DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Approval of financing for purposes of the Internal Revenue Code.
SUMMARY:
This Resolution approves the issuance by the Las Varas Public Facility Corporation of its Multifamily Housing Revenue Bonds (St. John’s Square Apartments Project) Series 2020 for purposes of Section 147(f) of the Internal Revenue Code.
BACKGROUND INFORMATION:
Section 147(f) of the Internal Revenue Code (the “Code”) requires that the issuance of any private activity bond obligations be approved by the applicable elected representative of the governmental unit in which the project is located after a public hearing following reasonable public notice.
The City was contacted regarding Las Varas Public Facility Corporation (the “Issuer”) for the benefit of St. Johns Square Apartments, LP (the “Borrower”), a Texas limited partnership that is financing in part through the Issuer the costs of constructing a mixed-income, multi-family housing development at 410 Nueva St., San Antonio, Texas 78205 (the “Project”). A public hearing with respect to the Project and the issuance of the Bonds was held in the City of San Antonio on January 6, 2020 in compliance with Section 147(f) of the Code.
The Issuer is an affiliate of the San Antonio Housing Authority, and the Issuer is undertaking this issuance in the furtherance of its mission of facilitating the provision of affordable housing.
ISSUE:
To meet the requirements of the Code, the Borrower has requested that City Council adopt a Resolution confirming public approval of the issuance of the one or more series of Bonds by the Issuer up to a maximum aggregate amount of $50,000,000, which will be used to finance the Project. The consideration and approval of this action is consistent with the City’s practice of providing consent for projects located in San Antonio that involve affordable housing developments obtaining tax-exempt financing for capital improvement projects through conduit issuers.
ALTERNATIVES:
If the City does not adopt a resolution confirming public approval of the bond issuance by the Issuer, this financing cannot be effectuated.
FISCAL IMPACT:
The Resolution does not obligate the City to pay the debt or the Bonds, and does not obligate or create any expectations of, or liabilities for, the City. The Borrower is solely responsible for paying all debt service and other costs associated with the Bonds. The Borrower will pay the City an administrative fee of $2,500 upon the adoption of the requested Resolution, which will be deposited into the General Fund in accordance with the FY 2020 Adopted Budget.
RECOMMENDATION:
Staff recommends approval of the Resolution which approves the issuance by the Las Varas Public Facility Corporation of Multifamily Housing Revenue Bonds (St. John’s Square Apartments Project) Series 2020 for purposes of Section 147(f) of the Internal Revenue Code.