Arvada approves $850,000 loan, tax-exemption partnership and $2M state grant for Marshall Pointe Apartments

The Arvada Housing Authority on Jan. 6 approved a resolution to loan Marshall Pointe Apartments LP $850,000 and to subordinate that loan behind a Colorado Housing and Finance Authority (CHFA) permanent loan, and later the City Council approved a separate $2 million state grant to help pay system development charges for the same project.

The Marshall Pointe Apartments development at 5170 Marshall Street will include 260 affordable units restricted to households averaging 60% of area median income (AMI); 13 units will be reserved for households earning 30% AMI or less and paired with on-site supportive services from Family Tree. The housing authority vote on the loan passed 5–1; the special limited partnership agreement that grants tax exemptions passed 5–1. The Council approved an intergovernmental agreement with the Colorado Department of Local Affairs (DOLA) awarding a $2,000,000 grant to the project on a 6–0 vote.

Why it matters

Marshall Pointe bundles multiple public subsidies — a construction loan, low-income housing tax credit equity, a CHFA permanent mortgage, a subordinated municipal loan and tax exemptions — to produce 260 long-term income-restricted units, including supportive housing. Supporters said the layered financing was necessary to close a narrow funding gap; at least one commissioner objected that local taxpayer subsidies were too large relative to the city’s contribution.

Financing and project structure

Ben Taylor, vice president with Lincoln Avenue Communities, said the total development cost is “approximately $120,000,000.” He told the authority that combined land and construction costs total about $70,000,000 and that roughly $50,000,000 covers financing costs (construction-period interest, fees and other soft costs). Taylor said the project is structured around a roughly $100,000,000 construction loan (36 months) from JPMorgan Chase at “around a 7% interest rate,” and that the development expects about $55,000,000 in permanent financing from CHFA after stabilization.

Taylor said the development also will use low-income housing tax credit equity — roughly $55,000,000 in federal credits and about $4,000,000 in Colorado state credits (a combined face amount he described as near $60,000,000, with an expected net yield of about 87%). He told commissioners the developer fee is $12,000,000 and that over 90% of that fee will be deferred and repaid from surplus cash flow, with repayment terms set by the equity investor and a repayment window of about 15 years.

The Arvada Housing Authority loan

The housing authority voted to make an $850,000 loan to Marshall Pointe Apartments LP and to subordinate that loan to CHFA’s permanent mortgage. Staff said the loan must be repaid within 20 years and that CHFA requested the housing authority’s $850,000 loan be subordinated to CHFA’s financing. The loan will be repaid with interest; the housing team recommended approval.

Commissioner Marriott cast the lone dissenting vote on the $850,000 loan. He said the project already had “about half” of its cost subsidized through federal and state sources and argued Arvada’s subordinate loan at a rate well below private-market subordinate financing represented an unnecessary taxpayer subsidy. Commissioner Marriott called the city’s contribution “a pretty large amount of subsidy for the Arvada taxpayers.”

Supporters pushed back. Commissioner Mormon said the city’s loan is a small portion of the overall capital stack and that the project advances longer-term affordability: “this is an investment in our working members of our community,” he said, describing the project’s target residents as working families. Commissioner Davis said exceeding the city’s Prop 123 commitment early provided additional justification for the support.

Special limited partner agreement, tax exemptions and local payments

The authority also approved a resolution to enter into a limited partnership agreement naming the Arvada Housing Authority a special limited partner for the development. Housing staff said the special limited partner role enables property and construction sales-and-use tax exemptions required to support the project’s tax-credit financing.

Staff estimated the net present value of property tax exemptions over the partnership period at about $3,500,000 and the value of sales-and-use tax exemptions at about $1,300,000, for a combined estimated benefit of about $4,800,000 over 15 years. As part of the partnership deal, the developer will provide a $500,000 special limited partnership fee at closing and a payment-in-lieu-of-taxes (PILOT) of $50 per unit per year with a 3% annual escalation. Housing staff said the exemption runs for 15 years; after that period the property either would carry 15% of taxes (to be allocated to the city) or the parties would renegotiate another lump-sum payment.

Commissioner Marriott voted no on the partnership vote as well, arguing the tax exemptions shift burdens from this project to schools, county services and special districts that will serve the development but will receive reduced tax revenue during the exemption period.

City Council DOLA grant

Separately the City Council voted 6–0 to approve an intergovernmental agreement with the Colorado Department of Local Affairs to accept a $2,000,000 grant that the city had applied for to help pay the project’s estimated system development charges (SDCs). Staff estimated total SDCs for Marshall Pointe at about $4,400,000. Housing staff said the city could not waive or reduce SDCs without creating enterprise-fund deficits, so the DOLA award will help fill that gap.

Project timeline and services

Housing staff told the authority that the developer was weeks away from closing construction financing and tax-credit equity. The project will include 13 supportive units to be prioritized for people experiencing homelessness; Family Tree will provide on-site supportive services (medical, behavioral health, food and economic services) for those units.

What the actions mean

Actions approved by the Arvada Housing Authority: - Loan: $850,000 subordinated municipal loan to Marshall Pointe Apartments LP; repayment required within 20 years; subordinate to CHFA permanent loan; passed 5–1 (Commissioner Marriott opposed; Commissioner Ambrose absent). - Special limited partnership agreement: approval to take a special limited partner role to enable property and sales-and-use tax exemptions for Marshall Pointe; estimated tax exemptions NPV $3.5M (property) + $1.3M (sales/use) over 15 years; developer to pay $500,000 at closing and a $50/unit/year PILOT with 3% escalation; passed 5–1 (Marriott opposed; Ambrose absent).

Action approved by the City Council: - Intergovernmental agreement with DOLA for a $2,000,000 grant toward system development charges; passed 6–0.

Local context and next steps

Housing staff said the project will be subject to closing timelines associated with CHFA and with the construction lender; staff reported the developer anticipated closing construction financing in late January 2025. Council and housing staff said the city will receive the $500,000 one-time payment at closing and that the city’s use of the payment is intended to support future affordable housing projects.

Speakers at the housing authority meeting emphasized the project’s role in expanding long-term restricted affordable units in Arvada, while dissenting commissioners cautioned about the scale and visibility of public subsidy. The developer and city staff said the financing is tightly structured and that “every dollar counts” to make the deal feasible.

Staff contacts and documents for the project are included in the authority’s meeting packet; the project remains subject to closing conditions and lender underwriting.