[Arizona] Industrial Development Authority committed to its non-profit mission

In its last two regular meetings, the Arizona Industrial Development Authority approved conduit revenue bond issues for 16 projects, including three new charter schools and 13 multifamily apartments that will provide thousands of affordable housing units in the Grand Canyon State.

The charter school bond issues will help nonprofit operators build new campuses that offer a wide range of classes and choice to parents. The affordable housing bond issues for projects in Tucson, Glendale, Prescott, Marana, Flagstaff, Lakeside, Waddell and Phoenix will help finance new apartments across the state of Arizona that cater to low-income residents who are being squeezed out of the market by increasing rents and property values.

In reality, it was just a typical few months at the Arizona IDA. Since its creation in 2016, the Arizona IDA has originated over $10.5 billion in affordable housing loans and over $2.7 billion in loans for charter schools, all without receiving a penny in public funds.

The Arizona IDA is an independent nonprofit corporation, and its all-volunteer board works every day to fulfill its mission to make home ownership more affordable for low and moderate-income families, to issue conduit revenue bonds to lower financing costs and to promote and support economic development in the state.

Not only does the Arizona IDA accomplish its goals without any taxpayer money, it has given out over $250 million in down payment assistance to low- and moderate-income homebuyers and over $40 million to the state’s Housing Trust Fund.

The Arizona IDA issues conduit revenue bonds, serving as a bridge between development sponsors and lenders – usually banks, insurance companies or other financial institutions. By acting as a conduit — a broker, essentially — to a loan between two separate private parties, the Arizona IDA helps development projects advance at a lower cost than typically would have occurred, while generating revenue for the state through voluntary fees paid by the parties.

We have closed 112 conduit revenue financings since 2017, the vast majority of which went to support the construction of public charter schools, affordable multifamily housing projects and health care facilities in the state.

While the Arizona IDA has been misunderstood and even overlooked, it is time to tell our story to both the public and policy makers.

First, the bond issues we approve are not backed or supported directly or indirectly by taxpayer dollars or Arizona’s credit. The state is not liable in case of any default by the conduit borrowers – which since the Arizona IDA’s creation is very rare.

Second, 100 percent of the surplus money earned by the Arizona IDA is transferred either to the state’s Housing Trust Fund, to fund affordable housing developments and programs for services like homeless shelters, or to the Office of Economic Opportunity, which promotes economic development in the state. In FY2021 we delivered over $14 million to Arizona for housing and economic development in the state.  Since our inception, we have transferred over $60 million in unencumbered funds to the state.

Third, the Arizona IDA has never been accused of wrongdoing in a lawsuit, never paid a penny in settlement and never received an adverse notice from any regulatory body. Our audited financials, which are delivered each year to the state, are squeaky clean with not even a hint of operational or financial abnormalities.

Everyday, the Arizona IDA is making a difference in our communities.

Last month the Arizona IDA approved a $23 million conduit revenue bond issue for Vista College Preparatory, which has schools throughout the south Phoenix area. The bonds will help the successful charter school build more campuses and serve far more than the 1,000 students already enrolled. By working with the Arizona IDA, Vista is saving hundreds of thousands of dollars in fees and interest – money that will instead go into its classrooms. We’re proud to work with Vista to build new campuses, expand enrollment and save money.

For the Arizona IDA, this is a routine transaction. We are here to benefit Arizonans in a multitude of ways and you can see our successes at charter schools and affordable housing developments throughout the state.

Patrick Ray is the program manager for the Arizona Industrial Development Authority.