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HomeMy WebLinkAbout75B - PH TAX EXEMPT BONDSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: FEBRUARY 5, 2019 TITLE: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE BENEFIT OF CORNERSTONE HOUSING PARTNERS L.P. AND NEW RESOLUTION APPROVING THE ISSUANCE OF BONDS (STRATEGIC PLAN NOS. 4, 1; 5,3) -5�a- V�- L" CITY MANAGER APPLICANT REQUESTED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2"d Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 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 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 S. 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 S. Minnie Street, Santa Ana, California. DISCUSSION On November 20, 2018, City Council authorized the City Manager and Executive Director of the Housing Authority to execute a commitment letter to resubordinate the current affordable housing loans for the Cornerstone Apartments at 805 - 904 South Minnie Street, Santa Ana, California to tax-exempt multifamily bonds (Bonds) in an amount not to exceed $8,700,000. The Bond funds will be used to substantially rehabilitate the Project. However, for this rehabilitation to occur a new TEFRA hearing will need to be held for the project because the current TEFRA expired in December 2018. As such, a new TEFRA Hearing is being recommended for this project. Specifically, Cornerstone Housing Partners, a California Limited Partnership; 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 rent -71 � iy project located at 805-904 S. Minnie Street, TEFRA Public Hearing for Cornerstone Apartments February 5, 2019 Page 2 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. A public notice was published for the TEFRA Hearing (Exhibit 1). 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 (Exhibit 2). 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. A notice was provided to the borrower informing them of this same information (Exhibit 3). STRATEGIC PLAN ALIGNMENT Approval of these items assists the City in meeting Goal # 4 — City Financial Stability, Objective # 1 (Maintain a stable, efficient and transparent financial environment) and 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 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 that a portion 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 $9,948 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). Steven A. Mendoza Executive Director Community Development Agency Exhibits: 1. Public Notice 2. Resolution 3. Notice to Applicant APPROVED AS TO FJ1NDS AND ACCOUNTS: Kathryn Downs, CPA Executive Director <P(I'N Finance and Management Services Agency 75B-2 ORANGE COUNTY REPORTER — SINCE 1921 — 600 W SANTA ANA BLVD, SANTA ANA, CA 92701 Telephone (714) 543-2027 / Fax (714) 542-6841 Lauren Sommerhauser ORRICK, HERRINGTON & SUTCLIFFE LLP 405 HOWARD ST SAN FRANCISCO, CA - 94105 PROOF OF PUBLICATION (2015.5 C.C.P.) State of California ) County of ORANGE ) ss Noace Type: HRG -NOTICE OF HEARING Ad Description: TEFRA NOTICE CORNERSTONE APTS I am a Citizen of the United States and a resident of the State of California; I am over the age of eighteen years, and not a party to or interested in the above entitled matter. I am the principal clerk of the printer and publisher of the 'ORANGE COUNTY REPORTER, a newspaper published in the English language in the city of SANTA ANA, county of ORANGE, and adjudged a newspaper of general circulation as defined by the laws of the State of California by the Superior Court of the County of ORANGE, State of California, under date 06/20/1922, Case No. 13421. That the notice, of which the annexed is a printed copy, has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to -wit: 01/18/2019 Executed on: 01/18/2019 At Los Angeles, California I certify (or declare) under penalty of perjury that the foregoing is true and Correct. Signature 11111111II II II IIIIIIIIII III X11 111111111 II * A 0 0 0 0 0 4 9 6 4 8 9 6 Email 75B-3 Exh" Lit 1 This space for filing stamp only OR#: 3212221 NOTICE OF PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF SANTA ANA, CA. The City of Santa Ana encourages the public to participate In Me decision- making process. The following notice Is being provided so that you can ask questions, make comments and stay Informed about protects that might be Impn"anttayou. eencoumgeyouto contact us prior W Ne Public Hearing If you have any questions. The Bonds and the obligation to pay principal (or redemption price) of and interest hereon will respect (hereto do not constitute indebtedness or an Interested persons wishing to express heir views on the Issuance of he Bonds or on the nature and local of he Project proposed to be financed or refinencm! may attend the public hearing or, prior to the tine of he hearing, submit written comments to the Clerk of he Council at he address indicated below. Meetln TIT, dOate—Thismetterwill e heats of n Tuesday, Febmary 5, 2019 at 5:0.5 p.m.or imnedialely following he 500 p.m. Clasetl Session, In the City Council Chamber, 22 Civic Center Plaza, Santa Ana, California 92701. All persons interested In his matter are notified to appear at this time. How To Make Comments - If you do not Wsh to appear atomic hearing, you may also send your wriften comments to 0�e CIeM of the Coundl, by mail to City of Santa Ana, 20 Civic Center Plan — M30, Santa Ana, CA 92701 or via e-rnail at emmmenis(oZsenta-ene.org (reference 'City Couno meeting') by 3:00 p.m on Ne day of Ne meeting: a -malls received after said time will be an file for public viewing the day after the meeting. Who To Contact For Question. -Should you have any quessons, pause contact Judson Brawn. Housing Division Manager, at (714) 667-2241 or you ran send an ennal to ecomments®sants- ana.org. he. To at More In/ormation - All inam reports regardingg any tem on this agenda am available !or pudic inspection In the Carl, of the Council Office during regular business hours and posted on he City's website he Friday before a Council meeting ab hltpJNww.sante- anaerg/wrlgmnicus.asp SI Ilene presumes an esparli favor de Jamar at (714) 66742267. Ni nII6n lac bins 114n W hAn dl¢n moat cho Tram Is (714 64 .5355. If you challenge the decision on the above matter, you may be limited to raising any Move Issues you or someone else raised at the public hearing described in this notice, or in written conespondence delivered to he City Council of the City of Santa Ana at or prior to, the public hearing. Made Huimr, Cleric of the Council 1118119 OR -32122210 75B-4 EXHIBITL RESOLUTION NO. 2019- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY OF 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") has requested that the California Municipal Finance Authority (the "Authority') adopt a plan of financing providing for the issuance 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, in an aggregate principal amount at no time 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 The 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 Project is located within the territorial limits of the City of Santa Ana (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, 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 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, 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 75B-5 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; and 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 4 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 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(0: and, (b) Section 4 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; (ii) 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 carry 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 , 2019. Miguel A. Pulido Mayor 75B-6 APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: gjAt:::� Ryao. H6dge Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers Councilmembers Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, NORMA MITRE, Acting Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2019 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana 75B-7 75B-8 MAYOR Miguel A. Pulido MAYOR PRO TEM Juan Villages COUNCILMEMBERS Cecilia Iglesias David Penaloza Roman Reyna Vicente Sarmlento Jose Solodo January 2, 2019 CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY 20 Civic Center Plaza . P.O. Box 1988 Santa Ana, California 92702 714-647-5360 wwW.santa-ana.oro Cornerstone Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 Attn: Laura Archuleta Subject: Notice to Applicant Regarding Request for TEFRA Hearing Dear Ms. Archuleta, EXHIBITS 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 Fiscal Responsibility Act 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, 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 S. Minnie Street, Santa Ana, California. The TEFRA Hearing has been placed on our City Council agenda for February 5, 2019 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 requestfor 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 can be reached by telephone at (714) 667-2241 or by e-mail at ibrown(a)santa-ana.ong. Sincerely, Judson Brown Housing Division Manager SANTA ANA CITY COUNCIL Niguel A Pulido Juan Villages Vicente Samuento David Penalo Jose solaria Roman Rayne Cecilia Iglesias Mayor Mayor Pio Tem, Ward 5 Ward? Ward Wad 3 Ward Ward mourdoRsanta-ana.om Ivillegasissanta-anaora vsaanientofalsanta-ana.ora anal zea a tae a Isolodofalsanta-ana.om rrevne0santa-aneora cidesiasOsanta-ano.om 75B-10