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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />OCTOBER 16, 2006 <br />TITLE: <br />PUBLIC HEARING - ISSUANCE <br />OF TAX EXEMPT BONDS FOR <br />CITY GARDENS APARTMENTS <br />o---~- <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />^ As Recommended <br />^ As Amended <br />^ Ordinance on 1" Reading <br />^ Ordinance on 2ntl Reading <br />^ Implementing Resolution <br />^ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Adopt a resolution approving the issuance of tax-exempt, multi-family <br />housing revenue bonds in an amount not to exceed $8,400,000 by the <br />Housing Authority of the City of Santa Ana for the purpose of refunding <br />Housing Authority bonds issued December 19, 1996, for City Gardens <br />Apartments. <br />DISCUSSION <br />City Gardens Apartments is located at 2901 N. Bristol (Exhibit 1). It is <br />a 274-unit complex composed of one and two bedroom units. On December <br />19, 1996, the Housing Authority of the City of Santa Ana issued tax <br />exempt mortgage revenue bonds to finance acquisition and rehabilitation <br />of the project by its current owner, LILAC - Bristol Associates 1, LP <br />(owner). The existing bonds are subject to a mandatory redemption on <br />December 1, 2006, and the owner has requested that the Housing Authority <br />issue bonds for the purpose of refunding the existing bonds in the amount <br />not to exceed $8,400,000 and to refinance subordinate debt. The <br />refinancing of the subordinate debt will lower the interest rate on the <br />debt and will increase the cash flow to the project. <br />The bonds are considered `conduit" obligations. This means that the <br />Housing Authority will issue the bonds, although the developer is the <br />borrower and is responsible for repayment. The bonds are repaid strictly <br />from the development under the project mortgage. There is no recourse to <br />the City of Santa Ana, the Housing Authority or the Community <br />Redevelopment Agency. <br />The owner was required to reserve twenty percent, or 55 units, for <br />occupancy at affordable rents by households whose incomes do not exceed <br />forty percent of the Orange County area median income. With the <br />75E-1 <br />