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Home My WebLink About75A - PH TAX EXEMPT BOND MATER DEI HSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 21, 2017 TITLE: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE BENEFIT OF MATER DEI HIGH SCHOOL AND RESOLUTION APPROVING THE ISSUANCE OF BONDS (STRATEGIC PLAN NO. 2,4) CI f ANAGER APPLICANT REQUESTED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on I� Reading ❑ Ordinance on 2" Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Conduct a Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing in consideration of the issuance of tax exempt bond financing by the California Municipal Finance Authority ("CMFA") on behalf of the Roman Catholic Bishop of Orange (the "Borrower''), for the benefit of Mater Dei High School (the "School") for the purpose of financing the design, construction and improvement of certain parking facilities. 2. Adopt a resolution approving the issuance of revenue bonds by the California Municipal Finance Authority in an amount not to exceed $17,0000,000 for the purpose of financing the design, construction and improvement of certain parking facilities. BACKGROUND In 2010, Mater Dei High School (MDHS) embarked on Phase 3 of its Redevelopment Campaign under the approved Mater Dei 2000 Master Plan, which included a Development Agreement with the City of Santa Ana (signed originally in 1995 and Amended in 1999). Due to an increase in enrollment, the construction of the gymnasium, and future construction of the performing arts center, the School and City began discussions on how to increase parking on campus. After a series of meetings with the City and Staff, the school decided to embark on a plan to purchase 19 private homes adjacent to Mater Dei High School with the plan to build a 3 level parking garage. During the next 6 years, Mater Dei High School, in conjunction with the City of Santa Ana, held several public forums on the school campus with the various neighborhood associations representing this area of Santa Ana, received the signatures of all 19 homeowners acknowledging the parking structure expansion project, and began the private purchase (no 75A-1 Mater Dei High School — TEFRA Hearing November 21, 2017 Page 2 eminent domain involved) of the 19 homes through California Property Specialists, Inc. (CPSI). In addition, the school completed a full Environmental Impact Report and proposed additional modifications to the development agreement, which were unanimously recommended for approval by the Planning Commission. In May 2016, the City Council also voted to approve this project. To date, Mater Dei has purchased 17 of the 19 homes (demolished 15 of them for temporary surface parking use by the Mater Dei High School students for the current school year). Per Mater Dei, they have reached an agreement in principle on the financial terms for the purchase of the final 2 homes and are about to enter escrow shortly on homes #18 and #19. It is Mater Dei's goal and plan to begin construction on the proposed MDHS Parking Structure in May 2018 and open it to student parking for the beginning of the 2019-20 school year in August 2019. The requested City of Santa Ana TEFRA approval will allow the tax exempt loan to Mater Dei in order for Mater Dei to undertake the construction of the parking garage. DISCUSSION The proceeds of the Bonds will be used by the Borrower, for the benefit of the School, pursuant to a plan of financing for: (1) the Project, as defined below, and (2) the payment of costs of issuance and certain interest with respect to the Bonds. The term "Project" means financing all or any portion of the costs of design, construction, installation, improvement, furnishing, and/or equipping of a new approximately 990 space parking structure (the "Parking Facility") on property owned or to be owned by the Borrower for the use and benefit of the School, whose address is 1202 West Edinger Avenue, Santa Ana, California 92707 (the "Campus"). All or a portion of the Parking Facility will be located on the following parcels of land, which form part of or will form a part of the Campus (and which the School anticipates will be consolidated into one or more larger legal parcels): 75A-2 APN Address city State Zip 1 013-224-06 1127 W. Berkeley Street Santa Ana CA 92707 2 013-226-07 1126 W. Occidental Street Santa Ana CA 92707 3 013-226-08 1130 W. Occidental Street Santa Ana CA 92707 4 013-225-07 1131 W. Occidental Street Santa Ana CA 92707 5 013-225-08 1135 W. Occidental Street Santa Ana CA 92707 6 015-220-16 1125 W. Saint Andrew Place Santa Ana CA 92707 7 015-220-15 1129 W. Saint Andrew Place Santa Ana CA 92707 8 015-220-14 1133 W. Saint Andrew Place Santa Ana CA 92707 9 015-220-13 1137 W. Saint Andrew Place Santa Ana CA 92707 10 013-225-13 1126 W. Berkeley Street Santa Ana CA 92707 11 013-225-12 1130 W. Berkeley Street Santa Ana CA 92707 75A-2 Mater Dei High School — TEFRA Hearing November 21, 2017 Page 3 12 013-224-07 1131 W. Berkeley Street Santa Ana CA 92707 13 013-225-11 1134 W. Berkeley Street Santa Ana CA 92707 14 013-225-10 1138 W. Berkeley Street Santa Ana CA 92707 15 013-225-06 1127 W. Occidental Street Santa Ana CA 92707 16 013-226-09 1134 W. Occidental Street Santa Ana CA 92707 17 013-226-10 1138 W. Occidental Street Santa Ana CA 92707 18 013-225-09 1139 W. Occidental Street Santa Ana CA 92707 19 015-220-01 1201 W. Saint Andrew Place Santa Ana CA 92707 The Project and the Parking Facility are to be owned by the Borrower, a corporation solely organized and existing under the laws of the State of California and described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, for the benefit of the School. The Project and the Parking Facility will be operated by or on behalf of the School. The Borrower has requested the assistance of the CMFA. The CMFA, which was established in 2004, was formed to assist local governments and non-profit organizations and businesses with the issuance of taxable and tax exempt bonds with the goal to promote economic, cultural, and community, development. The City is a member of the Authority. However, in order for all or a portion of the Bonds to qualify as tax-exempt bonds, a governmental unit having jurisdiction over the area in which the Project is located must conduct a public hearing (the "TEFRA Hearing") providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the refinancing of the Project. Following the close of the TEFRA Hearing, an "applicable elected representative" of the governmental unit hosting the Project, in this case the City, must provide its approval of the issuance of the Bonds by the Authority for the refinancing of the Project. The bonds to be issued by the Authority are the sole responsibility of the borrower. The City has no financial or legal liability for the project or repayment of the bonds and does not constitute any type of indebtedness for the City. In addition, this TEFRA Hearing and the adoption of the Resolution shall not obligate the City or any department thereof to (i) 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. In general, this action by the City of Santa Ana will not obligate the City or any department thereof to undertake any discretionary action related to the development of the project. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 2 — Youth, Education, Recreation, Objective # 4 (Partner with groups and organizations to promote education, senior services, job training and development for all Santa Ana residents). 75A-3 Mater Dei High School — TEFRA Hearing November 21, 2017 Page 4 FISCAL IMPACT 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 California Municipal Finance Authority (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 that 25 percent of the issuance fee 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 CMFA does not receive issuance fees until a bond issuance closes. The fees the CMFA receives are based upon the par amount of the bonds issued. The Borrower ultimately decides when and if the bonds are actually issued and the final amount of bonds issued. The amount granted to the City is to be determined, but will not exceed $7,833 under the assumption the entire $17 million in bonds are issued. Upon receipt, the funds will be deposited to the Miscellaneous Revenues, Miscellaneous Recoveries Revenue Account (no. 01102002-57010). Rbbert M. Zur Sc de Interim Executive MrActor Community Development Agency Exhibits: 1. Resolution 2. Notice to Applicant APPROVED AS TO FUNDS AND ACCOUNTS: Franc�tierrez �o Executive Director Finance and Management Services Agency 75A-4 EXHIBIT 1 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY REVENUE BONDS (MATER DEI HIGH SCHOOL PROJECT) SERIES 2017A, IN ONE OR MORE SERIES IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $17,000,000, FOR THE PURPOSE OF FINANCING THE DESIGN, CONSTRUCTION AND IMPROVEMENT OF PARKING FACILITIES AND CERTAIN C�Y:_i a17T1 /:V�HHs`l_'i �1I►17:\ 1►T�`Ce]CM :1 s1:7 �1 WHEREAS, pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended (the "Act"), certain public agencies (the "Members") have entered into a Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (as amended to date, the "Agreement") in order to form the California Municipal Finance Authority (the "Authority"), for the purpose of promoting economic, cultural and community development, and in order to exercise any powers common to the Members, including the issuance of bonds, notes or other evidences of indebtedness; WHEREAS, the City of Santa Ana, California (the "City"), by City Council Resolution No. 2008-053 adopted on July 7, 2008, is a Member of the Authority; WHEREAS, The Roman Catholic Bishop of Orange, a corporation solely organized and existing under the laws of the State of California and described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Corporation"), has requested that the Authority participate in the issuance of one or more series of revenue bonds in an aggregate principal amount not to exceed $17,000,000 (the "Bonds") for the benefit of Mater Dei High School (the "School"), for (a) financing all or any portion of the costs of design, construction, installation, improvement, furnishing, and/or equipping of a new approximately 990 space parking structure (the "Parking Facility") on property owned or to be owned by the Borrower, on or adjacent to the School's campus at 1202 W. Edinger Avenue, Santa Ana, California 92707, for the use and benefit of the School, and (b) the payment of costs of issuance and certain interest with respect to the Bonds; WHEREAS, the Parking Facility is to be owned by the Corporation for the benefit of the School, will be operated by or on behalf of the School and will be located within the City; WHEREAS, the Corporation has requested the issuance of the Bonds in order to finance the Project to effect significant public benefits pursuant to the Act; and WHEREAS, 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 a governmental unit having jurisdiction over the area in which the Project is located; WHEREAS, the City Council of the City (flee "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; 75A-5 WHEREAS, 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 147(f) of the Code and the requirements of Section 4 of the Agreement; WHEREAS, 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; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Ana, as follows: Section 1. The foregoing recitals are true and correct. Section 2. 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 a governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f); and, (b) Section 4 of the Agreement. Section 3. The issuance of the Bonds shall be subject to 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 repayment or administration of the Bonds. Section 4. The adoption of this Resolution shall not obligate the City or any department thereof to: (i) provide any financing with respect to 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 with respect to 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 5. The City Manager and applicable Executive Directors are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to cant' out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby. Section 6. This resolution shall take effect immediately upon its adoption. [Remainder of page intentionally left blank] 75A-6 ADOPTED by the City Council of the City of Santa Ana at a regular meeting of the City Council held on the 5th day of December, 2017, by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Clerk APPROVED AS TO FORM: Sonia R. Carvalho City Att�y By: ` Ryan 75A-7 Title: 75A-8 MAYOR Miguel A. Pulido MAYOR PRO TEM Michele Martinez COUNCILMEMBERS P. David Benavides Vicente Sanniento Jose Solorio Sal Tinaiero Juan Villages November 8, 2017 Mr. Patrick Murphy, President Mater Dei High School 1202 W Edinger Avenue Santa Ana, CA 92707 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, California 92702 w .santa-ana.orq Subject: Notice to Applicant Regarding Request for TEFRA Hearing Dear Mr. Murphy, CITY MANAGER Raul Godinez II CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Made D. Huizar This is in response to your request for the City of Santa Ana to conduct a Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing in consideration of the issuance of tax exempt bond financing by the California Municipal Finance Authority ("Authority") on behalf of the Roman Catholic Bishop of Orange for the benefit of Mater Dei High School. The TEFRA Hearing has been placed on our City Council agenda per your request. This TEFRA Hearing is not being considered by City Council as a recommended action per our staff. Instead this item is being considered as an applicant requested action. In addition, this TEFRA Hearing and the adoption of the Resolution shall not obligate the City or any department thereof to (i) 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. In general, this action by the City of Santa Ana will not obligate the City or any department thereof to undertake any discretionary action related to the development of your project. If you have any questions regarding this notice, I may be reached by telephone at (714) 667-2241 or by e- mail atjbrown e.santa-ana.org. Sincerely, Judson Brown Housing Division Manager EXHIBIT 2 SANTA ANA CITY COUNCIL Miguel k Pulido Michele Martinez Vicente Sarmientose olod P. David Benavides Juan Villages Sal Tinajero Mayor Mayor Pro Tem, Ward2 Ward1 N Ward4 Ward Ward moulidoOsanta-ana.om mimartinezfdsanta-ana ora vsarmientolesantaana oro dhenavides0santaana ora 'villeaas(Miantaana ora stinaierofdsanta-ana am 75A-10