Title
Resolution Approving the Issuance of Bonds by the Ann Arbor Housing Commission for Ann Arbor Housing Development Corporation (Dr. Willis C. Patterson Project)
Memorandum
This resolution requests City Council approval, solely for purposes of the public approval requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), of the proposed issuance by the Ann Arbor Housing Commission of one or more series of tax-exempt qualified 501(c)(3) bonds in a maximum aggregate principal amount not to exceed eighteen million dollars ($18,000,000.00) (the “Bonds”).
AAHDC, as a nonprofit corporation qualified under Section 501(c)(3) of the Code, is an eligible borrower of tax-exempt bond proceeds. Bonds issued for the benefit of the AAHDC would be “qualified 501(c)(3) bonds,” a category of “private activity bonds” under the Code.
The bond proceeds are expected to be loaned to AAHDC, and used to defray the cost of purchasing, acquiring, owning, improving, furnishing, equipping, and financing an approximately 114-unit multifamily residential rental housing facility known as AVIA Lofts, located at 800 Victors Way in Ann Arbor (the “Project”). The Project is intended to preserve and provide long-term low- and moderate-income rental housing subject to applicable affordability restrictions.
The Ann Arbor Housing Commission is authorized to issue taxable and tax-exempt bonds under Act 18 of the Public Acts of Michigan of 1933 (Ex. Sess.), as amended (“Act 18”). The Bonds are expected to be limited obligations of the Ann Arbor Housing Commission, payable from loan repayments made by the nonprofit borrower and from funds, accounts, and collateral pledged under the bond documents. The limited obligation nature of the Bonds is also consistent with Act 18, which provides that notes, bonds, or other obligations or claims against a housing project are not debts or charges against the city or village and do not create individual liability for members of the housing commission for official acts. The Bonds will not be general obligations of the City, will not pledge the City’s faith and credit or taxing power, and will not obligate the City to pay debt service.
Because the Bonds are expected to be issued as qualified 501(c)(3) bonds for the benefit of a 501(c)(3) borrower, federal tax law requires public approval following a noticed public hearing. City Council is being asked to provide that approval solely for federal tax purposes, including in its capacity as the applicable elected representative of the City, the governmental unit on behalf of which the Ann Arbor Housing Commission is treated as issuing the Bonds for such purposes, and as the elected legislative body of the governmental unit in which the Project is located.
City Council’s approval of this resolution is limited to the public approval required under federal tax law. It does not constitute approval of the bonds as City debt, does not pledge City funds or credit to repayment of the bonds, and does not make the City responsible for the project financing. Any separate City approval relating to the real estate transaction, City funding, or other project matters would be addressed separately or as otherwise provided in the applicable City Council materials.
City Council held a public hearing on July 20, 2026, which public hearing was duly noticed by publication on City’s website to provide interested parties an opportunity to be heard, regarding the Housing Commission’s issuance of the Bonds for the benefit of the Ann Arbor Housing Development Corporation, a nonprofit corporation, or a nonprofit affiliate. The public hearing and the approval of the Bonds by the City Council are required by federal income tax law, as a condition precedent to the issuance of the Bonds by the Housing Commission.
Staff
Prepared by: Jennifer Hall, Executive Director, Ann Arbor Housing Commission
Reviewed by: Michelle Landis, Senior Assistant City Attorney
Approved by: Milton Dohoney Jr, City Administrator
Body
CITY OF ANN ARBOR
COUNTY OF WASHTENAW, STATE OF MICHIGAN
RESOLUTION APPROVING ISSUANCE BY THE
ANN ARBOR HOUSING COMMISSION OF TAX-EXEMPT BONDS
(DR. WILLIS C. PATTERSON PROJECT)
Minutes of a regular meeting of the City Council of the City of Ann Arbor, County of Washtenaw, State of Michigan (the “City”) held on the 20th day of July, 2026, at 7:00 o’clock p.m. Eastern Time.
PRESENT: Councilmembers ____________;
ABSENT: Councilmember _____________.
The following preamble and resolution were offered by Councilmember ________ and supported by Councilmember _____________.
WHEREAS, the City has been advised that the Ann Arbor Housing Commission (the “Housing Commission”) proposes to issue one or more series of tax-exempt 501(c)(3) bonds in the aggregate principal amount of not to exceed Eighteen Million Dollars ($18,000,000) (the “Bonds”), the proceeds of which are expected to be loaned to Ann Arbor Housing Development Corporation, a Michigan nonprofit corporation and tax-exempt charitable organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Borrower”); and
WHEREAS, the proceeds of the Bonds are expected to be used to finance, refinance, or reimburse a portion of the costs of acquiring, owning, improving, furnishing, equipping, financing, refinancing, and paying related reserves, escrows, costs of issuance, and other transaction costs with respect to an approximately 114-unit multifamily residential rental housing facility known as AVIA Lofts, located at 800 Victors Way, Ann Arbor, Michigan (the “Project”), all in furtherance of the Borrower’s charitable purposes; and
WHEREAS, the Project is expected to be owned and operated by the Borrower or a related nonprofit affiliate of the Borrower, and used as a multifamily residential rental housing facility, including units reserved for occupancy by households meeting applicable federal income restrictions and additional units intended to serve moderate-income households, in each case in accordance with applicable federal tax requirements and related regulatory restrictions, all in furtherance of the Borrower’s charitable purposes; and
WHEREAS, the Housing Commission, and not the City, is expected to be the issuer of the Bonds and the Bonds are expected to be limited obligations of the Housing Commission payable from loan repayments to be made by the Borrower and from such funds, accounts, revenues, and collateral as may be pledged under the bond documents, and the Bonds are not expected to be general obligations of the City or to be payable from the City’s general funds, faith and credit, or taxing power; and
WHEREAS, Section 147(f) of the Code requires public approval of the Bonds before the Bonds may be issued as tax-exempt qualified 501(c)(3) bonds, and for purposes of the public approval requirements of the Code and the Treasury Regulations thereunder, the City Council is being asked to approve the issuance of the Bonds solely for federal tax purposes; and
WHEREAS, on July 20, 2026, in accordance with Section 147(f) of the Code and the Treasury Regulations thereunder; the City Council held a public hearing regarding the proposed issuance of the Bonds and interested persons were provided a reasonable opportunity to express their views; and
WHEREAS, the City Council’s approval of this resolution does not constitute approval of the Bonds as debt of the City, does not make the City the issuer of the Bonds, does not constitute a pledge of the City’s faith and credit or taxing power, does not obligate the City to pay debt service on the Bonds, and does not create any debt, liability, guaranty, or payment obligation of the City with respect to the Bonds or the Project financing; and
WHEREAS, based on the recommendation and request of the Housing Commission, and solely for federal tax purposes, this City Council desires to approve the issuance of the Bonds.
.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. Solely for the purposes of fulfilling the public approval requirements of Section 147(f) of the Code and the Treasury Regulations thereunder, the City Council hereby approves the issuance, sale, and delivery by the Housing Commission of the Bonds in one or more series, in the aggregate principal amount of not to exceed Eighteen Million Dollars ($18,000,000), to finance, refinance, or reimburse a portion of the costs of the Project.
2. The Bonds shall be limited obligations of the Housing Commission payable solely from loan repayments to be made by the Borrower and from such funds, accounts, revenues, and collateral as may be pledged under the bond documents. The Bonds shall not constitute general obligations or debt of the City, the State of Michigan or any political subdivision thereof. Nothing in this resolution shall be construed as creating a debt, liability, pledge of faith and credit, pledge of taxing power, guaranty, or payment obligation of the City with respect to the Bonds or the Project financing.
3. All resolutions and parts of resolutions to the extent that they conflict with the provisions of this resolution are hereby rescinded.
IN FAVOR: Councilmembers ;
AGAINST: Councilmember
RESOLUTION DECLARED ADOPTED.
____________________
Jacqueline Beaudry
City Clerk
I hereby certify that the foregoing is a true and complete copy of a resolution adopted at a regular meeting of the City Council of the City of Ann Arbor, Michigan, held on July __, 2026, the original of which is on file in my office. Public notice of said meeting was given pursuant to and in compliance with Act No. 267 of the Michigan Public Acts of 1976, as amended.
_____________________
Jacqueline Beaudry
Dated: ________________ City Clerk