HomeMy WebLinkAbout1991-03-26 - AGENDA REPORTS - TAX EXEMPT BOND FINANCING (2)4
NEW BUSINESS
DATE:
March 26, 1991
AGENDA REPORT
City Manager Approval /
Item to be presented Uy:
Andrea.Daroca
SUBJECT: City's cooperation with City of Lancaster to provide tax-exempt
bond financing for multifamily senior citizens project
DEPARTMENT: Finance
BACKGROUND
The city has been asked to participate in a joint financing of a proposed senior
citizen affordable rental project to be constructed in the City of Santa
Clarita. The issue would provide tax-exempt bond financing for 65 units of
multifamily senior citizens housing. The project is located at 22816 Market
Street. The financing would be in conjunction with the City of Lancaster with
Lancaster taking the lead on the project. There would be no potential liability
to the city and only the City of'Lancaster's name would be on the bond issue.
The advantages to the city by jointly. participating with Lancaster in this
project is it will provide over $8MIL tax-exempt bond financing at no cost to
the city. A credit enhancement would be provided by the developers which would
allow mostly institutional purchases-of:the bonds.
Attached is a development agreement which requires that the city and its
advisors review all documents with city costs to be reimbursed through the bond
issue.
RECOMMENDATION
That the City Council approve the attached cooperation agreement allowing the
city's joint participation with the City of Lancaster in a tax-exempt_ financing
for multifamily senior citizens housing.
AD/mc416
Agenda Item:
COOPERATIVE AGREEMENT BETWEEN THE
CITIES OF LANCASTER AND SANTA CLARITA
THIS COOPERATIVE AGREEMENT (the "Agreement") made and entered into
as of March, 1991, by and between the City of Lancaster and the City
of Santa Clarita, both political subdivisions of the State of California
(the "Cities"),
WITNESSETH
WHEREAS, the Cities have determined to cooperate in the issuance
of multi -family housing revenue bonds pursuant to Chapter 7, Part 5,
Division 31 of the Health and Safety Code of the State of California
(commencing with Section 52055) (the "Law"), to make or acquire, directly or
indirectly, loans to finance the construction and or acquisition of
multi -family rental housing units in the Cities, all as provided by law;
NOW THEREFORE, in consideration of the mutual covenants hereafter
provided, the parties hereto agree as follows:
SECTION 1. The terms used in this agreement shall, for purposes
of this Agreement, unless otherwise defined herein, have the meanings
assigned to such terms in the Law.
SECTION I. The .City of Lancaster agrees to issue revenue bonds
therefore pursuant to the Law as soon as practicable.
SECTION 3. The Cities agree hereby to cooperate with each other
in the exercise jointly or otherwise of their powers for the purpose of
financing various multi -family projects located in both cities pursuant to
Law by. agreeing that the City of Lancaster shall issue said multi -family
revenue bonds and shall administer said rental programs as required by law.
SECTION 4. The City of Lancaster agrees to pay any and all
reasonable administrative, legal and other costs and expenses of the City of
Santa Clarita incurred by the City of Santa Clarita in its performance of
this Agreement and in connection with revenue bonds issued for the purpose
of financing multi -family projects located in the Cities. All such costs
and expenses shall not .exceed $10.000. Such costs and expenses shall be
reimbursable to the City of Lancaster from bond proceeds to the extent
permitted by law. The City of Lancaster will advise the. City of Santa
Clarita on a regular basis of the processing 'of the financing. The City of
Lancaster agrees to consult with the City of Santa Clarita regarding the
financial structure of the transaction and will include the staff of the
City of Santa Clarita on the distribution of all legaland financial
documents pertaining to the financing.
SECTION 5. The City of Lancaster agrees to protect, defend,
indemnify and save harmless the City of Santa Clarita, its officers, agents
and employees, from and against any and all claims, damages, losses, fines,
penalties and liabilities of judgments, including attorneys' fees, resulting
from arising out of or related to any of the activities of the City of
Lancaster pursuant to this Agreement.
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SECTION 6. The Cities agree to undertake such further proceedings
or actions as may be necessary in order to carry out the terms and intent of
the Agreement.
SECTION 7. This Agreement may be amended by one or more
supplemental agreements executed by the Cities at any time, except that no
such amendment or supplement shall be made which shall adversely affect the
rights of the holders of any bonds issued by the City of Lancaster pursuant
to the Law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and attested by their proper officers thereunto duly
authorized, and their official seals to be hereto affixed all as of the day
first above written.
CITY OF SANTA CLARITA
ATTEST
APPROVED AS TO FORM:
CITY ATTORNEY
By
CITY OF LANCASTER
ATTEST
APPROVED AS TO FORM:
CITY ATTORNEY