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HomeMy WebLinkAbout25I - MULTI FAMILY HOUSING REV. REQUEST FOR HOUSING AUTHORITY/COUNCIL/ IAGENCY ACTION MEETING DATE: JAI~UARY 5, 2004 TITLE: AUTHORIZATION OF MULTI-FAMILY HOUSING REVENUE REFUNDING BONDS AND LOAM AGREEMENTS WITH WAKEHAM-GKANT, LP CITY MANAGER ~DIRECTOR RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED [] As Recommended [] As Amended [] Ordinance on 1st Reading [] Ordinance on 2nd Reading [] Implementing Resolution [] Set Public Hearing For CONTINUED TO FILE NUMBER LOUSING AUTHORITY ACTION Adopt a resolution authorizing issuance of multi-family housing revenue refunding bonds in an aggregate amount not to exceed $6,000,000 for the Wakeham-Grant Apartments, a California Limited Partnership, and authorize the Executive Director of the Housing Authority to execute all documents as necessary. CITY COUNCIL ACTION 1. Approve an agreement with Wakeham-Grant Apartments, a California Limited Partnership, to provide loans in the amount not to exceed $1,900,000. 2. Direct the City Attorney to prepare, and authorize the Executive Director of the Community Development Agency to execute agreements and all other required documents as necessary. COMMUNITY REDEVELOPMENT AGENCY 1. Approve an agreement with Wakeham-Grant Apartments, a California Limited Partnership, to provide loans in the amount not to exceed $1,000,000. Page 138 25.1. Authorization Of Multi-Family Housing Revenue Refunding Bonds And Loan Agreements With Wakeham-Grant, LP January 5, 2004 Page 2 o Direct the City Attorney to prepare, and authorize the Executive Director of the Community Development Agency to execute agreements and all other required documents as necessary. DISCUSSION On March 5, 2001, the City Council held a public hearing and authorized the Housing Authority to issue tax-exempt bonds for the Wakeham-Grant Apartments. On July 16, 2001, the Housing Authority authorized the issuance of the tax-exempt bonds in an aggregate principal amount not to exceed $8,155,000. In addition, on December 3, 2001, the City Council authorized $150,000 of HOME funds for the project. The bond proceeds were used to acquire and rehabilitate the properties located at 805, 810, 815, 816, 825, 828, 835 and 904 S. Minnie Street (Exhibit 1). This project consists of 127 one- and two-bedroom units. Currently, the developer cannot convert from the construction financing to a permanent loan based on their original agreement. The developer has found a new lender, U.S. Bank, who will be providing a permanent loan of up to $6,000,000. Due to the reduction of the loan amount and extensive and unforeseen repairs during construction, which caused a significant cost over-run, there remains a financial gap. The additional funds, $1,900,000 of HOME funds and $1,000,000 of tax- increment funds, will allow for conversion and additional rehabilitation of units, and will require covenants for deeper affordability. Currently, Wakeham-Grant is required to have 25% or 32 units at 50% of the area median income (AMI) and the remaining 75% or 95 units at 60% AMI. As a condition of funding, Wakeham-Grant will be required to have all 127 units affordable at 50% AMI for a term of 55 years. The bonds are considered "conduit" obligations. This means that the Housing Authority will issue the bonds, but the developer is the borrower and is solely responsible for repayment. The bonds are repaid strictly from the developer under the project mortgage. There is no recourse to the City of Santa Ana, the Housing Authority or the Community Redevelopment Agency. The bonds will be purchased directly by the lender, U.S. Bank, as a private placement. The law firm of Jones Hall has been retained to serve as bond counsel, and CSG Advisors has been retained as financial advisor. Final issuance of the bonds is conditioned on the underwriting by the lender and approval by the Housing Authority. 25.1. Page 139 Authorization Of Multi-Family Housing ~evenue Refunding Bonds And Loan Agreements With Wakeham-Grant, LP January 5, 2004 Page 3 Although all recommended actions of the Housing Authority of the City of Santa Ana are first reviewed and acted upon by the Redevelopment and Housing Commission, in this case there was insufficient time to process this request through standard procedures. Therefore, this action of the Housing Authority will be processed as an emergency action as required by state and federal regulations. The Housing Authority declares this to be an emergency matter under Health and Safety Code Section 34292 in order for the Housing Authority to take action. FISCAL IMPACT The issuance of tax-exempt bonds will result in developer payment of an annual affordable monitoring fee to the Housing Authority for a term of 55 years. Funds received will be deposited into the Issuer Fee account (account no. 133-01-5594). Funds for the loans are available in Tax Increment and HOME accounts (505-936-6951 & 130-148-6951/7094). APPROVED AS TO FUNDS AND ACCOUNTS: EJ°x~c/utP/i~rSet~or Community Development Agency \ .... ~Executive ~rector %Finance & Management Services Agenc~ JPR/SLB/mlr Page 140 25.1.