any  monetary
  default  or covenant default in connection with such financing and shall
  further notify the council or its designee of any  withdrawal  from  the
  debt service reserve fund established in connection with such financing;
b.  respond  in  writing  to  the  operational  recommendations of the
  council or its designee with respect  to  protecting  the  interests  of
  continuing  care  retirement  community  residents  in  the event of any
  monetary default or covenant default provided  for  in  connection  with
  such financing;
c.  provide  adequate  security for the repayment of the bonds issued,
  including the granting of liens on real and personal  property  and  the
  pledge  of  project  revenues;  the  maintenance of minimum debt service
  coverage and other financial ratios as shall be required in  regulations
  in existence at the time of issuance by the council; and restrictions on
  other debt and expenditures; and
d.  undertake  to  maintain the financial feasibility of the facility,
  including the retention of an independent consultant  to  recommend  and
  help implement remedial action.
4.   The  council  may  request,  and  shall  receive,  the  technical
  assistance of any state agency or state public authority  in  performing
  its functions under this article.