HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/15/2002 - RESOLUTION 2002-003 SETTING FORTH THE INTENTION AGENDA ITEM SUMMARY ITEM NUMBER: 14
DATE: January 15, 2002
• FORT COLLINS CITY COUNCIL
STAFF:
Alan Krcmarik
SUBJECT:
Resol.ttion 2002-003 Setting Forth the Intention of the City to Assign its Year 2002 Private Activity
Bond Allocation to the Colorado Housing and Finance Authority to Finance Multi-Family Housing
Revenue Bonds for the Caribou 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 and Finance Authority for this
project cannot and will not 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 will 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$4,450,950 of private activity bonds for
2002. The proponents will apply for additional private activity bond allocation, $11.500.000 from
the Colorado Housing and Finance Authority.
EXECUTIVE: SUMMARY:
In early December 2001, Mr. Marc Hendricks and Mr. Rodger Hara, representatives of the Caribou
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 the Colorado Housing and Finance Authority ("CHFA") for the purpose of
acquiring property, constructing and equipping a multi-family housing project in the northeast part
Fort Collins. This development would qualify as an Affordable Housing Project. The project is
located near the corner of the intersection of Timberline and Caribou Roads. A total of 192 dwelling
units will be included in the project. Of the total, 87 (45%)of the units will be affordable to persons
whose incomes do not exceed 60%of the Area Median Income, which include 14 units reserved for
fami'ies whose incomes do not exceed 50% of the AMI. The remaining units will be leased at
market rental rates.
Adoption of this Resolution would allow CHFA to issue up to $16 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 CHFA. The proposal is consistent with the City's adopted
polic ies regarding the issuance of multi-family rental housing bonds. The Affordable Housing Board
reviewed the project at its meeting on January J. 2002. The Board supports the proposal.
DATE: January 15, 2002 2 ITEM NUMBER: 14
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 CHFA. 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 Cariboo Apartment 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 Project is planned to be a 192-unit multi-family project in the north part of Fort Collins. The
site is located at the corner of Timberline and Caribou Roads (see the attached map). The project
will contain 78 one-bedroom units. 102 two-bedroom units and 12 three-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, thereby improving the overall financial viability
of the project.
According to the information received from the Project proponents,the tenancy for at least 87 units
(45%of the Project)will be affordable for residents making no greater than 60%of the area median
income, which includes 14 units will be affordable at the 50% of area median income.
Tenant eligibility and proof of meeting the targeted income clientele will be provided to the City
annually and will be regulated by, deed restrictions of the tax credit allocation.
Criterion 41
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 45% 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.
Criterion #2
For restricted units, the rents mast be set at 30% of 70% of median income. The rents for this
project will have 45% of the units' monthly rents set at or below 30% of 60% of area median
income.
FDA7T7E*: January 15, 2002 3 ITEM NUMBER: 14
The Froject meets this criterion.
RENT CALCULATIONS
Caribou Apartments Project Rent Calculations
Number of Bedrooms
(Assumes an average of 1.5 people per bedroom)
1 Bedroom 2 Bedrooms 3 Bedrooms
Income Rent Rent Rent
Market Rate $810-$830 $1,065-$1,085 $1,175-$1,195
60% of Median Income $629 $750 $863
50% of Median Income $516 $614 $705
Criterion 43
The City's policy is to request that the owner of the projects provide an additional rent subsidy for
the 2.0% restricted units. (This is an optional criterion. The rent subsidy is provided in lieu of
collection of the City's normal issuance fee.) In this project, 14 of the units will be available for
persons or families at 50%of area median income. This can be considered an additional rent subsidy
for purposes of this criterion.
Criterion 94
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
righ:s for appeal need to have expired. The underlying zoning for the subject property supports the
proposed land use. Final site plan approvals are anticipated prior to the end of the 2002 calendar
year.
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.
I
r
TE: January 15, 2002 4 ITEM NUMBER: 14
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 98
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 #4.
Recommendation
The Caribou Apartments Project has been presented to the Affordable Housing Board and received
its approval.
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 2002-003
OF THE COUNCIL OF THE CITY OF FORT COLLINS
SETTING FORTH THE INTENTION OF THE CITY TO ASSIGN ITS YEAR 2002
PRIVATE ACTIVITY BOND ALLOCATION TO THE COLORADO HOUSING AND
FINANCE AUTHORITY TO FINANCE MULTI-FAMILY HOUSING REVENUE
BONDS FOR THE CARIBOU 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 for the allocation of the 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 2002 State Ceiling for the issuance of Private
Activity Bonds in the aggregate principal amount of up to $4.450,950 prior to September 15.
2002 (the "2002 Allocation"): and
WHEREAS, the Citv 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 2002 Allocation to advance that objective; and
WHEREAS, the City of Fort Collins has determined that the 2002 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 the Caribou Apartments Project, a multi-family
housing project planned to be located near the intersection of Timberline Road and Caribou
Road in the north part of Fort Collins, which is expected to include a 192 housing units and a
clubhouse facility (the "Project"), or, if the Project does not proceed, for one or more rental
housing projects for low- and moderate-income persons and families in the Fort Collins area;
and
WHEREAS, the Council has determined to assign $4,450,950 of its 2002 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 $4,450.950 of the City of Fort
Collins' 2002 Allocation, for use by the Authority for the purposes set forth herein, is hereby
approved.
Section 2. That the form and substance of the Assignment of Allocation are hereby
approved; provided, however, that the City Manager, in consultation with the City Attorney, is
hereby 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 is hereby 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
15th day of January, A.D. 2002.
Mayor
ATTEST:
City Clerk
• ASSIGNMENT OF ALLOCATION Exhibit"A"
This Assignment of Allocation(the"Assignment'),dated this day of January,2002,
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
ame unt 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 2002 State Ceiling for the issuance of a specified principal amount
of Private Activity Bonds prior to September 15, 2002 (the "2002 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 2002 Allocation; and
WHEREAS, the Assignor has determined that the 2002 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 2002 Allocation; and
WHEREAS, the City Council of the Assignor has determined to assign to the Assignee
$4,450,950 of its 2002 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 $4,450,950 of its 2002 Allocation,
subject to the terms and conditions contained herein. The Assignor represents that it has received
no monetary consideration for said assignment.
t
2. The Assignee hereby accepts the assignment to it by the Assignor of$4,450,950 of
Assignor's 2002 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 Caribou Apartment Project, a proposed 192-unit multi-family rental
housing project for low and moderate income families located near the intersection of Timberline
Road and Caribou Road, Fort Collins, Colorado(the "Project"). In the event Assignee is unable to
finance the Project on or prior to December 31, 2002, Assignee agrees to use its best efforts to use
an amount equal to the 2002 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 for low and moderate income families, or, in the event such efforts are unsuccessful,for
one or more such projects 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.
IN WITNESS WHEREOF,the parties hereto have duly executed this Assignment onthe date
first written above.
THE CITY OF FORT COLLINS, COLORADO
[SEAL]
By:
John F. Fischbach
City Manager
ATTEST:
By:
Wanda M. Krajicek
City Clerk
APPROVED AS TO FORM:
By:
Carrie M. Daggett
Assistant City Attorney
2
COLORADO HOUSING AND FINANCE
AUTHORITY
[SEAL]
By:
Executive Director
ATTEST:
By:
Assistant Secretary
3
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