HomeMy WebLinkAbout2020-094-10/20/2020-AUTHORIZING A PARTIAL REASSIGNMENT OF THE CITY'S PRIVATE ACTIVITY BOND ALLOCATION FOR 2020 FROM MERC RESOLUTION 2020-094
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING A PARTIAL REASSIGNMENT OF THE CITY'S
PRIVATE ACTIVITY BOND ALLOCATION FOR 2020 FROM
MERCY HOUSING TO HOUSING CATALYST
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 purposes including the financing of
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" or "PAB") which may be issued in the
State (the"State Ceiling"); and
WHEREAS, pursuant to the Code, the Colorado General Assembly 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 various
State and local governmental units, and further providing for the assignment of such allocations
from such governmental units to any entity or person with the authority to issue bonds; and
WHEREAS,pursuant to an allocation under Section 24-32-1706 of the Allocation Act, the
City received a direct allocation of the 2020 State Ceiling for the issuance of Private Activity
Bonds in the aggregate principal amount of$8,885,119 (the "2020 Allocation"); and
WHEREAS, the City received four applications for the 2020 Allocation seeking PAB
capacity for a total of nine housing projects; and
WHEREAS, the City's PAB Committee reviewed the applications and recommended
assigning $3,885,119 of the 2020 Allocation to Housing Catalyst, and $5,000,000 to Mercy
Housing, pursuant to Section 24-32-1706 of the Allocation Act; and
WHEREAS, on June 2, 2020, the City Council adopted Resolution 2020-052 making
assignments as recommended by the PAB Committee; and
WHEREAS, Mercy Housing would use its portion of the 2020 Allocation for construction
of new affordable units at Northfield (the "Mercy Project"), but City staff has since learned that
Mercy Housing does not have authority to issue tax exempt bonds, and so cannot directly receive
a portion of the City's 2020 Allocation; and
WHEREAS, Housing Catalyst has the authority to issue bonds and has agreed to
collaborate with Mercy Housing on the Mercy Project and to attempt to issue bonds on Mercy
Housing's behalf in an amount equal to or greater than $5,000,000; and
WHEREAS, the City Council finds that the portion of the 2020 Allocation previously
assigned to Mercy Housing can be utilized most efficiently by assigning it to Housing Catalyst to
issue Private Activity Bonds for financing the Mercy Project, and that such assignment will
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advance the City's objective of increasing the availability of adequate affordable housing for low-
and moderate-income persons and families within the City; and
WHEREAS, the State Department of Local Affairs (DOLA) has advised staff that this
approach is acceptable, subject to approval by DOLA of an administrative reallocation; and
WHEREAS, the Council wishes to revoke the prior assignment to Mercy Housing and
reassign $5,000,000 of the 2020 Allocation to Housing Catalyst to be used for the Mercy Project,
which assignment is to be evidenced by an Assignment of Allocation agreement between the City
and Housing Catalyst; and
WHEREAS, a draft of the proposed Assignment of Allocation is attached as Exhibit "A"
and incorporated herein by reference.
NOW,THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That the City Council hereby rescinds its prior assignment to Mercy
Housing of $5,000,000 of the City's 2020 Allocation for the Mercy Project as described herein
and reassigns such portion of the City's 2020 Allocation to Housing Catalyst for the benefit of the
Mercy Project.
Section 3. That the City Council hereby authorizes the Mayor to execute an
Assignment of Allocation with Housing Catalyst in substantially the form attached as Exhibit"A,"
along with such other terms and conditions as the City Manager, in consultation with the City
Attorney, determines are necessary or appropriate to protect the interests of the City or effectuate
the purposes of this Resolution.
Section 4. That the City Council also authorizes the Mayor to execute such documents
as are necessary to terminate the prior Assignment of Allocation with Mercy Housing.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 20th
day of October, A.D. 2020.
Mayor
ATTEST:
-k .. �o
City Clerk
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EXHIBIT A
ASSIGNMENT OF ALLOCATION
THIS ASSIGNMENT(the"Assignment"), dated , 2020 is between the
City of Fort Collins, Colorado, a municipal corporation (the "Assignor"), and Housing Catalyst,
a body corporate and politic(the"Assignee").
RECITALS
A. On June 2, 2020, the Fort Collins City Council adopted Resolution 2020-052
making assignments of the Assignor's 2020 allocation (the "Allocation") under the bond ceiling
for the State of Colorado and its issuing authorities ("the State Veiling") computed under Section
146(d) of the Internal Revenue Code of 1986 (the "Code") as provided for the Assignor as a
"designated local issuing authority" under part 17 of article 32 of title 24, Colorado Revised
Statutes(the"Allocation Act").
B. Such Resolution assigned $5,000,000 of the Allocation to Mercy Housing
Mountain Plains, a Colorado nonprofit corporation ("Mercy Housing") to finance the
construction of 84 new units of rental housing at Northfield, for households with incomes
ranging from 30%to 70% of area median income(the"Project".)
C. Mercy Housing does not have authority to issue tax exempt bonds, and Assignee
has agreed with Mercy Housing to issue the bonds for financing Mercy's Housing's project.
D. On October 20, 2020, the Fort Collins City Council adopted Resolution 2020-_
rescinding its prior assignment to Mercy Housing and reassigning Mercy Housing's portion of
the Allocation to Assignee.
E. On behalf of Mercy Housing the Assignee intends to provide for the issuance of
its Multifamily Housing Revenue Bonds (the "Proposed Bonds"), pursuant to the provisions of
the Act for the purpose of financing the Project. The Project will be designed to qualify as a
"project" within the meaning of Title 29, Article 4, Part 2, Colorado Revised Statutes, as
amended (the"Act").
C. The Assignee has requested that the Assignor assign to the Assignee $5,000,000
of the for use in connection with the financing of the Projects.
D. Subject to the terms and conditions set forth herein, and subject to approval of an
administrative reallocation by the State Department of Local Affairs (DOLA), the Assignor
desires to assign to the Assignee, and the Assignee desires to accept, $5,000,000 of the
Assignor's 2020 allocation from the State Ceiling.
ASSIGNMENT
In exchange for the agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. The Assignor hereby assigns and transfers to the Assignee $5,000,000 of the
Assignor's 2020 Allocation from the State Ceiling for private activity bonds. The Assignor and
the Assignee understand that such assigned allocation shall automatically be relinquished to the
"Statewide Balance" as defined under the Allocation Act unless (a) the Proposed Bonds are
issued by the Assignee on or before September 15, 2020, or (b) Section 24-32-1706(3)(c),
C.R.S., applies, or(c)DOLA approves an administrative reallocation.
2. The Assignor represents that it has received no monetary consideration for the
assignment set forth above.
3. The Assignee hereby:
(a) accepts the assignment of $5,000,000 of the Assignor's Allocation from
the State Ceiling described above;
(b) agrees to use its best efforts to issue, and arrange with Mercy Housing to
use, the Proposed Bonds for the purpose of financing the Project; and
(b) agrees to abide by each of the terms and conditions of this Assignment in
connection with the use of such Allocation.
4. 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.
5. This Assignment shall not constitute a debt or indebtedness or financial obligation
of the Assignor within the meaning of the constitution or statutes of the State of Colorado, nor
give rise to a pecuniary liability or charge against the general credit or taxing power of the
Assignor.
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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this instrument to
be executed to be effective as of the date and year first written above.
CITY OF FORT COLLINS, COLORADO,
as Assignor
Wade O. Troxell, Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk Assistant City Attorney
(print name) (print name)
HOUSING CATALYST, as Assignee
By:
Its:
ATTEST:
By:
Its:
[Signature Page to Assignment of Allocation]
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