Developers seek council TEFRA hearing for 272‑unit Paxton Station affordable housing project

Developers for a proposed 272‑unit affordable housing project at 203 West Paxton Avenue asked the Salt Lake City Council to hold the tax-exempt financing public hearing required under federal tax law (a TEFRA hearing) so a public-benefit conduit issuer can consider issuing private-activity bonds.

City staff explained the proposal: Patriot Services Group (a nonprofit housing developer) aims to build Paxton Station Apartments with 272 units — described in the staff presentation as 182 studio units and 91 one-bedroom units (transcript wording) — and up to 75% of the units would be deed-restricted to households at 60% or 80% of area median income (AMI). The developer expects to use private-activity bonds issued by the Public Finance Authority of Wisconsin; city staff and bond counsel said the conduit financing structure would create no financial liability for Salt Lake City or its bond rating and that the council’s statutory role is limited to holding a TEFRA public hearing under the Tax Equity and Fiscal Responsibility Act.

Developer representatives explained the capital stack is a bond-centered structure (no LIHTC funds were reported in the capital stack at the time of the briefing) and said market and leasing analyses had been updated several times, most recently within the previous 6–8 weeks, to account for absorption and timing. Developers said the project team expects demand to strengthen by the expected delivery date and cited proximity to the Ballpark front-runner station, plans to activate the west platform and adjacent public realm, and a management partner experienced in similar housing assets. They also said they are coordinating with UTA and the city on pedestrian and streetscape improvements around the station.

Council members asked detailed financing and market questions: whether LIHTC would be part of the capital stack (developer said no LIHTC in the current stack), how the bond financing interacts with state private-activity-bond pools, and what would happen if leasing were slower than projected. Developers said Morgan Stanley is marketing the bonds, that the capital stack includes A/B/C bond structures, and that the development team was capitalized to stabilize the project if leasing takes longer than anticipated. City staff noted the council may consider a policy on when and how the city should facilitate these conduit bond public hearings in future cases, since the council’s only formal step in the process is the TEFRA hearing and the city has no financial obligation under this structure.

The council did not take a final vote at the work session; staff said a TEFRA hearing would be scheduled as part of the required statutory process and recommended the council hold the public hearing so the project can proceed through its financing steps.