HJ Sims Raises $31.7 million in Seed Capital for Development of New Connecticut Life Plan Community
“We are all so very excited about this opportunity and grateful to the entire HJ Sims team for guiding us through the process – from concept to closing. Everyone we worked with was professional, efficient and incredibly diligent to ensure a successful outcome.”
— Andrew Banoff, President and CEO, Jewish Senior Services
Jewish Senior Services (JSS) is a multi-faceted senior care organization which has served Connecticut residents for nearly 50 years. It completed a replacement of older, dated facilities with the opening of The Harry and Jeanette Weinberg Campus on Park Avenue in Bridgeport, CT in 2016. The state-of-the-art intergenerational campus includes skilled nursing, assisted living and memory care residences, rehabilitation services, adult day programs, home care, hospice, the Center for Elder Abuse Prevention, care navigation, adult family living, child development center, and fitness center.
The JSS board of directors and management team led by its Chief Executive Officer, Andrew Banoff is a dynamic group always seeking out new opportunities to broaden its mission, the population it serves and diversify its services into senior housing. HJ Sims is pleased to be a financial partner with JSS since 1994.
JSS, along with Greenbrier Development LLC (“Greenbrier”), had been looking for an appropriate location for a new Life Plan Community when an opportunity arose to acquire a 15-acre undeveloped site in Stamford, CT for $21 million. Located in Fairfield County, Stamford is 34 miles northeast of New York City and home to a broad range of businesses including nine Fortune 500 companies.
In addition to Greenbrier, JSS has assembled a highly experienced development team including Perkins Eastman, DPC architects and LECESSE Construction Services LLC to work on this new project. The community will consist of 168 Independent Living Units, 14 Assisted Living Units, 14 Memory Care Units, 14 Skilled Nursing Beds, approximately 45,000 square feet of community and amenity space, below ground garage parking spaces, and related site improvements.
A significant amount of upfront development capital is needed for a project of this size before it can obtain construction and permanent financing. The project development budget for the new community is approximately $35.7 million, the majority of which is needed to purchase the site as well as fund design and marketing expenses.
Working with the Housing Authority of the City of Stamford, HJ Sims proposed issuance of $31.7 million of tax-exempt Bond Anticipation Notes (BANs) to fund the development capital. JSS contributed $4.0 million through a fundraising campaign which will not be repaid.
BANs are a specialized form of financing that, as the name implies, anticipates, or relies on a subsequent bond issuance to repay the original issue. Although secured by the 15-acre site, there is no operating cash flow or alternate source of repayment, absent selling the land, which would not repay the BANs entirely. Furthermore, interest is not paid on the BANs during the term of the issue but accrues until the bonds are refinanced. Investors need to be able to evaluate the likelihood of the project meeting the requirements for construction and permanent financing.
The Preliminary Limited Offering Memorandum included significant information on the history of JSS, the track records of the development team, demographic and focus group information and a financial forecast prepared by Greenbrier. The forecast outlined anticipated financial metrics based on several assumptions, many of which could change over the estimated 3 to 5-year development period, to give the investor a picture of the permanent financing. The information included in the offering indicated the project met the criteria needed to attract permanent financing.
On December 1, 2022, HJ Sims closed on the $31.7 million tax-exempt BANs issue with participation from individuals with ties to JSS, HJ Sims’ Private Wealth investors and institutional bond funds. The yield on the bonds is 11% with a stated maturity of five years although it is repayable at any time with the proceeds of the construction and permanent financing.
Subsequent to closing JSS announced the project will be named Mozaic Concierge Living, drawing upon the idea of many individuals coming together to form a richer community.
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