HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/18/2000 - RESOLUTION 2000-16 SETTING FORTH THE INTENTION OF AGENDA ITEM SUMMARY ITEM NUMBER: 18
DATE: January 18, 2000
• FORT COLLINS CITY COUNCIL STAFF:
Alan Krcmazik
SUBJECT:
Resolution 2000-16 Setting Forth the Intention of the City to Assign its Year 2000 Private Activity
Bond Allocation to the Colorado Housing Finance Authority to Finance Multi-Family Housing
Revenue Bonds for the Fox Meadows Apartments Project.
RECOMMENDATION:
Staff and the Affordable Housing Board recommend adoption of the Resolution.
FINANCIAL IMPACT:
The private activity bonds that would be issued by Colorado Housing Finance Authority("CHFA")
for this project cannot be obligations of the City of Fort Collins. The City is assigning its allocation
to another entity eligible to issue the bonds. The debt service on the bonds would be repaid from
• revenue generated by the project. The debt service on the private activity bonds does not constitute
a debt of the City. The City has an allocation of$2,756,250 of private activity bonds for 2000. The
proponents will apply for additional private activity bond allocation from the Colorado Housing
Finance Authority.
EXECUTIVE SUMMARY:
In early December 1999, Mr. Lee Mendel and Mr. Rodger Hara, representatives of the Fox
Meadows Apartments Project(the"Project"),contacted staff members of the Advance Planning and
Finance Departments. They have requested the City consider assigning its annual allocation of
private activity bonds to CHFA for the purpose of acquiring property, constructing and equipping
a multi-family housing project in the southeast part Fort Collins. The Project would qualify as a
low-income rental housing project. The project is located near the southeast corner of the
intersection of Timberline and Horsetooth Road. 138 dwelling units will be included in the project.
Of the total,60%of the units will be affordable to persons whose incomes do not exceed 60%of the
Area Median Income. Five of the units will be reserved for families whose incomes do not exceed
40% of the AMI and five units for families at 50% of AMI. The remaining units will be leased at
market rental rates.
Adoption of this Resolution would allow CHFA to issue up to $10 million in tax-exempt private
activity bonds for the purpose of constructing the project. The issuance is contingent on the Project
using an additional allocation from the Colorado Housing Finance Authority. The proposal is
consistent with the City's adopted policies regarding the issuance of multi-family rental housing =
bonds. The Affordable Housing Board reviewed the project at its meeting on January 6,2000. The
Board supports the proposal.
DATE: January 18, 2000 2 ITEM NUMBER: 18
Staff finds that the project is consistent with Council's goal of increasing the quality of affordable
housing in the City. The project proponent is in the process of preparing an agreement to secure an
additional Private Activity Bond Allocation from the Colorado Housing Finance Authority. Based
on Council's action on the Resolution,the City will support the project proponent in its application
to CHFA.
BACKGROUND:
One of the Council's top priority work plan goals since 1995 has been to increase the quality and
affordability of housing. In 1984,the City adopted policies for the issuance of tax exempt bonds
that would acquire, rehabilitate, or maintain the supply of low-income housing. Through the
adoption of Resolution 84-179,specific criteria were set to allow the City the opportunity to pursue
its commitment to affordable housing in accordance with State and Federal legislation and
regulations. The Fox Meadows Project has been evaluated according to the criteria for issuance of
multi-family revenue bonds set forth in Resolution 84-179. Below, staff has provided a summary
of the project and then the evaluation.
The Project
The Fox Meadows Apartment Project is planned to be a 138-unit multi-family project in the north
part of Fort Collins. The site is located at the corner of Timberline and Horsetooth Roads (see the
attached map). The project will contain 56 one-bedroom units and 82 two-bedroom units. The
project is designed as two-story apartment units. A clubhouse of over 3,000 square-feet will have
a large community room for residents' use.
Financing for the project also includes tax credits and Community Development Block Grant
funding,thereby improving the overall financial viability of the project.
According to the information received from the Project proponents,the tenancy for at least 62(45%
of the Project) of the units will be affordable for residents making no greater than 60%of the area
median income. Five units will be affordable at the 50% of area median income and another five
units will be at the 50% area median income level.
Tenant eligibility and proof of meeting the targeted income clientele will be provided for in the,and
be regulated by, deed restrictions of the tax credit allocation.
Criterion#1
The City's policy requires a minimum of 20%of the units be rented to families at or below 70%of
median income. The state guidelines are more restrictive, requiring at least 40% of the units to be
rented to households at 60% of the area median income. The materials presented for the project
indicate that 60% of the units will be affordable to households at 60% of area median income or
lower. Therefore,the first policy criterion is met by the project.
DATE: January 18, 2000 3 ITEM NUMBER: 18
Criterion #2
For restricted units,the rents must be set at 30%of 70%of median income. The rents for this prof ect
will have 45% of the units' monthly rents set at or below 30% of 60% of area median income.
The project meets this criterion.
RENT CALCULATIONS
Fox Meadows Apartments Project Rent Calculations
Number of Bedrooms
(Assumes an average of 1.5 people per bedroom)
I Bedroom 2 Bedrooms
Income Rent Rent
Market Rate $735-$775 $875-$900
60% of Median Income $587 $700
50%of Median Income $548
Criterion #3
The City's policy is to request that the owner of the projects provide an additional rent subsidy for
the 200/6 restricted units. (The rent subsidy is provided in lieu of collection of the City's normal
issuance fee.) The project applicant has targeted households with 50%of area median income for
5 of the units.
Criterion#4
This criterion requires the use of#2 and#3 to calculate the actual rents for the restricted units. The
proponent has agreed to do so.
Criterion #5
This criterion requires final approval for the project by the Planning and Zoning Board. Further,any
rights for appeal need to have expired. The underlying zoning for the subject property supports the
proposed land use.
Criterion #6
This criterion requires that amenities for the low-income units be the same as other units in the
project. The proponent states that access to complex amenities are open to all residents. All units
will have the same features and quality.
This criterion will be met.
DATE: January 18, 2000 4 ITEM NUMBER: 18
Criterion #7
The owner of the project must meet all Federal and State requirements for the bonds. It is the
applicant's intention to meet all requirements. The bond documents for the project will comply with
the requirements.
This criterion will be met.
Criterion#8
Monitoring of the project management to meet the Federal and State requirements will be assigned
to the bond trustee. Bond documents will be drafted with this stipulation. The term of the rent
restrictions will be 25 years according to the requirements of the Colorado Housing Finance
Authority.
Criterion #9 and #10
These criteria allow the City to deny a project even if all criteria are met or to vary criteria #1
through 44.
Recommendation
The Fox Meadows Apartments Project has been presented to the Affordable Housing Board and
received its approval. The Board members were concerned that not more units were at lower income
levels. The Board is most interested in assisting projects that address persons and families at 30%
and 40% of area median income. A second project for affordable housing was received the day of
the meeting. The Board would have liked to be able to compare the two applications. However,due
to the deadline for additional allocation and the construction contracts on the Fox Meadows
Apartments Project, the Board supported the project by a 3-2 vote. The Board liked the idea of
leveraging approximately $7.5 million of County and State money with the City's $2.7 million
allocation. Staff will be reviewing the second application in the next few weeks and present it to the
Affordable Housing Board in February. The second project may file an application for aportion of
the statewide balance of private activity bond allocation.
Staff recommends adoption of the Resolution as it supports Council's goal of increasing the quality
and affordability of housing and is consistent with the adopted policies for multi-family housing
private activity bonds.
. RESOLUTION 2000-16
OF THE COUNCIL OF THE CITY OF FORT COLLINS
SETTING FORTH THE INTENTION OF THE CITY TO ASSIGN ITS YEAR 2000
PRIVATE ACTIVITY BOND ALLOCATION TO THE COLORADO HOUSING FINANCE
AUTHORITY TO FINANCE MULTI-FAMILY HOUSING REVENUE
BONDS FOR THE FOX MEADOWS APARTMENTS PROJECT
WHEREAS,the City of Fort Collins is authorized and empowered under the laws of the State
of Colorado (the "State")to issue revenue bonds for the purpose of financing multi-family rental
housing projects for low- and moderate-income persons and families; and
WHEREAS, the Internal Revenue Code of 1986, as amended (the "Code"), restricts the
amount of tax-exempt bonds("Private Activity Bonds")which may be issued in the State to finance
such rental housing projects and for certain other purposes (the "State Ceiling"); and
WHEREAS, pursuant to the Code, the Colorado legislature adopted the Colorado Private
Activity Bond Ceiling Allocation Act,Part 17 of Article 32 of Title 24,Colorado Revised Statutes
(the"Allocation Act"),providing forthe allocation ofthe State Ceiling among the Colorado Housing
and Finance Authority (the "Authority") and other governmental units in the State, and further
providing for the assignment of such allocations from such other governmental units to the
• Authority; and
WHEREAS,pursuant to an allocation under Section 24-32-1706 of the Allocation Act,the
City of Fort Collins has an allocation of the 2000 State Ceiling for the issuance of Private Activity
Bonds in the aggregate principal amount of up to$2,756,250 prior to September 15,2000(the"2000
Allocation"); and
WHEREAS,the City of Fort Collins has determined that,in order to increase the availability
of adequate affordable housing by low-and moderate-income persons and families within the city
and elsewhere in the State,it is necessary or desirable to provide for the utilization of all or a portion
of the 2000 Allocation; and
WHEREAS,the City of Fort Collins has determined that the 2000 Allocation, or a portion
thereof, can be utilized most efficiently by assigning it to the Authority to issue Private Activity
Bonds for the purpose of financing one or more rental housing projects for low- and moderate-
income persons and families; and
WHEREAS,the Council has determined to assign$2,756,250 of its 2000 Allocation to the
Authority, which assignment is to be evidenced by an Assignment of Allocation between the City
of Fort Collins and the Authority(the"Assignment of Allocation"),attached hereto as Exhibit"A"
and incorporated herein by this reference.
•
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fort Collins
as follows:
Section 1. That the assignment to the Authority of $2,756,250 of the City of Fort
Collins' 2000 Allocation be and hereby is approved.
Section 2. That the form and substance of the Assignment of Allocation be and hereby
are approved;provided,however,that the City Manager,in consultation with the City Attorney,be
and hereby is authorized to make such technical variations, additions or deletions in or to such
Assignment of Allocation as he shall deem necessary or appropriate and not inconsistent with the
approval thereof by this Resolution.
Section 3. That the City Manager be and hereby is authorized to execute and deliver the
Assignment of Allocation on behalf of the City of Fort Collins and to take such other steps or actions
as may be necessary,useful or convenient to effect the aforesaid assignment in accordance with the
intent of this Resolution.
Section 4. That if any section, paragraph, clause, or provision of this Resolution shall
for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
section, paragraph, clause, or provision shall not affect any of the remaining provisions of this
Resolution.
Section 5. That this Resolution shall be in full force and effect upon its passage and
approval.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 18th
day of January, A.D. 2000.
Mayor
ATTEST:
City Clerk
•
ASSIGNMENT OF ALLOCATION
This Assignment of Allocation(the"Assignment"),dated this day of January,2000,
is between the City of Fort Collins (the "Assignor") and the Colorado Housing and Finance
Authority (the "Assignee").
WITNESSETH:
WHEREAS,the Assignor and the Assignee are authorized and empowered under the laws
of the State of Colorado (the "State") to issue revenue bonds for the purpose of financing multi-
family rental housing projects for low-and moderate-income persons and families; and
WHEREAS, the Internal Revenue Code of 1986, as amended (the "Code"), restricts the
amount of tax-exempt bonds('Private Activity Bonds")which may be issued in the State to finance
such rental housing projects and for certain other purposes (the "State Ceiling"); and
. WHEREAS, pursuant to the Code, the Colorado legislature adopted the Colorado Private
Activity Bond Ceiling Allocation Act,Part 17 of Article 32 of Title 24,Colorado Revised Statutes
(the "Allocation Act"), providing for the allocation of the State Ceiling among the Assignee and
other governmental units in the State,and further providing for the assignment of allocations from
such other governmental units to the Assignee; and
WHEREAS,pursuant to an allocation under Section 24-32-1706 of the Allocation Act,the
Assignor has an allocation of the 2000 State Ceiling for the issuance of a specified principal amount
of Private Activity Bonds prior to September 15,2000 (the "2000 Allocation"); and
WHEREAS, the Assignor has determined that, in order to increase the availability of
adequate affordable housing by low-and moderate-income persons and families within the City of
Fort Collins and elsewhere in the State, it is necessary or desirable to provide for the utilization of
all or a portion of the 2000 Allocation; and
WHEREAS,the Assignor has determined that the 2000 Allocation,or a portion thereof,can
be utilized most efficiently by assigning it to the Assignee to issue Private Activity Bonds for the
purpose of financing one or more multi-family rental housing projects for low-and moderate-income
persons and families('Revenue Bonds"),and the Assignee has expressed its willingness to attempt
to issue Revenue Bonds with respect to the 2000 Allocation; and
• 1
WHEREAS, the City Council of the Assignor has determined to assign to the Assignee
$2,756,250 of its 2000 Allocation, and the Assignee has agreed to accept such assignment, which
is to be evidenced by this Assignment.
NOW,THEREFORE,in consideration of the premises and the mutual promises hereinafter
set forth, the parties hereto agree as follows:
1. The Assignor hereby assigns to the Assignee $2,756,250 of its 2000 Allocation,
subject to the terms and conditions contained herein. The Assignor represents that it has received
no monetary consideration for said assignment.
2. The Assignee hereby accepts the assignment to it by the Assignor of$2,756,250 of
Assignor's 2000 Allocation, subject to the terms and conditions contained herein. The Assignee
agrees to use its best efforts to issue and sell Revenue Bonds, in one or more series, and to make a
mortgage loan to finance the Fox Meadows Apartment Project,a multi-family rental housing project
located at Timberline and Horsetooth,Fort Collins,Colorado(the"Project"). In the event Assignee
is unable to finance the Project on or prior to December 31, 2000, Assignee agrees to use its best
efforts to use an amount equal to the 2000 Allocation hereby assigned in connection with the
issuance of Revenue Bonds to finance one or more other multi-family rental housing projects located
within Assignor's boundaries, or, in the event such efforts are unsuccessful, anywhere within the
State, as it may in its discretion determine.
3. The Assignor hereby consents to the election by the Assignee,if the Assignee in its
discretion so decides,to treat all or any portion of the assignment set forth herein as an allocation
for a project with a carryforward purpose.
4. The Assignor and Assignee each agree that it will take such further action and adopt
such further proceedings as may be required to implement the terms of this Assignment.
5. Nothing contained in this Assignment shall obligate the Assignee to finance the
Project or to use the allocation hereby assigned it to finance any other multi-family rental housing
project located in the City of Fort Collins.
6. This Assignment is effective upon execution and is irrevocable.
2
• IN WITNESS WHEREOF,the parties hereto have duly executed this Assignment on the date
first written above.
THE CITY OF FORT COLLINS, COLORADO
[S E A L]
By:
John F. Fischbach
City Manager
ATTEST:
By:
Wanda Krajicek
City Clerk
APPROVED AS TO FORM:
By:
Came M. Daggett
Assistant City Attorney
•
COLORADO HOUSING AND FINANCE
AUTHORITY
[SEAL]
By:
Fill in name
Executive Director
ATTEST:
By:
Assistant Secretary
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