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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/06/2001 - RESOLUTION 2001-19 AMENDING RESOLUTION 2000-32 FOR AGENDA ITEM SUMMARY ITEM NUMBER: 26 DATE: February 6, 2001 FORT COLLINS CITY COUNCIL STAFF: Alan Krcmarik SUBJECT: Resolution 2001-19 Amending Resolution 2000-32 for the Purpose of Extending the Time Period for the City to Issue Multifamily Housing Revenue Bonds for the Residence at Oakridge Project. RECOMMENDATION: Staff recommends adoption of the Resolution. The Finance Committee was informed of this item at its January 19, 2001, meeting and concurred with the recommendation. FINANCIAL IMPACT: Under the federal and state laws governing the use of tax-exempt private activity bonds, the City may issue the bonds but may not use its own revenues to support the project. Private activity bonds are paid with revenues generated by the project itself or the resources of the private proponent of the project. The expected total cost of the Residence at Oakridge Project is$4.5 million. The total amount of private activity bond allocation is $3,558,500 ($800,000 from the Statewide balance, $1,178,750 from the City of Loveland, and $1,579,750 from Latimer County). The Project proponents will finance the remainder of the Project with private taxable financing. EXECUTIVE SUMMARY: This Resolution extends the deadline for the issuance of private activity bonds for the Residence at Oakridge Project, an assisted living residence that will provide affordable housing for low-income frail elderly individuals. On February 15,2000,the City Council adopted the inducement resolution for the project. The inducement resolution contained a one-year deadline for the issuance of the bonds. The project proponents and their financial team expect that the financing will be completed by mid-year and have requested an extension for one year. The proponents have purchased the property for the project and the underwriting team will be conducting pre-marketing of the bonds in the next few months. Based on the commitment and progress shown to date, staff finds it reasonable for Council to extend the deadline for the issuance of the bonds. BACKGROUND: The Residence at Oakridge Project is an assisted living rental housing complex to be located along McMurray Drive in the Oakridge Business Park. National Healthcare Associates, the project proponent, estimates the total cost of the project to be about$4.5 million. The Project will contain 44 units with a total of 58 beds. Of the total units,50% will be reserved for persons whose incomes do not exceed 60% of the Area Median Income. The project will qualify as a low-income rental project. The remaining units will be leased at market rates. DATE: February 6, 2001 2 26 ITEM NUMBER: To support the Project's application for an allocation from the Statewide balance of private activity bonds, the City requested and the County granted its 2000 allocation of $1,579,750. The State Allocation Board ranked the project very high and recommended that the Project receive an allocation. Due to some uncertainty about the financing structure for the project, the $800,000 allocated was less than the amount needed to complete the financing. The State suggested the City of Fort Collins contact the City of Loveland to secure an assignment of its allocation. Staff did this last June and secured Loveland's allocation of$1,178,750. According to the Project proponent, it can secure supplemental taxable financing to complete the project. Staff recommends adoption of Resolution that extends the deadline for issuance of the private activity bonds by one year. For additional background, staff has included the agenda item summary from February 15, 2000, through which the Council originally induced the project. • RESOLUTION 2001-19 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING RESOLUTION 2000-32 FOR THE PURPOSE OF EXTENDING THE TIME PERIOD FOR THE CITY TO ISSUE MULTIFAMILY HOUSING REVENUE BONDS FOR THE RESIDENCE AT OAKRIDGE PROJECT WHEREAS, on February 15, 2000, the City Council (the "Council") of the City of Fort Collins, Colorado (the "City") adopted Resolution 2000-32 which set forth the City's intention to issue its multifamily housing revenue bonds (the "Bonds") for the Residence at Oakridge Project (the "Project"); and WHEREAS, as of the date of this Resolution, the Bonds have not been issued by the City; and WHEREAS, pursuant to Section 6 of Resolution 2000-32, the commitment of the City to issue Bonds for the Project will expire on February 15, 2001; and WHEREAS, representatives of National Healthcare Associates, Inc. have requested that the deadline for issuing Bonds pursuant to Resolution 2000-32 be extended and have represented to the City that the Project is still proceeding to completion. SNOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, as follows: Section 1. That Section 6 of Resolution 2000-32 is hereby amended to extend the deadline for issuing Bonds in connection with the Project until February 15, 2002. In the event that said Bonds to be issued pursuant hereto and pursuant to Resolution 2000-32 are not issued by February 15, 2002, the City shall be under no obligation to perform any of the terms and conditions contained herein or in Resolution 2000-32 Section 2. That all other provisions of Resolution 2000-32 shall remain in full force and effect. Section 3. That all resolutions or parts thereof concerning the subject matter hereof in conflict with this Resolution are hereby repealed to the extent of such conflict. This repealer shall not be construed to revive any resolution or part thereof, heretofore repealed. Section 4. That this Resolution shall take effect immediately upon its introduction and passage. Section 5. That the filing and execution by the Financial Officer of IRS Form 8328 "Carryforward Election of Unused Private Activity Bond Volume Cap" attached hereto is approved. Passed and adopted at a regular meeting of the City Council held this 6th day of February, A.D. 2001. Mayor ATTEST: City Clerk r AGENDA ITEM SUMMARY ITEM NUMBER: 22 FORT COLLINS CITY COUNCIL DATE: February 15, 2000 STAFF: Alan Krcmarik SUBJECT: Resolution 2000-32 Setting Forth the Intention of the City to Issue Multi-Family Housing Revenue Bonds for the National Healthcare Associates Residence at Oakridge Assisted Living Project and Authorizing the Execution of an Assignment Agreement and a Delegation Agreement with Larimer County. RECOMMENDATION: Staff recommends adoption oCee'so tion. e f yry5. sing Board's recommendation will be forwarded to Councilh eeti' Febru FINANCIAL IMPACT: The private activity bonds that would be issued by the City for this project cannot be obligations of the City of Fort Collins. The City serves only as the sponsor and issuer of the bonds for the project. The debt service on the bonds w e r fr ve emoted by the project. The debt service on the private activit, and s n o tit e f of the City. The City had an allocation of $2,756,250 of vate act 'ty bo s 00 used this allocation for the Fox Meadows Apartments Project. i er u s ocation 579,750) is available. If the City induces the project,the proponents will apply for the County's allocation and for additional private activity bond allocation from the Statewide Balance or the Colorado Housing Finance Authority ("CHFA"). EXECUTIVE SUMMARI ,: In late December 1 99,Mr.Robert Mattrazo,a representative of the National Healthcare Associates Project(the"Project"),contacted staff members of the Advance Planning and Finance Departments. The organization has requested the City consider issuing private activity bonds for the purpose of acquiring property,constructin 46d d�j i §td IN ti�lltifamily housing project in the southeast part Fort Collins. T e Project+would x a 1 income rental housing project. The project is located along McMurray Drive m`Oakftdge Business Park. Forty-four units(58 beds) will be included in the project. Of the total, 50% of the units (beds)will be affordable to persons whose incomes do not exceed 60%of the Area Median Income. The remaining units will be leased at market rental rates. Passage of this Resolution will allow the City to issue up to $4.5 million in tax-exempt private activity bonds for the purpose of constructing the project. The issuance is contingent on the Project receiving an additional allocation from the Statewide Balance or the Colorado Housing Finance Authority. The Resolution also authorizes the execution of an Assignment Agreement and a Delegation Agreement with the County, which would carry out the proposed assignment of the County's allocation to the City. The execution of those agreements is made contingent upon the receipt of the necessary additional allocations for the Project. The proposal is consistent with the City adopted policies regarding the issuance of multi-family rental housing bonds. i DATE: February 15, 2000 2 ITEM NUMBER: 22 Staff finds that the project is consistent with Council's goal of increasing the quality of affordable housing in the City. The project also serves a special niche in the housing market, that of low- income seniors that require some assistance in the course of their daily lives. The project proponent has prepared and submitted an application to secure an the additional Private Activity Bond Allocation from the Statewide Balance of private activity bonds. Based on Council's action on the resolution,the City will support the project proponent in its application to Larimer County and the competitive statewide balance. The deadline for applications for allocations is January 21, 2000. BACKGROUND: One of the Council's top prioCthe (th al o 19 been to increase the quality and affordability of housing. In 1p p icies for issuance of tax exempt bonds that would acquire, rehabilitate, pl low-in 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. Although the project proponent is seeking support for the Project from the State,CHFA,and Latimer County, the City's support for the Project is crucial,since the Project would be located in the City. As a general rule,the City,rather than the County,issues private activity bonds for projects such as this one that will be located within the City. The Concorde 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 an th ua The Proiect The Residence at Oakridge Project is planned to be a 44-unit assisted living multi-family project in the southeast part of Fort Collins. The site is located along McMurray Drive in the Oakridge Business Park ( see the attached map). The project will contain 44 unit, 58 beds. The project is designed as one-story residential units. Financing for the project also includes tax credits. The Project may apply for other affordable housing programs offered by the City, thereby improving the overall financial viability of the project. fi ,r s f According to the information niceived fr m the oi"ents ,pri`ipon ts,the tenancy for at least 29(50% i' of the Project) of the beds wil}(be affordable fot re mak�6g no greater than 60% of the area median income. The Project proomf6nts haV&indica"ted that some of the units may be reserved at even lower income levels should the financing and cash flow allow. 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. DATE: February 15, 2000 3 ITEM NUMBER: 22 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 50% 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 m e` eset Fr3YOZ% ome. The rents for this project will have 45% of the units' m- thly re of area median income. The project meets this criterion. RENT CALCULATIONS The Residence at Oakridge Project Rent Calculations The Residence at Oakridge is an assisted living project. Unit sizes and rents are not directly comparable to typical multi-family apartment projects financed with private activity bonds. The table below illustrates unit typCum '�ndi - Type of Unit Unit Size ber an ype o R set-Aside Market (#Beds/#Bath) in so.ft. a Set-Aside ,, Rent Rent Medicaid Shared 380 12 24 24 $309 n/a Private(2/1) Shared Private 380 2 4 0 n/a $365 (2/1) Small Private 225 6 6 5 $433 $433 (1/1) Large Private 330 24 i 24,' 4 tk 1 0" n/a $605 % is Based on projected cash flows♦ staff ant the A£fo able Houng Board have requested that the project proponents attempt to resetve'a portion of the"set-aside"'dnits for persons with income lower than 60% of the Area Median Income. Criterion#3 The City's policy is to request that the owner of the projects provide an additional rent subsidy for the 20% restricted units. (The rent subsidy is provided in lieu of collection the City's normal issuance fee.) This project will have 50% of the beds reserved for persons at 60% of the area median income. In 40 addition, this project serves the frail elderly population. Because this is not a typical low to moderate income project, it is difficult to apply the additional rent subsidy policy. DATE: February 15. 2000 4 ITEM NUMBER: 22 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 a This criterion requires that am e s fol - me unibe 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. Criterion#7 The owner of the project must meet 11 Federala to quireaments for the bonds. It is the applicant's intention to meet allequir ts. e b nd d¢cu ?ts for the project will comply with rz the requirements. 47 f 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#4. Recommendation 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. The Affordable Housing Board had not completed its recommendation at the time this packet went to print. Staff will provide the Board's recommendation as soon as it is available. . RESOLUTION 2000-32 OF THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO SETTING FORTH THE INTENTION OF THE CITY TO ISSUE MULTIFAMILY HOUSING REVENUE BONDS FOR THE RESIDENCE AT OAKRIDGE PROJECT AND AUTHORIZING THE EXECUTION OF AN ASSIGNMENT AGREEMENT AND A DELEGATION AGREEMENT WITH LARIMER COUNTY WHEREAS,represent es on e t e so c tes,Inc. (the"Company")have met with officials of the City Fort C ins, o e ` ' "), and have advised the City of the interest of the Company in uirin , nst and equi ing a multifamily housing assisted living project (the "Project") to ocate ap imatel 2 acres of land east of Wheaton Drive and south of the Comfort Suites in the Oakridge Business Park in Fort Collins, Colorado, subject to the City's financing the Project by the issuance of multifamily housing revenue bonds, pursuant to the Colorado County and Municipality Development Revenue Bond Act, constituting Article 3, Title 29, Colorado Revised Statutes, as amended (the"Act"); and WHEREAS, the Project is within the municipal boundaries of the City; and WHEREAS, the Comp y-� re nt e Zas t the Project will qualify as a • "project" within the meaning the Air nd WHEREAS,the Cound( _a�:cbnld therroposal concluded that the benefits to be derived therefrom by the City will be substantial; and WHEREAS, the Council has determined that the Project is consistent with the goals and objectives of the City; and WHEREAS, the Company and the City staff are working with Latimer County, Colorado (the"County"), the Colorado Housing Finance Authority("CHFA")and the State of Colorado(the "State"), seeking to increase the City's private activity bond volume cap allocation sufficient to permit the issuance of multifamily ho tsu#g re u o th(,Arcject; and 45 WHEREAS, the Council desires to mdites intent t roceed with financing the Project through the issuance of such reven'Ge b onds if the acjdditional"a location needed by the City to use in connection with the Project is made available by the County, CHFA, and/or the State; and WHEREAS,the County is authorized under the Act to finance projects as defined in the Act, including housing facilities for low- and middle-income persons and families; and WHEREAS,the County has been awarded$1,579,750(the"2000 Allocation")of the private activity bond volume cap for the State and its issuing authorities pursuant to the Colorado Private . Activity Bond Ceiling Allocation Act,constituting part 17 of article 32 of title 24,Colorado Revised Statutes, as amended (the "Allocation Act"); and WHEREAS,the County is considering the assignment of its 2000 Allocation to the City in order to assist with the financing of the Project; and WHEREAS, it is necessary to evidence such assignment by the execution and delivery by the County of an Assignment Agreement by and between the City and the County in substantially the form attached hereto as Exhibit"A"and incorporated herein by this reference(the"Assignment Agreement"); and WHEREAS, Section 29-3-104(2) of the Act provides that a county or municipality may delegate by resolution or ordCefi ca m t y er county or municipality the authority to act on its behalf i ng of of der Act and that any such delegation may be general or limited in e, y be irre able for the term or terms of any financing agreement or bondas p tde such re ion or ordinance; and WHEREAS,the County desires to delegate to the City the authority to finance and otherwise take action and exercise power under the Act on behalf of the County with respect to the Bonds and the Project; and WHEREAS,it is necessary to evidence such delegation by the execution and delivery by the County of a Delegation Agreement by and between the City and the County in substantially the form attached hereto as Exhibi ' ? nd�inefl er ' •b is reference (the "Delegation Agreement"). NOW,THEREFORE, I � � 1LYF THE C CIL OF THE CITY OF FORT COLLINS, COLORADO as follows: Section 1. That in order to induce the Company to undertake the Project, the City shall, subject to the provisions hereof,and,contingent upon the City obtaining sufficient additional private activity bond volume cap allocation from the County,CHFA and/or the State,take all necessary and advisable steps to effect the issuance of multifamily housing revenue bonds(the"Bonds")pursuant to the Act in the maximum aggregate principal amount of Four Million Five Hundred Thousand Dollars($4,500,000)or such lesser amount as shall be determined and agreed upon by the Company and the City to finance the ProX —1 lie B nds•, ill .�ot`(ie g eer4 bligations of the City. Neither shall the Bonds,including intef6st theredi.,cons k tut"the''ebt ot,indebtedness of the City within the meaning of any limitation of t4 Constitution ory st ptes of the Late or the Home Rule Charter of the Citythe "Charter" nor give i se to a"'ecuni " liabilit U of the City or a charge against its ( ), g l azy Y Y g g general credit or taxing powers. The Bonds shall be payable solely from and secured by a pledge of revenues derived from and payable by the Company pursuant to financing agreements with the City. Section 2. That no costs or expenses whether incurred by the City or any other party in connection with the issuance of the Bonds or the preparation of any documents by any legal or financial consultants retained in connection herewith shall be borne by the City. All such costs or expenses shall be paid from the proceeds of the Bonds or otherwise home by the Company. Section 3. That prior to any execution of a financing agreement,mortgage,indenture of trust, bond purchase agreement or any other necessary documents and agreements in connection with such Bonds, or any obligation on the part of the City to execute the same or to issue the Bonds, such documents and/or agreements shall be submitted to the City for review and approval, and shall, together with the issuance of the Bonds,be subject to the authorization of the same by ordinance of the Council pursuant to law. Section 4. That prior to any further action by the Council,the Company shall provide to the City an opinion of bond counsel satisfactory to the City supporting the legality of the financing of the Project and the utilization of bond proceeds for said Project. Section 5. That nothin ontaine T in this a sh onstitute the debt or indebtedness or a multiple fiscal year finan obli a n of y within a meaning of any limitation of the Constitution, or statutes of the St or the rter a City, give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. Section 6. That any commitments of the City contained herein are subject to the condition that within twelve (12) months of the date hereof, or such shorter period of time available under applicable law, unless otherwise extended by agreement between the City and the Company, the Bonds to be issued pursuant hereto shall be issued and sold. In the event that said Bonds to be issued pursuant hereto are not issued within twelve (12) months, or such shorter period of time available under applicable law, the City's. tat intend iss B s s I terminate, and shall be of no further force or effect. Nothin contaAe herei h co tit arranty or representation by the City that the Bonds will be iss d or thane Cit . eceive m the County,CHFA, or the State the necessary private activity h8lad,volume�G I 11 on. Th ity shall use reasonable efforts to cooperate with the Company in connection with the Company's efforts to secure from the County, CHFA, and/or the State an allocation from the private activity bond volume cap. Section 7. That all resolutions or part thereof concerning the subject matter hereof in conflict with this Resolution are hereby repealed to the extent of such conflict,provided,however, that this repealer shall not be construed to revive any resolution or part thereof, heretofore repealed. Section 8. That the agreements of the City set forth above are expressly conditioned upon the ability and willingness of th pity 6 issue the ion s h A xe pt obligations under the Internal Revenue Code of 1986, as ampded, and nothmgokunird miResolution shall be construed as -"requiring the City to issue the Bonds and the decisdion to issue to Bonds shall be in the complete discretion of the City. Section 9. That if any section, paragraph, clause, of provision of this Resolution with the exception of any section,paragraph,clause or provision limiting the City's financial obligation 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 10. That upon a determination by the County that it shall assign its 2000 Allocation to the City for the purpose of financing the Project, the Mayor is hereby authorized to execute the Assignment Agreement and the Delegation Agreement,together with such modifications thereto in form or substance as the City Manager,in consultation with the City Attorney,may deem necessary to effectuate the purposes set forth herein. Section 11. That this Resolution shall take effect immediately upon its introduction and passage. Passed and adopted at a regular meeting of the City Council held this 15th day of February, 2000. C 0 ayor ATTEST: City Clerk 'n�hkni:a..r'° •f ryAwreMGP ... .—L ..:b u... Olt Form 8328 Carryforward Election of Unused • (Rev.November 2000) P Private ActivityBond Volume Ca OMB No.1545-0874 hepement of the Treasury (Under Section 746 Internal Rsenue S. N (f)) Enter the calendar year for which the election is made ► 2000 Reporting Authority Issuer's name Issuer's employer identification number City of Fort Collins 84 : 6000587 Number,street for P.O.box if mail is not delivered to street address) Room/stute Report number 300 LaPorte Avenue 9-1 City or town,state.and ZIP code Fort Collins, Colorado 80522-0580 Computation of Unused Volume Ca 1 Total volume cap of the issuer for the calendar year . . . . . . . . . . . . . ils $2,756,250.00 2 Aggregate amount of private activity bonds issued to date that are taken into account under section 146 (see instructions) . . . . 2 2 756 250.00 3 Total amount of volume cap exchanged for authority to issue mortgage credit certificates(see instructions). . . . . . . . . . . 3 4 Total amount of volume cap allocated to private activity portion of governmental bonds(see instructions). . . . . . . . . . 4 —0— 5 Add lines 2 through 4 . . . . . . . . . . . . . . . . . . . . . . . 6 Unused volume cap (subtract line 5 from line 1) $2,758 500.00 . . . . . . . . . . . . . . 6 rom Purpose and Amount of Each Ca onward 7 Qualified student loan bonds. . . . . . . . . . . . . . . . . . . . . . 7 . 8 Qualified mortgage bonds or mortgage credit certificates . . . . . . . . . 8 9 Qualified redevelopment bonds . . . . . . . . . . . . . . . . . . . . . 9 10 Exempt facility bonds: a Mass commuting facilities (section 142(a)(3)) . . . . . . . . . . . . . . . . 10a b Water furnishing facilities (section 142(a)(4)) . . . . . . . . . . . . . . . . . 10b c Sewage facilities (section 142(a)(5)). . . . . . . . . . . . . . . . . . . . 10C d Solid waste disposal facilities (section 142(a)(6)) . . . . . . . . . . . . . . . 10d e Qualified residential rental projects(section 142(a)(7)). . . . . . . . . . . . . . 10e 2 7 58,500,00 f Facilities for the local furnishing of electric energy or gas(section 142(a)(8)) . . . . . . . 10f g local district heating or cooling facilities (section 142(a)(9)). . . . . . . . . . . . 1051 h Qualified hazardous waste facilities(section 142(a)(10)) . . . . . . . . . . . . . 10h i 25% of bonds for privately owned high-speed intercity rail facilities (section 142(a)(11)) . . . 10i j Qualified enterprise zone facility bonds (section 1394) . . . . . . . . . . . . . 10 11 Total car forward amount(add lines 7 through 10') . 11 under penalties of perjury, I declare that I have examined this return. including accompanying schedules and statements, and to me best of my Sign knowledge and belief,it is true,correct,and complete. Here t Signature of authorized public official Date , Type or print name and!title. For Paperwork Reduction Act Notice,see instructions on back. Cat. No. 13900J Form 8328 (Rev. 11-2000)