Title
A ordinance by the City of Colorado Springs, Colorado authorizing the issuance and delivery of its multifamily housing revenue bonds (Bradley Ridge Apartments Project), series 2025, in one or more tax-exempt or taxable series in an aggregate amount not to exceed $76,832,222.72 for the purpose of financing the acquisition, construction, improvement and equipping of a multifamily housing facility in the City of Colorado Springs, State of Colorado and to pay certain issuance expenses of such bonds, approving and authorizing execution of an indenture of trust, a loan agreement with the borrower, a forward bond purchase agreement, a bond purchase agreement, and a tax regulatory agreement with respect to the bonds; making findings and determinations with respect to the project and the bonds; authorizing the execution and delivery of related documents; and repealing all action heretofore taken in conflict herewith.
Presenter:
Aimee Cox, Chief Housing and Homelessness Officer, Housing & Homelessness Response Department
Body
Summary:
The ordinance will authorize the issuance of Private Activity Bonds (PAB) for Bradley Ridge and the new construction of approximately 336 total units of affordable housing located at the southwest corner of Bradley Ridge Drive and Bradley Landing Boulevard, Colorado Springs, Colorado 80925.
Previous Council Action:
Resolution No. 65-25: Resolution declaring the intent of the City of Colorado Springs, Colorado to issue its multifamily housing revenue bonds to finance the acquisition, construction, improvement, and equipping of an affordable multifamily housing facility known as Bradley Ridge Apartments.
Resolution Nos.106-22, 115-23, 101-24, and 64-25: Resolutions adopted to carry forward the City’s annual private activity bond allocations for the financing of affordable multi-family rental projects.
Background:
In 2018, 2019, 2020, 2021, 2022, 2023, 2024, and 2025, City Council voted to carry forward its PAB allocations for the purpose of financing qualified residential rental projects, an eligible use of PAB under the IRS code. Carrying forward PAB for multi-family affordable housing is a means for City Council to address the need for additional housing for lower-income populations in the community. The City is a conduit issuer of PAB. As a result, the City assumes no liability for repayment of the bonds. The developer accessing PAB financing agrees to carry all costs related to the bond issuance, marketing and servicing, including attorney’s fees, document preparation, and public notifications.
PAB is one of many financing tools available to private developers. As a result, PAB use is sensitive to local market conditions such as the cost of conventional financing, the experience level and willingness of the developer to use PAB, ease of access to PAB funds and the overall volume cap of the issuer.
This item supports the City’s 2024-2028 strategic plan goal of implementing policies, fostering community partnerships, and securing sustainable funding to increase housing choices so that residents have options that are right for them. Furthermore, this item is supported by and implements PlanCOS Vibrant Neighborhoods Policy VN-2.A-3 pertaining to attainable housing and providing variety of housing types for various life stages and income levels.
Financial Implications:
The Bradley Ridge project will utilize up to $76,832,222.72 of PAB volume cap. The City’s issuance fee is 120 basis points. The utilization of this cap will generate up to $921,986.67 in issuance fees that will be used to rebate eligible development expenses for Affordable and attainable housing construction through the Department’s Fee Rebate Program and pay for a portion of one staff position. The annual compliance fee is equal to 10 basis points of the outstanding bonds.
Board/Commission Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
The alternative is to deny the issuance. Not passing the ordinance would be inconsistent with the resolution the Council previously approved which stated the intent to issue bonds for the development. Nationwide tax credits are the main financings mechanism for constructing affordable housing. Additionally, not passing the ordinance would fail to address a shortage of affordable rentals for lower-income households in the community.
Recommended Action
Proposed Motion:
Approve the ordinance authorizing the issuance and delivery of the City’s multi-family housing revenue bonds for Bradley Ridge in one or more series, in an aggregate principal amount not to exceed $76,832,222.72.