ORDINANCE
WHEREAS, the City of Chicago (the "City"), a home rule unit of government under Section 6(a), Article VII of the 1970 Constitution of the State of Illinois, has heretofore found and does hereby find that there exists within the City a serious shortage of decent, safe and sanitary rental housing available for persons of low and moderate income; and
WHEREAS, the City has determined that the continuance of a shortage of affordable rental housing is harmful to the health, prosperity, economic stability and general welfare of the City; and
WHEREAS, Encuentro Square II LP, an Illinois limited partnership (the "Borrower") of which the general partner is Encuentro Square II GP LLC, an Illinois limited liability company whose sole member is Latin United Community Housing Association, an Illinois not-for-profit corporation ("LUCHA"), intends to acquire certain property located generally at 3737 West Cortland Street in the City (the "Property"); and
WHEREAS, the Borrower and LUCHA have proposed a certain low-income housing development project on the Property consisting ofthe acquisition ofthe Property and construction of one residential building and of approximately 57 residential dwelling units therein, along with related parking and site infrastructure costs (the acquisition, construction and equipping of the real estate and the building and other improvements on the Property, including the residential dwelling units and associated areas in the building, shall be known as the "Project"); and
WHEREAS, the Borrower has requested that the City issue multi-family housing revenue bonds, notes or other indebtedness in an amount not to exceed $19,500,000 (the "Bonds") for the purpose of financing a portion ofthe Project costs, including the Eligible Project Costs (as defined herein); and
WHEREAS, it is intended that the interest on the Bonds will be excluded from gross income for federal income tax purposes; and
WHEREAS, it is intended that this ordinance shall constitute a declaration of intent to reimburse certain eligible expenditures for the Project made prior to the issuance of the Bonds ("Eligible Project Costs") from the proceeds of the Bonds (if and when issued) within the meaning of Section 1.150-2 ofthe Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended (the "Treasury Regulations"); now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:
SECTION 1. The above recitals are expressly incorporated in and made a part of this ordinance as though fully set forth herein.
SECTION 2. The City intends to issue the Bonds and lend all or a portion of the proceeds thereof ("Bond Proceeds") to the Borrower, or an entity affiliated with or related to the Borrower, for the purpose of financing a portion ofthe Project costs, as well as costs incurred in connection with the issuance of the Bonds and funding certain reserves, if required, subject to the City and the Borrower agreeing to the terms and conditions necessary to issue the Bonds and further approval by the City Council of the City. The maximum principal amount of Bonds which the City intends to issue for the Project will not exceed $19,500,000.
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SECTION 3. Certain Eligible Project Costs will be incurred by the Borrower and/or its affiliates in connection with the Project prior to the issuance of the Bonds. The City reasonably expects to reimburse such Eligible Project Costs with Bond Proceeds.
SECTION 4. The Eligible Project Costs to be reimbursed with Bond Proceeds will be paid initially from funds of the Borrower and/or an entity or entities affiliated with or related to the Borrower.
SECTION 5. This ordinance is consistent with the budgetary and financial circumstances of the City. No funds from sources other than Bond Proceeds are, or are reasonably expected to be, reserved, allocated on a long-term basis or otherwise set aside by the City for the Project for costs to be paid from Bond Proceeds.
SECTION 6. This ordinance constitutes a declaration of official intent under Section 1.150-2 ofthe Treasury Regulations.
SECTION 7. To the extent that any ordinance, resolution, rule, order or provision of the Municipal Code of Chicago, or any part thereof, is in conflict with the provisions of this ordinance, the provisions of this ordinance shall control. If any section, paragraph, clause or provision of this ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any ofthe other provisions ofthis ordinance.
SECTION 8. -This ordinance shall be effective as of the date of its passage and approval.
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CHICAGO Mav 23, 2022
To the President and Members of the City Council:
Your Committee on Finance having had under consideration a communication recommending a proposed ordinance concerning the authority to issue multi-family low income housing bonds for the purchase and development of 3737 West Cortland Street by Encuantro Square II LP, Encuantro Square II GP and Latin United Community Housing Association (LUCHA) in the 26,h Ward.
O2022-I247
Amount: up to $19,500,000