HomeMy WebLinkAboutDoc 584 - Housing Authority BondsDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of November 5, 2014
DATE: November 3,2014
FROM: Dave Doyle Legal Department 388-6625
TITLE OF AGENDA ITEM:
Board authorization of Certificate of Approval, Document No. 2014-584 allowing Housing Works to
proceed with its revenue bond issuance.
PUBLIC HEARING ON THIS DATE? Yes.
BACKGROUND AND POLICY IMPLICATIONS:
The Central Oregon Regional Housing Authority (Housing Works) is proceeding with an issuance of
tax-exempt conduit revenue bonds to finance 50 units of affordable housing within Deschutes County
(specifically the Redmond area). Section 147(t)(2)(A)(ii) of the Internal Revenue Code of 1986
requires the BOCC, as the "applicable elected representatives" to hold a public hearing prior to
approving a Certificate of Approval. Deschutes County assumes no financial responsibility or
financial liability for repayment of the bond proceeds. The bond issue is scheduled to close on
November 14, 2014.
FISCAL IMPLICATIONS:
None.
RECOMMENDATION & ACTION REQUESTED:
Conduct public hearing; move approval of Certificate of Approval, Document No. 2014-584 which
allows the Central Oregon Regional Housing Authority to proceed with issuance of tax-exempt conduit
revenue bonds.
ATTENDANCE: . Dave Doyle, County Counsel
DISTRIBUTION OF DOCUMENTS:
Tom Kemper -tkemper@housing-works.org
Tom Anderson
Dave Doyle
DESCHUTES COUNTY DOCUMENT SUMMARY
(NOTE: This form is required to be submitted with ALL contracts and other agreements, regardless of whether the document is to be
on a Board agenda or can be signed by the County Administrator or Department Director. If the document is to be on a Board
agenda, the Agenda Request Form is also required. If this form is not included with the document, the document will be returned to
the Department. Please submit documents to the Board Secretary for tracking purposes, and not directly to Legal Counsel, the
County Administrator or the Commissioners. In addition to submitting this form with your documents, please submit this form
electronically to the Board Secretary.)
Please complete all sections above the Official Review line.
Date: 111/03/141 Department: IBoccl
Contractor/Supplier/Consultant Name: '------1
Contractor Contact: [om Andersonl Contractor Phone #: 1388-656~
Type of Document: Certificate of Approval -Document No. 2014-584
Goods and/or Services: NIA
Background & History: The Central Oregon Regional Housing Authority (Housing
Works) is proceeding with an issuance of tax-exempt conduit revenue bonds to finance
50 units of affordable housing within Deschutes County (specifically the Redmond
area). Section 147(f)(2)(A)(ii) of the Internal Revenue Code of 1986 requires the
BOCC, as the "applicable elected representatives" to hold a public hearing prior to
approving a Celiificate of Approval. Deschutes County assumes no financial
responsibility or financial liability for repayment of the bond proceeds. The bond issue is
scheduled to close on November 14, 2014.
Agreement Starting Date: 111/05/141 Ending Date: ,-I_--'
Annual Value or Total Payment:
'-----'
D Insurance Certificate Receiied (c,eck box)
Insurance Expiration Date:
Check all that apply:
D RFP, Solicitation or Bid Process
D Informal quotes «$150K)
D Exempt from RFP, Solicitation or Bid Process (specify -see DCC §2.37)
Funding Source: (Included in current budget? D Yes No
If No, has budget amendment been submitted? DYes D No
Is this a Grant Agreement providing revenue to the County? DYes !2SJ No
Special conditions attached to this grant:
Deadlines for reporting to the grantor:
11/3/2014
If a new FTE will be hired with grant funds, confirm that Personnel has been notified that
it is a grant-funded position so that this will be noted in the offer letter: DYes D No
Contact information for the person responsible for grant compliance:
Name:
Phone #:
L------'
Departmental Contact and Title: 1T0m Anderson, Adminl Phone #:
388-6565 .-, ./ j /
Department Director Approval: 2~~_/L...!/_...._3>"-------'-,_'i-<--_
Signature Date
Distribution of Document: Who gets the original document and/or copies after it has
been signed? Include complete information if the document is to be mailed.
Official Review:
County Signature Required (check one):/BOCC 0 Department Director (if <$25K)
o Administrator (if >$25K but <$150K; if >$150K, BOCC Order No. _____),
Legal Review DateffivYV
Document Number 2014-584
1113/2014
REVIEWED
!6fjJTh
LEGAL COUNSEL
CERTIFICATE OF BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY APPROVING BONDS ISSUED BY THE
CENTRAL OREGON REGIONAL HOUSING AUTHORITY
We, the Board of County Commissioners of Deschutes County, Oregon (the "County"),
CERTIFY that:
WHEREAS, the Central Oregon Regional Housing Authority (the "Authority") is a
public body corporate and politic of the State of Oregon; and
WHEREAS, ORS 456.175 provides that a housing authority may issue bonds for any of
its corporate purposes; and
WHEREAS, the Authority intends to issue its Multifamily Housing Revenue Bonds
(Reindeer Meadows Project), Series 2014 (the "Bonds"), in the aggregate principal amount of
not to exceed $3,000,000 and to loan the proceeds thereof to Reindeer Housing LLC, an Oregon
limited liability company (the "Borrower") of which the Authority is the managing member, in
connection with the acquisition and rehabilitation of the 50-unit multifamily apartment complex
presently known as the Reindeer Meadows Apartments, located in Redmond, Oregon, and the
payment of issuance costs with respect to the Bonds (together, the "Project"); and
WHEREAS, the Authority conducted a public hearing, pursuant to the requirements of
Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to
the Bonds on October 22, 2014, in Bend, Oregon, following timely notice being published in a
newspaper of general circulation throughout the County; and
WHEREAS, the County, conducted a notice public hearing as required by the Code on
November 5,2014, in Bend, Oregon; and
WHEREAS, the County did receive and review a written summary of the public
testimony, if any, provided to the Authority; and
WHEREAS, the Board of County Commissioners is a County-wide elected legislative
body representing the County with respect to the approval of the Bonds for purposes of
Section 147(f)(2)(A)(ii) of the Code.
Certificate of Approval (Document No. 2014-584) Page 1
NOW, THEREFORE, we approve the issuance by the Authority of the Bonds, the
proceeds of which will be loaned to the Borrower to finance the Project. This approval is
intended to comply with the requirements of Section 147(f)(2)(A)(ii) of the Code in order to
permit the issuance of the Bonds. In providing this certificate, the County shall take no financial
responsibility and incur no financial liability with respect to the Authority'S issuance or
repayment of the Bonds.
IN WITNESS WHEREOF, we have executed this instrument this 5th day of November,
2014.
Tammy Baney, County Commissioner
Deschutes County, Oregon
Alan Unger, County Commissioner
Deschutes County, Oregon
Tony DeBone, County Commissioner
Deschutes County, Oregon
Certificate of Approval (Document No. 2014-584) Page 2
405 SW 6th Street
Redmond, OR 97756
p:541.923,1018
f: 541.923.6441
www.housing-works.org
October 29, 2014
BY MAIL & EMAIL
Board of County Commissioners
Deschutes County
1300 NW Wall Street, Suite 200
Bend, OR 97701
Re: Central Oregon Regional Housing Authority Multifamily Housing Revenue Bonds (Reindeer Meadows
Project), Series 2014
Honorable Board of County Commissioners:
The Central Oregon Regional Housing Authority (the "Authority") intends to issue tax-exempt conduit revenue
bonds to finance 50 units of affordable housing in Deschutes County. The purpose of this letter is to notify you of the
bond issuance and, pursuant to Section 147(f)(2)(A){ii) of the Internal Revenue Code of 1986, as amended (the "Code"),
to request the approval for the bond issue from the Board of County Commissioners of Deschutes County, as the
"applicable elected representative" for Deschutes County, the jurisdiction in which the Authority is issuing bonds.
The Authority intends to issue its Multifamily Housing Revenue Bonds (Reindeer Meadows Project), Series 2014
and to loan the proceeds of the bonds to Reindeer Housing LLC, an Oregon limited liability company of which the
Authority is the managing member, Reindeer Housing LLC will acquire and rehabilitate the 50-unit multifamily
apartment complex presently known as the Reindeer Meadows Apartments, located in Redmond, Oregon.
As required by the Code, the Authority published a notice in the Bend Bulletin of a public hearing for the projects
and the bond issue at least two weeks in advance of the hearing. The hearing occurred on October 22, 2014. Attached
for your reference is a copy of the notice which was published, the affidavit of publication and the minutes of the public
hearing, along with the Certificate of County Commissioners approving the bond issue. We respectfully request that the
Board of County Commissioners review and execute the certificate in order to approve the bond transaction as required
by the Code.
The bond issue is scheduled to close on November 14, 2014. We appreciate your review of the attached
documents and return of the executed certificate at your earliest convenience. Please let me know if you anticipate any
issues in meeting this schedule.
Please call me at 541-323-7405 or Faith Pettis of Pacifica Law Group LLP, bond counsel to the Authority, at (206)
245-1715 if you have any questions.
Executive Director
MINUTES OF THE PUBUC HEARING
Proposed Issuance of Tax-exempt Bonds
October 22, 2014
I. call to Order
Pursuant to notice through the media and in conformance with the Public Hearings law, Executive Director Thomas J.
Kemper called the hearing to order at 1:02 p.m.
II. Individuals f!res~nt
Thomas 1. Kemper
GeoffWaU
Keith Wooden
III. Discussion
Kemper opened the public hearing by announcing the reason for the hearing. The hearing was open to public comment
regarding the proposed issuance of tax-exempt bonds by Central Oregon Regional Housing Authority dba Housing
Works to finance the acquisition and rehabilitation of the Reindeer Meadows Apartments by Reindeer Housing LLC, of
which the Authority is the managing member. Estimated bond amount would not exceed $3,000,000. The apartment
complex is located in Redmond, Oregon.
The hearing was opened to public testimony and written comments. There were no written comments submitted and
no members of the public In attendance.
no public testimony or written comments the hearing was closed by Kemper at 1 :07 p.m .
. -r i~
Resp~"d}u'ly submi d,
Thomas 1. Kemper
Secretory
Page 1 ofl
405 SW 6th Street
Redmond, OR 97756
p: 541.923.1018
f: 541.923.6441
iQiOW.""''''oviiOiiiii. \NWW.housing-works.org
October I, 2014
VIA ELECTRONIC TRANSMISSION
Private Activity Bond Committee
350 Winter Street NE, Suite 100
Salem, Oregon 97301-3896
Re: Request for $3 Million in Private Activity Bond Cap
Property: Reindeer Meadows Apartments
Location: Redmond, Oregon
Issuer: Central Oregon Regional Housing Authority (DBA Housing Works)
Members of the Committee:
The purpose of this letter is to request an allocation of $3,000,000 of Private Activity Bond Volume Cap for the
redevelopment of Reindeer Meadows Apartments, a 50 unit senior apartment property in Redmond, Oregon
(Apartments). The 2014 allocation of$3 million in bond cap is critical to secure $1.225 million in LIHTC tax
credit equity from our financial partner for the redevelopment of the properties.
Transaction Overview
Housing Works has created Reindeer Housing LLC, a special purpose limited liability company (LLC), to
acquire, rehab and operate the property. Housing Works will be the managing member of the LLC. There are
four key components to financing the acquisition and rehab of the properties: (l) $2.06 million in tax exempt,
private activity bonds A tranche (A Bonds) issued by Housing Works in a private placement to Washington
Federal Bank,(2) $903,000 in tax exempt private activity bonds B tranche (B Bonds) issued by Housing Works
in a private placement to PNC Bank which gets replaced by LIHTC equity of $1.225 million after the property
is placed in service upon completion of the rehabilitation of the building, (3) loan from Housing Works in the
approximate amount of $958,000, and (4) a deferred development fee of $400,000 owed to Housing Works. A
Bonds and B Bonds are referred to herein as Bonds.
The Bonds are utilized to obtain the$I.225 million in tax credit equity necessary to acquire and rehab the
Apartments. The amount of the issue must be more than 50% of the development cost and must be used to
acquire and rehab the Apartments to obtain the LIHTC credits. The closing of the Bonds will be simultaneous
with the acquisition of the Apartments and closing of the Bonds. The A Bonds are expected to be outstanding
for a period of sixteen years and will be secured by a first trust deed on the property. Proceeds of the Bonds are
drawn as the acquisition and rehab occur. Once the rehab is completed and the Apartments are placed in
service. the B Bonds are paid oft: leaving the A Bonds and other financing in place.
Transaction Detail
Key aspects of the transaction are noted below:
Address: 1601 SW Reindeer Ave., Redmond, Oregon
Unit Mix: One bedroom units 40
Two bedroom units .ill
Total: 50
Land: Approximately 2.5 acres
Sources & Uses: Total
(l,OOOs)
Acquisition: 2,365
Improvements: 1,217
Soft Costs: 457
Development Fee: 605
Total Uses: 4,645
Sources:
A Bonds: 2.061
LlHTC Equity: 1,225
Housing Works Loan: 959
Deferred Dev.Fee: 400
Total Sources: 4,645
Improvements:Reindeer will undergo a total envelope update with new siding, windows and roofing. Ariel
unit interiors will be upt,1faded with new cabinets, appliances, flooring, paint and air conditioning. The
entry portico will be expanded to enlarge the entry lobby. Reindeer landscaping will be improved.
Rent Levels: Tv~e No. Rent
One bedrooms 9 534
One bedrooms 31 565
Two bedrooms I 630
Two Bedrooms 9 645
:\fet Operating Income
Rents: 345,072
Other income: 8,034
Vacancy: (17,655)
EOr: 335,451
Expenses: 19 7 ,486
NOr: t§7.~65
A Bonds debt service: 129,014
Cash for other debt: 38,951
Key Players: A Bond Lender: Washington Federal Bank
B Bond/LlHTC Equity: PNC
Bond Counsel: Pacifica Law Group (Faith Pettis)
Contractor: LMC Construction, Inc.
Housing Works Counsel: Bateman Seidel (Doug Blomgren)
Schedule: OHCS 4% Tax credit application: June 2014
PNC LOI July 2013
Washington Federal LOI August 2013
Private Activity Bond Cap allocation: October 20 I 4
Closing: November 2014
Rehab construction coml11encement: November 2014
Rehab completion: June 2015
Buildings placed in service: June 2015
Thank you for this opportunity to present our plans for the acquisition and rehab of the Reindeer Meadows
Apartments. The allocation of Private Activity Bond Volume Cap is critical to the success of the transaction and
your SUpp0l1 is greatly appreciated.
Tho as J. Keml~
Executive Director
CC Doug Blomgren
Faith Pettis
Teresa Pumula, Oregon Housing and Community Services
Brig Watley
Attachments:
Map
Aerial
Reindeer photos
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