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HomeMy WebLinkAbout75D - PH - TEFRA CORNERSTONEREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: DECEMBER 19, 2017 TITLE: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE BENEFIT OF CORNERSTONE APARTMENTS AND RESOLUTION APPROVING THE ISSUANCE OF BONDS (STRATEGIC PLAN NO. 5, 3) CITY MUNAGER APPLICANT REQUESTED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on I� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Conduct a Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing in consideration of the issuance of tax exempt bond financing by the California Municipal Finance Authority (the "Authority") on behalf of Cornerstone Housing Partners LP (the 'Borrower"), for the benefit of Cornerstone Apartments (the "Project") for the acquisition, rehabilitation, improvement and equipping of a 126 -unit multifamily rental housing project located at 805 - 904 South Minnie Street, Santa Ana, California. 2. Adopt a resolution approving the issuance of revenue bonds by the Authority in an amount not to exceed $23,000,000 for the acquisition, rehabilitation, improvement and equipping of a 126 -unit multifamily rental housing project located at 805 - 904 South Minnie Street, Santa Ana, California. BACKGROUND The Cornerstone Apartments project is an acquisition/rehabilitation of a 126 -unit multi -family affordable housing project located in the City of Santa Ana. The project will involve the rehabilitation of the existing structures. Rehabilitation will include the addition of a new community building to serve the residents and provide more space for programs. Property amenities will include laundry rooms in all buildings, courtyards with seating and landscaping, and tuck under parking in select locations. There will be a site needs assessment to determine if the property will benefit from programs including afterschool programs, English as a Second Language, computer literacy, financial literacy, and leadership development. The units will be restricted to households with incomes no more than 50% of the area median income. The financing of this project will result in continuing to provide affordable housing for 126 households in the City of Santa Ana for 7513-1 Cornerstone Apartments — TEFRA Hearing December 19, 2017 Page 2 another 55 years. The project site is already owned by Jamboree Housing and the rehabilitation work will not require approval by the Planning Commission or City Council. DISCUSSION Cornerstone Housing Partners, a California Limited Partnership or a partnership created by Jamboree Housing Corporation (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 California Municipal Finance Authority (the "CMFA") 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 $23,000,000 (the "Bonds") for the acquisition, rehabilitation, improvement and equipping of a 126 -unit multifamily rental housing project located at 805 - 904 S. Minnie Street, Santa Ana, California, generally known as Cornerstone Apartments (the "Project") and operated by John Stewart Company. 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 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. 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. 75D-2 Cornerstone Apartments — TEFRA Hearing December 19, 2017 Page 3 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 Board of Directors of the California Foundation for Stronger Communities, a California non- profit public benefit corporation (the "Foundation"), acts as the Board of Directors for the California Municipal Finance Authority (CMFA). Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Santa Ana, it is expected that 25 percent of the issuance fee will be granted by the CMFA to the general fund of the City. Such grant may be used for any lawful purpose of the City. The CMFA does not receive issuance fees until a bond issuance closes. The fees the CMFA receives are based upon the par amount of the bonds issued. The Borrower ultimately decides when and if the bonds are actually issued and the final amount of bonds issued. The amount granted to the City is to be determined, but will not exceed $11,250 under the assumption the entire $23,000,000 in bonds are issued. Upon receipt, the funds will be deposited to the Miscellaneous Revenues, Miscellaneous Recoveries Revenue Account (no. 01102002-57010). Robert M. Zur S hm ed Interim Executive ' ector Community Development Agency Exhibits: 1. Resolution 2. Notice to Applicant APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director bb Finance and Management Services Agency 75D-3 75D-4 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $23,000,000 FOR THE PURPOSE OF FINANCING OR REFINANCING THE ACQUISITION, REHABILITATION, IMPROVEMENT AND EQUIPPING OF CORNERSTONE APARTMENTS AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, Cornerstone Housing Partners LP (the "Borrower") or a partnership created by Jamboree Housing Corporation (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 California Municipal Finance Authority (the "Authority") adopt aplan 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 $23,000,000 (the "Bonds") for the acquisition, rehabilitation, improvement and equipping of a 126 -unit multifamily rental housing project located at 805-904 S. Minnie Street, Santa Ana, California, generally known as Cornerstone Apartments (the "Project") and operated by John Stewart Company; and WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the "Code"), the issuance of the Bonds by the Authority must be approved by a governmental unit having jurisdiction over the area in which the Project is located; and WHEREAS, the City Council 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 WHEREAS, 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 Joint 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 has, 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; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Ana as follows: Section 1. The foregoing resolutions are true and correct. Section 2. The City Council hereby approves the issuance of the Bonds by the Authority. It is the purpose 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 147(f) of the Code by the applicable elected representative of a governmental unit having jurisdiction over the area in which the Project is located, in accordance with said Section 147(f); and, (b) Section 4 of the Agreement. 75D-5 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 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. 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 which 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 transaction approved hereby. Section 6. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the City Council of the City of Santa Ana this 19th day of December, 2017. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney Bi AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers Miguel A. Pulido Mayor 75D-6 MAYOR Miguel A. Pulido MAYOR PRO TEM Michele Martinez COUNCILMEMBERS P. David Benevides Vicente Sarmiento Jose Solorio Sal Tinajero Juan Villages December 4, 2017 Exhibit 2 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, California 92702 www.santa-ana.org Laura Archuleta Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, California 92614 Subject: Notice to Applicant Regarding Request for TEFRA Hearing Dear Ms. Archuleta, 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 (TEFRA) Hearing in consideration of the issuance of tax exempt bond financing by the California Municipal Finance Authority on behalf of CornerstoneHousing Partners LP for the benefit of Cornerstone 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 jbrown e Santa-ana.org. Sincerely, Judson Brown Housing Division Manager SANTA ANA CITY COUNCIL Miguel A Pulido Michele Martinez Vicente Sarmientoto P. David Benavides Juan Villages Sal Tinalero Mayor Mayor Pro Tem, Ward 2 Wand 7 i Ward 4 Ward 5 Ward 6 moulido0sanla-ana.ora m1madiney8santa-ana ora vsarmientoOsanla-ana ora a a o dbenavidesasantaana ora v stinaiero(&sanla-ana ora 75D-8