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HomeMy WebLinkAbout04 -PHMORTREVBNDINDUCTEFRAISSUBNDWILSHRIEMINNIECLERK ®F C®UClL tJSE ®NLY. DECEMBER 1$, 2006 TITLE. APPROVEL7 D As Recommended As Amended Qrdinance on '1st Reading Ordinance on 2nd Reading implementing Resolution Set Public Hearing For PUBLIC HEARING - MORTGAGE REVENUE BOND INDUCEMENT AND TEF`RA ON ISSUANCE OF TAX-EXEMPT BONDS AND LOAN AGREEMENTS WITH WILSHIRE/MINNIE, L.P. ~' r' ~ CITY MANAGER E ~CECUTIV ©IRECTOR ~® ~~ ~~~ CITY COUNCIL ACTION CONTINiJED TO FILE NUMBER 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, 1.213, 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 far the acquisition and rehabilitation of 1201, 1209,1213, 1221,1225,1229,and 1233 East Wilshire and 1401, 1403, 1409, 1413, 2421, 1425, 1429, 1433, 1437, and 1439 South ~~ »H:>,, P. H. - Mortgage Revenue Band 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 an 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 projects include Santiago Villas, an 89 unit seniors only project, Ross-Durant, an acquisition-reconfiguration project offering larger units for families, and the acquisition and rehabilitatian of 178 units in Cornerstone Village. OHBC 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 twa-bedroom, 18 three-bedroom and 2 four-bedroom units. In 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 additien, 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 affordability 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 band 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 bands 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 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 availability of larger affordable housing units. rehabilitation of these properties will assist th meet their affordable housing goals as identified Plan, Redevelopment Implementation Plan and Housing ENVIRONMENTAL IMPACT The acquisition and e City and Agency to in the Consolidated Element. In accordance with the California Environmental Quality Act and the National Environmental Policy Act, the proposed project 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: ~~ L~NU Nancy T. dwards Assistant Director Community Development Agency SGH/SLB/mlr ~~~ancisco Gutierrez Executive Director Finance and Management ,Services Agency ,~ H:\ACTIONS\2006 CC\~T CC-CRA-HA ~ortRevBondInduceTefra 12--18-06.doc 4 APARTMENT AFFQRDABILITY AND UNIT MIX W~,SNfRF/MINNIE APARTMENTS A~~ordability Level Bedrooms NO. of Units Max. Allowable Rent 1 11 $581 400 2 2 $596 (very-low) 3 2 $788 1 34 $733 500 2 3 $878 (very-low) 3 5 $ 999 4 1 $l, 115 1 63 $885 60a 2 10 $1,0611 (low) 3 11 $1,210 4 1 $1,350 EXHIBIT 2 WILSHIRE/MINNIE SOURCES AND USES BUDGET Funding Sources Amount Tax Exernpt Bonds $7,9&7,109.00 Community Redevelopment Agency {Housing Setaside) $8,100,000.00 City of Santa Ana (HOME Funds) $2,400,000.00 Capital Contribution -General Partner $1,100,000.00 Capital Contribution -Limited Partner (Tax Credits) $7,804,080.00 $27,371,189.00 Funding Uses Amount Acquisition $16,750,000.00 Residential Construction and Related Costs $10,621,189.00 $27,371,189.00 EXHIBIT 3 4