REQUEST FOR LENDER FINANCING FOR CONSTRUCTION & PERMANENT PRIVATE ACTIVITY BOND DEBT BOULDER HOUSING PARTNERS PALO PARK COMMUNITY PROJECT

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1 4800 N. Broadway, Boulder, CO Phone: Fax: Hearing Assistance: REQUEST FOR LENDER FINANCING FOR CONSTRUCTION & PERMANENT PRIVATE ACTIVITY BOND DEBT BOULDER HOUSING PARTNERS PALO PARK COMMUNITY PROJECT Issued: Friday April 15, 2016 Written Clarifying Questions Due: Wednesday April 20, 2016 at 2:00 PM MT Term Sheets Due: Friday May 6, 2016 at 4:00 PM MT Boulder Housing Partners 4800 Broadway Boulder, Co (720) Rev. 2016/01

2 Request for Financing Construction & Permanent Private Activity Bond Debt Contents A. Scope of Work, Submittal Process and Deadlines 1. Scope of Work 2. Submittal Process and Deadlines B. Additional Information 1. Development Team 2. Project Description 3. Capital Needs Assessment 4. Rent and Income Strategy 5. Gap Financing Strategy 6. Development Schedule 7. Resident Relocation Strategy C. BHP Reservation of Rights D. Attachments Attachment A Proforma Attachment B Site Map and Plan Attachment C 2014 Final Audit Attachment D Schedule of Real Estate Holdings Attachment E 2015 Preliminary Balance Sheet Attachment F 2015 Preliminary Income Statement 2

3 A. Scope of Work, Process and Deadlines 1. Scope of Work The Housing Authority of the City of Boulder dba Boulder Housing Partners (BHP) intends to procure a lending institution to finance the project known as the Palo Park Community. This is a mixed finance project that will include 4% Low Income Housing Tax Credits, State of Colorado Housing Tax Credits, Private Activity Bonds (PAB s), Community Development Block Grant funds for Disaster Recovery (CDBG-DR), as well as local funding from the City of Boulder and potentially Boulder County. BHP reserves the right to extend this contract for future mixed income finance deals. This is a new construction project. Recent experience with 4% LIHTC/PAB investments and Housing Authorities is a plus. Firm(s) should be willing to work collaboratively and in coordination with BHP, the equity provider(s), and other lenders. Previous, and positive, experience working with BHP will be considered as a factor in our review process. The attached proforma does not reflect final deal format. The proforma will evolve as construction pricing, LIHTC equity approval and other information becomes available for the deal. 2. Submittal Process and Deadlines and PAB Debt Response Request. BHP is requesting proposals for construction and permanent debt financing. The PAB s will be issued by BHP as a conduit issuer on behalf of a LIHTC partnership to be created (the Partnership ). The proposed debt financing facility will be tax-exempt but not bank-qualified due to the PAB nature of the financing. BHP will provide a legal opinion from nationally recognized bond counsel relative to the federal and state tax-exemption of the interest on the PAB debt facility. It is assumed the Partnership s construction, operating and reserve accounts will be held by the selected lending provider. Please indicate in the PAB term sheet the fixed or variable rate during the construction period as a rate indexed to a nationally recognized index, i.e. 1- month LIBOR. For the permanent period please indicate the current fixed rate and its relation to a nationally recognized index such as the 10-year U.S. Treasury constant maturity rate. Please specify all lending fees such as loan origination fees, conversion fees, if any, plus estimate the costs of appraisal, title, survey, and legal fees, etc. Please also specify any minimum amount of the initial LIHTC equity pay-in to be required of the investing partner. BHP is open to any deal structure so please submit any and all formats, including fully amortizing products. Requests for Clarification and/or Additional Information. Please submit all questions and requests for clarification and/or additional information by Wednesday, April at 2:00 PM to Lauren Schevets and Laura Valdez by . BHP will compile all questions and provide all responding parties a comprehensive list of all questions and answers no later than Wednesday, April 27, 2016 at 4:00 PM. 3

4 Proposal Due Date: Please submit final proposals and term sheets no later than Friday May 6, 2016 at 4:00 PM to Lauren Schevets and Laura Valdez by . Only those submittals received by the specified date and time will be considered. Any submittal received after the specified date and time will not be reviewed. B. Additional Information Lauren Schevets, Senior Project Manager Laura Valdez, Senior Financial Analyst 1. Project Description The project, referred to as the Palo Park Community, is a new construction affordable housing project. BHP intends to develop 35 LIHTC units for families and individuals at 4525 Palo Parkway. The project will include a mix of 13 onebedroom units, 14 two-bedroom units, and eight three-bedroom units, with income ranges between 30% and 60% AMI. In addition to the residential buildings, the project will include a community center, leasing office, playground, community gardens, and connections to nearby trails. BHP has partnered with Flatirons Habitat for Humanity ( Habitat ) who will also be developing nine homeownership units on the property. Due to this unique partnership, BHP intends to retain ownership of the land and will grant a longterm lease to both the tax credit LLLP and Habitat. The land will be encumbered by a permanent affordability covenant as a condition of accepting financial assistance from the City of Boulder. The total development costs are anticipated to be $12,372,584 ($353,502 per unit). Total estimated construction loan/pab is estimated to be $6,426,906, with and estimated permanent loan of $2,494,928. BHP has submitted a preliminary application to CHFA for 4% LIHTCs and State of Colorado Tax Credits. BHP has also applied for both CDBG-DR funds and anticipates an award for this project. The City of Boulder has donated the land to Boulder Housing Partners, as well as committed initial funding. BHP anticipates a second request to the City for funding, as well as an application to Boulder County for Worthy Cause funds. Please see the Attachment A for the draft deal proforma, Attachment B for a site map, and Attachment C for relevant BHP financial information. The BHP Board of Commissioners has adopted an inducement resolution to issue up to $9MM in PABs for this transaction. 4

5 2. Development Team Sponsor and General Partner Boulder Housing Partners: BHP provides assistance to nearly 2,000 households through their five housing programs. BHP has nearly 30 years of experience building affordable housing development, including experience successfully managing 332 apartments financed through the Low Income Housing Tax Credit program. Together the BHP team has experience with development, stabilized lease-up, and management of nine LIHTC projects throughout the City. Tax Credit Attorney Jon Peterson, Winthrop and Weinstein Bond Counsel Fred Marienthal, Kutak Rock Design Teams STUDIO Architecture (Boulder, CO) General Contractor Deneuve Construction (Boulder, CO) CHFA Market Study Analyst James Real Estate Services 3. Development Ownership Structures The Project ownership entity will be a Colorado limited liability limited partnership with BHP through a single member LLC as the general partner and the to-be-identified tax credit investor(s) as the limited partner(s). 4. Development Schedule BHP has submitted preliminary applications for 4% LIHTC, State Tax Credits, and CDBG-DR funds and anticipates award notices in mid-may. BHP is also working through the entitlement process with the City of Boulder. Our goal is to complete a financial close in November 2016 and begin construction immediately upon closing. C. BHP Reservation of Rights: 1. BHP reserves the right to reject any or all proposals, to waive any informality in the RFF process, or to terminate the RFF process at any time, if deemed by BHP to be in its best interests. 2. BHP reserves the right not to award a contract pursuant to this RFF. 3. BHP reserves the right to terminate a contract awarded pursuant to this RFF, at any time for its convenience upon 10 days written notice to the successful bidder. 4. BHP reserves the right to retain all proposals submitted and not permit withdrawal for a period of 60 days subsequent to the deadline for receiving proposals without the written consent of BHP Procurement Officer. 5. BHP reserves the right to negotiate the fees proposed by the bidder if applicable to bid process. 5

6 6. BHP reserves the right to reject and not consider any proposal that does not meet the requirements of this RFF, including but not limited to incomplete proposals and/or proposals offering alternate or non-requested services. 7. BHP shall have no obligation to compensate any bidder for any costs incurred in responding to this RFF. 8. BHP shall reserve the right to at any time during the RFF or contract process to prohibit any further participation by a bidder or reject any proposal submitted that does not conform to any of the requirements detailed herein. 9. BHP reserves the right to discontinue the RFF process at any point in time. 10. Proposals are subject to public review via open records requests. Once the award of the project has been made, proposals may also be shared with non-successful respondents. 6