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HomeMy WebLinkAboutMINUTES-01/12/1999-SpecialJanuary 12,1999 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Special Meeting - 6:00 p.m. A special meeting of the Council ofthe City of Fort Collins was held on Tuesday, January 12, 1999, at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered by the following Councilmembers: Yeas: Byrne, Kneeland, Mason, Smith and Wanner. Councilmembers Absent: Azari and Bertschy. Staff Members Present: Fischbach, Krajicek, Roy. Emergency Ordinance No. 10,1999, Appropriating $550,000 in the Sales and Use Tax Fund to Guarantee Payment of Financing to Be Obtained by the Fort Collins Housing Authority for the Construction of the Via Lopez Project Adopted The following is staff's memorandum on this item. "Financial Impact This Emergency Ordinance would appropriate $550, 000from the Use Tax Carryover Reserve in the Sales and Use Tax Fund to guarantee the Fort Collins Housing Authority's payment of a construction loan for the Via Lopez Project. The $550,000 will remain in the Sales and Use Tax Fund and any amount not needed will be returned to the Use Tax Carryover Reserve. Executive Summary The property for the Via Lopez project was purchased in April, 1992 and land banked for future development. This property consists of 33 lots on five acres of land, for a density of 6.6 units per acre (which is in excess of City Plan requirements of 5.0 units per acre). The first draft of the plans for an affordable housing project on this parcel was initiated in 1996 and, was proposed in response to the Pioneer Mobile Home park relocations. Due to physical constraints (easements, drainage, etc), the project was delayed until 1998. The project is currently targeted to provide affordable homes ownership opportunities to low income residents of the City with priorities in thefollowing order: victims of the 1997 flood, clients enrolled in the Fort Collins HousingAuthority's SelfSuff ciency Programs, other clients and tenants of the Fort Collins Housing Authority, and finally those members of the general public who meet the income eligibility requirements. 25 January 12, 1999 Eligibility requirements for the Via Lopez project were determined by funding limitations and the desire to provide housing for families whose income would otherwise deny them access to home ownership. The profile of this mixed income project is: 1. 25% of the buyers fall between 65 - 80% ofAMI (Area Median Income) 2. 45% of the buyers fall between 50 - 65% ofAMI 3. 30% of the buyers fall below 50% ofAMI The Housing Authority has tentatively negotiated sales contracts with eligible buyers for the properties of the Via Lopez project; however, construction costs require that a loan be obtained to complete the project so that units may be completed for sale. On January 5, 1999, the Fort Collins City Council, acting officio as the Board of Commissioners of the Fort Collins Housing Authority, approved a resolution authorizing the execution of loan documents by the Chair or Vice Chair of the Authority in connection with the project. While it is anticipated that the total amount of the financing needed to construction the project will approach $3, 000, 000, it is likely that this financing will be advanced incrementally as manufactured housing units are delivered to the site. Upon the sale of the completed lots, the financing will be repaid, and additional funds will be advanced to finance the completion and sale of the remaining lots. The loan(s) will be secured by first deeds of trust in the properties to be sold in the project. The project pro forma indicates that the proceeds of the sale of the lots will be more than adequate to fully repay the indebtedness incurred by the Housing Authority. However, in order to further secure this indebtedness, the lender is requiring, as a condition of the loan, that the City of Fort Collins guarantee repayment of the loan(s) up to the amount of$550,000. It is anticipated that an additional guarantee will be provided by the Fort Collins Housing Corporation. Payment to the manufacturer of the housing is due immediately for ten housing units already delivered to the site. Therefore, in order to enable the project to proceed, it is imperative that all conditions of the lender be satisfied immediately. Because the project is necessary in order to meet pressing affordable housing needs of the community, and because the provision of this housing serves an important public purpose for the citizens of the City, staff is recommending that the City Council provide the guarantee required by the lender, and that the Emergency Ordinance be adopted by the Council to avoid any further delay in the completion of the project. " City Manager Fischbach gave background concerning the item and explained the need for an Emergency Ordinance. 26 January 12, 1999 Councilmember Kneeland asked what would happen if Council decided not to adopt the Emergency Ordinance. City Manager Fischbach stated that if the Emergency Ordinance is not adopted, the City could not move forward on the Via Lopez Project. Councilmember Kneeland asked what stage the Via Lopez Project is in at this time. City Manager Fischbach stated that there are approximately 14 modular homes on site that have not been paid for, and this Ordinance would enable the City to pay for those homes. He stated that there are 24 contracts for modular homes that are awaiting signature. Councilmember Kneeland made a motion, seconded by Councilmember Wanner, to adopt Emergency Ordinance No. 10, 1999, Councilmember Kneeland stated that she would be supporting the motion and that adoption of the Emergency Ordinance is the responsible thing to do given the circumstances. The vote on Councilmember Kneeland's motion was as follows: Yeas: Councilmembers Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. THE MOTION CARRIED. Adjournment The meeting adjourned at 6:10 p.m. -- ATTEST: 27 Mayor Pro Tem