COVINGTON — Still smarting over the backlash she and other Covington City Council members received after the Covington Housing Authority provided $75,000 to fund a developer’s renderings of a proposed renovation of the Conyers Street Gym and Baker Field for multi-family residential without the knowledge of the city, council member Fleeta Baggett was in no mood to approve two proposed multi-million dollar tax-exempt bonds that would go through the CHA. No one from the Housing Authority attended the Nov. 15 meeting where the request was presented.
The first proposal for a resolution approving the issuance of $22 million in CHA bonds to purchase and rehabilitate the Magnolia Heights apartment complex was approved by a 4-2 vote, with Baggett and Don Floyd opposed. The second proposal for $23 million in CHA bonds to build rental homes at The Reserve at Jackson Highway was tabled until Jan. 18, 2022, with the urging that someone from the Housing Authority be at that meeting.
Ambling Covington LP was seeking a resolution for the issuance of $22 million in tax-exempt multi-family housing revenue bonds by the CHA for Ambling’s benefit for the acquisition and rehabilitation of the 200-unit Magnolia Heights apartment complex at 10156 Magnolia Heights Circle.
Bond counsel Allison Dyer, of Holland & Knight LLP in Atlanta, said the Housing Authority held a public hearing on the bond issuance. For the purpose of internal revenue code requirements, the city must approve the issuance of the bonds by the authority, but is not responsible to repay the bonds. She added that the Housing Authority is simply facilitating the issuance of the bonds and receiving a fee for that. The property will not become part of the Housing Authority.
An Ambling representative said the renovation will begin in February and take 12-18 months to complete. He said on average the rents will remain about the same and added that they plan to restrict 100% of the apartments as affordable.
“You want our approval on $22 million in bonds and no one from the Housing Authority is here?” Baggett asked. “They didn’t feel the need to show up?”
The representative apologized for the authority saying he was just hearing about it.
“We had certainly hoped that the Housing Authority would be here tonight,” he said. “We and our finance team are bringing the $22 million, loaning it to the Housing Authority on a non-recourse basis, contingent only upon the property’s repayment of those funds to the Housing Authority. The Housing Authority is acting more as a conduit. There is no obligation to the city. We’re not requesting any city funds.”
Baggett made a motion to deny the bond, and Don Floyd seconded it.
Baggett explained her reasons for the denial.
“We’ve not been given clear parameters by the Housing Authority lately,” she said. “I’m very uncomfortable with this. How many more projects do they have going on? We’re just now hearing of this. We had the whole Baker Field debacle that went on a month ago. Now we’re turning around and Item 10 is a whole other thing that is going on, and no one can show up? I’m a hard no.”
The vote was called for and the motion to deny was defeated 2-4.
After further discussion, Councilman Anthony Henderson made a motion to approve the resolution and Hawnethia Williams seconded it. The vote was 4-2 in favor, with Baggett and Floyd casting the dissenting votes.
Item 10 was a request for approval of a resolution for the issuance of $23 million in tax-exempt multi-family housing revenue bonds by the CHA for The Reserve at Jackson Highway LP, 9155 SW Jackson Highway. The proposal is to build 72 single-family homes and 30 townhomes. All would be long-term rental homes.
Keith Bauer, a representative of the developer, said their request was much the same as Ambling’s, and they would have liked for the Housing Authority to be represented at the meeting.
“They were very excited about our project,” said Bauer. “We worked with them on it.”
Baggett noted that when the council agreed on the land sale for this project, they were told these were going to be single-family homes that would be sold and not rented.
Bauer said they will be affordable housing under the terms of the bond issue.
“They will start off as long-term rentals,” he said. “Our exit strategy would be to sell them as affordable housing. We’re working with the Housing Authority on the financing of this.”
Councilman Kenneth Morgan noted that the council has approved things like this all the time without the Housing Authority being there.
Baggett replied that they “got blistered” (on Baker Field) and it was not going to happen again.
“I’m sitting here with four pages of stuff that the Housing Authority owns, that I can’t even begin to tell you when I started digging into this what I found,” she said. “And either we need to table it or they need to show up, because I’m not willing to put my name on any of this stuff. And saying that they’re not here is not an excuse. If it’s important enough to put their name on the bond, it’s important enough for them to show up for $23 million.”
Mayor Steve Horton said since there is some question as to what was originally approved and what is now being discussed, it might make sense to table it to “gather facts and be able to talk about it.”
Bauer had no issue with the council tabling the request and said his group is willing to work with the city.
Morgan made a motion to table the request until Jan. 18, 2022 “and hopefully somebody from the Housing Authority can also be here.” Henderson seconded the motion and it was approved, 5-1, with Baggett dissenting.