HomeMy WebLinkAbout80B - JOINT MORTGAGE REVENUE BONDS
REQUEST FOR COUNCIL/
AGENCY/HOUSING
AUTHORITY ACTION
MEETING DATE:
CLERK OF COUNCIL USE ONLY:
DECEMBER 18, 2006
TITLE:
APPROVED
o As Recommended
o As Amended
D Ordinance on 1st Reading
D Ordinance on 2nd Reading
o Implementing Resolution
o Set Public Hearing For
PUBLIC HEARING - MORTGAGE REVENUE
BOND INDUCEMENT AND TEFRA ON ISSUANCE
OF TAX-EXEMPT BONDS AND LOAN
AGREEMENTS WITH WILSHIRE/MINNIE, L.P.
l)r
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
CITY COUNCIL ACTION
1. Hold a TEFRA (Tax Equity and Financial Responsibility Act) Hearing
in consideration of the issuance of multi-family housing revenue
bonds by the Housing Authority of the City of Santa Ana for the
purpose of financing the acquisition and rehabilitation of
seventeen properties located at 1201, 1209, 1213, 1221, 1225, 1229,
and 1233 East Wilshire and 1401, 1403, 1409, 1413, 1421, 1425,
1429, 1433, 1437, and 1439 South Minnie by Wilshire/Minnie, L.P.
2. Adopt a resolution approving the issuance of tax-exempt bonds for
the project.
3. Direct the City Attorney to prepare a loan agreement with
Wilshire/Minnie, L. P., for the acquisition and rehabilitation of
1201, 1209, 1213, 1221, 1225, 1229, and 1233 East Wilshire and
1401, 1403, 1409, 1413, 1421, 1425, 1429, 1433, 1437, and 1439
South Minnie in a total amount not to exceed $2.4 million.
COMMUNITY REDEVELOPMENT AGENCY ACTION
Direct the Agency General Counsel to prepare and authorize the Executive
Director to execute loan agreements for the acquisition and
rehabilitation of 1201, 1209,1213,1221,1225,1229, and 1233 East Wilshire
and 1401, 1403, 1409, 1413, 1421, 1425, 1429, 1433, 1437, and 1439 South
808-1
P. H. - Mortgage Revenue Bond Inducement
and TEFRA on Issuance of Tax-Exempt
and Loan Agreements with Wilshire/Minnie, L.P.
December 18, 2006
Page 2
Minnie with Wilshire/Minnie, L.P. in a total amount not to exceed $8.1
million.
HOUSING AUTHORITY ACTION
Adopt a resolution relating to the issuance of bonds for the purpose of
financing the acquisition and rehabilitation of seventeen properties
located at 1201, 1209, 1213, 1221, 1225, 1229, and 1233 East Wilshire
and 1401, 1403, 1409, 1413, 1421, 1425, 1429, 1433, 1437, and 1439 South
Minnie by Wilshire/Minnie, L.P.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION
At its Regular Meeting of December 5, 2006, the Community Redevelopment
and Housing Commission voted 6: 0 (Turner absent) to continue this item
to a Special Meeting on December 13, 2006.
The results will be reported to the City Council.
DISCUSSION
Orange Housing Development Corporation, a non-profit 501 (c) (3) (OHDC),
and C & C Development Company, LLC (C & C) have formed a partnership,
Wilshire/Minnie, L. P. to acquire and rehabilitate seventeen apartment
buildings containing 164 units located at 1201, 1209, 1213, 1221, 1225,
1229, and 1233 East Wilshire and 1401, 1403, 1409, 1413, 1421, 1425,
1429, 1433, 1437, and 1439 South Minnie (Exhibit 1). OHDC has
successfully partnered with the City of Santa Ana and the Community
Redevelopment Agency to acquire and rehabilitate 424 units in the City.
Its proj ects include Santiago Villas, an 89 unit seniors only proj ect,
Ross-Durant, an acquisition-reconfiguration project offering larger
units for families, and the acquisition and rehabilitation of 178 units
in Cornerstone Village. OHDC owns and manages 2,626 units located
throughout California. C & C has many years of residential development
and management experience and previously partnered with OHDC in the
Santiago Villas and Ross-Durant projects.
As part of the rehabilitation, the partnership is proposing to
reconfigure the 164 one-bedroom units into 144 one, two, three and four
bedrooms. After the reconfiguration, the unit mix will be 108 one-
bedroom, 16 two-bedroom, 18 three-bedroom and 2 four-bedroom units. In
808-2
P. H. - Mortgage Revenue Bond Inducement
and TEFRA on Issuance of Tax-Exempt
and Loan Agreements with Wilshire/Minnie, L.P.
December 18, 2006
Page 3
addition, the partnership is proposing to provide a community/learning
center for the residents.
Rents will be restricted to those affordable low- and very low-income
households as described in Exhibit 2. The maximum occupancy will also
be restricted to three persons for one-bedroom, four persons for two-
bedrooms, six persons for three-bedrooms and eight persons for four-
bedrooms.
The total cost to acquire, rehabilitate and provide for the level of
affordabili ty for these properties will not be met solely through the
issuance of bonds and tax credit allocation. Staff is recommending the
gap be filled with $2.4 million funded from HOME and $8.1 million from
the Community Redevelopment Agency (Exhibit 3). Repayment will be based
on residual receipts. These loans are contingent on approval of the
bond allocation and tax credits, approval of the relocation plan and any
necessary variances by the Planning Commission.
In order for the Housing Authority to apply for a bond allocation from
the California Debt Limitation Allocation Committee on behalf of the
partnership, the Housing Authority must adopt an Inducement resolution
relating to the bonds. The Inducement resolution confirms the Housing
Authority's intent to issue the bonds and identifies the time at which
costs expended on the project qualify for financing with the tax-exempt
bonds. The bonds are considered "conduit" obligations. This means that
although the Housing Authority will issue the bonds, the owner is
actually the borrower and has sole responsibility for repayment. The
bonds will be repaid strictly out of the project's cash flow. There is
no recourse to the Housing Authority, the City of Santa Ana or the
Community Redevelopment Agency.
Prior to bonds being sold, the City Council must hold a public hearing
as required by the Tax Equity and Fiscal Responsibility Act (TEFRA).
The public hearing is to solicit comments on the project and the
issuance of the bonds. Holding the TEFRA is also a precondition to
applying for the bond allocation.
Approval of this project will ensure the future integrity and stability
of the neighborhood by retaining ownership of seventeen contiguous
buildings under one owner, which will be rehabilitated and will have
affordability and occupancy covenants. It will also increase the
808-3
P. H. - Mortgage Revenue Bond Inducement
and TEFRA on Issuance of Tax-Exempt
and Loan Agreements with Wilshire/Minnie, L.P.
December 18, 2006
Page 4
availabili ty of larger affordable housing units. The acquisition and
rehabili tation of these properties will assist the City and Agency to
meet their affordable housing goals as identified in the Consolidated
Plan, Redevelopment Implementation Plan and Housing Element.
ENVIRONMENTAL IMPACT
In accordance with the California Environmental Quality Act and the
National Environmental Policy Act, the proposed proj ect is exempt from
further review. Categorical Exemption No. ER 06-203 will be filed for
this project.
FISCAL IMPACT
Funds for the acquisitions and rehabilitation loans are available in the
HOME Program in the amount of $2.4 million (account no.130-148-6951) and
Tax Increment Housing Set-Aside Fund in the amount of $8.1 million
(account no. 507-936-6951).
APPROVED AS TO FUNDS AND ACCOUNTS:
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Assistant Director
Community Development Agency
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808-4
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APARTMENT AFFORDABILITY AND UNIT MIX
WILSHIRE/MINNIE APARTMENTS
Affordability Bedrooms NO. of Max. Allowable
Level Units Rent
1 11 $581
40% 2 2 $696
(very-low) 3 2 $788
1 34 $733
50% 2 3 $878
(very-low) 3 5 $999
4 1 $1,115
1 63 $885
60% 2 10 $1,0611
(low) 3 11 $1,210
4 1 $1,350
EXHIBIT 2
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WILSHIRE/MINNIE SOURCES AND USES BUDGET
Funding Sources
Tax Exempt Bonds
Community Redevelopment Agency (Housing Setaside)
City of Santa Ana (HOME Funds)
Capital Contribution - General Partner
Capital Contribution - Limited Partner (Tax Credits)
Funding Uses
Acquisition
Residential Construction and Related Costs
EXHIBIT 3
808-7
Amount
$7,967,109.00
$8,100,000.00
$2,400,000.00
$1,100,000.00
$7,804,080.00
$27,371,189.00
Amount
$16,750,000.00
$10,621,189.00
$27,371,189.00
12/11/06 les
RESOLUTION NO. 2006-_
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA
APPROVING THE ISSUANCE BY THE HOUSING AUTHORITY OF THE
CITY OF SANTA ANA OF MULTIFAMILY HOUSING REVENUE BONDS
IN AN AMOUNT NOT TO EXCEED FIFTEEN MILLION FIVE HUNDRED
THOUSAND DOLLARS FOR THE PURPOSE OF FINANCING THE
ACQUISITION AND REHABILITATION OF SEVENTEEN BUILDINGS OF
MULTIFAMILY RENTAL HOUSING BY WILSHIRE/MINNIE, L.P.
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 Chapter 1 of Part 2 of Division 24 (commencing with Section 34200) of the Health
and Safety Code of the State of California (the "Law"), to issue and sell revenue bonds
for the purpose of financing the acquisition, construction, rehabilitation and
development of multifamily rental housing for families and individuals of low and very
low income.
B. Orange Housing Development Corporation, a California nonprofit public
benefit corporation, on behalf of Wilshire/Minnie, L.P., a California limited partnership,
formed by Orange Housing Development Corporation and C&C Development Company
LLC, has requested the Authority to issue and sell revenue bonds in an expected
principal amount of $15,500,000 (the "Bonds") pursuant to the procedures specified in
the Law for the purpose of providing financing for the acquisition and rehabilitation of
164-units of multifamily rental housing located at 1201,1209,1213,1221,1225,1229,
and 1233 E. Wilshire Avenue and 1401, 1403, 1409, 1413, 1421, 1425, 1429, 1433,
1437, and 1439 S. Minnie Street in the City of Santa Ana, California (the "Project"),
located within the area of operation of the Authority.
C. 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.
D. The Authority has determined that the City Council of the City of Santa Ana
is the "applicable elected representatives" to hold said public hearing.
E. 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 therefore.
F. The Project is located wholly within the geographic jurisdiction of the City.
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G. 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 finance the Project. It is the purpose and
intent of this City Council that this resolution constitute 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.
808-9
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:
Councilmembers:
ABSTAIN:
Councilmembers:
NOT PRESENT:
Councilmembers:
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
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