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Lakewood housing project clues in commissioners to unused financing method

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Rosier laments lack of awareness about ‘private activity bonds’

By Ramsey Scott

A nonprofit’s proposal to build affordable, transit-oriented housing in Lakewood has put an alternative funding mechanism on the radar screen of the Jeffco commissioners.

The commissioners gave initial approval April 22 to using most of the county’s allocation of “private activity bonds” for a housing development proposed by Metro West Housing Solutions. It was the first time all three commissioners had heard of the tax-exempt bonds, a federal program that gives state and local governments the authority to issue the bonds for projects that benefit local residents.

“I’ve been here six years, and I’ve never heard (of this funding) before,” said Commissioner Faye Griffin.

“I’m finding it kind of concerning that this is the first time I’ve ever heard of these. And it makes me rather upset and angry, to be quite honest with you,” Rosier said. “We’ve been talking now for over three years about slash collection, and we could have used these bond dollars with private entities who wanted to do this.”

Local governments can transfer their authority to issue the bonds to other governments; any unused bond authority reverts back to the state every year on Sept. 15. According to the county’s staff, only about half of the bonding authority is ever used in a given year.  

The last time Jeffco issued a public activity bond was in 2007, when it allowed Adams County to use $3 million of its allotment to help finance the TruStile Doors industrial project. 

“I appreciate staff coming forward with this project. It’s a good proposal,” Commissioner Casey Tighe said. “I’ve been on board about 1 1/2 years, and I’m learning stuff every day. There’s lots of different things going on in the county, and that’s why we rely on staff.”

 

The project in question

Funding needs for the $8.5 million Zephyr Line Apartments, which would be built near West Colfax Avenue and Wadsworth Boulevard, exceed Lakewood’s annual $7.3 million ceiling for the bonds, so it asked Jeffco to issue the entire $8.5 million to streamline the process.

According to several representatives of the Zephyr project and Jeffco staff members, there has been limited interest in projects funded by private activity bonds in recent years. Low interest rates have made it easier and cheaper to borrow money in the private equity market. 

Rosier said his support would be contingent on Lakewood agreeing to issue Jeffco its full allotment of private activity bonds in 2014 if the county identifies another project. 

The proposal will come before the commissioners again in several weeks on their consent agenda.