June 6, 2024

Bakersfield College Foundation
Special Finance & Investment Committee Meeting

June 6, 2024 @ 3:00 PM
BC Campus Center, West Wing, 2^nd Floor, Rm. 218
1801 Panorama Drive Bakersfield, CA 93305

Present: Jeff Bell, John Pitre, Ken Byrum, Marko Zaninovich, Paul Pavletich, Tom Ming, Mike Giacomini, Derek Yurosek

Absent: Connie Perez-Andreesen

Staff: Cheryl Scott, Kylee Gregory-Gutierrez, Susan Hubbell, Alyssa Cross

Guests: Harlan Spinner, Jerry Fliger, Steven Bloomberg, Romeo Agbalog, Mark Pafford, David Acevedo, Jacob Acevedo, Steven F., Kevin Kuhner

1. Call to Order – Derek Yurosek called the meeting to order at 3:07 p.m.
   
   
2. Roll Call – Kylee Gregory-Gutierrez took the roll and confirmed there was a quorum.
   
   
3. Public Comments Statement – Derek read the public comments statement.There were no public comments received.
   
   
4. Approval of Agenda – Motion – There were no amendments to the agenda. Jeff Bell motioned to approve the agenda. Marko Zaninovich seconded. All were in favor, none opposed. The agenda for June 6, 2024 is APPROVED.
   
   
5. Information Items – No Action Taken  
   • Presentation regarding investment opportunity in real property – Chancellor Steven Bloomberg thanked the finance committee for taking the time to listen to this investment opportunity. He introduced Kern CCD Trustee Romeo Agbalog to give a quick summary of how this opportunity transpired. Romeo was contacted about two years ago by the President & CEO of Dignity Health’s Bakersfield Memorial Hospital, Ken Keller, about possibly having Bakersfield College’s new residential dorms house medical residents. As they discovered that was not possible, Kern CCD contracted with Grapevine Development to see whether the land owned by them across from the Weill Institute was feasible to develop. Dignity Health has partnered with Morehouse School of Medicine to form a new entity called Common Alliance, to provide regional medical campuses in healthcare deserts throughout the country. The goal is to bring medical residents with specialized training to Bakersfield, with the hope that they will choose to stay and work in the area after completing their residency. Kern CCD aims to support this initiative by developing housing for these residents at 2220 L Street, land owned by Kern CCD. Grapevine Development gave an overview of the project development. The 2220 L Street Project is a 4-story mixed-use building of 84 residential units, approximately 6,000 square feet of commercial space, and 12,000 square feet of amenity space. The 92,212 sq. ft. building will be built using modular construction and completion is expected for Summer 2025. Grapevine Development has a model for using tax-exempt bond financing for a similar project. The BC Foundation’s status as a 501(c)(3) allows for the opportunity of using this public financing. The building would remain under a ground lease because of disposition challenges by Kern CCD. The total estimated project cost is $26.8 million. The BC Foundation would be the sole equity holder of this building and must hold the asset for at least 10 years before a call option can be transacted. In those 10 years, the projected equity is roughly $37 million or 97.8% ROE. The Foundation would be expected to invest an $11 million equity injection. The Finance & Investment Committee asked questions and expressed concerns. Derek Yurosek recommended that the committee gather and consolidate questions to bring back to another special meeting about this investment.
   • Presentation by UBS Investment Bank regarding general investment opportunity –Harlan Spinner was joined by Kevin Kuhner who’s a Senior Vice President with Canyon Partners based in Los Angeles. Harlan gave an overview of this private investment, where the Foundation would commit a certain amount of capital over a 3-to-4-year period in private credit that’s invested in bonds not necessarily publicly traded, then liquidate the investments over a period of time. Typically, the fund expects to last about 7 years but can be extended out to 10 years. Harlan recommended investing $1.5 million. Kevin stated that they’re targeting a 15 to 18 percent return over the period of time that will be invested in the fund.