TO: Mayor and Members of City Council
THRU: Kelly Olivera, Assistant City Manager
FROM: Christopher Cauley, MPA - Director of Economic and Community Development
DATE: August 12, 2024
RE:
Title
Public Hearing on Authorization of the Issuance of Private Activity Bonds not to Exceed $80,000,000 by the Public Finance Authority Relating to Two Mixed Income Housing Developments Located at 1701 Owen Drive and 1944 Cedar Creek Road - Reauthorization
end
COUNCIL DISTRICT(S):
Council District(s)
District 2
b
Relationship To Strategic Plan:
GOAL II: The City of Fayetteville will have a Responsive City Government supporting a diverse and viable economy.
GOAL III: The City of Fayetteville will be a city invested in Today and Tomorrow.
GOAL IV: The City of Fayetteville will be a highly desirable place to live, work and recreate.
Executive Summary:
GoodHomes, Inc., acting as the developer, has partnered with the Community Finance Corporation, a non-profit developer, and its affiliates CFC-FNC, LLC and CFC-FNC II, LLC (together, the Borrower) and is requesting the City hold a Public Hearing and adopt a resolution authorizing the issuance of not more than $80,000,000 in Private Activity Bonds issued by the Public Finance Authority (PFA). The project involves redevelopment of properties located at 1701 Owen Drive and 1944 Cedar Creek Road. Additional details of each development are attached. The issuance of bonds is a transaction between the PFA and the Borrower and does not expose the City to any financial risk. City Council is asked to hold a Public Hearing and adopt the resolutions authorizing the issuance of not more than $80,000,000 in Private Activity Bonds issued by the PFA.
Background:
GoodHomes, Inc. is a developer specializing in the adaptive reuse of underperforming hotels by taking once prosperous developments and converting them into vibrant and meaningful communities. The Borrower is organized, among other purposes, for the purpose of lessening the government burdens of entities like the City by providing essential rental housing. The PFA is a governmental entity established under Section 66.0304 of the Wisconsin State Statutes, authorized to issue tax-exempt, taxable, and tax credit conduit bonds for public and private entities throughout all 50 states.
To enable the Borrower to access municipal lending rates, the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) requires the City provide reasonable public notice (TEFRA notice) and conduct a Public Hearing (TEFRA Hearing). The hearing provides a reasonable opportunity for interested individuals to express their views, either orally or in writing, on the proposed issue of bonds, location, and nature of the project to be financed. The resolution affirms the project locations, the expressed government burdens, and authorizes the applicable elected representative (Mayor) to approve the issuance of the Private Activity Bonds. This issuance was authorized on December 12, 2022, following a properly noticed TEFRA hearing. However, IRS regulations require authorization within one year of issuance. This reauthorization has occurred on previous projects before the City Council.
Issues/Analysis:
The City of Fayetteville is the governmental unit with the geographic jurisdiction containing both project sites and is required to approve the issuance. The TEFRA Notice was posted in the Fayetteville Observer on August 2, 2024 to allow for a 10-day notice of the TEFRA Hearing.
Budget Impact:
Private Activity Bonds do not involve the City’s finances and do not impact the City’s borrowing ability.
Options:
• Conduct the Public Hearing (TEFRA Hearing) and approve the resolution authorizing the issuance of private activity bonds not to exceed $80,000,000 by the Public Finance Authority relating to two mixed income housing developments located at 1701 Owen Drive and 1944 Cedar Creek Road,
• Do not Conduct the Public Hearing (TEFRA Hearing) and do not approve the resolution authorizing the issuance of private activity bonds not to exceed $80,000,000 by the Public Finance Authority relating to two mixed income housing developments located at 1701 Owen Drive and 1944 Cedar Creek Road,
• Direct staff to some other action.
Recommended Action:
Staff recommends that Council conduct the public hearing and, upon closing the hearing, move to approve the resolution authorizing the issuance of private activity bonds not to exceed $80,000,000 by the Public Finance Authority relating to two mixed income housing developments located at 1701 Owen Drive and 1944 Cedar Creek Road.
Attachments:
GoodHomes, Inc. TEFRA Notice
GoodHomes, Inc. TEFRA Resolution
GoodHomes, Inc. 1701 Owen Drive Project
GoodHomes, Inc. 1944 Cedar Creek Project