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Kutak Rock Serves as Bond Counsel for Sustainable Multifamily Project

News | June 3, 2022


Kutak Rock served as bond counsel for the issuance of the $8,361,000 City of Colorado Springs, Colorado Multifamily Housing Tax-Exempt Sustainable Mortgage-Backed Bonds (M-TEMS — FANNIE MAE DESIGNATED SUSTAINABLE MBS) (Draper Commons) Series 2022A (FN) and the $3,316,000 City of Colorado Springs, Colorado Multifamily Housing Revenue Bonds (Draper Commons) Series 2022B. The Series A Bonds are captioned Sustainable based on the Project meeting the Sustainable criteria for MBS under the Fannie Mae Sustainable Framework. Because at least 40 percent of all units in the Project will have rent or income restrictions in place, making them affordable to households earning no more than 60 percent of area median income as adjusted for family size, the Project qualifies as “Restricted Affordable Housing” under the applicable Fannie Mae Social criteria under the Framework. In addition, the Borrower expects the Project to meet the Green MBS criteria under the Framework because the Borrower expects to include a number of features at the Project that are intended to generate savings with respect to energy and water usage, including lighting fixtures, water fixtures, HVAC systems, and appliances, and the projected energy and water consumption savings generated by such features are expected by the Borrower to total at least 30percent, inclusive of a minimum of 15 percent energy consumption savings.

The Project, known as Draper Commons, is located in Colorado Springs, Colorado, on an approximately 1.55-acre site. The Project contains 95 apartment units located in two buildings. Construction of the Project is anticipated to commence in May 2022 and be completed approximately 15 months later. Common area improvements will include: shared laundry rooms, a business center, a life room, outdoor deck space, a mail room, social gathering space and meeting rooms, and indoor bicycle storage. Site amenities include: playground areas for various ages of children and families, a dog park, outdoor bicycle storage, picnic and barbeque areas, a garden, and walking paths to encourage outdoor physical activity. There are 126 parking spaces.

The Fannie Mae framework for its social, green, and sustainable mortgage-backed securities provides opportunities for social, green, or sustainable investing, increasing the positive impact on social and green issues throughout the United States multifamily housing market. The Framework addresses the four components of the International Capital Markets Association (“ICMA”) Social Bond Principles, Green Bond Principles and the union of both as outlined in the Sustainability Bond Guidelines, as well as their recommendation on the use of external reviews and impact reporting. The Framework can be found here. Fannie Mae has received a Second Party Opinion (SPO) on the Framework from Sustainalytics, an independent provider of Environmental, Social and Governance (ESG) and corporate governance research and ratings. The SPO can be found here.

Fred Marienthal, John Bales and Jack McGill worked on this financing.