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HomeMy WebLinkAbout75B - PH - TEFRA TINY TIMREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: DECEMBER 19, 2017 TITLE; PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE BENEFIT OF TINY TIM APARTMENTS AND RESOLUTION APPROVING THE ISSUANCE OF BONDS (STRATEGIC PLAN NO. 5,3) Vr r CI MANAGER APPLICANT REQUESTED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 15' Reading ❑ Ordinance on 2"d Reading ❑ Implementing Resolution__ ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. 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 ("CSCDA" or the "Authority") on behalf of Community Development Partners (the "Borrower"), for the benefit of Tiny Tim Apartments (the "Project") to finance the acquisition, construction, improvement, and equipping of the Project, a 51 -unit multifamily rental housing project located at 2223 West Fifth Street, Santa Ana, California. 2. Adopt a resolution approving the issuance of revenue bonds by the Authority in an amount not to exceed $27,000,000 for the purpose of financing the acquisition, construction, improvement and equipping of Tiny Tim Apartments, a 51 -unit multifamily rental housing project. BACKGROUND The Tiny Tim Apartments project includes the acquisition and redevelopment of an underutilized, retail site to construct 51 units of affordable rental housing targeting low-income families. The project is located at 2223 West Fifth Street in Santa Ana. The approximately 49',000 square foot development will provide 20 two-bedroom, 29 three-bedroom and two four-bedroom apartment homes (including one manager's unit) with open space, community room, offices for property management and Mercy House who will provide on-site case management and services coordination to 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. The property is situated along the north side of Fifth Street, with single family residential bordering the property to the north and east, and commercial properties bordering the property to the south and west. The building design includes one level of on -grade structured garage with 91 parking stalls along with guest parking near the entrance to the property. There is one 4 -story residential building, which includes the management and services offices along Fifth Street. 7513-1 Tiny Tim Apartments — TEFRA Hearing December 19, 2017 Page 2 Interior units will be serviced by an elevator and improved with energy efficient appliances, low - flow plumbing fixtures, solid surface countertops, vinyl plank flooring, A/C and heat. The project will be financed through 4% federal low-income housing tax credit equity, permanent hard debt, a loan from the City of Santa Ana, Affordable Housing and Sustainable Communities Grant funds, Infill Infrastructure Grant funds, and deferred developer fee. The Project anticipates receiving site plan / design review approval on December 19th, 2017, an award of low-income housing tax credits in June 2018 in order for construction to start in October 2019 and the project to be completed in January 2020. DISCUSSION 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 CSCDA adopt a plan of financing providing for the issuance of one or more series of revenue bonds issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, in an aggregate principal amount not to exceed $27,000,000 (the "Bonds") for the acquisition, construction, improvement and equipping of a 51 -unit multifamily rental housing project located at 2223 West Fifth Street, Santa Ana, California, generally known as Tiny Tim 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 75B-2 Tiny Tim Apartments — TEFRA Hearing December 19, 2017 Page 3 improve the overall quality of life in local communities throughout California. CSCDA is comprised of more than 500 members, including the City of Santa Ana. CSCDA has issued more than $58 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. 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 There is no fiscal impact associated with this action. R bert M. Zur Pckmiko Interim ExecutiVPJDirector Community Development Agency Exhibits: 1. Resolution 2. Notice to Applicant 75B-3 75B-4 RESOLUTION NO. 2017- 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 TINY TIM APARTMENTS WHEREAS, the California Statewide Communities Development Authority (the "Authority') is authorized pursuant to the provisions of California Government Code Section 6500 at 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, Tiny Tim 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 $27,000,000 in outstanding aggregate principal amount, to finance the acquisition, construction and development of a 51 -unit multifamily rental housing project located at 2223 West Fifth Street, Santa Ana, California, generally known as Tiny Tim Apartments (the "Project") and operated by Solari Enterprises, Inc.; and WHEREAS, the Bonds ora 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 Exhibit t 75B-5 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 cavy 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 _ day of , 2017. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney Attorney Miguel A. Pulido Mayor 75B-6 AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers 75B-7 75B-8 MAYOR Miguel A. Pulido MAYOR PRO TEM Michele Martinez COUNCILMEMBERS P. David Benavides Vicente Sarmiento Jose Solodo Sal Tinajero Juan Villages December 4, 2017 Kyle Paine, President 3416 Via Oporto, Suite # 301 Newport Beach, CA 92661 Exhibit 2 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, Califomia 92702 www.santa-ana.ora Subject: Notice to Applicant Regarding Request for TEFRA Hearing Dear Mr. Paine, CITY MANAGER Raul Godinez II CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Made 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 Tiny Tim Apartments. The TEFRA Hearing has been placed on our City Council agenda for December 19, 2017 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. 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 your project. If you have any questions regarding this notice, I may be reached by telephone at (714) 667-2241 or by e- mail at ibrown(a.santa-ana.or¢. Sincerely, Judson Brown Housing Division Manager SANTA ANA CITY COUNCIL Miguel A. Pulido Michele Martinez Vicente Sarmiento lo' P. David Benavides Juan Villages Sal Tna'em B Mayor Mayor Pm Tem, Ward 2 Ward 7� !� Ward Ward Ward lnoulldoftsaMe-ana.om mimartineviDsanta-ana.ora vsarmiento(�santa-ana.ora solono sante-ana.or dbenevidesna sanlaana.wa iNlleaasfolsanlaana.na slinaiero(alsanlaana.om 75B-10 NOTICE OF PUBLIC HEARING REGARDING ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS FOR TINY TIM APARTMENTS NOTICE IS HEREBY GIVEN that, at 5:45 p.m., or as soon thereafter as the matter can be heard, on Tuesday, December 19, 2017, at the City Council Chambers, 22 Civic Center Plaza, Santa Ana, California, the City Council of the City of Santa Ana (the "City') will conduct a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986, at which it will hear and consider information concerning a proposed plan of financing providing for the issuance by the California Statewide Communities Development Authority of multifamily housing revenue 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 $27,000,000 in outstanding aggregate principal amount, to finance the acquisition, construction and development of a 51 -unit multifamily rental housing project located at 2223 West Fifth Street, Santa Ana, California. The facilities are to be owned by Tiny Tim Housing LP (the "Borrower") 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, operated by Solari Enterprises, Inc., and are generally known as Tiny Tim Apartments (the "Project`). Those wishing to comment on the proposed financing and the nature and location of the Project may either appear in person at the public hearing or submit written comments, which must be received by the City prior to the hearing. Written comments should be sent to City of Santa Ana at 20 Civic Center Plaza; 8th Floor, Santa Ana, California 92702 Attention: City Clerk. CITY CLERK CITY OF SANTA ANA Dated: December 4, 2017 Exhibit 2. 75B-11 75B-12