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Habitat for Humanity asks bond issuance to pass at Rifle City Council

Habitat for Humanity's employees and volunteers taking a group photo at the Habitat for Humanity's Home Dedication ceremony on Thursday afternoon in Wapiti Commons.
Katherine Tomanek/Post Independent

During the city of Rifle’s regularly scheduled meeting on Jan. 15, council was once again presented with the bond issuance to the Habitat for Humanity Roaring Fork for building the factory. 

The factory would be producing around 200 homes each year and anticipates employing around 64 people, and Habitat for Humanity asked for the city to endorse a letter of support to become bond council for the event of building the factory in September

Helen Atkeson from Hogan Lovells, a firm based out of Denver, is working as bond counsel on the project, closely with Jim Neu, the city attorney for Rifle and Habitat for Humanity Roaring Fork, to make sure the bond issuance goes smoothly. 



“It would authorize the issuance by the city as a conduit issuer, three series of bonds…and those proceeds of those series, which are authorized within parameters of certain dollar amounts set forth in the ordinance, would authorize the loan of those proceeds to Habitat for Humanity, Roaring Fork Valley,” Atkeson said. 

Atkeson explained that the purposes of the bonds would be financing of the acquisition of the land for construction, improvement and equipping the modular production facility, the payment of capitalized interest during the startup period, the payment of issuance, expenses related to financing and to fund certain reserves that are available during the startup period of the construction. 



“The city (would be) authorized in connection with the bonds to execute certain agreements…they include an indenture of trust, which would be between the city and the bond trustee,” Atkeson said. “A loan agreement between the city and borrower, Habitat for Humanity Roaring Fork, and a bond purchase agreement, which is amongst the city, the borrower and D.A. Davidson & Company.”

D. A. Davidson and Company is a financial advice company, who would be going into the market to identify institutional investors on who would be buying the bonds, Atkeson said. 

The other part of the ordinance is a lease that relates to the land where the facility will be constructed and includes some amendments to accommodate the financing and needs or interests of the potential investors, Atkeson said. 

“Helen’s firm graciously drafted a memorandum that I knew would be of most concern for you all,” Neu said, speaking to the councilors. “On any liability, effect on our credit rate and staff time — those were the main things. We’ve been talking about this since the beginning, that the only collateral for the bonds, even though the city’s issuing them, is the Habitat facility and revenue from it, the leasehold interest and that’s why we’re having to amend the lease to reference the bond issue.”

The city of Rifle would have no liability for the bonds or processing the payments, which the city staff wouldn’t have to do, Neu said. 

As this is an emergency ordinance being presented to the city council, it takes a supermajority of the council to approve it, especially with councilor Clint Hostettler absent. 

“I can understand the emergency aspect as to where our economy is changing regularly and has the opportunity to in the next six weeks, so I feel like we need to lock it in for stability,” said Mayor Sean Strode. 

He also asked what their confidence level was on selling the bonds. 

“We’re highly optimistic we’ll be able to sell these bonds,” said Lee White, managing director from D.A. Davidson and underwriter on the Habitat for Humanity project. “These are non-recourse bonds to the city, you’re doing us a favor, doing Habitat a favor by issuing these bonds.”

Strode said he was for the project before the council voted, and it passed unanimously. 

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