HomeMy WebLinkAboutFive Points Springs LTD - 1989-08-21 (2) q
18019-2E JHHW:WHM:pch 07/24/89 • M7995
DEPOSIT AND ESCROW AGREEMENT
This Deposit and Escrow Agreement (the "Agreement"), by and between the City
of Huntington Beach (the "Public Agency"), and the entity listed as the developer in
Schedule A attached hereto and by this reference incorporated herein (the "Developer"),
WITNESSETH
WHEREAS, the Developer has requested that the Public Agency obtain an
allocation from the State of California to issue multifamily housing revenue bonds (the
"Bonds"), the interest on which would be excluded from gross income for federal income
tax purposes to assist in the financing of the project described in Schedule A (the
"Project"); and
WHEREAS, the Bonds are characterized as "Private Activity Bonds" under
applicable sections of and are subject to the volume limitations contained in Section 146
of the Internal Revenue Code of 1986, as amended (the "Tax Code"); and
WHEREAS, pursuant to Section 8869.80, et seq., of the California Government
Code (the "Code"), the California Debt Limit Allocation Committee ("CDLAC") has been
allocated the entire amount specified by Section 146(d) of the Tax Code for the State of
California (the "Volume Limit") for 1989; and
WHEREAS, CDLAC, acting in concert with the Mortgage Bond and Tax Credit
Allocation Committee of the State of California ("MBTCAC") has established procedures
to be followed by local agencies in California to obtain a portion of the Volume Limit for
specific financings; and
WHEREAS, such procedures require that, in order to obtain a portion of the
Volume Limit for the financing for the benefit of the Developer described in Schedule A,
in addition to other requirements, the city manager or county administrative officer, as
applicable, must collect from the Developer and hold on deposit in an escrow account
specifically established for such purpose an amount equal to 1% of the principal amount
of Bonds expected to be issued; and
WHEREAS, the Public Agency and the Developer desire to set forth the terms and
conditions under which said amount will be deposited and held in escrow.
NOW, THEREFORE in consideration of the premises and for other consideration
the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby
agree as follows:
Section 1. Deposit and Escrow Account; Initial Application Fee. By its
execution of this Agreement, the Public Agency acknowledges receipt of the deposit from
the Developer, in the form of cash, in an amount equal to 1% of the principal amount of
Bonds shown in Schedule A (the "Deposit"), along with a cashier's check in the amount of
$300 made out to CDLAC (the "Initial Application Fee"). The Deposit shall be held and
drawn upon by the Public Agency solely in accordance with this Agreement, the Code,
the procedures of CDLAC and MBTCAC and the laws of the State of California. The
Initial Application Fee shall be forwarded to CDLAC along with the application of the
Public Agency to CDLAC for a portion of the Volume Limit for the Project, and shall be
nonrefundable in any event.
Section 2. Disposition of the Deposit. The Deposit shall be disposed of as
follows:
(A) If the Project fails to receive any portion of the Volume Limit by
January 1, 1990, the Public Agency shall, promptly upon receiving confirmation
thereof and written permission to release the Deposit from CDLAC, return the
Deposit to the Developer.
(B) If the Project receives a portion of the Volume Limit by January 1,
1990, in an amount less than the principal amount of Bonds requested, a pro rata
portion of the Deposit promptly may be, upon receipt of written notification thereof
from CDLAC and written permission to release the Deposit, (i) reduced by the
Developer and the balance of the Deposit shall be retained by the Public Agency,
subject to paragraph 2(C) below, or (ii) at the Developer's election, it may petition
CDLAC for written permission for the Public Agency to return the Deposit in full
to the Developer. If such permission is granted by CDLAC, the Public Agency shall
withdraw its application to CDLAC. If the Project receives a portion of the
Volume Limit in an amount equal to the principal amount of Bonds requested, the
entire Deposit shall be retained by the Public Agency, subject to paragraph 2(C)
below.
(C) Any portion of the Deposit retained by the Public Agency pursuant to
paragraph 2(B) shall be disposed of as follows:
(i) If the Bonds are issued by the Public Agency, the deposit may
be reduced by the Developer upon written permission of CDLAC in an
amount equal to the product of(1) the amount of the Deposit, times (2) the
ratio between the amount of Bonds issued divided by the amount of Volume
Limit received. The balance of the Deposit shall be drawn upon in full by
the Public Agency and the proceeds of such draw shall be disposed of in
accordance with the rules promulgated by CDLAC as they pertain to
proceeds of the Deposit.
GO If no Bonds are issued prior to the expiration of the Volume
Limit allocation, the Deposit shall be drawn upon in full by the Public
Agency and the proceeds of such draw shall be disposed of in accordance
with the rules promulgated by CDLAC as they pertain to proceeds of the
Deposit.
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F
(iii) Notwithstanding the above, all or a portion of the Deposit
which otherwise would be drawn upon by the Public Agency under
subparagraph (i) or (ii) above may be released if the Public Agency receives
written notification or confirmation from CDLAC that such release may be
made without liability on the part of the Public Agency.
(D) The Public Agency shall not be responsible to the Developer for any
interest earned on the Deposit while held under this Agreement.
Section 3. Volume Limit. The Developer understands that if the Project
receives a portion of the Volume Limit, such allocation will be subject to the Code and
any rules promulgated by MBTCAC and/or CDLAC pertaining to the allocation of the
Volume Limit. The Developer further understands that any Volume Limit allocated to
the Project by CDLAC will expire on a certain date, and if Bonds have not been issued by
such expiration date the Deposit will be drawn upon by the Public Agency as provided in
paragraphs 2(B) and (C) above.
Section 4. Issuance of Bonds. The Developer understands that neither the
execution of this Agreement nor the acceptance of the Deposit by the Public Agency and
application to CDLAC for an allocation of the Volume Limit for the Project by the Public
Agency, in any way obligates the Public Agency to issue the Bonds, said issuance being
expressly contingent upon the negotiation and approval by the Public Agency of
documentation for the financing acceptable to it in its sole discretion. The Public Agency
intends to cooperate with the Developer in issuing the Bonds, but is in no way obligated
to effect said issuance on terms other than as are fully acceptable to the Public Agency.
Section 5. Public Agency Not Liable. Notwithstanding any breach of the terms
of this Agreement by the Public Agency or the occurrence of any other event, in no event
shall the Public Agency be liable to the Developer hereunder for any amount in excess of
that portion of the Deposit to be released to or reduced by the Developer under the terms
of Section 2 hereof.
Section 6. No Estoppel. This Agreement shall not create any estoppel of the
Developer with respect to any claim or right which the Developer may have against
CDLAC or MBTCAC with respect to any release or reduction of the Deposit.
Section 7. Assignment. The Developer shall have no right to assign this
Agreement or the benefits hereof to any other entity. Subject to the provisions of the
Code and any regulations of CDLAC or MBTCAC, the Public Agency may assign this
Agreement to another public agency qualified to issue the Bonds.
Section 8. Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signatures thereto were upon the same instrument.
-3-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth of their signatures below.
CITY OF HUNTINGTON BEACH
(the "Public Agency")
Date of Execution and Receipt of the By:
Deposit by the Public Agency: City Manager
August 21 , 1989
FIVE POINTS SPRINGS, LTD., a California
limited partnership
(the "Developer")
Date of Execution by the Developer: By: az-"k �r
August 25 , 1989 Gen, Partner
P 4-
Approved as to Form:
�S\
City Attor y(,,,A--
-4—
SCHEDULE A
Developer (insert exact legal name of the Five Points Springs, Ltd., a California
developer): limited partnership
Project (insert project description including name: Fowler Place Apartments
name and location, number of units)
# of units: 148
Principal Amount of Bonds Requested: $10,000,000
A-1
i
CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
August 29, 1989
Ernest F. Thompson
President/CEO
Beach Savings Bank
18020 Brookhurst Street
Fountain Valley, CA 92708
Enclosed is an excecuted copy of the Deposit & Escrow Agreement
between the City of Huntington Beach and Five Points Springs Ltd.
which was approved by the City Council on August 21 , 1989.
Connie Brockway, CMC
City Clerk
CB:bt
Enc.
(Telephone: 714-536-5227)
REQUES-WOR CITY COUNCILOCTION
RH 89-73
Date AUGUST 21, 1989
Submitted to: HONORABLE MAYOR AND CITY COUNCIL MEMBERS APPROVED BY CITY COUNCIL ----
c _ s
Submitted by: PAUL E. COOK, CITY ADMI 19NISTRATOR '
g: �. h
Prepared by: DOUGLAS N. LA BELLE, DEPUTY CITY ADMINIST I CITY .E „�c�im
Subject: INDUCEMENT RESOLUTION; FIVE POINTS SPRING, LTD. o
r
Consistent with Council Policy? [g] Yes [ ] New Policy or Exception Te 45.
Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments:
STATEMENT OF ISSUE:
The purchasor of the elderly housing project on Florida Street (previously destroyed
by fire) has requested the City's consideration in the sale of bonds to finance the
construction of the project.
RECOMMEENDATION:
Approve and authorize the City Clerk to execute the attached "Inducement Resolution"
stating the City's intention to sell bonds in an amount not to exceed Ten Million
Dollars for the construction of the Five Points Spring, Ltd. project located at the
southwest corner of Main and Florida Streets, and approve the Deposit and Escrow
Agreement between the City and the developer.
ANALYSIS:
The approved 148 unit congregate care facility located at the southwest corner of
Main and Florida has been purchased by a partnership known as Five Points Spring,
Ltd. . This firm has requested the consideration of the City in the sale of bonds
to finance the construction of the project (see letter attached) .
The first step in the provision of tax exempt financing for a multi-family rental
project is the adoption of an "Inducement Resolution". While this resolution is
not a committment to sell bonds, it is required by the Tax Code and marks the point
in time after which project costs are financable from bond proceeds.
Also required prior to the financing of such a project with bonds, is the receipt
of an allocation for the bonds from the State Treasurer's Office. Before the
Treasurer will consider an application for an allocation, it must be shown that the
developer has posted with the public agency a deposit equal to one percent of the
proposed financing plus a three hundred dollar ($300) application fee. The attached
Deposit and Escrow Agreement accomplishes the posting of these fees.
If financing is provided, twenty percent of the project's units must be reserved
for lower income households.
Actual sale of bonds will be subject to a subsequent public hearing and approval
by the City Council.
Plo 5/85
� s
a A
RH 89-73
Aug. 21, 1989
Page 2
ALTERNATIVES:
Do not approve the Inducement Resolution. This will pre-empt provision of tax
exempt financing for the project.
FUNDING SOURCE:
Deposit and application fees .provided by developer. If bonds are sold, City will
collect the usual one-half of one percent issuance fee at the closing of the
financing.
ATTACHMENT:
1. Inducement Resolution
2. Letter
3. Deposit and Escrow Agreement
PEC/DLB/SVK:kjl
RESOLUTION NO. 6059
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH AUTHORIZING THE ISSUANCE OF REVENUE BONDS
FOR THE PURPOSE OF PROVIDING FINANCING FOR A MULTIFAMILY
RENTAL HOUSING DEVELOPMENT (FIVE POINTS SPRINGS) PROJECT
WHEREAS, the City of Huntington Beach (the "City" ) is
authorized by Chapter 7 (commencing with Section 52075) of Part 5 of
Division 31 of the Health and Safety Code of the State of California ,
as amended (the "Act" ) , to issue and sell revenue bonds for the
purpose of providing financing for the development of multifamily
housing facilities located within the City by private developers ; and
Five Points Springs , Ltd. , a California limited partnership
(the "Developer" ) , has applied to the City to issue and sell revenue
bonds for the purpose of providing financing for the acquisition of
land and construction thereon of an approximately 148-unit
multifamily rental housing development and related auxiliary
facilities to be located within the City on the southwest corner of
Main and Florida and more commonly known as 18660 Main Street ,
Huntington Beach, California (the "Project" ) ; and
The City wishes to induce the Developer to acquire and
construct the Project and, in particular, to do so at such location;.
and
It is in the public interest , for the public benefit and in
furtherance of the public purposes of the City that the City
authorize revenue bonds for the aforesaid purposes ;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Huntington Beach, as follows : K
Section 1 . Authorization of Bonds . The City Council hereby
authorizes the issuance and sale of bonds (the "Bonds" ) of the City
- 1 -
0
pursuant to the Act in a principal amount of not to exceed
$10 , 000, 000 for the purpose of providing construction and permanent
financing to the Developer, its successors and assigns , for the
acquisition, construction and development of the Project .
Section 2 . Terms of Bonds . The issuance and sale of the
Bonds shall be upon such terms and conditions as may be mutually
agreed upon by the City, the Developer and the purchaser of the Bonds
and subject to completion of proceedings for the issuance, sale and
delivery of the Bonds by the City. The issuance of the Bonds shall
be subject to final approval and authorization by the City Council ,
and nothing in this resolution is intended or shall be construed to
commit the City Council to giving such final approval and
---, authorization.
t
i Section 3 . Use of Bond Proceeds . The proceeds of the Bonds
shall include such related and necessary issuance expenses ,
administrative costs , debt service reserves and interest payments as
may be required successfully to accomplish the financing of the
Project .
Section 4 . Inducement . The City Council hereby finds that
the issuance of the Bonds is a substantial inducement to the
Developer to acquire, construct and develop the Project and that the
Project will further the public purposes of the City.
Section 5 . Payment of Costs . The Developer shall be
responsible for the payment of all costs in connection with the
issuance of the Bonds , including but -not limited to printing of any
! official statement , rating agency costs , bond counsel fees and
- 2 -
6059
expenses , underwriting discount and costs, trustee fees and expenses ,
City fees and the cost of printing the Bonds .
Section 6 . Effective Date . This Resolution shall take effect
from and after the date of its passage and adoption.
PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof , held on the .2lst day of
August , 1989 .
Mayor ;2
ATTEST:
City Clerk
1
d
APPROVED AS TO CONTENT: APPROVED AS TO FORM:
City Administrator City Attor y p,-, b l
PPROVED, INITIATING DEPARTMENT: 66 8
Di for of Economic
Development
i
_ 3 _ 6059
Res. No. 6059
STATE OF CALIFORNIA
i COUNTY OF ORANGE ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City
Clerk of the City of Huntington Beach, and ex-officio Clerk of the
City Council of said City, do hereby certify that the whole number of
members of the City -Council of the City of Huntington Beach is seven;
that the foregoing resolution was passed and adopted by the affirmative
vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on the 21st day
of August 19 89 by the following vote:
AYES: Councilmembers:
Green, Winchell , Bannister, Mays, Silva
NOES: Councilmembers:
MacAllister
ABSENT: Councilmembers:
None
NOT VOTING: Erskine
City Clerk *anexL-o ,c er
of the City Council of the City
of Huntington Beach, California
BEACHSMNGSBA K
RECEIVED
July 14 , 1989
J U L 131989
DEPARTMENT OF
ECONOMIC DEVELOPMENT
Mr. Stephen Kohler
Principal Redevelopment Specialist
City of Huntington Beach
2000 Main Street
Huntington Beach, California 92648
Dear Mr. Kohler:
By this letter we are requesting an inducement resolution
for an approximately 148-unit multi-family rental housing
development and related auxiliary facilities located on the
southwest corner of Main and Florida in the City of
Huntington Beach and more commonly known as 18660 Main
Street, Huntington Beach, California, in the amount of
$10, 000, 000. The inducement resolution is to be issued in
the name of Five Points Springs, Ltd.
We would appreciate your efforts in scheduling this request
for the August 7th City Council meeting. Please call if you
have any questions. Thank you very much.
Sincerel ,
Ernest F. Thompson
President/CEO
EFT:kt
18020 Brookhurst • Fountain Valley, California 92708
�' (714) 964-6636 9 (800) 232-9200
REQUEA FOR CITY COUNCIPACTION 89-30
April 3, 1989
Date
Submitted to: Honorable Mayor and City Council Members
Submitted by: Paul E. Cook, City Administrator
XRK
Prepared by:
Douglas N. La Belle, Deputy City Administrator/Ec
Subject: INDUCEMENT RESOLUTION; BEACH FRONT CONSTRUCTION;
FIVE POINTS PROJECT
Consistent with Council Policy? � Yes New Policy or Exception
Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions, Attachments:
In-a
STATEMENT OF ISSUE:
Beach Front Construction has requested the provision of bond financing for a proposed
elderly housing project. The attached "Inducement" resolution is the first official
action in this process.
RECOMMENDATION:
Approve and authorize the Clerk to execute the attached resolution authorizing the
issuance of bonds for an elderly housing project at Florida and Main Streets in an
amount not-to-exceed twenty-five million dollars ($25,000,000).
ANALYSIS:
This project site was previously approved for the construction of 148 elderly units by
Conditional Use Permit No. 84-31 and was under construction at the time of its
destruction by suspected arson. Beach Front Construction has secured an option for the
purchase of the property in "As Is" condition and has requested approval of the attached
resolution for the provision of revenue bonds for the construction and long term
financing of the project. The firm is planning to build the project as previously
approved.
It is important to note that the adoption of the attached resolution is only the first
official action toward the issuance of bonds and will provide the opportunity for the
City and developer to analyze the financial feasibility of the project. Any subsequent
bond issue would be subject to public hearing before and approval by the City Council.
Also, the federal tax code will require that twenty (20) percent of the units in the
project be made affordable to lower income households. Of these units, one-half (or
ten percent of the project) must be occupied by very low income households (at or
below 50 percent of median income) and these very low income households must pay no
more than thirty (30) percent of their income for rent.
3
Plo 5/85
RH 89-30
April 3, 1989
Page Two
Lastly, the bonds, if issued, are not an obligation of the City but are secured by
revenues of the project and a Letter of Credit from a major financial institution
without recourse to City funds.
FUNDING SOURCE:
All costs are paid from bond proceeds or directly by the developer. One half of one
percent City issuance fee will be assessed and used for affordable housing programs of
the City.
ALTERNATIVE ACTION:
Do not approve the resolution.
ATTACHMENTS:
1. Resolution.
2. Letter from Beach Front Construction.
3. Location Map.
PEC/DLB/SVK:sar
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• •
BEACH FRONT CONSTRUCTION
210 Adams, Unit A • Huntington Beach, CA 92648 • (714)960-1220 • License B-480723
March 16, 1989
Th City of Huntington Beach
Redevelopment Department
2000 Main Street
41r,tington Beach, Ca. 92648
ATTENTION: Stephen Kohler
Dear Mr. Kohler,
Regarding the Five Points Court land parcel, we pmpose the following:
This project would be a full-service senior project of 148 units, as per Conditional Use
Permit #i84-31; with a unit mix consisting of 143 - 1 tr in:xm apar•trrients and 5 - 2 bedr>xin
apartments. Since our aim would bp. in the dirvcticei (;t ,:n;;l>>..iate care, facilities for U-P,
sevices below would be incltxted in our plans*
- 3 full meals a day
- 24 hour snack bar
- daily mail and maid services
- daily transportation
- daily planned activities
- full security, smke detector and fire sprinkler systems
- underground parking
- balconies
- beauty salon and barber shop
- game roan
- billiard mom
- all on site parking and landscaping
As you can see, this project will be quite comprehensive to the needs of today's Seniors.
We hope this will provide you with the neccesary informnation for your narrative to the
City.
A
,
rey
RESOLUTION NO. 6013
j RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH AUTHORIZING THE ISSUANCE OF
REVENUE BONDS FOR THE PURPOSE OF PROVIDING
FINANCING FOR A MULTIFAMILY RENTAL HOUSING
DEVELOPMENT (BEACHFRONT DEVELOPMENT PROJECT)
WHEREAS, the City of Huntington Beach (the "City" ) is
authorized by Chapter 7 (commencing with Section 52075) of Part
5 of Division 31 of the Health and Safety Code of the State of
California , as amended (the "Act" ) , to issue and sell revenue
bonds for the purpose of providing financing for the development
of multifamily rental housing facilities located within the City
by private developers ; and
Beachfront Development , a California partnership (the
"Developer" ) , has applied to the City to issue and sell revenue
bonds for the purpose of providing financing for the acquisition
of land and construction thereon of multifamily rental housing
development to be located within the City at 18660 Main Street
( the "Project" ) ; and
The City wishes to induce the Developer to acquire and
construct the Project and, in particular , to do so at such
location; and
It is in the public interest , for the public benefit and
in furtherance of the public purposes of the City that the City
authorize revenue bonds for the aforesaid purposes ;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Huntington Beach, as follows :
Section 1 . Authorization of Bonds . The City Council
hereby authorizes the issuance and sale of bonds (the "Bonds" )
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of the City pursuant to the Act in a principal amount of not to
exceed twenty-five million dollars ($25 million) for the purpose
of providing construction and permanent financing to the
Developer, its successors and assigns , for the acquisition,
construction and development of the Project .
Section 2 . Terms of Bonds . The issuance and sale of the
Bonds shall be upon such terms and conditions as may be mutually
agreed upon by the City, the Developer and the purchaser of the
Bonds and subject to completion of proceedings for the issuance,
sale and delivery of the Bonds by the City.
Section 3 . Use of Bond Proceeds . The proceeds of the
Bonds shall include such related and necessary issuance
t. expenses , administrative costs , debt service reserves and
s
interest payments as may be required successfully to accomplish
the financing of the Project .
Section 4 . Inducement . The City Council finds that the
issuance of the Bonds is a substantial inducement to the
Developer to acquire, construct and develop the Project and that
the Project will further the public purposes of the City.
Section 5 . Payment of Costs . The Developer shall be
responsible for the payment of all costs in connection with the
issuance of the Bonds , including but not limited to printing of
any official statement , rating agency costs , bond counsel fees
and expenses , underwriting discount and costs , trustee fees and
expenses, and the cost of printing the Bonds .
I
Section 6 . Bond Counsel . The law firm of Jones Hall
Hill & White, A Professional Law Corporation, is hereby named as
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6013
bond counsel to the City for the Bonds , according to the terms
and condition of the Bond Counsel Agreement which shall be on
file with the City Clerk prior to Council action hereon,
approved by the City Attorney and which shall provide that the
fees and expenses of bond counsel in connection with the
issuance of the Bonds are to be paid solely from the proceeds of
the Bonds or directly by the Developer .
Section 7 . Effective Date . This Resolution shall take
effect from and after the date of its passage and adoption .
PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on
the 3rd day of Apri 1 1989 .
c Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk 1Y-5-9 City Attorney 3_Z .} _�f►
REVIEWED ND APPROVED : IN �IATEID AND A --PR VED :
_ l ;X
Deput City Administrator City Administrator
i
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6013
No, 6013
STATE OF CALIFORNIA )
COUNTY Of ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I , CONNIE BROCKWAY, the duly appointed, qualified City
Clerk of the City of Huntington Beach, and ex-officio Clerk of the
City Council of said City, do hereby certify that the whole number of
members of the City Council of the City of Huntington Beach is seven;
that the foregoing resolution was passed and adopted by the affirmative
vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on the 3rd day
of April 19 89 , by the following vote:
AYES : Councilmembers:
MacAllister, Green , Winchell , Bannister Mays , Silva
NOES: Councilmembers :
None
ABSENT: Councilmembers:
Erskine (out of room)
City Clerk and ex-officio Uerk
of the City Council of the City
of Huntington Beach, California
I
1
CITY OF HUNTINGTON BEACH CA 89-33
COUNCIL ADMINISTRATOR COMMUNICATION
HUNTINGTON BEACH
C
To Honorable Mayor and From Paul E. Cook
City Council Members City Administrator
Subject BACKGROUND PAPER; Date March 29, 1989
REVENUE BONDS
On the City Council's agenda for Monday, April 3, 1989 is an "Inducement Resolution" for
an elderly project located in the Five Points area (Consent Calendar Item E-13). In
preparation for consideration of this item, attached please find a background paper
regarding revenue bonds as prepared by staff.
We hope this information will be of assistance to the Council in preparing for the April 3
Agenda. If you should have any questions, please do not hesitate to contact us.
PEC/DLB/SVK:sar ,,
Attachment
4715r
ATTACHMENT 3
FACT SHEET
MULTI-FAMILY INDUSTRIAL DEVELOPMENT BONDS
STEP 1. INDUCEMENT RESOLUTION: As with nearly all types of tax-exempt
financings, the initial step is the adoption by the local legislative body of an inducement
resolution. This resolution states the jurisdiction's intention to issue tax-exempt
securities, sets a not to exceed amount for the issue, and is a procedural requirement
established by law. It is important to note that the adoption of an inducement resolution
constitutes no commitment to actuallv issue bonds. However, the adoption of this
resolution is important in that it marks the point in time after which costs incurred are
financable from bond proceeds. This may be a key step if the developer has an open
escrow for the acquisition of land which cannot close until such inducement resolution is
adopted. Generally, staff tries to assure that the development which will benefit from
the tax-exempt financing has been approved or is recommended for approval regarding
general plan, zoning, or other entitlements prior to forwarding an inducement resolution
to the City Council for its consideration.
STEP 2. TEFRA HEARING: Also as a requirement of Federal law for all financings
categorized as IDB's, everything except single-family mortgage revenue bonds), it is
necessary for the local legislative body to conduct a puhlic hearing. This is a procedural
requirement of the internal Revenue Service Code Section 103(k). Again, no commitment
on the part of the local jurisdiction is created through the conduct of this hearing.
However, it is important since the tax-exempt securities cannot be issued until this is
complete. On the close of the TEFRA hearing, it may be necessary for the City Council
to adopt a resolution certifying that a public hearing was conducted. Minutes of this
public hearing are incorporated into the financing transcript and the hearing is usually
held in conjunction with the legislative body's approval of the financing documents.
STEP 3. FINANCING DOCUMENTS PREPARED: Staff, underwriter and bond counsel
prepare documents and secure a rating from a nationally-recognized rating agency. The
developer secures loan approval from a bank or savings and loan that will provide a Letter
of Credit or other "credit enhancement device" that will pay bond holders if the developer
defaults. This credit enhancement device assures that there is no long-term financial
liability on the part of the issuing jurisdiction.
STEP 4. FINANCING DOCUMENTS APPROVED: While each type of financing and each
issue has a unique set of documents, most important among these is the adoption of a
resolution authorizinz the Movor, Citv Administrator and Clerk to execute the financing
documents as necessary and appropriate. Usually included within this authority is the
"purchase contract" between the City and the underwriter which binds the underwriter to
purchase the securities at a specific time and at a specific interest rate. Both the
underwriter and City are bound upon execution of this document by the City
Administrator.
STEPS. BONDS SOLD
0581h
Recording Requested by:
When Recorded Return to and
Mail Tax Statements to:
GRANT DEED
For a valuable consideration receipt of which is hereby acknowledged,
The HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body,
corporate and politic,of the State of California,herein called"Grantor,"acting to carry
out the Redevelopment Plan, herein called"Redevelopment Plan"for the Redevelopment
Project for the Main-Pier Project Area, herein called"Project,"under the Community
Redevelopment Law of California,hereby grants to CALIFORNIA RESORTS/HASEKO
ASSOCIATES, a joint venture,herein called"Grantee,"the certain real property located
in the City of Huntington Beach, County of Orange, hereinafter referred to as"Property,"
described in Exhibit A attached hereto and incorporated herein.
1. Said Property is conveyed in accordance with and subject to the
Redevelopment Plan which was approved and adopted by Ordinance No. 2578 of the City
Council of the City of Huntington Beach and amended by Ordinance No. 2634, and a
Second Amended and Restated Disposition and Development Agreement entered into
between Grantor and Grantee dated August 26, 1988, (the"Agreement"), a copy of which
is on file with the Grantor at its offices as a public record and which is incorporated
herein by reference. Any amendments to the Redevelopment Plan which changes the uses
or development permitted on the Property,or otherwise change any of the restrictions or
controls that apply to the Property, shall require the written consent of Grantee.
2. The Grantee shall devote the Property only to the development
permitted and the uses specified in the applicable provisions of the Redevelopment Plan
for the Project and this Grant Deed, whichever document is more restrictive.
3. The Property is conveyed to Grantee for consideration determined in
accordance with the uses permitted. Therefore, Grantee hereby covenants and agrees for
itself, its successors, its assigns, and every successor in interest to that Property that the
Grantee, such successors and such assigns, shall develop, maintain, and use the Property
only as follows:
(a) Grantee shall develop the Property as required by the Agreement.
(b) Grantee shall not use or suffer the Property to be used in violation of
Conditional Use Permit No. 88-7, Coastal Development Permit No. 88-3, and Tentative
Tract Map No. 13478, as such permits now exist or may hereafter be amended.
Page 1 of 6
• •
(c) Grantee shall maintain the improvements on the Property and shall
keep the Property free from any accumulation of debris or waste materials. Grantee shall
also maintain the required landscaping in a healthy condition.
If, at any time, Grantee fails to maintain the said landscaping, and
said condition is not corrected after expiration of fifteen(15)days from the date of
written notice from the Grantor, either the Grantor, or the City may perform the
necessary maintenance and Grantee shall pay such costs as are reasonably incurred for
such maintenance.
4. Prior to recordation of a Certificate of Completion issued by the
Grantor for the improvements to be constructed on the Property, in accordance with
Section 415 of the Agreement, Grantee shall not make any sale, transfer, conveyance, or
assignment of the Property or any part thereof or any interest therein except in
accordance with Section 107 of the Agreement. In addition,prior to recordation of such
Certificate of Completion, Grantor shall have the right,but not the obligation, to
purchase from Grantee certain real property defined in the Agreement, including the
Property, upon the terms, subject to the conditions, and upon payment of the
consideration as set forth in Section 611 of the Agreement.
5. The Grantee agrees for itself and any successor in interest not to
discriminate upon the basis of race, color, creed,or national origin in the sale, lease,or
rental or in the use or occupancy of the Property hereby conveyed or any part thereof.
Grantee covenants by and for itself, its successors, and assigns, and all persons claiming
under or through them that there shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, national origin or ancestry in
the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property,
nor shall the Grantee itself or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees,
or vendees in the Property. The foregoing covenants shall run with the land.
6. No violation or breach of the covenants, conditions,restrictions,
provisions or limitations contained in this Grant Deed shall defeat or render invalid or in
any way impair the lien or charge of any mortgage or deed of trust or security interest
permitted by paragraph 4 of this Grant Deed and Section 107 of the Agreement;provided,
however, that any subsequent owner of the Property shall be bound by such remaining
covenants, conditions,restrictions, limitations, and provisions, whether such owner's title
was acquired by foreclosure,deed in lieu of foreclosure, trustee's sale or otherwise.
7. All covenants contained in this Grant Deed shall be covenants running
with the land. The covenants contained in the Agreement and in paragraph 4 herein and
Grantee's obligation to develop the improvements on the Property as referenced in
paragraph 3 (a)of this Grant Deed shall terminate and shall become null and void upon
recordation of a Certificate of Completion issued by Grantor for the"Separate
Development Parcel"which includes the Property, as required in accordance with Section
415 of the Agreement. Grantor's warranties and representations in paragraph 2 and
Grantee's covenants in paragraph 2, 3 (a), and 3 (b), regarding the permitted uses and
maintenance of landscaping on the Property shall remain in effect until December 31,
2018, and shall terminate and be of no further force or effect at the expiration of said
period. Every covenant against discrimination contained in paragraph 5 of this Grant
Deed shall remain in effect in perpetuity.
Page 2 of 6
8. All covenants without regard to technical classification or designation
shall be binding for the benefit of the Grantor, and such covenants shall run in favor of
the Grantor for the entire period during which such covenants shall be in force and effect,
without regard to whether the Grantor is or remains an owner of land or interest therein
to which such covenants relate. The Grantor, in the event of any breach of such
covenants, shall have the right to exercise all the rights and remedies and to maintain any
actions at law or suits in equity or other property proceedings to enforce the curing of
such breach.
9. Both before and after recordation of a Certificate of Completion,both
Grantor, its successors and Grantee in and to all or any part of the fee title to the
Property shall have the right to consent and agree to changes in,or to eliminate in whole
or in part, any of the covenants, easements or restrictions contained in this Grant Deed
without the consent of any tenant,lessee, easement holder,license, mortgages, trustee,
beneficiary under a deed of trust or any other person or entity having any interest less
than a fee in the Property. The covenants contained in this Grant, without regard to
technical classification shall not benefit or be enforceable by any owner of any other real
property within or outside the Project Area, or any person or entity having any interest in
any other such realty.
10. The covenants contained in this Grant Deed shall be construed as
covenants running with the land and not as conditions which might result in forfeiture of
title.
} . ,.;y2pu'<i#ta3{3f3E3f3£d£�fkii<��rsfi'iiRs. >„&ki?,r?
Page 3 of 6
IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument
to be executed on their behalf b their respective officers hereunto duly authorized,
this day of , 1981.
HUNTINGTON BEACH REDEVELOPMENT
AGENCY
B CGG GLc-c.
Y ��
Chairman
ATTEST:
Clerk
The Grantee consents to the foregoing covenants which shall run with the land.
CALIFORNIA RESORTS/HASEKO
ASSOCIATES, a joint venture
By: CALIFORNIA RESORTS INTERNATIONAL,
INC., a California Corporation, a general
partner
By:
Its:
By: HASEKO PIER COLONY, INC.,
a California Corporation,
general partnership
By:
Its:
Page 4 of 6
I
STATE OF CALIFORNIA )
ss.
COUNTY OF &A���
On this day of _,in the year 1989,before me, the
undersigned, a Notary Public in and for said State,personally
appeared WQS 1!�A,)/U;s f P , known to me(or proved to me on the
basis of satisfactory evidence)to be the erson who executed this instrument as p
the Mg V.tL A rk A 0A+;P-M&, ce -4Ce ICE deve.lno uP � �9aT�F4-liC�
/� It (insert title of the officer)// /�
20ckWA)�-L'FP--0,0 4 My 4,- ,P -4P l " V, Ole Q-IC
(name of public corporate n, agency or political subdivision)
and acknowledged to me that.the s,/cN Pv b I i c AFC c-4 e xPc u 4pd —{a o Is li m e
(public corporation, agency or political subdivision)
OFFICIAL SEAL '
BETTE BARILLA
Notary Publk-Caftmla Signature of Notary Public
ORANGE COUIVY
My Comm.Exp.1M.S,"90 E71 E �RR i I tl
Name typed or printed
Page 5 of 6
I
Exhibit"A"
LOTS 1, 2, 3, 4, 5, 6, 7, 8,9, 10 of Block 102
Huntington Beach Tract, Map Book 3, Page 36
Page 6 of 6