HomeMy WebLinkAboutMemo - Mail Packet - 08/13/2024 - Memorandum from Travis Storin re Heartside Hill Affordable Housing Project and City Tax Exemption
City Manager’s Office
City Hall
300 LaPorte Ave.
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
DATE: August 8, 2024
TO: Mayor Arndt and City Councilmembers
FROM: Kelly DiMartino, City Manager
CC: Travis Storin, Chief Financial Officer
RE: Heartside Hill Affordable Housing Project & City Tax Exemption
Background:
As required in City Code Ch. 25 Sec 25-198(e), the City Manager is notifying City Council of a
written agreement between the City and Heartside Hill LLLP, dated 08-01-24, that waived more
than $100,000 in sales and use tax.
Heartside Hill LLLP is a 100% affordable housing project currently under construction at the corner
of E. Trilby Rd and S. Lemay Ave (the “Project”). The Fort Collins Housing Authority (dba Housing
Catalyst) has a 0.01% ownership interest in the Project. The City issued seven building permits for
the project – all dated 5/23/24, except for one dated 4/17/24 – with a project valuation totaling
$19,464,726.66. The City is helping fund the Project with more than $1M in ARPA dollars.
City Taxability Discussion:
There was no specific tax exemption in the City Code that applied to the Project. Therefore, in
order to exempt the Project from City taxes the City entered into a simple letter agreement with the
Project to apply a City sales and use tax exemption to taxable tangible personal property and
services acquired by the Project.
The exemption applies in proportion to the percentage of the Project that is for affordable housing,
and as of today the City understands the Project to be for 100% affordable housing. The City sales
and use tax exemption amount is $374,732.39 based upon the building permit valuations.
The City tax exemption will cease at the conclusion of construction evidenced by the City’s
issuance of final certificates of occupancy for each issued building permit.
The letter agreement was based on C.R.S. 29-4-227(1)(b). This state statute outlines property,
sales, and use tax exemptions for certain housing projects associated with housing authorities in
Colorado.
The letter agreement is for this Project only and the City is not otherwise conceding that the state
statute, or other state law, controls over the City Charter, City Code, or the City’s home rule taxing
authority. Further, the letter agreement is subject to the Project maintaining strict terms and
conditions centered upon the Housing Catalyst’s continued ownership interest.
Docusign Envelope ID: 8B190D45-D1E0-4D36-87C9-0BED2276712A