NOTICE OF PUBLIC HEARING BY THE MINNESOTA AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD ON PROPOSED PROJECTS AND THE ISSUANCE OF BONDS UNDER MINNESOTA STATUTES, CHAPTER 41A AND SECTIONS 469.152 THROUGH 469.165

NOTICE OF PUBLIC HEARING BY THE MINNESOTA AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD ON PROPOSED PROJECTS AND THE ISSUANCE OF BONDS UNDER MINNESOTA STATUTES, CHAPTER 41A AND SECTIONS 469.152 THROUGH 469.165<BR><BR>NOTICE IS GIVEN that the Minnesota Agricultural and Economic Development Board (the "Board") or its designated representative, will meet on Tuesday, January 26, 2010, at 9:00 a.m., or as soon thereafter as reasonably possible at 332 Minnesota Street, Suite E200, in St. Paul, Minnesota, for the purpose of conducting a public hearing on a proposed issue of revenue obligations (the "Bonds") in one or more series, whether taxable or tax exempt, under Minnesota Statutes, Chapter 41A and Sections 469.152 through 469.165, as amended (collectively, the "Act"), to undertake and finance and refinance projects on behalf of Essentia Health, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Borrower") and its affiliates. The Bonds are proposed to be issued pursuant to the authority granted under Section 41A.05, subdivision 2 and Section 469.153, subdivision 2(d) of the Act.<BR><BR>A. Purpose of the Bonds. The Bonds are being issued for the following purposes:<BR><BR>(i) to refund in a current refunding the outstanding Duluth Economic Development Authority ("DEDA") Health Care Facilities Refunding Revenue Bonds (Benedictine Health System - St. Mary's Medical Center), Series 1993C (the "Series 1993C Bonds") dated January 15, 1993, previously issued to finance the project described in Section C below;<BR><BR>(ii) to refund in a current refunding the outstanding City of Brainerd, Minnesota ("Brainerd") Health Care Facilities Refunding Revenue Bonds (Benedictine Health System - St. Joseph's Medical Center), Series 1993E (the "Series 1993E Bonds") dated January 15, 1993, previously issued to finance the project described in Section D below;<BR><BR>(iii) to refund in a current refunding the Board's outstanding Health Care Facilities Variable Rate Demand Revenue Bonds, Series 2008C-3 (Essentia Health Obligated Group) (the "Series 2008C-3 Bonds") dated March 4, 2008, previously issued to finance the project described in Section E below;<BR><BR>(iv) to refund in a current refunding the Board's outstanding Health Care Facilities Variable Rate Demand Revenue Bonds, Series 2008C-4B (Essentia Health Obligated Group) (the "Series 2008C-4B Bonds") dated March 4, 2008, previously issued to finance the project described in Section F below;<BR><BR>(v) to refinance a term note payable by St. Mary's Regional Health Center ("SMRHC"), a Minnesota nonprofit corporation (the "2008 Term Note") incurred to finance the project described in Section G below;<BR><BR>(vi) to finance capital expenditures to be incurred by SMRHC to construct, furnish and equip an approximately 40,000 square foot medical clinic building to be located at 1027 Washington Avenue in Detroit Lakes, Minnesota ("Detroit Lakes");<BR><BR>(vii) to finance capital expenditures incurred and to be incurred by Brainerd Lakes Integrated Health System, a Minnesota nonprofit corporation ("BLIHS") to construct, furnish and equip an approximately 12,000 square-foot addition to, and to renovate, furnish and equip approximately 6,000 square feet of, the 162-bed hospital facility of St. Joseph's Medical Center, a Minnesota nonprofit corporation ("SJMC") located at 523 North Third Street in Brainerd;<BR><BR>(viii) to finance capital expenditures incurred and to be incurred by St. Mary's Duluth Clinic Health System ("SMDC") consisting of equipping of and improvements to health care, hospital and clinic facilities and other routine capital expenditures at 400 East Third Street and 407 East Third Street in Duluth, Minnesota ("Duluth") and the other Clinic Facilities referred to in Section E(iii) below;<BR><BR>(ix) to fund a debt service reserve fund for the Bonds; and<BR><BR>(x) to pay costs associated with the issuance of the Bonds.<BR><BR>B. The Borrower. The Series 1993C Bonds, the Series 1993E Bonds, the Series 2008C-3 Bonds and the Series 2008C-4B Bonds were issued by the issuers identified above for the benefit of the Borrower and its affiliates, including SMRHC, BLIHS, SJMC and SMDC referred to above.<BR><BR>C. The Series 1993C Bonds. The Series 1993C Bonds were issued to advance refund DEDA's $38,805,000 Health Care Facilities Revenue Bonds (Benedictine Health System - St. Mary's Medical Center Project), Series 1990 (the "Series 1990 DEDA Bonds"). The Series 1990 DEDA Bonds were issued to finance acquiring and installing equipment in, and remodeling and making improvements to (A) the hospital facilities of St. Mary's Medical Center, a Minnesota non-profit corporation and affiliate of Borrower ("SMMC") located at 407 East Third Street in Duluth and (B) the medical facilities of Nat G. Polinsky Memorial Rehabilitation Center, Inc., a Minnesota nonprofit corporation, doing business as Polinsky Medical Rehabilitation Center located at 530 East Second Street in Duluth.<BR><BR>D. The Series 1993E Bonds. The Series 1993E Bonds were issued to advance refund Brainerd's $10,845,000 Health Care Facilities Revenue Bonds (Benedictine Health System - St. Joseph's Medical Center), Series 1990 (the "Series 1990 Brainerd Bonds"). The Series 1990 Brainerd Bonds were issued to finance acquiring and installing certain equipment in and remodeling, new construction and improvements to the medical facilities of SJMC located at 523 North Third Street in Brainerd.<BR><BR>E. The Series 2008C-3 Bonds. The Series 2008C-3 Bonds were issued to refund the portion of the Board's $138,230,000 Health Care Revenue Bonds (BHS - SMDC Health System Obligated Group), Series 1999A (the "Series 1999A Bonds"). The Series 1999A Bonds were issued to finance:<BR><BR>(i) constructing, renovating and equipping improvements to the medical facilities of SMRHC and constructing, renovating and equipping an approximately 60&#8209;unit addition and improvements to the senior assisted living facility of SMRHC, all located at 1027 Washington Avenue, Detroit Lakes;<BR><BR>(ii) constructing, renovating and equipping the hospital facilities of SMMC located at 407 East Third Street in Duluth;<BR><BR>(iii) constructing, renovating and equipping medical clinic facilities of The Duluth Clinic, Ltd., a Minnesota corporation ("DC") located at 328 West Conan Street, Ely, Minnesota; 901 North Sixth Avenue, Virginia, Minnesota; 109 Port Avenue South, Sandstone, Minnesota; 206 Main Street, Hinckley, Minnesota; 730 East 34th Street, Hibbing, Minnesota; 4855 West Arrowhead Road, Hermantown, Minnesota; 126 West Ninth Avenue, Floodwood, Minnesota; 400 East Third Street, Duluth; 4621 East Superior Street, Duluth; 4325 Grand Avenue, Duluth; 400 N.W. First Street, Chisholm, Minnesota; 405 West Third Avenue North, Aurora, Minnesota (the "Clinic Facilities");<BR><BR>(iv) acquiring land for DC medical clinic facilities located at 4855 West Arrowhead Road, Hermantown, Minnesota; and<BR><BR>(v) acquiring land and constructing, renovating and equipping medical clinic facilities now owned by Rainy Lake Medical Center, a Minnesota nonprofit corporation, located at 2501 Keenan Drive, International Falls, Minnesota, 50 percent of the board of directors of which is appointed by SMDC.<BR><BR>F. The Series 2008C-4B Bonds. The Series 2008C-4B Bonds were issued to advance refund a portion of DEDA's $140,400,000 Health Care Facilities Revenue Bonds (Benedictine Health System - St. Mary's Duluth Clinic Health System Obligated Group), Series 2004 (the "Series 2004 Bonds"). The Series 2004 Bonds were issued to:<BR><BR>(i) refund Brainerd's Health Care Facilities Refunding Revenue Bonds (Benedictine Health System - St. Joseph's Medical Center), Series 1993D, issued to refund Brainerd's Hospital Facilities Revenue Bonds (St. Joseph's Medical Center), Series 1985 issued to finance improvements to the hospital facilities of SJMC located at 523 North Third Street in Brainerd;<BR><BR>(ii) refund Brainerd's Health Care Facilities Refunding Revenue Bonds (Benedictine Health System - St. Joseph's Medical Center), Series 1993E, issued to refund Brainerd's Health Care Facilities Revenue Bonds (Benedictine Health System - St. Joseph's Medical Center), Series 1990, issued to finance equipment for, and a three-story addition and other improvements to, the hospital facilities of SJMC located at 523 North Third Street in Brainerd;<BR><BR>(iii) refund Brainerd's Health Care Facilities Revenue Bonds (Benedictine Health System - St. Joseph's Medical Center), Series 1993F, issued to finance acquiring, equipping, remodeling and constructing improvements to the medical facilities of SJMC located at 523 North Third Street in Brainerd;<BR><BR>(iv) finance acquisition and installation of equipment in, and remodeling, new construction and improvements to, the medical facilities of SJMC, all located at 523 North Third Street in Brainerd;<BR><BR>(v) finance acquisition and installation of equipment in and capital improvements to the medical facilities of SMRHC located at 1027 Washington Avenue in Detroit Lakes, including the construction of a two-story, approximately 50,000 square foot clinic expansion and medical/surgical/pediatrics unit, a new central supply and loading dock, private rooms and short-stay nursing center, and demolition of obsolete facilities;<BR><BR>(vi) finance renovation by SMRHC of a former retail facility located at 603 Highway 10 East in Detroit Lakes to provide dialysis, clinical and office functions;<BR><BR>(vii) refund DEDA's Health Care Facilities Refunding Revenue Bonds (Benedictine Health System - St. Mary's Medical Center), Series 1993A, issued to refund Duluth's Hospital Facilities Revenue Bonds (St. Mary's Medical Center), issued to finance the acquisition and installation of equipment in and the remodeling, new construction and improvements to the medical facilities of SMMC located at 407 East Third Street in Duluth;<BR><BR>(viii) refund DEDA's Health Care Facilities Refunding Revenue Bonds (Benedictine Health System - St. Mary's Medical Center), Series 1993C, issued to refund DEDA's Health Care Facilities Revenue Bonds (Benedictine Health System - St. Mary's Medical Center Project), Series 1990, issued to finance the acquisition and installation of equipment in, and the remodeling, new construction and improvements to, the medical facilities of SMMC located at 407 East Third Street in Duluth; and<BR><BR>(ix) finance acquisition, construction and equipping of a three-story, approximately 225,000 square foot building by SMDC located at 420 East First Street in Duluth for use as a cancer center and other departments of SMDC, including but not limited to ambulatory surgery, orthopedics, digestive diseases and diagnostic imaging.<BR><BR>G. The 2008 Term Note. The 2008 Term Note was entered into by SMRHC to finance capital improvements to its 96-bed skilled nursing facility located at 1027 Washington Avenue in Detroit Lakes.<BR><BR>H. Ownership. The owner of each of the above-described projects (the "Projects") is the Borrower or identified affiliated entity of the Borrower. The Projects are operated and managed by affiliates of the Borrower. The Projects are used primarily for hospitals and medical clinics and related facilities, including a skilled nursing facility at SMRHC.<BR><BR>The estimated amount of the Bonds is an amount not to exceed $145,000,000. The Bonds will be limited obligations of the Board. The Bonds and the interest thereon will be payable solely from the revenue pledged to the payment thereof and other security arrangements to be established by or on behalf of the Borrower. Notwithstanding the foregoing, no holders of any of the Bonds will ever have the right to compel any exercise of the taxing powers of the State of Minnesota or any political subdivision thereof to pay the Bonds or the interest thereon or to enforce payment against any property of said State or any political subdivision thereof.<BR><BR>A draft copy of the proposed Application to the Minnesota Department of Employment and Economic Development for approval of the Projects, together with all attachments and exhibits thereto; a copy of the Application to the Board for approval of the Projects, together with all attachments and exhibits thereto; and a copy of the Board's resolution accepting the Application are available for public inspection at the offices of the Board at 1st National Banking Building, Suite E200, 332 Minnesota Street, in St. Paul, Minnesota, during normal business hours.<BR><BR>All persons interested may appear and be heard at the time and place set forth above or may mail written comments to the Executive Director at the address set forth above prior to the date of the hearing set forth above.<BR><BR>This Notice of Public Hearing is being given pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended and Minnesota Statutes, Section 469.154, subdivision 4.