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HomeMy WebLinkAbout03- MFREVBONDSKDFHENINGER~ ;~ I ~ .!~... __ . ~tra~~'~, ,.,, r' ~EE~N ~ATE~ JULY 2, 2001 ~'I°~,.: MULTI-FAMILY HOUSING REVENUE BONDS - KDF HENTNGER REOO~~BG SEOi~E7'AFiI( USE ON~.Y: APPhOVED C.~ As Recommended [~ As Amended E~GUTIV ~I~EGT~~ -._ ~ ~~~ CC)t~TI~fUED TO Adapt a resolution authorizing the issuance of Multi-Family Housing Revenue Bands (Heninger Village Apartments) designated as 2001 Series A (tax-exempt), 2001 Series A-T {taxable), and 2001 Series A-ST {subordinate taxable) in an aggregate principal amount not to exceed $4,500,000 for KDF Heninger, a California Limited Partnership, and ' authorize the Chair, Vice Chair and/or Executive Director of the Housing Authority to execute all documents as necessary. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION Recommend that the Housing Authority adopt a resolution authorizing the issuance of Multi-Family Housing Revenue Bonds (Heninger Village Apartments) designated as 2001 Series A (tax-exempt), 2001 Series A-T {taxable), and 2001 Series A-ST (subordinate taxable) in an aggregate principal amount not to exceed $4,500,000 for KDF Heninger, a California Limited Partnership, and authorize the Chair, Vice Chair and/or Executive Director of the Housing Authority to execute all documents as necessary. By a vote of 6:0 (Betancourt absent) at its Regular Meeting of June 19, 2001. DISCUSSION 1n September 1987, the Housing Authority of the City of Santa Ana issued tax-exempt bonds in the amount of $3,290,000 for the development of a 58~- unit seniors complex consisting of one- and two_bedroom units located at 200 S. Sycamore (Exhibit 1) In December 1997, the bonds were refunded z:~~;. Multi-Family Housing Revenue Bonds -- KDF Heninger July 2, 2001 Page 2 and new tax-exempt bonds were issued by the Housing Authority in the amount of $2,540,000. The building is currently in escrow and the buyer, KDF Heninger, has requested that the Housing Authority issue tax-exempt and taxable bonds for the acquisition and rehabilitation of the property. KDF Heninger will finalize the purchase of the property with the proceeds from the bonds issued and start rehabilitation in August 2001. The sale of the bonds will provide permanent financing for the Heninger Village Apartments project with a below-market, fixed-rate loan. The owner/developer will be required to reserve 20 percent, or 12 units, for very low-income persons and the remaining 4& units for lower-income persons for a minimum of 55 years. This project will assist the City in continuing to meet its overall affordable housing goals. Without the issuance of bonds, KDF Heninger would be required to obtain market-rate permanent financing, and there would not be a provision for continued affordable housing. The 2041 Series A Bonds and 2001 Series A-T Bands will be sold to Fannie Mae in a private placement. The Series S~-T bands will be held by the Agency. Neither the Housing Authority nor the Agency will be incurring any financial liability for the issuance of these bonds. The band documents appoint the firm of Jones Hall as band counsel. On April 2, 2001 the Redevelopment Agency authorized the continued subordination of the existing loan of $240,000 that had been authorized in 1987. KDF Heninger is requesting that this promissory note be exchanged for the 200. Series A-ST Bonds issued by the Housing Authority of the City of Santa Ana. The principal balance owed and interest rate will remain the same. The repayment of this debt will be based an residual receipt. Residual receipt is defined as the positive cash flow to the project after payment of debt service on senior liens. A residual receipt note provides an assurance to the first mortgage holder that they will receive priority in payment of debt from project cash flow. The Agency will receive repayment from the net cash flow after the senior lien holder is paid. The Redevelopment Agency will take action on the acceptance of the exchange on July 2, 2001. ~,~3 Y`~; Multi-Family Housing Revenue Bonds -- KDF Heninger July 2, 2001 Page 3 FISCAL IMPACT The issuance of tax-exempt bonds will provide an affordable monitoring fee to the Housing Authority account for issuer fees (account no. 133-01- 5594) for 15 years. APPROVED AS TO FUNDS AND ACCOUNTS: Jo P. Reekstin Executive Director ~~ - Rod R. Coloma Executive Director Finance & Management Services Agenc~ H:Adion512001 HAltviufidamHsgRevBonds-KOFHen7-2-01 w ~ t it T O C ~ ~-- F- cr~ to WALNUT STREET '` ' ~,~`~ P P~IVE STREET a w ~ ~ 0 0 4 Q Z m U ~ ~ CHESTNlJT AVENUE KDF COMMUNITIES/ /~ HENINGER VILLAGE N EXHIBIT ~!