HomeMy WebLinkAboutMemo - Mail Packet - 5/12/2020 - Memorandum From Sue Beck-Ferkiss Re: Assignment Of 2020 Allocation Of Private Activity BondsSocial Sustainability
222 Laporte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6758
MEMORANDUM
DATE: May 5, 2020
TO: Mayor Wade Troxell & City Councilmembers
THRU: Darin Atteberry, City Manager
Jeff Mihelich, Deputy City Manager
Jacqueline Kozak-Thiel, Chief Sustainability Officer
Beth Sowder, Director, Social Sustainability Department
FROM: Sue Beck-Ferkiss, Social Policy & Housing Program Manager, SSD
RE: Assignment of 2020 Allocation of Private Activity Bonds
Bottom Line:
The City received an unprecedented amount of requests, over $44M, for Private Activity Bonds
(PABs) and only $8.9M in PAB capacity available in 2020. The internal PAB committee
representing three City Departments met and recommends partially funding for 2 of 4
applications, which will support financing for 246 affordable homes. This recommendation will
be considered by the Affordable Housing Board on May 7, 2020. The matter is expected to
come before City Council on June 2, 2020. Notification letters were sent to applicants. The
recommendations prioritize the addition of new units in our community and projects with some
PAB assembled from other sources such as Larimer County. (see the table on Page 2 for a full
list of requests and recommendations).
Background:
Every year, the City gets an allocation of Private Activity Bond (PAB) capacity from the US
Internal Revenue Service. These types of bonds are required for 4% Low Income Housing Tax
Credit (LIHTC) funding, which is how most affordable rental housing is currently constructed and
rehabilitated in Colorado.
The City had a first come, first served approach until 2017when the City passed a Finance
Policy to guide distribution of PABs. The Finance Policy guides letters of applications with
criteria to be considered when assigning the City’s allocation. The Policy establishes a PAB
Committee comprised of representatives from Economic Health, Finance, and Social
Sustainability Departments. In the past, the State had ample PAB capacity to match local
contributions. Now the State is also oversubscribed, resulting in more competition for local PAB.
Still, the State can often provide the last needed PAB once most of the capacity is secured.
Projects must have their PAB secured before they can apply for LIHTCs. This year, Letters of
Intent are due June 1 with full applications due August 3. While the City policy requires that
recommendations go to Council before August 15, it is helpful to our partners to decide as soon
as practical.
DocuSign Envelope ID: 72C1BC05-E56F-4E5F-99CF-7297B27FF274
2
PAB Committee 2020 Recommendations:
Based on the criteria listed in the Finance Policy and the City’s affordable housing goals, the
Committee recommends allocating the City’s 2020 PAB capacity of $8,885,119 as follows:
$3,885,119 to Housing Catalyst for both new construction and rehabilitation of affordable
housing
$5,000,000 to Mercy Housing for new construction of affordable housing
The PAB committee did not recommend approving applications from Neighbor to Neighbor and
Logan Capital Advisors due to lack of PAB capacity. The PAB Committee prioritized projects
producing new units and those projects that already had assembled some of the required PAB
capacity. The PAB Committee understands all of these projects are important and encourages
these applicants to continue to seek bond capacity from every possible source.
Summary of 2020 Requests:
Next steps:
Affordable Housing Board will review PAB Committee recommendation at a public
hearing on May 7, 2020.
City Council consideration is scheduled for June 2, 2020.
Applicant Requested
amount
total
Per
project
request
PAB secured Project Number
of units
New/Preserve AMI
target
Housing
Catalyst
$4.77M $2.61M $7.45M
($2.61M
DOH)
Swallow/Care 84 Both (40
preserve and
44 new
restrictions)
0-60%
(58%
average)
$2.16M $12M Oak St. 78 New 0-60%
(58%)
Neighbor
to
Neighbor
$10 M n/a Coachlight 68 Preserve 30%
n/a Aztec Apts 4 Preserve 50%
n/a Conifer 1 4 Preserve 50%
n/a Conifer 2 4 Preserve 50%
Mercy
Housing
$5.77M $5.77M $2.6MLarimer
County
($1.8M gap
DOH)
Northfield 84 New 30-70%
(60% or
less
average)
Logan
Capital
Advisors
$24M $13.5M Oakbrook 1 107 Preserve Age
restricted
$10.5M Oakbrook 2 100 New
restrictions
Project
based
DocuSign Envelope ID: 72C1BC05-E56F-4E5F-99CF-7297B27FF274