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HomeMy WebLinkAbout75A - PH - TAX BONDSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: APRIL 4, 2017 TITLE: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE BENEFIT OF SANTA ANA ARTS COLLECTIVE, L.P. AND RESOLUTION APPROVING THE ISSUANCE OF BONDS (STRATEGIC PLAN NO. 5,3) RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: ST UZT.011071anp ❑ As Recommended ❑ As Amended El Ordinance on 1 61 Reading © Ordinance on god Reading 0 Implementing Resolution El Set Public Hearing Fora_ CONTINUED TO FILE NUMBER 1. Conduct a Tax Equity and Financial Responsibility Act (TEFRA) Hearing in consideration of the issuance of tax exempt bond financing by the California Municipal Finance Authority on behalf of the Santa Ana Arts Collective, L.P., for the benefit of for the acquisition, construction, improvement and equipping of a 58 -unit affordable multifamily rental housing facility to be owned and operated by the Borrower and located at 1666 North Main Street within the City of Santa Ana. 2. Adopt a resolution approving the issuance of revenue bonds by the Authority in an amount not to exceed $10,000,000 for the purpose of financing or for the acquisition, construction, improvement and equipping of the Project. DISCUSSION Meta Housing Corporation and Western Community Housing, Inc., on behalf of Santa Ana Arts Collective, L.P., a California limited partnership, or another entity to be established by Meta Housing Corporation and /or Western Community Housing, Inc. or an affiliate thereof (the "Borrower "), has requested that the California Municipal Finance Authority (the "Authority ") issue one or more series of revenue bonds in an aggregate principal amount not to exceed $10,000,000 (the "Bonds ") for the acquisition, construction, improvement and equipping of a 58- unit affordable multifamily rental housing facility (the "Project') to be owned and operated by the Borrower and located at 1666 North Main Street within the City of Santa Ana. 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 refinancing of the Project. Following the close of the TEFRA Hearing, an "applicable elected 75A -1 Santa Ana Arts Collective — TEFRA Hearing April 4, 2017 Page 2 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. 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 California Municipal Finance Authority shares 25 percent of all issuance fees directly with its member communities. With respect to the City of Santa Ana, it is expected that 25% of the issuance fee will be granted by the Authority to the general fund of the City. Such grant may be used for any lawful purpose of the City. The Borrower will be the beneficiary of the Authority's charitable donation through a 25% reduction in issuance fees. Staff esitmates the City's share may be $2,000, however the final amount depends on the final fees.Upon receipt, the funds will be deposited to the Miscellaneous Revenues, Miscellaneous Recoveries Revenue Account (no. 01102002- 57010). Robert C. Cortez -- Deputy City Manager Community Development Agency Exhibits: 1. Resolution APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management Services Agency 75A -2 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL, FINANCE AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $10,000,000 TO FINANCE A 58 -UNIT AFFORDABLE MULTIFAMILY RENTAL FACILITY FOR THE BENEFIT OF SANTA ANA ARTS COLLECTIVE, L.P., OR ANOTHER E'NTIT'Y TO BE FORMED BY META HOUSING CORPORATION AND /OR WESTERN COMMUNITY HOUSING, INC. (OR AN AFFILIATE OF EITHER) AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, Meta Housing Corporation and Western Community Housing, Inc., on behalf of Santa Ana Arts Collective, L.P., a California limited ,partnership, or another entity to be established by Meta housing Corporation and/or Western Coralnunity Housing, Inc, or an affiliate thereof (the "Borrower "), has requested that the California Municipal 'Finance Authority (the "Authority ") issue one or more series of revenue bonds in an aggregate principal amount not to exceed $10,000,000 (the "Bonds ") for the acquisition, construction, improvement and equipping of a 58 -unit affordable multifamily rental housing facility (the "Project ") to be owned and operated by the Borrower and located at 1666 North Main Strect within the City of Santa Ana (the "City "); and WHEREAS, pursuant to Section 147(1) of the Internal Revenue Code of 1986 (the "Code "), the issuance of the Ponds by the Authority must be approved by the City because the Tlmo i; t- iytebelacatedwitmn' tlTetet °ritorrfal limits oftlse City" alrd- WHEREAS, the City Connell of the City (the "City Council ") is the elected legislative body of the City and is one of the "applicable elected representatives" required to approve the issuance of the Bonds under Section 147(f) of the Code; and WHERE AS, the Authority has requested that the City Council approve the issuance of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the ,Point Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement "), among certain local agencies, including the City; and WHEREAS, pursuant to Section 147(f) of the Code, the City Council leas, following, notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the issuance of the Bonds by the Authority; and WHEREAS, the City Council understands that its actions in holding this public hearing and in approving this Resolution do not obligate the City in any manner for payment of the principal, interest, fees or any other costs associated with the issuance of the Bonds, and said City Council expressly conditions its approval of this Resolution on that understanding. Exhibit 1 75A -3 NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Ana as follows: Section 1, The foregoing recitals are true and correct. Section 2. The City Council hereby approves the issuance of the Bonds by the Authority. It is the purposo and .intent of the City Council that this resolution constitute approval of the issuance of the Bonds by the Authority, for the purposes of (a) Section 1470 of the Code by the applicable elected representative of the governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement. Section 3. The issuance of the Bonds shall be subject to the 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 the Bonds. Section 4. The adoption of this 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 planting approval, permit or other action necessary for the acquisition, construction, rehabilitation installation or operation of the Project; or, (iii) make any contribution or advance any funds whatsoever to the Authority, S oction 5. The officers 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 which they doom necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this_ resolution and the financing transaction-approved hereby. Section b. The City Council expressly conditions its approval of this Resolution on its understanding that the City shall have no obligation whatsoever to pay any principal, interest, fees or any other costs associated with the Authority's issuance of the Bonds for the financing of the Project, Section 7, The Clerk shall forward a certified copy of this Resolution and an originally executed Agreement to the Authority in care of its counsel: Ronald E. Lee, Esq. Jones Hall, A:PLC 475 Sansome Street, Suite 1700 San Francisco, CA 94111 Section 8. This resolution shall take effect immediately upon its adoption. 75A -4 PASSED AND ADOPTED by the City Council of the City of Santa Ana this _ day of 2017. AYES: NOES: ABSTAIN: ABSENT: Attest: By: City Clerk APPROVED AS TO FORM: Sonia R. Carvalho City Attyigy 1 ! i By: i Ryan 75A -5 MAYOR 75A -6