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HomeMy WebLinkAbout2022-03-22 - AGENDA REPORTS - CANTERBURY VILLAGE TEFRA HEARINGAgenda Item: 13 1. CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARINGS CITY MANAGER APPROVAL: A,1 A11�44_1) DATE: March 22, 2022 SUBJECT: THE CANTERBURY VILLAGE APARTMENTS TAX EQUITY AND FISCAL RESPONSIBILITY ACT (TEFRA) HEARING DEPARTMENT: Administrative Services PRESENTER: Brittany Houston RECOMMENDED ACTION City Council conduct a public hearing and adopt a Tax Equity and Financial Responsibility Act resolution approving the issuance of tax-exempt obligations by the California Municipal Finance Authority in an aggregate principal amount not to exceed $15 million. BACKGROUND The California Municipal Finance Authority (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 by assisting 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. To date, over 350 municipalities, including the City of Santa Clarita (City), have become members of the CMFA. The City received a request from CMFA to conduct a public hearing under and in accordance with Section 147(f) of the Internal Revenue Code, in order for CMFA to issue tax-exempt revenue bonds (Bonds) in an aggregate principal amount not to exceed $15 million on behalf of HumanGood Affordable Housing, a California nonprofit public benefit corporation (the "Sponsor"), on behalf of Canterbury Village LP, a California limited partnership, or another entity created by the Sponsor or an affiliate of the Sponsor for the purpose of owning the project described herein (such limited partnership or other entity being referred to herein as the "Borrower"). The Borrower has requested that the CMFA participate in the issuance of one or more series of revenue bonds in an aggregate principal amount not to exceed $15 million (the "Bonds") to finance the acquisition and rehabilitation of a 64-unit multifamily rental housing facility for low - Page 1 Packet Pg. 155 income seniors (the "Project") located at 23420 Avenida Rotella in Santa Clarita, California. While the Tax Equity and Financial Responsibility Act Hearing is being requested in an amount not to exceed $15 million, it is anticipated that actual bond issuance will only be in the amount of $11.4 million. Approximately $7 million in bond proceeds will provide for the capital improvement throughout the property, including new windows, new energy efficiency LED lighting, new resident kitchen cabinets, countertops, and appliances. Building -wide upgrades to electrical and plumbing systems will also occur. The improvements will extend the useful life of the building. The remaining bond proceeds will cover temporary resident relocation cost, construction loan interest, architectural/engineering and permitting fees, furniture, fixtures, and equipment; developer fee, lender and legal fees, a hard and soft cost contingency; and seller proceeds. Upon completion of this project, affordability covenants will be extended out from the current affordability restrictions. First, the current agreement is approximately 25 years into a 40-year HUD affordability restriction. With recordation of a new HUD use agreement, the affordability of the project for seniors in the Santa Clarita area will extend out an additional 20 years. The Tax -Exempt Bond Regulatory Agreement will also extend out affordability for 55 years, to 2077. Additionally, a new project -based 20-year rental subsidy contract with HUD will be executed, keeping the resident paid portion of the rent at or below 30 percent of resident income. The Bonds would be tax-exempt private activity bonds for purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the Project to be financed is located. The approval and adoption of the resolution authorizing the issuance of the Bonds will not require the City to be financially obligated, liable, or provide any financing for the Project. The City's credit and bond ratings are not at risk by adopting this resolution, and no City revenues are at risk by this bond issuance. In order for the CMFA to issue such Bonds, the City must (1) conduct a public hearing allowing members of the public to comment on the proposed Project and the Bonds, and (2) approve the CMFA's issuance of Bonds on behalf of the proposed financing. Although CMFA, not the City, will be the issuer of the tax-exempt revenue bonds for the Project, the financing cannot proceed without the City, as the governmental entity having jurisdiction over the site, approving the Bonds. For this item, the Borrower selected the CMFA as the financing agency. As a result of the Borrower selecting the CMFA, the City will receive a one-time issuance fee paid by the Borrower and allocated to the City. Participation by the City will not impact the City's appropriations limits or constitute any type of indebtedness by the City. Specifically, approval and adoption of the resolution authorizing the issuance of the Bonds will not require the City to be financially obligated, liable, or provide any financing for any of the cost mentioned above. In addition, the City's credit, bond ratings, and revenues are not at risk whatsoever by adopting this resolution or bond issuance. Once the City holds the required public hearing and adopts the required resolution following the public hearing, no other participation of the City in the actions of the CMFA or in the financing will be required. Page 2 Packet Pg. 156 Approval pursuant to this resolution does not constitute any other approval by any commission or agency of the City with respect to any other City regulatory or other requirements, such as planning approval, permit or other action necessary, in connection with the Project. ALTERNATIVE ACTION 1. City Council not agree to approve the issuance of bonds by the CMFA for the Borrower. 2. Other action as determined by City Council. FISCAL IMPACT The City will receive 25 percent of a one-time issuance fee from the California Municipal Finance Authority, equating to approximately $7,100, which will be deposited to General Fund miscellaneous revenues (100-462101). The actual amount may vary and will be dependent on the actual closing of the Bonds. ATTACHMENTS Notice of Public Hearing Resolution Page 3 Packet Pg. 157 13.a NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that at 6 p.m. on March 22, 2022, or as soon thereafter as practicable, at the regular meeting place of the City Council of the City of Santa Clarita (the "City"), City Council Chambers, 23920 Valencia Boulevard, Santa Clarita, California 91355, a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 will be held with respect to the proposed issuance by the California Municipal Finance Authority (the "Authority") of its revenue bonds in one or more series in an aggregate principal amount not to exceed $15,000,000 (the "Bonds"), including but not limited to revenue bonds issued as part of a plan to: (1) finance and refinance the acquisition and rehabilitation of a 64-unit multifamily rental housing facility for low-income seniors located at 23420 Avenida Rotella, Santa Clarita, California 91355; and (2) pay certain expenses incurred in connection with the issuance of the Bonds. The facilities are to be owned and operated by Canterbury Village LP, a California limited partnership, or another entity created by HumanGood Affordable Housing, a California nonprofit public benefit corporation, or an affiliate thereof (the "Borrower"). The Bonds and the obligation to pay principal thereof and interest thereon and any redemption premium with respect thereto do not constitute indebtedness or an obligation of the City, the Authority, the State of California or any political subdivision thereof, within the meaning of any constitutional or statutory debt limitation, or a charge against the general credit or taxing powers of any of them. The Bonds shall be a limited obligation of the Authority, payable solely from certain revenues duly pledged therefor and generally representing amounts paid by the Borrower. Interested persons wishing to express their views on the issuance of the Bonds or on the nature and location of the facilities proposed to be financed and refinanced may attend the public hearing or, prior to the time of the hearing, submit written comments. Inquiries concerning the Projects may be directed to HumanGood Affordable Housing, 1900 Huntington Drive, Duarte, California 91010, Telephone: (818) 638-4565, Attention: Orest Dolyniuk, Development Director. Those wishing to comment on the sale, execution and delivery of the Bonds or on the proposed nature and description of the Projects and the financing of the Projects with the proceeds of the Bonds may either appear in person at the time and place indicated above or submit written comments, which must be received prior to the public hearing. Written comments should be sent to City of Santa Clarita, 23920 Valencia Boulevard, Suite 120, Santa Clarita, CA 91355, Attention City Clerk. Dated: March 3, 2022 Mary Cusick, MMC City Clerk Publish Date: March 12, 2022 Packet Pg. 158 13.b RESOLUTION NO. 22- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA APPROVING THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $15,000,000 TO FINANCE AND REFINANCE A 64-UNIT MULTIFAMILY HOUSING FACILITY FOR THE BENEFIT OF CANTERBURY VILLAGE LP, A CALIFORNIA LIMITED PARTNERSHIP, OR ANOTHER ENTITY CREATED BY HUMANGOOD AFFORDABLE HOUSING, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION (OR AN AFFILIATE), AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, HumanGood Affordable Housing, a California nonprofit public benefit corporation (the "Sponsor"), on behalf of Canterbury Village LP, a California limited partnership, or another entity created by the Sponsor or an affiliate of the Sponsor for the purpose of owning the project described herein (such limited partnership or other entity being referred to herein as the "Borrower"), has requested that the California Municipal Finance Authority (the "Authority") issue one or more series of revenue bonds in an aggregate principal amount not to exceed $15,000,000 (the "Bonds"), including but not limited to revenue bonds issued as part of a plan to (1) finance and refinance the acquisition and rehabilitation of a 64-unit multifamily rental housing facility for low-income seniors (the "Project") located at 23420 Avenida Rotella in Santa Clarita, California (the "City"), and (2) pay certain expenses in connection with the issuance of the Bonds; WHEREAS, an "applicable elected representative" of a jurisdiction in which the Project is located is required to approve the issuance of the Bonds under Section 147(f) of the Code; WHEREAS, the City Council of the City (the "City Council") is the elected legislative body of the City and is an "applicable elected representative" for purposes of Section 147(f) of the Code; 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 Joint Exercise 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 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, the City Council of the City of Santa Clarita, California, does hereby resolve as follows: SECTION 1. The foregoing recitals are true and correct. Page 1 of 3 Packet Pg. 159 13.b SECTION 2. The City Council hereby approves the issuance of the Bonds by the Authority, including but not limited to Bonds issued as part of a plan to finance and refinance the facilities described herein. 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 Project, 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 located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement. SECTION 3. The officers of the City 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 carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby. SECTION 4. The Bonds and the obligation to pay principal thereof and interest thereon and any redemption premium with respect thereto do not constitute indebtedness or an obligation of the City, the Authority, the State of California, or any political subdivision thereof, within the meaning of any constitutional or statutory debt limitation, or a charge against the general credit or taxing powers of any of them. The Bonds shall be a limited obligation of the Authority, payable solely from certain revenues duly pledged therefor and generally representing amounts paid by the Borrower. SECTION 5. The City Council approval pursuant to this Resolution of the issuance of the Bonds does not constitute any other approval by any commission or agency of the City with respect to any other City regulatory or other requirements in connection with the Project. SECTION 6. The Clerk shall forward a certified copy of this resolution to the Authority in care of its counsel: Ronald E. Lee, Esq. Jones Hall, A Professional Law Corporation 475 Sansome Street, Suite 1700 San Francisco, California 94111 SECTION 7. This resolution shall take effect immediately upon its adoption. PASSED, APPROVED, AND ADOPTED this th day of 2022. ATTEST: CITY CLERK DATE: MAYOR Page 2 of 3 Packet Pg. 160 13.b STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. z CITY OF SANTA CLARITA ) Q w x I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 22- was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the th day of 2022, by the following vote: U Q AYES: COUNCIL,MEMBERS: NOES: COUNCIL,MEMBERS: ABSENT: COUNCIL,MEMBERS: CITY CLERK Page 3 of 3 Packet Pg. 161