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AGENDA ITEM SUMMARY ITEM NUMBER: 11
FORT COLLINS CITY COUNCIL DATE: August 3, 1999
STAFF: Alan Krcmarik
SUBJECT:
Public Hearing and Second Reading of Ordinance No. 118, 1999,Authorizing the Issuance of Not
to Exceed $8,980,000 of Private Activity Bonds for the Dry Creek Apartments Project and
Authorizing the Execution of Certain Related Documents and Instruments.
RECOMMENDATION: j
Staff recommends adoption of the Ordinance on Second Reading.
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EXECUTIVE SUMMARY:
Representatives from Concorde Capital Corporation contacted the City of Fort Collins in December
of 1998 requesting that the City consider issuing private activity bonds for the purpose of supporting
an affordable housing project. The project will consist of up to 150 dwelling units. Twenty-seven
of the units will be for individuals or households making no greater than 60% of area median
income. Fort percent of the units will be for households under the 50%median income level. The
remainder of the project (33%) will be rented at market rates. The City Council considered the
request and approved a resolution inducing the project on January 19, 1999. This action used all
of the City's 1999 private activity bond allocation of$2,684,075. Concorde Capital and City staff
prepared an allocation to the state for additional bonding capacity and made a presentation to the
state allocation board. The board awarded $6.3 million of additional allocation to the project.
Ordinance No. 118, 1999 was unanimously adopted on First Reading on July 20, 1999.
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AGENDA ITEM SUMMARY ITEM NUMBER: 16
DATE: July 20, 1999
FORT COLLINS CITY COUNCIL
STAFF: Alan Krcmazik
SUBJECT:
First Reading of Ordinance No. 118, 1999,Authorizing the Issuance of Not to Exceed $8,980,000
of Private Activity Bonds for the Dry Creek Apartments Project and Authorizing the Execution of
Certain Related Documents and Instruments.
RECOMMENDATION:
Staff recommends adoption of the Ordinance on Fitk,Reading
FINANCIAL IMPACT:
The total amount of the private activity bond issue will be an amount not to exceed$8,980,000. The
City serves as the issuer of the bonds, however, the bonds are not obligations of the City of Fort
Collins. The debt service will Ire paid from iental-i'ficome tn" developer from the housing units
constructed with the proceeds":fof the bonds. The zaffordable, is within the project will carry
monthly rents of$551 to$794Ter month This wilhallow indi duals and families with income at
50%of the area median income 'c live in the units.-4 he units All remain affordable for at least 20
years subject to the trust indenture and financing documents.
EXECUTIVE SUMMARY:
Representatives from Concorde Capital Corporation contacted the City of Fort Collins in December
of 1998 requesting that the City consider issuing private activity bonds forthe purpose of supporting
an affordable housing project.Prntder.the federal andztate laws,the-project would qualify as a low-
income rental housing project.,Pe project is to.be 1cated iniheatorth part of Fort Collins near the
southeast comer of the mterse6hon of Redwoodandl*Conifer. to project will consist of up to 150
dwelling units. The site is approximates 13.6-abres. Twee-seven of the units will be for
individuals or households making no greater than 60%of area median income. Forty percent of the
units will be for households under the 50% median income level. The remainder of the project
(33%) will be rented at market rates. The City Council considered the request and approved a
resolution inducing the project on January 19, 1999. This action used all of the City's 1999 private
activity bond allocation of$2,684,075. Concorde Capital and City staff prepared an allocation to
the state for additional bonding capacity and made a presentation to the state allocation board. The
board awarded $6.3 million of additional allocation to the project.
Concorde Capital and its financing team have secured the appropriate financial guarantees and
structured the financing. The interest rate on the bonds wRll be about 3.9%in the variable rate mode
and the final maturity of the bonds will not exceed 43 years from the date of issuance.
DATE: July20, 1999 2 ITEM NUMBER: 16
BACKGROUND:
Staff has attached the agenda item summary from the inducement resolution including the site map
of the location of the project.
Project Costs
The following figures are the best estimates available as of the deadline for first reading. They are
subject to change up to the sale of the bonds.
Sources of Funds
Tax Exempt Private Activity Bands _ $ 8,890,0kAQ
City HOME Program Support 250,000
Private Equity Loan 673,500
Equity Contribution from Developer 4,913,804
Total Project Sources $14,817,304
ADnlications of Funds
Land Acquisition $`, 80,0000
Project Construction G 9,429; 0
Soft Costs(impact fees, cost ofassuance,=serves
developer fees, interest, etc.) 4,588,304
Total Project Uses $14,817,304
Sources and Uses of Bond Proceeds
The following figures are also subject to change up to the sale of the bonds.
Sources -A''
Proceeds from the Sale of the Bonds $ 8,890,tM
Uses
Project Construction Costs 8,712,200
Costs of Issuance 177,800
Total Uses of Bond Proceeds $8,890,000
DATE: July 20, 1999 3 ITEM NUMBER: 16
Term and Estimated Interest Rate on the Bonds
The bonds will be initially offered with a variable interest rate. The estimated rate on the variable
rate bonds will be about 3.9%. The interest rate can also be fixed on the bonds. When the interest
rate on the bonds is adjusted, the bondholders have the option to tender the bonds back for
repurchase. The payment of principal and interest on the bonds and any repurchase obligations are
supported by a letter of credit issued by a AA rated bank, Fifth Third Bank of Cincinnati, Ohio.
Recommendation
The Affordable Housing Board reviewed the project proposal at the time of its inducement and
recommended it for Council's approval. Stafffinds-tlat the.project supports Council's goal of
increasing the quality and affordability of housing in the community. The project has also met the
City's adopted policies for mulri family private activity bonds. Therefore, staff recommends
adoption of the Ordinance on first reading.
This Project uses the City's private activity bond allocation of$2,684,075 to leverage $12,133,229
of state allocation and private sector investment.
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