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Rowlett HFC to issue tax‑exempt bonds for Lakeview Point senior housing; council approves TEFRA resolution
Summary
Council approved Jan. 21 a resolution authorizing the Rowlett Housing Finance Corporation to issue tax‑exempt bonds for the Lakeview Point Senior Living project to meet IRS requirements for low‑income housing tax credits.
Rowlett City Council on Jan. 21 approved a resolution allowing the Rowlett Housing Finance Corporation (HFC) to proceed with a tax‑exempt bond issuance supporting Lakeview Point Senior Living, a project completed and receiving certificates of occupancy in recent weeks.
Peter Arrutia, executive director of the Rowlett Housing Finance Corporation, and Melissa Fisher of RISE Construction described the project status: the property has received certificates of occupancy, the leasing effort is underway and residents are already moving into units. Arrutia and bond counsel said the bond issuance is intended to bring the financing into compliance with a federal IRS requirement known as the “50% test,” which affects the allocation of 4% low‑income housing tax credits. Bond counsel said the issuance will be a conduit, revenue‑backed obligation of the HFC and not an obligation of the city.
Ryan Bowen, bond counsel, explained that the council’s action is a TEFRA‑style approval (a federal tax‑law procedural requirement) after a telephonic public hearing held earlier in the day; no members of the public called in or offered comments during the hearing. Counsel said many similar projects across the state have used short‑term bond issuances to satisfy the 50% eligible‑basis test and thereby increase the tax‑credit equity available to projects.
Council members questioned whether the bond would expose the city to liability; bond counsel and Arrutia said the bonds are special limited obligations secured by project revenues and the mortgage; bondholders could, in an extreme case, foreclose on the property but could not compel the city or HFC to make payments from unrelated funds. Arrutia and Melissa Fisher said the plan was to convert the short‑term issuance to a permanent mortgage by July, which would trigger any catch‑up PILOT payments to the city. Councilmember Hsu, who also serves on the HFC board, said the issuance preserves tax credits and supports the project’s viability.
Councilmember Shoop moved to approve the alternate resolution presented; Councilmember Bowers seconded. Council approved the resolution by voice vote; the resolution records that the public hearing had no participants and that the council’s approval does not obligate the city to repay the bonds.
