Title
A Resolution declaring the intent of the City of Colorado Springs to issue its Multifamily Housing Revenue Bonds to finance the construction of an affordable multifamily housing development known as Academy Heights
Presenter:
Steve Posey, HUD Program Manager, Planning & Community Development
Peter Wysocki, Director of Planning and Community Development
Body
Summary:
A Preliminary Inducement Resolution for the issuance of Private Activity Bonds (PAB) for Academy Heights, a 201 unit multi-family affordable rental development made up of 1BR, 2BR and 3BR apartments for households earning an average of 60% area median income. The proposed project is located at the NW corner of E Fountain Blvd & Academy Park Loop.
Previous Council Action:
On June 22, 2020, this item was introduced to City Council at the work session.
Background:
Private activity bonds (PAB) are a form of tax-exempt financing in which the City acts as the conduit issuer, but assumes no debt responsibility. The developer accessing PAB financing agrees to carry all costs related to the bond issuance, including attorney’s fees, document preparation, and public notifications. Proceeds from the sale of the bonds are combined with 4% Low-Income Housing Tax Credits (LIHTC) to finance affordable multi-family development.
The developer must include a preliminary inducement resolution from an issuer such as the City of Colorado Springs in their application to the Colorado Housing Finance Authority (CHFA) for the balance of the financing needed to build the project. Previously, City Council has adopted preliminary inducement resolutions for two other affordable multi-family projects, including the Atrium at Austin Bluffs and Draper Commons. The Atrium project will be breaking ground this summer and Draper Commons is expected to break ground later this year.
The developer for the project submitted an application for PAB financing to the Community Development Division (CDD) on April 9, 2020. CDD staff reviewed the application and set up a meeting of the PAB Review Committee on April 29, 2020. The review committee recommended moving forward with a preliminary inducement resolution pending confirmation from the development team that the Colorado Springs Housing Authority (CSHA) would participate in the project as a Special Limited Partner providing property tax abatement. The CSHA board met on May 21, 2020 and voted to participate as a Special Limited Partner in the project.
This item supports the City’s strategic goal relating to building community and collaborative relationships by addressing a shortage of affordable housing. The item also supports the Mayor’s goal included in HomeCOS, Housing Our Future, of building or preserving an average of 1000 units of affordable housing each year. A total of 874 units of affordable multi-family rental are expected to break ground in 2020. These projects have their PAB financing lined up or are 9% tax credit projects that do not require PAB. The project pipeline of submitted applications and inquiries for 2021 includes 880 units of affordable multi-family rental. These projects include a mix of PAB issues by the City and PAB issuers to be determined.
This item is supported by and implements PlanCOS Vibrant Neighborhoods Policy VN-2-A pertaining to attainable housing and providing a variety of housing types for various life stages and income levels.
Financial Implications:
The developer is requesting $23M in bond cap. The City will provide the amount either from its available cap or by combining cap with El Paso County or the Colorado Housing Finance Authority.
This item was presented to the Finance/Budget Committee on 6/9/2020. The committee recommended moving forward with introduction of the item at City Council Work Session on June 22, 2020.
Per Administrative Regulation 2020-04, a non-refundable preliminary inducement resolution fee of $5000 will be collected from the developer. This fee will be credited to the 40 bps issuer fee due at financial closing on the project.
Board/Commission Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
Adopt the resolution as presented.
Adopt the resolution with modifications.
Not adopt the resolution.
Recommended Action
Proposed Motion:
Adopt a resolution declaring the intent of the City of Colorado Springs to issue a portion of its multifamily housing revenue bonds to finance the construction of an affordable multifamily housing facility known as Academy Heights.
Summary of Ordinance Language
N/A