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HomeMy WebLinkAbout75B - PH - RESO TAX EXEMPTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: FEBRUARY 17, 2015 TITLE: PUBLIC HEARING - RESOLUTION APPROVING THE ISSUANCE OF TAX - EXEMPT OBLIGATIONS AND DIRECTING CERTAIN ACTIONS {STRATEGIC PLAN NO. 5,31 CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on 181 Reading ❑ Ordinance on 2n0 Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt the resolution approving the issuance of the Bonds by the California Municipal Finance Authority not to exceed $17,500,000, for the benefit of C &C Development Co, LLC, to provide financing for the acquisition, construction and equipping of an 82 -unit multifamily rental housing project generally known as Lemon Grove Apartments, DISCUSSION C &C Development Company, LLC (the "Borrower") requested that the California Municipal Finance Authority (CMFA) serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $16,000,000 of tax - exempt revenue bonds. The proceeds of the Bonds will be used for the purpose of making a loan to the Borrower, to enable the Borrower to finance the acquisition, construction, rehabilitation, improvement and equipping of an 70 -unit affordable multifamily housing rental project located at 803 -815 North Harbor Boulevard, Santa Ana, California (the "Project"), which will be owned and operated by the Borrower. 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 the members of the community an opportunity to speak in favor of or against the use of tax- exempt bonds for the financing of the Project. Adoption of the resolution is solely for the purposes of satisfying the requirements of TEFRA, the Code and the California Government Code Section 6500 (and following). Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA Hearing, an "applicable elected representative" of the 75B -1 Public Hearing- Resolution Approving Tax Exempt Obligations February 17, 2015 Page 2 governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project. CALIFORNIA MUNICIPAL FINANCE AUTHORITY The CMFA was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 200 municipalities have become members of CMFA. The CMFA was formed to assist local governments, non - profit organizations and businesses with the issuance of taxable and tax - exempt bonds aimed at improving the standard of living in California. The CMFA's representatives and its Board of Directors have considerable experience in bond financings. The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not obligations of the City or the State of California, but are to be paid for solely from funds provided by the Borrower. There are no costs associated with membership in the CMFA and the City will in no way become exposed to any financial liability by reason of its membership in the CMFA. In addition, participation by the City in the CMFA will not impact the City's appropriations limits and will not constitute any type of indebtedness by the City. Outside of holding the TEFRA hearing and adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required. STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet 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 There is no fiscal impact associated with this action 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 75B -2 Public Hearing- Resolution Approving Tax Exempt Obligations February 17, 2015 Page 3 that that a portion of the issuance fee attributable to the City 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 Borrower will be the beneficiary of the CMFA's charitable donation through a 25% reduction in issuance fees. WW-A0X/'- Kelly L. R n ers Executive !rector Community Development Agency KR/SS /NV /sb Exhibit: 1. Resolution 75B -3 75B -4 219115 LES RESOLUTION NO, 2015- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY MULTIFAMILY HOUSING REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $16,000,000 FOR THE PURPOSE OF FINANCING OR REFINANCING THE ACQUISITION, CONSTRUCTION, IMPROVEMENT AND EQUIPPING OF 815 N. HARBOR APARTMENTS AND OTHER MATTERS RELATING THERETO 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. C &C Development Co., LLC, a California limited liability company, or entities related thereto (the "Borrower"), has requested that the California Municipal Finance Authority (the "Authority') participate in 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 $16,000,000 (the "Bonds ") for the acquisition, construction, improvement and equipping of a 70 -unit multifamily affordable rental housing project located at 803 -815 North Harbor Boulevard, Santa Ana, California, generally known as 815 N. Harbor Apartments (the "Project') and operated by Advanced Property Services, LLC. B. 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 the City of Santa Ana (the "City ") because the Project is to be located within the territorial limits of the City. C. 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. D. 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 14z(f) -of -the -Code- and- the - requirements -of -Section -4 -of- the -Joi nt-- E- xereise -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 E. 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. 75B -5 NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Ana as follows: Section 2. The foregoing determinations and declarations are true and correct. Section 3. The City Council hereby approves the issuance of the 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 the governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f) and (b) of the Code and Section 4 of the Agreement. Section 4. The issuance of the Bonds shall be subject to the 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 the Bonds. Section 5. The adoption of this Resolution shall not obligate the City or any department thereof to (1) provide any financing to acquire or construct the Project or any refinancing of 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 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. Section 6. The City Manager or his designee is hereby authorized and directed, jointly and severalty, to do any and all things and to execute and deliver any and all documents which are deemed necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby, Section 7. This resolution shall take effect immediately upon its adoption. 75B -6 ADOPTED this day of February, 2015. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: c Lisa Storck Assistant City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2015- to be the original resolution adopted by the City Council of the City of Santa Ana on , 2015. Date: Clerk of the Council City of Santa Ana 75B -7 75B -8