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Home My WebLink About11014 City Clerk's Office Item # R8 Background Paper for Proposed Action Item COUNCIL MEETING DATE: August 11, 2025 TO: President Mark Aliff and Members of City Council CC: Mayor Heather Graham VIA: Marisa Stoller, City Clerk FROM: Melissa Cook, Director Department of Housing & Citizen Services SUBJECT: AN ORDINANCE APPROVING AN AFFORDABLE HOUSING DEVELOPMENT AGREEMENT AND RELATED DOCUMENTS BETWEEN COMPASS POINTE, LP, A COLORADO LIMITED PARTNERSHIP, AND THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION, AND AUTHORIZING THE MAYOR TO EXECUTE SAME SUMMARY: Agreement with Compass Pointe, LP, for the development of a one hundred ninety-two (192) unit affordable housing rental project known as Compass Pointe Apartments. The City of Pueblo is providing $750,000.00 in HOME Investment Partnership funding to assist with the development of this affordable housing development. PREVIOUS COUNCIL ACTION: On April 28, 2025, Council voted to approve a partial fee waiver for this development, an amount not to exceed $250,000.00. BACKGROUND: In May 2025, the Division of Housing and Citizen Services issued a Notice of Funding Availability (NOFA) for the HOME Program. The Division received an application for a 192-unit rental project to be known as Compass Pointe Apartment. HOME funds will assist three (3) of the units. The Project will serve households at 30-80% of the area median income (AMI). Project costs are approximately $74.2 million, and are being funded through multiple sources: Source Amount Cedar Rapids (Bonds) $21,800,000.00 Kittle Property Group Sponsor Note $4,300,000.00 City of Pueblo HOME $750,000.00 4% Federal Tax Credit Equity $29,568,295.00 State Affordable Housing Tax Credit $8,530,294.00 Proceeds City of Pueblo Waived Permit Fees $250,000.00 Interim Income $960,000.00 Deferred Developer Fee $6,011,533.00 DOH CHIF Loan $2,000,000.00 Total $74,170,122.00 FINANCIAL IMPLICATIONS: The City HOME contribution is available in the 251 Fund, and is comprised of HOME grant funds, program income, and City match contributions. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: If this HOME Loan is not made, the Affordable Housing Project will have to identify additional funding or fail. RECOMMENDATION: Approval of the Ordinance. ATTACHMENTS: 1. US Bank Subordination Agreement 2. US Bank Swap Subordination Agreement 3. Cedar Rapids Subordination Agreement 4. Authority to Use Grant Funds - Compass Pointe 5. Compass Point Development Agreement 6. Deed of Trust - Compass Pointe 7. Promissory Note ORDINANCE NO.11014 AN ORDINANCE APPROVING AN AFFORDABLE HOUSING DEVELOPMENT AGREEMENT AND RELATED DOCUMENTS BETWEEN COMPASS POINTE, LP, A COLORADO LIMITED PARTNERSHIP, AND THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION, AND AUTHORIZING THE MAYOR TO EXECUTE SAME WHEREAS, there exists a need for affordable housing in the City of Pueblo; and WHEREAS, the City of Pueblo receives HOME Investment Partnership Grant funds from the U.S. Department of Housing and Urban Development for the creation and retention of affordable housing; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City of Pueblo Affordable Housing Development Agreement between Compass Pointe, LP, a Colorado limited partnership and the City of Pueblo, a Colorado Municipal documents, specifically the promissory note, deed of trust, and subordination agreements, (the approved as to form by the City Attorney, are hereby approved. SECTION 2. The $750,000.00 in loan funds are available in Fund 251 and will be dedicated to this Agreement and the associated project. SECTION 3. The Mayor is hereby authorized to execute the Agreement and the associated Documents as needed and upon closing of the transaction in the name and on behalf of the City of Pueblo, where the Mayor may execute the Agreement and Documents by electronic signature and such electronic signature shall be attributable to the Mayor and the City of Pueblo. SECTION 4. The Mayor is hereby authorized to execute the construction and permanent financing subordinations to Cedar Rapids Bank and Trust Company and U.S. Bank National Association, when requested and in the name and on behalf of the City of Pueblo, where the Mayor may execute the subordinations by electronic signature and such electronic signature shall be attributable to the Mayor and the City of Pueblo. SECTION 5. The officers and staff of the City are authorized to perform any and all acts consistent with the intent of this Ordinance and the attached Agreement and Documents to effectuate the transactions described therein. SECTION 6. If any section, paragraph, clause, or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause, or provision shall not affect any of the remaining provisions of this Ordinance. SECTION 7. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on July 28, 2025. Final adoption of Ordinance by City Council on August 11, 2025. ____________________________ President of City Council Action by the Mayor: Approved on _______________. Disapproved on ______________ based on the following objections: ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ____________________________ Mayor Action by City Council After Disapproval by the Mayor: Council did not act to override the Mayor's veto. Ordinance re-adopted on a vote of ____________, on _____________ ____________________________ President of City Council ATTEST ________________________________ City Clerk