HomeMy WebLinkAbout2020-061-07/21/2020-DETERMINING FAIR VALUE FOR THE LEASE OF PROPERTY OWNED BY THE DOWNTOWN DEVELOPMENT AUTHORITY IN CONN RESOLUTION 2020-061
OF THE COUNCIL OF THE CITY OF FORT COLLINS
DETERMINING FAIR VALUE FOR THE LEASE OF PROPERTY OWNED
BY THE DOWNTOWN DEVELOPMENT AUTHORITY IN CONNECTION
WITH THE 140 EAST OAK STREET AFFORDABLE HOUSING PROJECT
WHEREAS, on April 21, 1981, the City Council adopted Ordinance No. 046, 1981,
creating the Fort Collins, Colorado Downtown Development Authority (the "DDA"); and
WHEREAS, the DDA was formed pursuant to, and is governed by, C.R.S. 31-25-801 et
seq. (the "DDA Act"); and
WHEREAS, the DDA adopted a plan of development, as authorized by Section 807(2)(d)
of the DDA Act, on July 1, 1981, which plan of development was approved by the City Council
on September 8, 1981, by Resolution 1981-129 (the "PIan of Development"); and
WHEREAS, the DDA is the owner of the real property located at 140 East Oak Street,Fort
Collins, Colorado (the"Property"); and
WHEREAS, there is a shortage of housing options in general, and lower-income housing
options in particular, within the boundaries of the DDA (the "DDA District"); and
WHEREAS, the Plan of Development identifies "increasing the housing supply" as a
primary objective and purpose of the DDA to help achieve the DDA's goal of the DDA District as
"an area of mixed-use residential, commercial and entertainment uses," and "[encouraging] living
within the District" as a way to improve the diversity and attractiveness of the DDA District; and
WHEREAS, the DDA's priorities within the Plan of Development include providing sites
for land uses that are important to the economic vitality of the DDA District, and working with
developers and builders if their project is highly desirable, is consistent with the plans and
objectives of the DDA, and may not otherwise be economically viable; and
WHEREAS, based upon substantial public outreach and community input, the Board of
Directors of the DDA(the"DDA Board")determined that construction on the Property of a mixed-
use building containing qualified-affordable housing would be beneficial to the DDA District(the
"Project Concept"); and
WHEREAS, on December 16, 1971, the City Council adopted Resolution 1971-099,
creating the Fort Collins Housing Authority, now known as Housing Catalyst ("Housing
Catalyst"); and
WHEREAS, the DDA and Housing Catalyst are collaborating to further develop the
Project Concept and potential sources of financing for the Project Concept,with a goal of providing
one- and two-bedroom units to a mix of households earning thirty percent of area median income
("AMI"), between thirty and fifty percent of AMI, between fifty and seventy percent of AMI, and
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between seventy and eighty percent of AMI, with a target average household income of
approximately sixty percent of AMI; and
WHEREAS, the DDA and Housing Catalyst have determined that the most beneficial and
economically viable project would consist of construction of a single multi-story, mixed-use
building containing a ground floor commercial space, and seventy-nine or more qualified-
affordable housing units on the upper floors (the `Building"), financed with low-income housing
tax credit assistance through the Colorado Housing and Financing Authority;private activity bonds
issued by Housing Catalyst; federal, state, and local grants and loans; and construction and
permanent loans made by banks or other institutional lenders (the "Project"); and
WHEREAS, the DDA and Housing Catalyst have agreed that the DDA, or a DDA-
controlled entity, will retain ownership of the Property and the Building and will manage the
ground floor of the building,while Housing Catalyst,through a Housing Catalyst-controlled entity,
will lease the upper floors of the building for a nominal sum (one hundred dollars or less) for up
to 99 years, and will control and manage the housing component of the Project; and
WHEREAS, Section 808(2) of the DDA Act require that any sale or letting of property by
the DDA shall be at not less than its"fair value", as determined by the DDA and the City Council,
for uses in accordance with the DDA's Plan of Development; and
WHEREAS Section 808(2) also states that this determination of fair value shall take into
account and give consideration to the uses provided in the Plan of Development; the restrictions
upon and the covenants, conditions, and obligations assumed by the purchaser or lessee; and the
objectives of such plan; and
WHEREAS, at its regular meeting on June 11, 2020, the DDA Board adopted Resolution
2020-03 making findings and determinations that the sale and/or lease of a portion of the DDA
Property to Housing Catalyst, or a Housing Catalyst-controlled entity, for a nominal sum of one
hundred dollars or less,for use in connection with the Project,constitutes "fair value"for purposes
of C.R.S. 31-25-808(2), and requesting that the City Council make a similar determination; and
WHEREAS, in making this determination the DDA Board found that the Project is
consistent with the uses identified in its Plan of Development and that completion of the Project
would advance the objectives of its Plan of Development in several ways,including,but not limited
to:
1. Increasing the housing stock to help reverse the declining residential population within
the DDA District;
2. Promoting a diversity of activities within the DDA District;
3. Improving and sustaining the economic vitality of the DDA District; and
4. Maintaining the DDA District as a regional center for social, recreational and cultural
activities; and
WHEREAS, the DDA Board further found that the Project would be financially infeasible
without the lease and/or sale of a portion of the DDA Property to Housing Catalyst, or a Housing
Catalyst-controlled entity, for a nominal sum; and
WHEREAS, the Property would be restricted by the terms of the lease and by covenants
that will limit the use of the leased space to affordable housing and limit the assignment or transfer
of the lease; and
WHEREAS, pursuant to Section 808(2) of the DDA Act, City Council must also make a
determination that the DDA's proposed lease of a portion of the DDA Property as described herein,
constitutes "fair value", and the DDA Board is requesting that City Council make such a
determination; and
WHEREAS, the City Council supports the DDA's goal of increasing the supply of housing
within the DDA District, and finds that increasing economic diversity among residents of the DDA
District contributes to the vitality of the District.
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 determines that the lease of a portion of the
DDA Property to Housing Catalyst, or a Housing Catalyst-controlled entity, for a nominal sum of
One Hundred Dollars ($100.00) or less, for use in connection with the Project, constitutes "fair
value" for purposes of C.R.S. 31-25-808(2).
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 21st
day of July, A.D. 2020.
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