Title
Ordinance No. 21-29 authorizing the issuance and delivery of the City’s Series 2021 multi-family housing revenue bonds for the Academy Heights Apartments project in one or more series, in the aggregate principal amount of $22,000,000
Presenter:
Steve Posey, HUD Program Manager, Planning & Community Development
John Bales, Fred Marienthal, Kutak Rock LLP
Peter Wysocki, Director of Planning and Community Development
Body
Summary:
The ordinance will authorize the issuance of Private Activity Bonds (PAB) for the Academy Heights Apartments, a 201 unit affordable housing project located at the NW Corner of E. Fountain Boulevard & Academy Park Loop. Due to a favorable modification of the 4% Low Income Housing Tax Credit program, the bond amount has been reduced to $22M from the $23M previously approved by City Council in July, 2020.
Previous Council Action:
20-278: Preliminary inducement resolution adopted for $23M in private activity bonds to finance the Academy Heights Apartments.
18-038, 19-352, 20-389: 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, and 2020, 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.
In June, 2020, the CC Budget Committee recommended moving forward with a preliminary inducement resolution to issue up to $23M in private activity bonds (PAB) for the Academy Heights project. On July 14, 2020, CC adopted a preliminary inducement resolution to issue up to $23M of PAB financing for the Academy Heights Apartments, a 201 unit affordable housing project located at the NW corner of E. Fountain Boulevard and Academy Park Loop. The preliminary inducement resolution was needed for the developer to receive an allocation of 4% federal low-income housing tax credits to create adequate financing for the project. Adoption of the bond ordinance is needed for the developer to close on the financing for the construction of the Academy Heights Apartments in Spring, 2021, and begin construction soon after.
This item supports the Mayor’s goal of building or preserving on average 1000 units of affordable housing each year established in HomeCOS, the City’s affordable and attainable housing plan.
Furthermore, this item is supported by and implements PlanCOS Vibrant Neighborhoods Policy VN-2-A pertaining to affordable and attainable housing and providing a variety of housing types for households at all income levels.
Financial Implications:
On 12/31/2020, a previously issued preliminary inducement resolution in the amount of $21M for the Draper Commons project expired. The Draper Commons development team is working through some required due diligence with the Colorado Housing Finance Authority and expects to have this project back on track by the 2nd quarter, 2021. The expiration of the Draper Commons preliminary inducement resolution freed up approximately $16M in 2018 PAB. PAB that has been carried forward must be used for a qualified project within 3 years. As a result, approximately $16M of the City’s 2018 private activity bond allocation will be issued to finance development of the Academy Heights project, along with approximately $6M of the City’s 2019 allocation.
Board/Commission Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
City Council could choose to postpone the bond ordinance, however, this would delay construction of the project and fail to address a shortage of affordable rentals for lower-income senior households in the community.
Recommended Action
Proposed Motion:
Approve the ordinance authorizing the issuance and delivery of the City’s Series 2021 multi-family housing revenue bonds for the Academy Heights Apartments project in one or more series, in the aggregate principal amount of $22,000,000.
Summary of Ordinance Language
An ordinance authorizing the issuance and delivery of the City’s Series 2021 multi-family housing revenue bonds for the Atrium at Austin Bluffs Apartments project in one or more series, in the aggregate principal amount of $22,000,000