Citigroup is gearing up to sell $84.1 million in bonds to finance the Nova Southeastern University regional campus in Clearwater.
Investors will get a tour of the campus this Thursday, with the bonds set to price on July 24 and the deal expected to close by Aug. 15.
The campus is home to the Dr. Kiran C. Patel College of Osteopathic Medicine and the Dr. Pallavi Patel College of Health Sciences, newly constructed facilities that will open to students this fall.
Bond proceeds will refinance a portion of the costs of the land acquisition, construction and equipping of the 311,695-square-foot facility, said Citigroup, the underwriter for the bonds, in roadshow materials posted online.
The Patels, health care entrepreneurs and philanthropists, committed $200 million to NSU in September 2017 for the project. A family foundation, the Drs. Kiran & Pallavi Patel 2017 Foundation for Global Understanding Inc., owns the property.
Through June 30, about $85 million of the project’s cost was funded through construction loans with SunTrust Bank and Fifth Third Bank, and about $15.5 million was funded through loans from related parties. The rest of the project, about $35 million, was funded through equity from the foundation.
About $46 million in drawn construction loans will be repaid when the bonds are issued, Citigroup said.
The Pinellas County Industrial Development Authority is issuing the bonds on behalf of the foundation, which was formed in December 2017 and is a not-for-profit corporation with $262 million in total assets. The board of directors of the foundation are the Patels and their children — Shilen Patel, founder and CEO of HealthAxis Group; Dr. Sheetal Patel, a radiologist who now is chief operating officer of the Patel Family Office; and Dr. Sonali Judd, a family physician who owns Bay Area Primary Care with her husband, Dr. Scott Judd.
The foundation will own the building and lease it to NSU for 10 years, with two five-year lease renewals. NSU will pay $25 a square foot, subject to an annual increase of 1 percent starting in the 6th year of the lease.
The bonds are secured by a first lien on the lease revenue, the mortgage on the property and a general obligation backstop by the foundation, Citigroup said.
The project was turned over to the tenant, NSU, on July 1, and the College of Medicine on campus will begin with a class of 162 students in the fall. The College of Health Sciences will offer nine degrees and will house about 2,000 students at full capacity.