When property owners in Ojus, Florida, wanted to upgradefrom septic systems to sewers, Miami-Dade County turned to Drexel Hamilton LLC to manage the municipal bond deal that made it happen.
Drexel Hamilton,the investment bank 100% owned and operated by military veterans, sole managed its first deal in the municipal market space in early December — acting as placement agent for Miami-Dade County, Florida’s $10.85 million of special assessment revenue bonds for the Ojus Sanitary Sewer Special Benefit Area.
The 30-year tax-exempt bonds were sold through a negotiated private placement transaction.
Proceeds will fund the transition from the use of septic tanks in the area to a hookup to the sewer system, Roger Anderson, director of municipal finance at Drexel Hamilton, told The Bond Buyer.
The county had plans, including economic development of the area and an adjacent neighborhood, with a transit center set to be built there in the near future as well. This project is also a way to help the area prepare for possible expansion due to economic growth.
“The bonds are important to this special assessment because they will allow for the progression of their sanitary sewer project,” Arlesa Wood, director of bond administration for Miami-Dade’s Finance Department, told The Bond Buyer.
“We were very pleased with the results of the transaction as led by Drexel Hamilton,” she said. “This was their first senior-led deal for Miami-Dade County. Drexel is a veteran-owned firm and they stepped up and did a great job because a lot of firms don’t like to deal with smaller deals and special assessment-type transactions. So we were very pleased with the hard work, determination and drive that Drexel put into this transaction and making it happen for the county.”
The county expects the project to be completed within the next two years, she said, with bonds being paid offt from a special assessment on the parcels within the special benefit area over a 30-year period.
The deal, a private placement, was unrated and uninsured due to the small size of the area.
The Series 2021A term bonds, [CUSIP: 59333VAF2] dated Dec. 9, were priced at 100.011 with a 5.1% coupon to yield 5.098% on July 1, 2051.
PFM Financial Advisors LLC served as financial advisor to the county. Squire Patton Boggs LLP and D. Seaton and Associates P.A. acted as bond counsel and Hunton Andrews Kurth LLP and DiFalco & Fernandez LLLP served as disclosure counsel. Liebler, Gonzalez & Portuondo of Miami was the placement agent’s counsel.
Proceeds will be used to finance the costs of the project, finance interest on the Series 2021 bonds during construction and for up to a year after, make a deposit to the bond reserve account and pay the costs of issuance.
Preston Hollow Capital LLC was the sole purchaser of the bonds.
“We were excited to work with the county on the transaction, and with Drexel Hamilton on their first senior-managed transaction in the muni market,” Charlie Visconsi, managing director and co-head of transaction originations at Preston Hollow, told The Bond Buyer. “We were proud to be part of the deal and hope to work again with both parties.”
The Miami-Dade Water and Sewer Department has undertaken a capital improvement program to upgrade, replace and expand the water and sewer infrastructure throughout the county. And one of the projects is in the Ojus Urban Area District.
Ojus, which is in the northern part of the county, has less than 100 existing properties and wastewater there is currently disposed of by using septic tanks, something which is mostly seen in rural areas where centralized sewer systems are not viable, according to WASD.
The lack of sanitary sewer service to commercial properties within Ojus is a drawback for further development.
This project will build centralized sewers to allow for building expansion, redevelopment and eliminate regulatory sewage disposal that limits economic growth in the area, WASD said.
However, economic development will not be the only benefit to the area.
“Beyond its direct economic impact, sewering the Ojus Area will provide significant environmental benefits,” a spokesperson for the WASD told The Bond Buyer. “The high groundwater table in Miami-Dade County, coupled with a highly hydraulically conductive groundwater, often transports the nutrients and contaminants from septic tanks to nearby surface waters — including Biscayne Bay. The elimination of the septic tanks will correspondingly remove their adverse effects on the environment. Other secondary benefits include the creation of local jobs and enhanced property values.”
The Board of County Commissioners last year approved Ordinance 19-31 that created a special benefit district to provide sewer facilities to part of the Ojus Urban Area District for commercial, industrial and mixed-used parcels.
The project will include gravity lines, lateral connections, force mains and water mains as well as fund the complete repaving of all affected roads.
The property owners were supportive of the effort, which will make development easier and more affordable.
Drexel Hamilton was formed in 2006 as a way to help returning veterans learn, enter the world of finance and adapt back into civilian life.
In 2011, the firm received its new issue license, just after Tom Mead joined the firm. Mead serves as a managing director for Drexel Hamilton’s municipal finance department. He is a United States Army and Vietnam-era veteran.
Anderson joined the firm in 2017. He had been deputy assistant secretary for federal finance at the U.S. Treasury Department, where he helped design and implement Treasury inflation-protected securities. He had also served as executive director of the New Jersey Educational Facilities Authority, where he oversaw the authority’s debt portfolio and bond offerings. Most recently, he was CFO and COO at Centenary University in New Jersey and had served as deputy comptroller for finance for New York City.
At the beginning of 2018, the ownership of the firm changed as the founder sold most of the company to the veterans who had come up through its ranks. Since then, the firm has streamlined operations and its net capital has grown substantially. Today, almost 60% of the firm is made up of veterans and 82% of the ownership and management is comprised of service-disabled veterans.
“It’s been a success because the veterans have learned enough to take over and run the firm,” Anderson said. “And they’ve been bringing veterans in and training more and more of them.”
Looking to 2022, Anderson said Drexel Hamilton wants to expand its municipal business and hire more employees.
“We are doing very well in terms of the deals that we get into,” he said, “but as we grow, we need more boots on the ground, which has been a little tough to do during the pandemic.”
Plus, he said, the firm needs to have more of a presence in places that sell a lot of bonds, like Texas and California.
“It’s a really exciting time,” Anderson said. “There are great opportunities and there is great potential for the future.”