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 me...
Click here for full text