By a unanimous vote at its monthly meeting this Tuesday night, the City of Falls Church’s Economic Development Authority determined to move ahead with the potential use of its tax exempt revenue bonding authority for purposes of acquiring The Fields, a rental property with over 90 units that have been under contract with the City to offer affordable housing on Ellison Street, an agreement that is set to expire in the next two years.
It is reported that ownership of The Fields received a number of bids for acquisition of the entire site with a deadline of last weekend. The EDA, with access to the issuance of revenue bonds at a non-profit rate, would be best positioned to make a compelling bid for acquisition of The Fields, but will need to step up with an offer quickly.
The last time the EDA used its authority for non-profit revenue bond issuance came when it voted to offer such bonds for the non-profit Easter Seals foundation for a development project in the City. The City of Falls Church would bear no liability for the bonds should the EDA move ahead to provide them.
According to the City of Falls Church’s website, steps in the application process, while there may be some variation in the timing and sequence of events leading up to issuance of the bonds, normally proceeds as follows:
1. The applicant decides to acquire, construct, or renovate real property in the City of Falls Church.
2. The applicant consults with bond counsel to determine eligibility for tax-exempt financing.
3. The applicant begins to arrange for financing, either through a financial institution or through an underwriter.
4. The applicant submits an application (17 sets) requesting the EDA to issue bonds, complete with payment of application fee (payable to “City of Falls Church”).
5. Staff and counsel to the EDA review application for completeness. If the application is in order, the application is put on the agenda for a public hearing at the next EDA meeting.
6. A newspaper notice of the public hearing is published once a week for two successive weeks. NOTE: State law requires that the public hearing take place no fewer than six nor more than twenty-one days after the second notice appears in the newspaper. The EDA Board meets on the first Tuesday of each month, unless otherwise noted. Accordingly, in order to comply with state law, the notice of the public hearing on the application must be published in a newspaper of general circulation on or before the two Wednesdays immediately prior to the Tuesday date for the public hearing. Bond counsel may determine that certain additional notice requirements must be met in order to comply with Internal Revenue Code provisions relative to tax-exempt financing.
7. The EDA conducts the public hearing and the EDA Board votes on a resolution approving the application and recommending that the Falls Church City Council approve the issuance of bonds.
8. The Falls Church City Council adopts a resolution approving the issuance of the bonds. NOTE: State law requires that the City Council’s approval take place within sixty days of the public hearing by the EDA. The Falls Church City Council meets on the second and fourth Mondays of each month, unless otherwise noted.
9. Simultaneously with the approval process outlined in Steps 7 and 8 above, bond counsel prepares the bond documents reflecting the financial transactions relating to issuance of the bonds. The documents are submitted to counsel for the EDA to review.
10. The EDA adopts a final resolution authorizing the issuance of the bonds.
11. Bond counsel conducts the bond closing. EDA officials execute bond documents in accordance with the terms of the resolutions passed by the EDA.
12. The administrative fee is initially payable in advance at closing, and thereafter is payable annually and due on the anniversary date of the issuance of the bonds.
