HomeMy WebLinkAbout75A - PH TAX EXEMPT BONDS AQUA APTSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
4, 2018
TITLE:
PUBLIC HEARING ON ISSUANCE OF TAX
EXEMPT BONDS FOR THE BENEFIT OF
AQUA APARTMENTS AND NEW
RESOLUTION APPROVING THE
ISSUANCE OF BONDS
(STRATEGIC PLAN NO. 5,3)
-X0XM
��WMANAGER
APPLICANT REQUESTED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 131 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Conduct a new Tax Equity and Fiscal Responsibility Act Hearing in consideration of the
issuance of tax exempt bond financing by the California Statewide Communities Development
Authority on behalf of Aqua Housing LP (the `Borrower"), for the benefit of Aqua Apartments
(the "Project') to finance the acquisition, rehabilitation, improvement, and equipping of the
Project, a 57 -unit multifamily rental housing project located at 317 East 17th Street, Santa Ana,
California.
2. Adopt a new resolution approving the issuance of revenue bonds by the California Statewide
Communities Development Authority in an amount not to exceed $30,000,000 for the purpose
of financing the acquisition, rehabilitation, improvement and equipping of Aqua Apartments, a
57 -unit multifamily rental housing project.
DISCUSSION
On December 19, 2017, City Council conducted a TEFRA hearing in consideration of the issuance
of tax exempt bond financing by the California Statewide Communities Development Authority for
the benefit of the Borrower and adopted a resolution approving the issuance of bonds. However,
the project is expected to close on their financing after December 19, 2018 which is when the prior
TEFRA approval expires. TEFRA approvals are only valid for one year and the prior hearing was
held on December 19, 2017. Therefore, staff is requesting City Council to approve a new resolution
to allow the project to have a valid TEFRA approval at the time of their closing.
Community Development Partners (the "Developer') has requested that the California Statewide
Communities Development Authority ("CSCDA" or the "Authority") adopt a plan of financing
providing for the issuance of one or more series of revenue bonds issued, including bonds issued
to refund such revenue bonds in one or more series from time to time, in an aggregate principal
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Aqua Apartments — TEFRA Hearing
December 4, 2018
Page 2
amount not to exceed $30,000,000 (the "Bonds") for the acquisition, rehabilitation, improvement
and equipping of a 57 -unit multifamily rental housing project located at 317 East 17th Street, Santa
Ana, California, generally known as Aqua Apartments.
However, in order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Santa
Ana must conduct a public hearing (the "TEFRA Hearing") providing for the members of the
community an opportunity to speak in favor of or against the use of tax-exempt bonds for the
financing of the Project. Following the close of the TEFRA Hearing, an "applicable elected
representative" of the governmental unit hosting the Project, in this case the City, must provide its
approval of the issuance of the Bonds by the Authority for the refinancing of the Project.
The bonds to be issued by the Authority are the sole responsibility of the borrower. The City has
no financial or legal liability for the project or repayment of the bonds and does not constitute any
type of indebtedness for the City. In addition, this TEFRA Hearing and the adoption of the
Resolution shall not obligate the City or any department thereof to (i) provide any financing to
acquire or construct the Project or any refinancing of the Project; (ii) approve any application or
request for or take any other action in connection with any planning approval, permit or other action
necessary for the acquisition, construction, rehabilitation, installation or operation of the Project;
(iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further
action with respect to the Authority or its membership therein. In general, this action by the City of
Santa Ana will not obligate the City or any department thereof to undertake any discretionary action
related to the development of the project.
California Statewide Communities Development Authority
CSCDA is a joint powers authority sponsored by the League of California Cities ("League") and the
California State Association of Counties ("CSAC"). CSCDA was created by the League and CSAC
in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt
financing for projects that provide a tangible public benefit, contribute to social and economic
growth and improve the overall quality of life in local communities throughout California. CSCDA
is comprised of more than 530 members, including the City of Santa Ana. CSCDA has issued more
than $60 billion through 1,400 plus financings since 1988 and consistently ranks in the top 10 of
more than 3,000 nationwide public issuers of tax-exempt debt, as measured by annual issuance
amount. Both the League and CSAC continue to sponsor CSCDA. Issuance fees are shared with
both the League and CSAC which have kept member dues unchanged and provide other benefits
to all city and county members.
Backoround on the Proiect
The Aqua Apartments project includes the acquisition and demolition of an underutilized, blighted
motel site to construct 57 units of permanent supportive housing targeting chronically homeless
individuals and small families. The project is located at 317 E. 17th Street. The approximately
34,000 square foot development will provide 12 studio and 45 one -bedroom apartment homes
(including one manager's unit) with open space, a community room, offices for property
management and Mercy House Living Centers staff who will provide on-site case management and
services coordination for each resident. Rent levels at the property will be restricted for 55 years to
households earning at or below 60% of the Area Median Income. Additionally, the property will
have a Project -Based Voucher Housing Assistance Payments Contract in place further restricting
eligibility to chronically homeless individuals.
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Aqua Apartments — TEFRA Hearing
December 4, 2018
Page 3
The property is situated along the north side of 17th Street, with the 1-5 freeway bordering the
property to the east and single family and multifamily buildings to the west. The building design
includes one level of an on -grade structured garage with 36 parking stalls along with guest parking
near the entrance to the property. There are two 4 -story residential buildings, the first of which
includes the management and services offices along 17th street, in the commercial zoned section
of the property. Buildings are connected by a catwalk and serviced by an elevator. Interior units will
be improved with energy efficient appliances, low -flow plumbing fixtures, solid surface countertops,
vinyl plank flooring, A/C and heat. The owner will pay utilities and common area laundry will be
provided. The project will be financed through 4% federal low-income housing tax credit equity,
permanent hard debt, Affordable Housing Program funds, Mental Health Services Act funds, and
deferred developer fee. Fifty-six Project -Based Vouchers (PBVs) from the Santa Ana Housing
Authority have been awarded, which will ensure all residents have rental assistance and pay no
more than 30% of their income. Mercy House and the property management company will follow a
Housing First model and make every effort to help applicants get approved for and then maintain
housing. Mercy House will take applicant referrals from the Coordinated Entry System and work
with applicants to secure housing. The Project received site plan / design review approval on June
20, 2017, and received an allocation of 4% low-income housing tax credits in October 2018.
Construction start is anticipated by February 2019 with completion in April 2020.
The Housing Element of the City's General Plan contains various goals and policies which are
intended to provide a diversity of quality housing, affordability levels and living experiences that
accommodate Santa Ana's residents to foster an inclusive community. Additionally, the General
Plan encourages development of affordable rental and ownership housing for seniors, people with
disabilities, families with children, and people needing emergency, transitional or supportive
housing options.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal # 5 - Community Health, Livability,
Engagement & Sustainability, Objective # 3 (Facilitate diverse housing opportunities and support
efforts to preserve and improve the livability of Santa Ana neighborhoods).
FISCAL IMPACT
The City received a payment of $832.40 in November 2018 to hold a TEFRA Hearing for this project
that was deposited into Account # 01102002-53902.
APPR VED AS TO FUNDS AND ACCOUNTS:
Steven A. Mendoza Ka hryn Downs, CPAP
Executive Director Executive Director
Community Development Agency Finance and Management Services Agency
Exhibits: 1. Resolution
2. Notice to Applicant
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EXHIBIT 1
RESOLUTION NO. 2018-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA
APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING
REVENUE BONDS FOR THE AQUA APARTMENTS
WHEREAS, the California Statewide Communities Development Authority (the "Authority")
is authorized pursuant to the provisions of California Government Code Section 6500 et seq. and
the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1,
1988 (the "Agreement'), among certain local agencies throughout the State of California, including
the City of Santa Ana (the "City'), to issue revenue bonds in accordance with Chapter 7 of Part 5 of
Division 31 of the California Health and Safety Code for the purpose of financing multifamily rental
housing projects; and
WHEREAS, Aqua Housing LP or a partnership created by Community Development
Partners (the "Developer"), consisting at least of the Developer or a related person to the
Developer and one or more limited partners, has requested that the Authority adopt a plan of
financing providing for the issuance of multifamily housing revenue bonds (the "Bonds") in one or
more series issued from time to time, including bonds issued to refund such revenue bonds in one
or more series from time to time, and at no time to exceed $30,000,000 in outstanding aggregate
principal amount, to finance or refinance the acquisition, construction and development of a 57 -
unit multifamily rental housing project located at 317 E. 171h Street, Santa Ana, California,
generally known as Aqua Apartments (the 'Project') and operated by Solari Enterprises, Inc.;
and
WHEREAS, the Bonds or a portion thereof will be "private activity bonds" for purposes of
the Internal Revenue Code of 1986(the "Code");,and
WHEREAS, pursuant to Section 147(f) of the Code, prior to their issuance, private activity
bonds are required to be approved by the "applicable elected representative" of the governmental
units on whose behalf such bonds are expected to be issued and by a governmental unit having
jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a
public hearing held following reasonable public notice; and
WHEREAS, the members of this City Council (this "City Council") are the applicable
elected representatives of the City; and
WHEREAS, there has been published, at least 14 days prior to the date hereof, in a
newspaper of general circulation within the City, a notice that a public hearing regarding the Bonds
would be held on a date specified in such notice; and
WHEREAS, such public hearing was conducted on such date, at which time an opportunity
was provided to interested parties to present arguments both for and against the issuance of the
Bonds; and
WHEREAS, the Authority is also requesting that the City Council approve the issuance
of any refunding bonds hereafter issued by the Authority for the purpose of refinancing the
Bonds which financed the Project (the 'Refunding Bonds"), but only in such cases where federal
tax laws would not require additional consideration or approval by the City Council; and
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EXHIBIT 1
WHEREAS, it is intended that this resolution shall constitute the approval of the issuance of
the Bonds required by Section 147(f) of the Code and Section 9 of the Agreement;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SANTA ANA AS FOLLOWS:
Section 1. The above recitals are true and correct.
Section 2. The City Council hereby approves the issuance of the Bonds and the
Refunding Bonds by the Authority. It is the purpose and Intent of the City Council that this
resolution constitute approval of the Bonds for the purposes of (a) Section 147(f) of the Code and
(b) Section 9 of the Agreement.
Section 3. The issuance of the Bonds shall be subject to approval of the Authority of all
financing documents relating thereto to which the Authority is a party. The City shall have no
responsibility or liability whatsoever with respect to repayment or administration of the Bonds.
Section 4. The adoption of this Resolution shall not obligate the City or any department
thereof to: (i) provide any financing with respect to the Project; (li) approve any application or
request for or take any other action in connection with any planning approval, permit or other action
necessary with respect to the Project; (iii) make any contribution or advance any funds whatsoever
to the Authority; or (iv) take any further action with respect to the Authority or its membership
therein.
Section 5. The City Manager and applicable Executive Directors of the City are hereby
authorized and directed, jointly and severally, to do any and all things and to execute and deliver
any and all documents that they deem necessary or advisable in order to carry out, give effect to
and comply with the terms and intent of this resolution and the financing approved hereby.
Section 6. This resolution shall take effect immediately upon adoption.
ADOPTED this 01 day of December, 2018.
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
a
Miguel A. Pulido
Mayor
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AYES:
Councilmembers
NOES:
Councilmembers
ABSTAIN:
Councilmembers
NOT PRESENT:
Councilmembers
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EXHIBIT 1
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MAYOR
Miguel A. Pulido
MAYOR PRO TEM
Michele Martinez
COUNCILMEMBERS
P. David Benavides
Vicente Sarmiento
Jose Solorio
Sal Tinalero
Juan Villages
November 14, 2018
Kyle Paine, President
3416 Via Oporto, Suite # 301
Newport Beach, CA 92661
CITY OF SANTA ANA
20 Civic Center Plaza • P.O. Box 1988
Santa Ana, California 92702
W vW.santa-ana.oro
Subject: Notice to Applicant Regarding Request for TEFRA Hearing
Dear Mr. Paine,
EXHIBIT 2
CITY MANAGER
Raul Godinez II
CITY ATTORNEY
Sonia R. Carvalho
CLERK OF THE COUNCIL
Maria D. Huizar
This is in response to your request for the City of Santa Ana to conduct a Tax Equity and Fiscal
Responsibility Act Hearing in consideration of the issuance of tax exempt bond financing by the California
Statewide Communities Development Authority on behalf of Community Development Partners for the
benefit of Aqua Apartments. The TEFRA Hearing has been placed on our City Council agenda for December
4, 2018 per your request. This TEFRA Hearing is not being considered by City Council as a recommended
action per our staff. Instead this item is being considered as an applicant requested action.
hi addition, this TEFRA Hearing and the adoption of the Resolution shall not obligate the City or any
department thereof to (i) provide any financing to acquire or construct the Project or any refinancing of the
Project; (ii) approve any application or request for or take any other action in connection with any planning
approval, permit or other action necessary for the acquisition, construction, rehabilitation, installation or
operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv)
take any further action with respect to the Authority or its membership therein. In general, this action by the
City of Santa Ana will not obligate the City or any department thereof to undertake any discretionary action
related to the development of your project.
If you have any questions regarding this notice, I can be reached by telephone at (714) 667-2241 or by e-mail
at'bri ounxnusatita-ana.org.
Sincerely,
Judson Brown
Housing Division Manager
SANTA ANA CITY COUNCIL
Miguel A. Pulido Michele Martinez Vicente Sarmiento Jose Solorio P. Davld BenaAse Juan Villegas Sal Tinajero
Mayor Mayor Pro Tem, Ward 2 Ward Ward Ward Ward Ward
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