HomeMy WebLinkAbout2 Study Session Agenda Packet 01-27-20 - SpecialSPECIAL STUDY SESSION AGENDA
CITY COUNCIL CITY OF WHEAT RIDGE, COLORADO
7500 W. 29th Ave.
Wheat Ridge CO
January 27, 2020
Upon adjournment from Regular Council Meeting
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Citizen Comment on Agenda Item
1.Delegation of 2020 Private Activity Bond Cap to Jefferson County
Housing Authority
2.Staff Report(s)
3.Elected Officials’ Report(s)
ADJOURNMENT
Memorandum
TO: Mayor and City Council
FROM: Patrick Goff, City Manager
DATE: January 22, 2020 (for January 27, 2020 Special Study Session)
SUBJECT: Delegation of Private Activity Bond Cap to Jefferson County Housing Authority
ISSUE: The City of Wheat Ridge has received an allocation of $1,665,506 for the purpose of issuing Private Activity Bonds (PABs) in 2020 under the state ceiling imposed by the Tax Reform Act of 1987. Staff recommends assigning the City’s allocation to Metro West Housing Solutions which
has agreed to issue PABs for the renovation of the Caesar Square Apartments owned and operated by the Jefferson County Housing Authority (JCHA). The City also assigned its 2019 PAB cap to West Metro Housing Solutions for this same project. JCHA is asking for the City’s 2020 allocation to help increase the hard costs of improvements to Caesar Square from $6 million to approximately $10 million.
PRIOR ACTION: The City of Wheat Ridge has traditionally assigned the City’s PAB allocation to either the Colorado Housing and Finance Authority (CHFA) or the Metro Mayors Caucus for single family mortgage revenue bonds. The last allocation assignment was approved in 2011 to CHFA. Since
2011, neither CHFA nor the Metro Mayors Caucus were accepting applications for allocations because of the decline in the financial markets and the impact that has had on investor interest in PAB. Between 2012 and 2018, the City’s allocation was relinquished to the statewide balance for distribution to applicants by the Department of Local Affairs.
On August 26, 2019, City Council assigned the City’s 2019 PAB cap to JCHA for the Caesar Square Apartments project.
FINANCIAL IMPACT: There is no direct financial impact to the City of Wheat Ridge. However, injecting PAB capital
into the community has a direct impact on real estate, construction, and financial markets by stimulating economic activity and jobs.
BACKGROUND: PABs are tax exempt bonds designed to offer low-cost financing to private sector borrowers for
projects that create jobs and expand the tax bases of local communities. PABs may be used to finance a broad array of community development projects including housing, manufacturing, higher education, infrastructure, and environmental projects. The bonding authority which allows the issuance of PABs is Volume Cap, created under the federal Tax Reform Act of 1986. The federal government allocates a maximum amount of Volume Cap use to each state annually,
Item No. 1
Delegation of Private Activity Bond Cap
Page 2 based on population.
Per Colorado statute, the Department of Local Affairs (DOLA) administers the state’s allocation of Volume Cap. Under the statute, 50 percent of Colorado’s allocation is given to five statewide authorities, with DOLA deciding the proportional allocation of each. As a political subdivision of the state and an authority, CHFA is eligible to receive an allocation
of Volume Cap, which it uses to issue tax exempt bonds throughout Colorado. CHFA uses its annual allocation to issue tax exempt bonds for single family mortgages, multifamily rental developments, manufacturers, and mortgage credit certificates. The remaining 50 percent of annual Volume Cap is allocated to local issuing authorities. A local
issuing authority consists of “any city, town, county, or city and county which has a population in any year which would result in the local issuing authority having any allocation of the state ceiling in excess of one million dollars” (CRS 24-32-1702-8). After allocating Volume Cap to local issuing authorities, any remaining balance becomes available by application to the statewide balance.
RECOMMENDATIONS: Staff recommends assigning the City’s PAB allocation to Metro West Housing Solutions for the renovation of the Caesar Square Apartments in Wheat Ridge.
ATTACHMENTS: 1. Memo from JCHA 2. Caesar Square Renovation Plans
January 22, 2020
Patrick Goff, City Manager
City of Wheat Ridge
7500 W 29th Ave
Wheat Ridge, CO 80033
RE: Request for 2020 Private Activity Bond Cap to Support Renovation of Caesar Square Apartments
Dear Mr. Goff,
The Jefferson County Housing Authority (JCHA) is the housing authority serving Colorado’s 774 square
mile Jefferson County, located just to the west of Denver. JCHA provides housing opportunities including
affordable units, voucher administration, single family rehab, and new development in both
incorporated and unincorporated areas of Jefferson County. Our mission is to create vibrant, stable
communities in areas of opportunity, via bold and strategic initiatives, and to provide families and
individuals with housing options driven by compassion and respect throughout Jefferson County. JCHA’s
portfolio includes 21 rental properties with 1200+ units.
Caesar Square Apartments is a 108-unit multifamily rental community owned and operated by JCHA,
located at 9235-9355 W 48th Ave in Wheat Ridge, Colorado. Caesar Square includes 5 buildings, built
from 1970 to 1973, on approximately 5 acres. JCHA has identified Caesar Square as one of the
properties in our portfolio with a significant need for reinvestment. JCHA plans to use 4% Low-Income
Housing Tax Credits and Private Activity Bonds to finance approximately $10M in renovations to the
property.
The scope of renovation will include the following investments:
Complete renovation of all unit interiors, including new kitchens and bathrooms and paint,
flooring and fixtures throughout, and including asbestos mitigation
Creation of 6 fully Type A accessible units (currently, there are no units at the property with
step-free access, and unit interiors do not meet ADA/504 guidelines) and common amenities
Addition of a new community center building which will include a fully accessible leasing office,
laundry, community space, and outdoor gathering and play areas
Reconfiguration and renovation of parking areas, drive lanes, and landscaped areas to enhance
safety and security of residents and neighbors and to build sense of place and community
identity
7490 West 45th Avenue, Wheat Ridge, CO 80033 ∙ Phone: 303.422.8600 ∙ Fax: 303.422.3229
Admin. Fax 720.974.5808 Colorado Relay 711 ∙ Web: www.jcha.org
ATTACHMENT 1
2
In order to support the 4% LIHTC that will finance these reinvestments, JCHA requests that the City of
Wheat Ridge assign its 2020 Private Activity Bond (PAB) cap of $1,665,506 to Metro West Housing
Solutions, which has agreed to issue PABs for this transaction. In August 2019, the City of Wheat Ridge
assigned its 2019 PAB cap to support JCHA’s reinvestment, and JCHA was able to obtain a matching
assignment of Jefferson County’s 2019 PAB cap as well. Since that time, JCHA has been able to
incorporate additional capital sources into the transaction to increase the funds available for
construction hard costs from approximately $6M to approximately $10M. Since 50% of the project
investment must be backed by PAB cap, this increased investment means that our need for PAB cap is
increased, which is the reason for our current request.
The City’s support of this project will directly impact the 108 households who currently reside at Caesar
Square Apartments, who will benefit from a significantly improved quality of life and an enhanced sense
of safety and security. In addition to the immediate impact on Caesar Square’s existing households, this
reinvestment will allow JCHA to secure the affordability of all 108 units at Caesar Square. While JCHA
keeps rents affordable at all of our properties as a matter of policy, Caesar Square has never had a
recorded rent restriction or income qualification. Through this refinancing, JCHA will secure all 108 units
for households earning no more than 60% of Area Median Income. By doing so, we will create a long-
term, high quality affordable asset in the heart of Wheat Ridge that will serve as a welcoming place to
call home for lower-income Wheat Ridge residents for decades to come.
We look forward to the opportunity to present this request to Wheat Ridge City Council.
Sincerely,
Julie Stern
Director of Development
NSHEET NO.PLAN DATES 15940 S. GOLDEN ROAD GOLDEN, COLORADO 303.284.1276DATEDESCRIPTIONREV. #ARCHITECTURE, LLC studio 646
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SHEET NO.PLAN DATES 15940 S. GOLDEN ROAD GOLDEN, COLORADO 303.284.1276DATE DESCRIPTIONREV. #ARCHITECTURE, LLC studio 646
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SHEET NO.PLAN DATES 15940 S. GOLDEN ROAD GOLDEN, COLORADO 303.284.1276DATE DESCRIPTIONREV. #ARCHITECTURE, LLC studio 646
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