HomeMy WebLinkAboutConduct a Tax and Equity Fiscal Responsibility Act (TEFRA) P Dept ID ED 15-15 Page 1 of 2
Meeting Date 8/3/2015
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
I
MEETING DATE: 8/3/2015
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A Wilson, City Manager
PREPARED BY: Ken Domer, Assistant City Manager
Kellee Fritzal, Deputy Director, Business Development
SUBJECT: Conduct a Tax and Equity Fiscal Responsibility Act (TEFRA) Public Hearing,
Adopt Resolution No 2015-42 approving the issuance by the California
Statewide Communities Development Authority (CSCDA) a Multifamily Housing
Revenue Bond, in an amount not to exceed $13,000,000, for Huntington Villa'
Yorba located at 16000 Villa Yorba Lane with no City obligations
Statement of Issue The City Council is asked to conduct a public hearing under the Tax and
Equity Fiscal Responsibility Act (TEFRA) in connection with the proposed tax-exempt Bond by the
California Statewide Communities Development Authority (CSCDA) of Multifamily Housing
Revenue Bonds for Huntington Villa Yorba located at 16000 Villa Yorba Lane The Bond is not to
exceed $13 million and is for rehabilitation On December 16, 2013, the City Council approved a
similar Resolution and funding for this property
Financial Impact There is no fiscal impact to the City California Statewide Communities
Development Authority is a joint exercise of powers authority and public entity of the State of
California and is the responsible fiscal agent for the bonds The City will receive a $12,500
payment for the processing of the request
Recommended Action
A) Conduct the public hearing under the requirements of TEFRA and the Internal Revenue Code of
1986, as amended (Code), and,
B) Adopt Resolution No 2015-42, "A Resolution of the City Council of the City of Huntington Beach
Approving the Issuance by the California Statewide Communities Development Authority of
Multifamily Housing Revenue Bonds for the Huntington Villa Yorba "
Alternative Action(s) Do not adopt the Resolution and direct staff as necessary
Analysis State law provides the ability for cities and counties to join together under cooperative
agreements to form joint powers authorities to issue debt obligations to fund projects that provide a
public benefit and serve the needs of residents within the jurisdictions of the participating members
Federal law allows these obligations to be issued on a tax-exempt basis under certain
® circumstances Cities and counties in California have the ability to act as issuers of conduit bonds
and other obligations, but many jurisdictions utilize joint powers authorities such as CSCDA,
primarily for economies of scale and to access specialized transaction knowledge and resources
CSCDA was established 25 years ago to stimulate economic development throughout California by
financing privately owned projects that provide public benefit by creating jobs, health care,
xB -1069- Item 14. - 1
Dept ID ED 15-15 Page 2 of 2
Meeting Date 8/3/2015
affordable housing, infrastructure, schools and other fundamental services that enrich and Improve
the quality of life in local communities Today it consists of over 500 local agencies in California and
provides financing programs that directly benefit local governments as well The City is a member
of CSCDA It is not permitted to issue bonds or notes for a project without first conducting a public
TEFRA hearing and obtaining permission from the governing board of the jurisdiction in which the
project is located
The City has been requested to conduct a TEFRA public hearing and approve the issuance of the
Bonds for purposes of federal law The Bonds are limited obligations of CSCDA payable solely byi
Preservation Partners Management Group and will not be direct obligations of CSCDA, the City, or
any member of CSCDA
The City Council is being asked to adopt a resolution that would approve the issuance of tax
exempt revenue bonds by CSCDA in one or more series in a maximum aggregate principal amount
of$13,000,000 (the"Bonds") This is the second request for a TEFRA hearing In December 2013,
a Resolution was passed that consisted of the acquisition and rehabilitation of the property This
new request is to refinance the property and lower the interest rate of the main taxable loan With,
the reduction in the rate, the project would be able to continue the rehabilitation of the property
As discussed, the purpose of the bond is to finance the rehabilitation of a 396-unit multifamily low;
income residential housing facility called Huntington Villa Yorba, located at 16000 Villa Yorba Lane
As part of the City's 2013 adopted Housing Element, Huntington Villa Yorba was at-risk of
converting from affordable housing to market-rate housing The previous property owner placed
Huntington Villa Yorba up for sale, which could have resulted in the loss of all 396 affordable units
in the City Preservation Partners Management Group purchased the property and has agreed to!
ithe preservation of all units - 10% at 50% of the area median gross income, and 90% at 60% of the
area median gross income The preservation of these units helps the City meet the Housing
Element goals
Environmental Status Not applicable
Strategic Plan Goal Improve quality of life
Attachments)
1) Resolution No 2015-42, "A Resolution of the City Council of the City of Huntington Beach
Approving the Issuance by the California Statewide Communities Development Authority of
Multifamily Housing Revenue Bonds for the Huntington Villa Yorba "
2) PowerPoint Presentation
Item 14. - 2 xB -1070-
I
RESOLUTION NO. 2 015—4 2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF HUNTINGTON BEACH APPROVING THE ISSUANCE BY THE
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR
HUNTINGTON VILLA YORBA
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 Huntington Beach "City"),
ia Health and Safety Codeln accordance forthe purpose oth
f
Chapter 7 of Part 5 of Division 31 of the California
financing multifamily rental housing projects, and
Huntington Villa Yorba Preservation Limited Partnership or related entities, has requested
that the Authority adopt a plan of financing providing for the issuance of multifamily housing
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
$13,000,000 in outstanding aggregate principal amount, to finance the acquisition and
rehabilitation of a 198-unit multifamily rental housing project located at 16000 Villa Yorba
Lane, Huntington Beach, California, generally known as Huntington Villa Yorba (the "Project")
and operated by Preservation Partners Management Group; and
The Bonds or a portion thereof will be "private activity bonds" for purposes of the Internal
Revenue Code of 1986 (the"Code");and
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
The members of this City Council (this "City Council") are the applicable elected
representatives of the City, and
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
15-4839/123698 doc
Resolution No . 2015-42
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
The Authority is also requesting that the City Council approve the issuance of any
refunding bonds hereafter issued by the Authority for the purpose of refinancing the Bonds
which financed the Project (the "Refunding Bonds"), but only in such cases where federal tax
laws would not require additional consideration or approval by the City Council; and
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 Huntington Beach does hereby
resolve as follows:
Section 1. The above recitals are true and conect
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 City Clerk shall forward a certified copy of this Resolution 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.
15-4839/123698 doe
resolution mo . LUiD-4L
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 3 r d day of August , 2015.
M
M
REVIE D APPROVED-
APPROVED O
Cit er
Cr- ttorneys
INITIATED AND APPROVED-
Deputy Diiector Oconomic Development
15-4839/123698 doc
Res. No. 2015-42
A
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L FLYNN 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 August 3, 2015 by the following vote
AYES: Posey, Katapodis, Hardy, Sullivan, Delgleize, Peterson
NOES: None
ABSENT: O'Connell
ABSTAIN: None
e
City Clok and ex-officio C rk of the
City Council of the City of
Huntington Beach, California
CD
..
TEFRA Public Hearing
Huntington V ■ •
August 3 , 2015
x x•x
NO
0 0 0
Summary
There is no fiscal impact to the city - the City is a
conduit to allow for the tax exempt financing
Q Bonds are limited obligations of the CSCDA
o Paid solely by Preservation Partners Management Group
(owners)
o No direct obligation of CSCEA or the City
V
Va
Huntington Villa Yorba is an affordable apartment
complex located at 16000 Villa Yorba Lane
This is the second TEFRA Hearing for this project,
refinancing of the main loan has allowed tor
additional rehabilitation
n
r
00 California Statewide Communities
Development Authority (CSCDA)
► CSCDA was formed in 1988
► City is a member of the CSCDA which is a
point Exercise of Powers with over 500 local
agencies
� Issues taxable and tax-exempt bonds for
financing economic , cultural and community
development
Works with local governments , non - profit
organizations and businesses
0 0 0
Public Hearing
To satisfy the Federal and State tax code , the
City is required to :
► Conduct tonight' s public hearing under the
requirements of TEFRA and the Internal
Revenue Code of 1986 ;
Adopt the Resolution approving the issuance
of the Bonds by the CSCDA for the benefit of
Huntington Villa Yorba to provide for the
financing of the Project.
N
0
Questions
1
%B
SUPPLEMENTAL
COMMUNICATION
Mesons Date: 3 —/•r
Agenda Ikm No•��4_
TEFRA Public Hearing
Huntington Villa Yorba
August 3 , 2015
Public Hearing
To satisfy Federal and State tax codes and
laws , the City is required to :
► Conduct tonight' s public hearing under the
requirements of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Internal
Revenue Code of 1986 ;
► Adopt the Resolution approving the issuance
of the Bonds by the CSCDA for the benefit of
Huntington ViI
la Yorba to provide for the
financing of the Project.
overview
► There is no fiscal impact to the City of this
action
► The City is solely a conduit to allow for the
tax exempt financing of the project
• Bonds are being issued by the CSCDA
• Paid solely by Preservation Partners
Management Group (owners)
• No direct obligation of CSCDA, its members
or the City
► Federal law requires approval from the
jurisdiction where the project is located
California Statewide Communities
Development Authority (CSCDA)
► CSCDA was formed in 1988
► City is a member of the CSCDA which is a
,Joint Exercise of Powers with over 500 local
agencies
Issues taxable and tax-exempt bonds for
financing economic , cultural and community
development
► Works with local governments , non - profit
organizations and businesses
SU ary
► Huntington Villa Yorba is a multi-family
residential complex located at 16000 Villa
Yorba Lane
► On December 16 , 2013 the City Council
approved the original CSCDA financing of the
project
► This TEFRA Hearing allows the refinancing of
the project to take advantage of lower interest
rates and provide for additional rehabilitation
Questions ?
AFFIDAVIT OF PUBLICATION
STATE OF CALIFORNIA, )
ss.
County of Orange ) PROOF OF PUBLICATION
I am a citizen of the United States and a resident
of the County aforesaid, I am over the age of
eighteen years,and not a party to or interested in
the above entitled matter I am the principal clerk
of The Orange County Register, a newspaper
of general circulation, published in the city of
Santa Ana, County of Orange, and which news-
paper has been adjudged to be a newspaper of
general circulation by the Superior Court of the
County of Orange, State of California, under the
i i - F NO'n OF PUBLIC HEARING LL a
date of November 19, 1905, Case No A-21046, REGARDING ISSUANCE OF
MULTIFAMILY HOUSING REVENUE BONDS FOR
HUNTINGTON VILLA YORBA
that the notice, of which the annexed is a true I'°
NOTICE IS HEREBY GIVEN.that,at 6 00 p m.,or as soon thareefier es the matter can
be hesid;ton Monday Au I 2015-at theCIty Cou-ncit-Chambeia`,`2000„Maln Street;
printed copy, has been published in each regular Huntington Besch,'Calfiwrnia ire City&mndl"of the C of Huntington Beachl(the'City')
will conduct a public hearing ae requhed by Section 147�1)of the Inter l Revenue Code of
1986,atiwtntc#n it will,hear and consider Informat[an concerning a proposed plan of,financ-
and entire issue of said newspaper and not in any Ing providing tor;the tasuanee by the Calilomta_Statewdde Communities Devalppment`Au=
the of mulliflimily housingg revenue bonds Irt one w more sense Issued from tune to
time,lnctudtng=Gonda Is- ,torretundsuah revenue,bonds m one or mreesseries from
supplement thereof on the following dates, to time to time,and et'ho time to-ex $130,tWl'inooutstandin ate principal
amount,to the acquisition and rehsbiltstion of,all unit multifam rental housing
project,located at Ill VNia,Yorba Lane,„Hu ilBeach.Callfomta, a facilities are
wit to be owned by Hun*Vton Villa Yorba P=Limited Partnership(the'Borrower!).-
operated by Preservall PaMete Mail meM Gnwp,ennd are generally known as Hun,
Urigtd-niVilla Yorb`e ghs'Proll'- `,4 '`, - - r� nr,(' -
July 20,2015 Those wfWq comment on„the proposed finalcinp and the nature All location of
the Project msy war appear In at Tha pubUc hearing or sutimit written comm enta,
:: which must be recenred by the C Jr �to ttie hearing WrNdsn comments should be s�M
I certifyor declare under the penalty of
( ) p ty to Cltyyof H on tin at'� Mahn stragt;Hun Beach;CatEtomin,g2648,=At-
tentian CIty�For additionet informadort,jPiesse the Office&USus1fill Dilil
penury under the laws of the State of California °p-fAe"t,Kailas Frtttat at M4)374-1519' £=n
F"
II '� CITY CLERK �
that the foregoing is true and correct" _ CITY OF,rtuNnrt�BEACH
Executed at Santa Ana, Orange County, Published OrangeCountyR gttarJ. 2%,iota R-mgCl6a7i4aii'
California,on
Date July 20,2015
71
. I
bn re
The Orange County Register
625 N.Grand Ave.
Santa Ana,CA 92701
(714)796-2209
City ®f Huntington Beach
20oo Main Street ® Huntington Beach, CA 92648
(714) 536-5227 ® www.huntingtonbeachca.gov
s
e a ♦ office of the City Clerk
t) 199,
Joan L. Flynn, City Clerk
August 5, 2015
Justin Cooper, Esq
Orrick, Herrington & Sutcliffe, LLP
405 Howard Street
San Francisco, CA 94105
Dear Mr Cooper
The City Council of the City of Huntington Beach at the meeting held August 3, 2015,
adopted Resolution No 2015-42 approving the issuance by the California Statewide
Communities Development Authority of Multifamily Housing Revenue Bonds for
Huntington Villa Yorba
Enclosed is a certified copy of the resolution for your records
Sincerely,
9nJ *
L. Flynn, CMC
City Clerk
Enclosure
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