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Council approves $12 million bond certificate for South Mesa Hills affordable rental project
Summary
The council approved resolutions authorizing up to $12 million in tax-exempt bond issuance and a no-objection letter to the Texas Department of Housing and Community Affairs for a South Mesa Hills affordable rental project. The development will deliver 104 affordable units in two phases and is expected to be in service by December 2026.
El Paso City Council on Tuesday approved two related resolutions authorizing the mayor to sign a certificate approving proposed bond financing and confirming that the city has no objection to a South Mesa Hills residential rental project financed through tax-exempt bonds and low-income housing tax credits.
City staff and legal counsel said the Alameda Public Facilities Corporation — a public facility corporation associated with the Housing Authority of the City of El Paso (HOME) — seeks authority for an issuance not to exceed $12,000,000 to satisfy IRS and state requirements tied to a tax-credit-financed affordable housing project. The council also authorized the city clerk to certify the no-objection resolution to the Texas Department of Housing and Community Affairs.
Shelly Rivas, in-house counsel for HOME, told the council that all units in the development will be affordable. Counsel for the issuer said the project includes a 40-unit first phase and a 64-unit second phase, for a total of 104 units. Counsel said the $12 million in bonds represents roughly half of the financing structure required to meet the IRS ratio test that enables tax-credit equity to be used in the project; total project cost was stated in the meeting as about $25 million.
William Avila, bond counsel, described the broader conversion strategy that HOME has used nationwide to attract private capital for rehabilitation of former public housing and to fund large-scale renovation while preserving tenant vouchers and resident rights. Avila said the project’s anticipated place-in-service date is December 2026 and that the bonds are structured so the city does not incur contingent liability if the project does not perform; bond investors could pursue property remedies but the city would not be financially exposed.
Council members noted the long-running process of rehabilitating former public housing units through 4 percent tax-credit and tax-exempt bond financing and expressed support for the project’s preservation and rehabilitation outcomes.
Both resolutions passed unanimously. Staff said the project remains subject to usual closing, tax-credit allocation and construction processes but that council approval clears the municipal steps required for bond issuance and the TDHCA certification process.
