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HomeMy WebLinkAbout75G - PH - TEFRA VILLA COURT SRREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: DECEMBER 19, 2017 TITLE: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE BENEFIT OF VILLA COURT SENIOR APARTMENTS AND RESOLUTION APPROVING THE ISSUANCE OF BONDS (STRATEGIC PLAN NO. 5, 3) C MANAGER APPLICANT REQUESTED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For 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 Senior Associates, a California L.P. (the 'Borrower"), for the benefit of Villa Court Senior Apartments (the 'Project") to finance the acquisition, construction, improvement and equipping of a 418 -unit senior multifamily rental housing project located at 2222 E. 1st Street, Santa Ana, California, generally known as Villa Court Senior Apartments. 2. Adopt a resolution approving the issuance of revenue bonds by the Authority in an amount not to exceed $120,000,000 for the purpose of financing the acquisition, construction, improvement and equipping of a 418 -unit senior multifamily rental housing project located at 2222 E. 1 st Street, Santa Ana, California, generally known as Villa Court Senior Apartments. BACKGROUND The project site is located at 2222 E. 1st Street and is currently occupied by Leonardo Inn and Suites. The proposed development was approved at the September 11, 2017 Planning Commission meeting for a total of 418 units, with a mix of 96 studio units of 402-457 square feet; 257 one -bedroom units between 559-608 square feet, and 65 two-bedroom units between 797- 828 square feet. The building will have various amenities such as community gathering areas spread over four courtyards. In addition, there will be a clubhouse, gym, computer room, seating benches throughout the site, and on-site laundry facilities. The amenities are situated throughout the site and will offer opportunities for seniors to be active and socialize. 75G-1 Villa Court Senior Apartments — TEFRA Hearing December 19, 2017 Page 2 DISCUSSION At the City Council meeting on November 7, 2017, this item was tabled by City Council. However, on December 5, 2017, Councilmember Sarmiento requested to place this item back on the City Council agenda for December 19, 2017. Santa Ana Senior Associates, a California Limited Partnership or a partnership created by Pacific West Communities, Inc. (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 $120,000,000 (the "Bonds") for the acquisition, construction, improvement and equipping of a 418 -unit senior multifamily rental housing project located at 2222 E. 1st Street, Santa Ana, California, generally known as Villa Court Senior Apartments (the "Project") and operated by Barker Management, Inc. 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. On September 28, 2017, AMG and Associates submitted a request for a project subsidy equal to 70% of the City's annual affordable housing in -lieu fees collected from developers under the Housing Opportunity Ordinance, up to a maximum of $1.75 million per year for 40 years. AMG proposes to use the requested annual payment for debt service on their affordable housing projects located at 2110, 2114 and 2222 E. 15t Street. The City has made no decisions on whether it will provide financial support for the projects. The bonds to be issued by the CMFA 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. 75G-2 Villa Court Senior Apartments — TEFRA Hearing December 19, 2017 Page 3 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 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. With approval by the CMFA, 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 $29,167 under the assumption the entire $120 million in bonds are issued. Upon receipt, the funds will be deposited to the Miscellaneous Revenues, Miscellaneous Recoveries Revenue Account (no. 01102002-57010). APPROVED AS TO FUNDS AND ACCOUNTS: Robert M. Zur ch ie Francisco Gutierrez Interim Executive Director Executive Director yJ Community Development Agency Finance and Management Services Agency Exhibits: 1. Resolution 2. Notice to Applicant 75G-3 75G-4 RESOLUTION NO. 2017 - 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 $120,000,000 FOR THE PURPOSE OF FINANCING OR REFINANCING THE ACQUISITION, CONSTRUCTION, IMPROVEMENT AND EQUIPPING OF VILLA COURT SENIOR APARTMENTS AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, Santa Ana Senior Associates, a California Limited Partnership (the "Borrower") or a partnership created by Pacific West Communities, Inc. (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 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 $120,000,000 (the 'Bonds") for the acquisition, construction, improvement and equipping of a 418 -unit senior multifamily rental housing project located at 2222 E. list Street, Santa Ana, California, generally known as Villa Court Senior Apartments (the "Project') and operated by Barker Management, Inc.; 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 the City of Santa Ana (the "City") because the Project is located within the territorial limits of the City; 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 recitals 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 the governmental unit having jurisdiction over the area in Exhibit 1 75G-5 which the Project is 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 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 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 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 transaction approved hereby. Section 6. This resolution shall take effect immediately upon its adoption. ADOPTED this _ day of 2017. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: Rya oe Assi nt CitAttorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers Miguel A. Pulido Mayor 75G-6 MAYOR Miguel A. Pulido MAYOR PRO TEM Michele Martinez COUNCILMEMBERS P. David Benavides Vicente Sarmiento Jose Solorio Sal Tinajero Juan Villages December 12, 2017 Tony Crowder The Pacific Companies 430 E State Street, Suite 100 Eagle, ID 83616 Exhibit 2 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, California 92702 www.santa-ana.org Subject: Notice to Applicant Regarding Request for TEFRA Hearing Dear Mr. Crowder, 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 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 Senior Associates, a California L.P., for the benefit of Villa Court Senior 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 atjbrown e.santa-ana.org. Sincerely, ice//�� Judson Brown Housing Division Manager SANTA ANA CITY COUNCIL Miguel A Pulido Michele Martinez Vicente Sarmiento�b to P. David Benavides Juan Villages Sal rmajero Mayor Mayor Pro Tem, Ward 2 Ward 7 a GS Ward 4 Word 5 Ward 6 moulidgAsanauana.om mi maninez(d)santaanaaro vsarmantoralsanta-ana ora sol ono0sanlaana.org dbenavidesaPsanta.ana cro 'villenasresanta-zna oro sl'na'ero(ol5antaana om NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on Tuesday, December 19, 2017, a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 will be held with respect to a proposed plan of financing providing for the issuance by the California Municipal Finance Authority (the "Authority") of its 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, in an amount not to exceed $120,000,000 (the 'Bonds"). The proceeds of the Bonds will be used to: (1) finance or refinance the acquisition, construction, improvement and equipping of Villa Court Senior Apartments, a 418 -unit senior multifamily rental housing project located at 2222 E. 1st Street, Santa Ana, California; and (2) pay certain expenses incurred in connection with the issuance of the Bonds. The facilities are to be owned by Santa Ana Senior Associates, a California Limited Partnership (the 'Borrower") or a partnership created by Pacific West Communities, Inc, (the "Developer"), consisting at least of the Developer or a related person to the Developer and one or more limited partners and operated by Barker Management, Inc. The Bonds and the obligation to pay principal of and interest thereon and any redemption premium with respect thereto do not constitute indebtedness or an obligation of the Authority, the State of California or any political subdivision thereof, within the meaning of any constitutional or statutory debt limitation, or a charge against the general credit or taxing powers of any of them. The Bonds shall be a limited obligation of the Authority, payable solely from certain revenues duly pledged therefor and generally representing amounts paid by the Borrower. The hearing will commence at 5:45 p.m. or as soon thereafter as the matter can be heard, and will be held in the City Council Chambers, 22 Civic Center Plaza, Santa Ana, California. Interested persons wishing to express their views on the issuance of the Bonds or on the nature and location of the facilities proposed to be financed or refinanced may attend the public hearing or, prior to the time of the hearing, submit written comments. Additional information concerning the above matter may be obtained from, and written comments should be addressed to, City Clerk, City of Santa Ana, 20 Civic Center Plaza, 8th Floor, Santa Ana, California 92702. Dated: December 4, 2017 75G-8