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HomeMy WebLinkAbout2010-08-24 - AGENDA REPORTS - RECOVERY ZONE BOND 19307 GVR (2)PUBLIC HEARING DATE: SUBJECT: DEPARTMENT Agenda Item: /CJ CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval Item to be presented by August 24, 2010 &1,11171� - Jason Crawford ISSUANCE OF RECOVERY ZONE FACILITY BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY TO SUNEDISON, LLC FOR A PHOTOVOLTAIC PROJECT AT KOHLS LOCATED AT 19307 GOLDEN VALLEY ROAD City Manager's Office RECOMMENDED ACTION City Council conduct public hearing and adopt resolution approving the issuance of Recovery Zone Facility Bonds by the California Statewide Communities Development Authority. BACKGROUND On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act (Recovery Act) of 2009 which, among other actions, amended the Internal Revenue Code to create a new method of federally subsidized financing available to private borrowers for economic development called Recovery Zone Facility Bonds (RZFBs). States, counties, and large municipalities (population over 100,000) were given a direct allocation of bonds to be used by January 1, 2011, to finance certain qualified economic development purposes for use within a designated "Recovery Zone."'As a result of the direct allocation, the United States Department of Treasury awarded the City of Santa Clarita an allocation of $13,270,000 in Recovery Zone Facility Bonds (RZFBs). At the June 22, 2010, City Council meeting, the City Council awarded that entire amount to Aerospace Dynamics International. ,In addition to the allocation received directly by the City, businesses have the option to apply to the State of California to receive funds for projects in designated Recovery Zones. The funds kdopted: Lslo available from the State include allocations from cities and counties that chose not to participate in this program and voluntarily waived those funds back to the State or those cities and counties that had their allocations deemed waived. These tax-exempt, private activity bonds are economic development bonds to assist local agencies in stimulating economic growth by supporting selected private development projects. The California Statewide Communities Development Authority serves as•the conduit issuer of the bonds for projects that meet the requirements of the Recovery Act and neither the City nor. the Authority is liable or obligated to pay any debt incurred as a result. On April 28. 2009, the City Council unanimously approved the 21 -Point Business Plan for Progress, a broad -reaching economic development stimulus program to strengthen our local economy for both the short- and long-term. The 21 -Point Business Plan for Progress will enhance local business partnerships, encourage quality job creation in the area through business retention, expansion and attraction, bolster retail spending, and attract external dollars to the community. A component of the plan included maximizing the funds available to the City as a result of President Obama's stimulus package and aggressively pursuing opportunities that would maximize job creation. In October 2009, the City Council approved a "Recovery Zone" for the purposes of accessing these funds. The Santa Clarita Recovery Zone was approved to include the same boundaries as the Santa Clarita Enterprise Zone, whereby the goals to reduce poverty and increase employment are similar. The City received a request from the California Statewide Communities Development Authority (the "Authority") to conduct a public hearing as required by the Internal Revenue Code in order for the Authority to issue tax-exempt revenue bonds (the "Bonds") in an aggregate amount not to exceed $2 million on behalf of SunEdison, LLC (the "Borrower"). The Borrower will use the proceeds of the bonds to finance the installation of solar energy facilities at Kohl's, located at 19307 Golden Valley Road. Access to the requested bonds does not affect the City's allocation of $13,270,000, which the City Council allocated to Aerospace Dynamics International at the June 22, 2010, City Council meeting. Rather, the Borrower will apply to the State to receive a portion of the State's allocation. In order for the Authority to issue such Bonds, the City must: 1. Conduct a public hearing allowing members of the public to comment on the proposed Project; and 2. Approve the Authority's issuance of Bonds on behalf of the proposed financing. Although the Authority (not the City) will be the issuer of the tax-exempt revenue bonds for the Project, the financing cannot proceed without the City being a member of the Authority and, as the governmental entity having jurisdiction over the site, approving of the Authority's issuance of indebtedness. The City has been a member of the Authority since July 22, 1993. The Authority is a California joint exercise of powers authority, organized and existing under the laws of the State of California (specifically, California Government Code Section 6500 and following), and is sponsored by the League of California Cities and the California State Association of Counties. Under the California Government Code, cities and counties are authorized to form by agreement a governmental entity that combines the powers of such entities to perform certain governmental functions specifically outlined in the Agreement. With respect to the Authority, over 460 California cities, counties, and special districts have entered into and executed the Agreement to become a member of the Authority. ALTERNATIVE ACTIONS Other action as determined by City Council. FISCAL IMPACT The Borrower, SunEdison, LLC, shall be responsible for the payment of all present and future costs in connection with the issuance of the obligations. The payment of the principal and interest on the obligations shall be solely the responsibility of the Borrower. The obligations shall not constitute a debt or obligation of the Authority or the City. ATTACHMENTS Resolution 8 RESOLUTION 10= A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF RECOVERY ZONE FACILITY REVENUE BONDS FOR THE SUNEDISON PORTFOLIO #2 WHEREAS, the California Statewide Communities Development Authority (the "Authority") is authorized pursuant to the provisions of California Government Code Section 6500 et seq. and the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 (the "Agreement"), among certain local agencies throughout the State of California, including the City of Santa Clarita (the "City"), to issue revenue bonds for the purpose of promoting economic development in the State of California; and WHEREAS, SunEdison LLC or related entities, has requested that the Authority adopt a plan of financing providing for the issuance of recovery zone facility revenue bonds (the "Bonds") in one or more series issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, and at no time to exceed $2,000,000 in outstanding aggregate principal amount, to finance solar facilities located at the following address in the City and generally known as SunEdison Portfolio #2 (the "Project"): 19307 Golden Valley Road, Santa Clarita, California; and WHEREAS, the Bonds or a portion thereof will be "private activity bonds" for purposes of the Internal Revenue Code of 1986 (the "Code"); and WHEREAS, pursuant to Section 147(f) of the Code, prior to their issuance, private activity bonds are required to be approved by the "applicable elected representative" of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice; and WHEREAS, the Project is located within the City boundaries and the members of this City Council (this "City Council") are the applicable elected representatives of the City; and WHEREAS, there has been published, at least 14 days prior to the date hereof, in a newspaper of general circulation within the City, a notice that a public hearing regarding the Bonds would be held on a date specified in such notice; and WHEREAS, such public hearing was conducted on such date, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds; and WHEREAS, the Authority' is also requesting that the City Council approve the issuance of any refunding bonds hereafter issued by the Authority at no time to exceed $2,000,000 for the purpose of refinancing the Bonds which financed the Project (the "Refunding y Bonds"), but only in such cases where federal tax laws would not require additional public hearings, consideration or approval by the City Council; and WHEREAS, it is intended that this resolution shall constitute the approval of the issuance of the Bonds required by Section 147(f) of the Code and Section 9 of the Agreement. NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as follows: SECTION 1. The above recitals are true and correct. SECTION 2. The City Council hereby approves the issuance of the Bonds and the Refunding Bonds by the Authority. It is the purpose and intent of the. City Council that this resolution constitute approval of the Bonds for the purposes of (a) Section 147(f) of the Code and (b) Section 9 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 that 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 approved hereby. SECTION 4. The Clerk of the City Council shall forward a certified copy of this Resolution and a copy of the affidavit of publication of the hearing notice to: Justin Cooper, Esq. Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, California 94105 SECTION 5. This resolution shall take effect immediately upon its passage. SECTION 6. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this day of 2010. MAYOR ATTEST: CITY CLERK 5 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Sarah P. Gorman, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of 2010, by the following vote: AYES: . COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) CERTIFICATION OF CITY COUNCIL RESOLUTION I, , City Clerk of the City of Santa Clarita, do hereby certify that this is a true and correct copy of the original Resolution 10- adopted by the City Council of the City of Santa Clarita, California on , 2010, which is now on file in my office. Witness my hand and seal of the City of Santa Clarita, California, this day of 2010. City Clerk By Deputy City Clerk CITY OF SANTA CLARITA NOTICE OF PUBLIC HEARING REGARDING ISSUANCE OF RECOVERY ZONE FACILITY REVENUE BONDS FOR SUNEDISON PORTFOLIO #2 NOTICE IS HEREBY GIVEN that, at 6:00 p.m., or as soon thereafter as the matter can be heard, on Tuesday, August 24, 2010 in the City Council Chambers, 1st floor, 23920 Valencia Blvd., Santa Clarita, California, the City of Santa Clarita (the "City") will conduct a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986, at which it will hear and consider information concerning a proposed plan of financing providing for the issuance by the California Statewide Communities Development Authority of recovery zone facility revenue bonds in one or more series issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, and at no time to exceed $2,000,000 in outstanding aggregate principal amount, to finance solar facilities (collectively, the "Project") located at the following address in the City: 19307 Golden Valley Road, Santa Clarita, California. The Project will be owned and operated by SunEdison LLC or related entities. Those wishing to comment on the proposed financing and the nature and location of the Project may either appear in person at the public hearing or submit written comments, which must be received by the City prior to the hearing. Written comments should be sent to Santa Clarita City Clerk's Office at 23920 Valencia Blvd., Suite 304, Santa Clarita, CA 91355. Sarah P. Gorman, Esq. City Clerk Dated: August 10, 2010