City council authorizes BHA to pursue up to $100M in bonds to acquire 5 apartment complexes

The Bloomington City Council voted to authorize the Bloomington Housing Authority (BHA) to move forward with a bond program that could, at its maximum, total $100,000,000 to acquire five apartment complexes from Hometown Group, preserving 924 units of workforce housing.

Nathan Ferrer, executive director of the BHA, told the council the properties—Woodland Springs, Basswood, Northcrest, Kingston Manor and Summit Point—require about $9,000,000 in immediate capital repairs to address code violations and deferred maintenance. "We are excited about this project for a number of reasons," Ferrer said, adding the acquisition is intended to preserve naturally occurring affordable rents and to create a pipeline for future low-income housing tax credit or RAD conversions.

Chris Cashman of Ice Miller, serving as bond counsel, said the bonds would be issued under the local housing authority statute (36 7 18 30) and would be payable solely from the project revenues and surplus funds of the BHA, not from city taxes. "It will not be an obligation of the city," Cashman said, stressing the resolution sets outside parameters (maximum amounts, interest cap and maturity limits) while allowing the BHA and its advisors to finalize deal structure and pricing.

Council members pressed BHA staff on key financial details. "So a $100,000,000 — that's a lot of money — what is the timeline for repaying the bonds?" asked Council member Piedmont Smith. Ferrer and Cashman answered that initial pro forma models contemplated shorter terms with an illustrative eight- to ten-year window, but that the actual structure could change depending on whether the BHA assumes existing mortgage debt (approximately $65,000,000) held by Fannie Mae; if that debt is assumed, the bond issuance modeled could be nearer $32,000,000.

Speakers from the public included Mary Morgan, executive director of Heading Home and a BHA board member, who expressed the board's full support for the proposal, and other residents who urged careful independent appraisal and multi-year operating analyses before finalizing the financing. Kevin Keough, an online commenter, asked the council to require independent valuation and risk assessment prior to final approval: "Good intentions do not pay off bonds. Sound math does," he said.

Council members emphasized the statutory nature of the council's role as the fiscal body's authorization of maximum issuance while noting the BHA still must complete due diligence, finalize pro formas, obtain any necessary approvals from Fannie Mae to assume existing loans, and return with confirmatory documents. The council recorded its roll-call vote to approve the resolution authorizing the BHA to pursue the bond transaction and asked BHA staff to provide more specific repayment schedules and appraisal results before second-reading or closing.