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HomeMy WebLinkAbout75E - TAX EXEMPT BONDS CITY GARDENS APTS CITY COUNCil MEETING DATE: REQUEST FOR COUNCIL ACTION CLERK OF COUNCIL USE ONLY: OCTOBER 16, 2006 TITLE: PUBLIC HEARING - ISSUANCE OF TAX EXEMPT BONDS FOR CITY GARDENS APARTMENTS APPROVED o As Recommended o As Amended o Ordinance on 1" Reading o Ordinance on 2nd Reading o Implementing Resolution o Set Pubiic Hearing For aJ~ CONTINUED TO FILE NUMBER RECOMMENDED ACTION Adopt a resolution approving the issuance of tax-exempt, multi-family housing revenue bonds in an amount not to exceed $8,400,000 by the Housing Authority of the City of Santa Ana for the purpose of refunding Housing Authority bonds issued December 19, 1996, for City Gardens Apartments. DISCUSSION City Gardens Apartments is located at 2901 N, Bristol (Exhibit 1), It is a 27 4-uni t complex composed of one and two bedroom units, On December 19, 1996, the Housing Authority of the City of Santa Ana issued tax exempt mortgage revenue bonds to finance acquisition and rehabilitation of the proj ect by its current owner, LINC - Bristol Associates 1, LP (owner) . The existing bonds are subject to a mandatory redemption on December 1, 2006, and the owner has requested that the Housing Authority issue bonds for the purpose of refunding the existing bonds in the amount not to exceed $8,400,000 and to refinance subordinate debt. The refinancing of the subordinate debt will lower the interest rate on the debt and will increase the cash flow to the project, The bonds are considered "conduit" obligations. This means that the Housing Authority will issue the bonds, although the developer is the borrower and is responsible for repayment. The bonds are repaid strictly from the development under the project mortgage. There is no recourse to the City of Santa Ana, the Housing Authority or the Community Redevelopment Agency. The owner was required occupancy at affordable forty percent of the to reserve twenty rents by households Orange County area percent, or 55 whose incomes do median income. units, for not exceed With the 75E-1 P. H, - Issuance of Tax Exempt Bonds for City Gardens Apartments October 16, 2006 Page 2 refunding of the bonds, the existing affordabili ty requirement will be extended to December 19, 2011, and will help preserve this affordable housing option. Prior to bonds being sold, the legislative body within the jurisdiction where the project is located must hold a public hearing at which time the public may discuss the project and the issuance of the bonds, On October 1, 2006, notification of the public hearing was published in the Orange County Register. FISCAL IMPACT There are no fiscal or economic liabilities or obligations assumed or imposed upon the City of Santa Ana as a result of the public hearing or the adoption of the resolution. Stephen G. H Deputy City Development rding anager for Services SGH/TG/mlr H:\ACTIONS\2006 CC\PH - IssuTaXExBondsCityGardens lO-16-06.doc 75E-2 A N CITY GARDENS APARTMENTS 2901 N. Bristol Street ~~ ~ - en E (/) .;:: tD Memory Lane Qj Q) ~ ii5 ~ Q) ~ o 0: 17th Street EXHIBIT 1 75E-3 9/27/06 les RESOLUTION A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE REFUNDING BONDS BY THE HOUSING AUTHORITY OF THE CITY OF SANTA ANA FOR THE PURPOSE OF REFINANCING THE ACQUISITION AND REHABILITATION OF CITY GARDENS APARTMENTS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The Housing Authority of the City of Santa Ana (the "Authority") is authorized by Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the "Law"), to issue and sell refunding revenue bonds for the purpose of refunding outstanding bonds of the Authority, and the Law provides a complete, additional and alternative method for such financing, B. The Authority has previously issued its Housing Authority of the City of Santa Ana Multifamily Housing Revenue Bonds (City Gardens Apartments, 1996 Series C in the original principal amount of $10,425,000 (the "Prior Bonds") for the purpose of providing financing for the acquisition and rehabilitation of a 274-unit multifamily residential rental project and underlying land and related and appurtenant facilities located at 2901 N. Bristol Avenue in the City of Santa Ana, California and known as City Gardens Apartments (the "Project"), located within the area of operation of the Authority. C. L1NC-Bristol Associates I L.P., a California limited partnership (the "Owner") has requested the Authority to issue and sell refunding revenue bonds (the "Bonds") pursuant to the procedures specified in the Law for the purpose of refunding the Prior Bonds. D. The Bonds will be considered to be "qualified exempt facility bonds" under Section 142 (a) of the Internal Revenue Code of 1986, as amended (the "Code"), and Section 147(f) of the Code requires that the "applicable elected representatives" with respect to the Authority hold a public hearing with respect to the issuance of the Bonds. E. The Authority has determined that the City Council of the City of Santa Ana is the "applicable elected representatives" to hold said public hearing. F. Notice of said public hearing has been duly given as required by the Code, and this City Council has heretofore held such public hearing at which all interested persons were given an opportunity to be heard on all matters relative to the financing and operation of the Project and the Authority's issuance of the Bonds. 1 75E-4 9/27/06 les G. The Project is located wholly within the geographic jurisdiction of the City. H. The City Council of the City of Santa Ana, as the "applicable elected representatives" of the Authority, approves of the issuance of the Bonds as in the public interests of the Authority. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 2. The City Council hereby finds and determines that the foregoing recitals are true and correct. Section 3. Pursuant to the Code, the City Council hereby approves the issuance of the Bonds by the Authority to refinance the Project. It is the purpose and intent of the City Council that this resolution constitutes approval of the issuance of the Bonds by the applicable elected representatives of the governmental unit having jurisdiction over the area in which the Project is located, in accordance with the Code. Section 4. The issuance of the Bonds shall be subject to approval by the Authority of all financing documents relating thereto to which the Authority is a party and subject to the sale of the Bonds by the Authority to the underwriter thereof. Section 5. This resolution shall take effect immediately. 2 7SE-S 9/27/06 les ADOPTED this day of ,2006. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney By: Lisa E. Storck Assistant City Attorney AYES: Councilmembers: NOES: ABSTAIN: NOT PRESENT: Councilmembers: Council members: Council members: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of Council, do hereby attest to and certify the attached Resolution No. 2006-_ to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of Council City of Santa Ana 3 75E-6