HomeMy WebLinkAboutAdopt Resolution No. 2021-76 Approving the Issuance of Tax-E 2000 Main Street.
Huntington Beach.CA
92648
City of Huntington Beach
File #: 21-976 MEETING DATE: 12/21/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Ursula Luna-Reynosa, Director of Community Development
Subject:
Adopt Resolution No. 2021-76 approving the issuance of Tax-Exempt Bonds for the
Huntington Beach Senior Housing Apartments located at 18431 Beach Blvd.
Statement of Issue:
The City Council previously approved an Affordable Housing Agreement with Beach Housing
Partners, LP (a partnership between Jamboree Housing Corporation - Beach. LLC (a subsidiary of
Jamboree Housing Corporation) as Managing General Partner, USA Huntington Beach 687, Inc as
Administrative General Partner and US Bancorp Community Development Corporation, Investor
Limited Partner) for a 43-unit senior affordable housing project located at 18431 Beach Boulevard
Multiple sources of funding sources have been assembled to finance this development. The last
layer of financing includes tax-exempt bonds in an aggregate principal amount not to exceed $20
million and requires City Council approval of the issuance, although the City will neither issue the
bonds nor be responsible for their repayment. The federal Tax Equity and Fiscal Responsibility
Act (TEFRA) requires that a public hearing be held in connection with the issuance of tax-exempt
bonds, and that the local legislative body (the City Council) approve the issuance of the bonds for a
development located in its jurisdiction.
Financial Impact:
City approval of the issuance of bonds by CMFA for this development has no financial or budgetary
impact.
Recommended Action:
A) Conduct the public hearing under the requirements of TEFRA and the Internal Revenue Code of
1986. as amended (the "Code"). and.
B) Adopt Resolution No. 2021-76, "Resolution of the City Council of the City of Huntington Beach
Approving California Municipal Finance Authority Issuance of the Multifamily Housing Revenue
Bonds in an Aggregate Principal Amount Not To Exceed $20,000,000 for the Purpose of Financing or
Refinancing the Acquisition. Construction, Improvement and Equipping of Huntington Beach Senior
Housing and Certain Other Matters Relating Thereto." (Attachment 1)
City of Huntington Beach Page 1 of 3 Printed on 12 15:2021
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File #: 21-976 MEETING DATE: 12/21/2021
Alternative Action(s):
Do not approve the proposed bond issue.
Analysis:
On November 4, 2019, the City Council approved an Acquisition Loan Agreement with Jamboree
Housing Corporation (Jamboree) to purchase a 0.78 acre parcel of vacant land located at 18431
Beach Boulevard (the "Property') to develop a 43-unit senior affordable housing project (the
"Project"). On January 19, 2021, the City Council approved an Affordable Housing Agreement with
Beach Housing Partners, LP, a subsidiary of Jamboree Housing Corporation, (the "Developer")
setting forth the specific affordable housing terms for the Project, which include the following
requirements:
The Project will be affordable for 60 years,
• 33 units will be affordable to extremely low-income households (those earning less than 30%
of the area median income),
• 9 units will be affordable to very low-income households (those earning less than 50% of the
area median income), and
• One unit will be an on-site manager's unit.
As part of the January 191h action, the City's $3 million acquisition loan was converted to a permanent
loan and other funding sources were identified. Jamboree has successfully assembled all necessary
funding sources to finance the Project as follows:
SOURCES AND USES OF FUNDS
Sources of Funds Construction Permanent
Conventional Construction Loan to F$20,900,000 S 3,564,348
Low Income Housing Tax Credit$ 3,813,160 $12,710,534
NPLH Funds (State HCD) $ 5,856,018
MHSA Funds (County of Orange) $ 3,603,160
City of Huntington Beach (HOME & S 3,000,000 $ 3,000,000
Deferred Costs/ Fees S 1,653,796 $ 632,896
OTAL $29,366,956 $29,366,956
The public funding sources should be thought of as equity while the tax-exempt bonds serve primarily
as the construction loan with a small portion utilized as permanent financing. (The construction costs
are covered by $17 million of tax exempt bonds with Union Bank providing the remaining amount.)
Tax exempt bonds offer lower interest rates compared to regular bank loan, thus providing cost
savings and increased leverage of the public funding sources. The tax exempt bonds require an
allocation of bond authority from the State of California's Debt Limit Allocation Committee (CDLAC).
City of Huntington Beach Page 2 of 3 Printed on 12/15/2021
wwerlM Legistar°
File #: 21-976 MEETING DATE: 12/21/2021
Such allocations of authority are obtained through a competitive application process. Additionally, the
federal Tax Equity and Fiscal Responsibility Act (TEFRA) requires that a public hearing be held in
connection with the issuance of tax-exempt bonds, and that the local legislative body (the City
Council) approve the issuance of the bonds for a development located in its jurisdiction.
The City-of Huntington Beach will not issue the bonds for the proiect,_and neither the City of
Huntington Beach nor its residents will be responsible for repayment of the bonds. Instead,
the California Municipal Finance Authority (CMFA) will issue the bonds. CMFA was established in
2004 as a California Joint Powers Authority to assist local governments, non-profit organizations and
businesses with the issuance of taxable and tax-exempt debt aimed at improving the standard of
living in California. To date, over 330 municipalities in California, including the City of Huntington
Beach, have become members of CMFA. CMFA takes responsibility for reviewing requests for bond
financing, ensuring that the proposed financing meets all CMFA guidelines, ensuring the
development satisfies the public benefit requirements for tax-exempt bonds, and recommending the
development for bond allocation by CDLAC.
The repayment of the bonds will be the sole obligation of the Developer and the affordable
housing development. The sources of repayment will be private investor equity from the sale of
federal Low-Income Housing Tax Credits and rental revenue from the Project. The total development
cost for the Project is approximately $29.4 million, and the attached resolution authorizes up to $20
million of tax-exempt bonds.
In light of the foregoing, and in order to support affordable housing, staff recommends that the City
conduct the TEFRA Hearing and adopt the resolution in favor of the issuance of the Bonds by CMFA
for the Project.
Environmental Status:
Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15194, affordable
housing projects meeting specific criteria listed in Section 15192 and 15194 of the CEQA Guidelines
are exempt. The Project meets the criteria listed in the above-mentioned sections and is therefore
exempt.
Strategic Plan Goal:
Economic Development & Housing
Attachment(s):
1. Resolution No. 2021-76, "Resolution of the City Council of the City of Huntington Beach
Approving California Municipal Finance Authority Issuance of the Multifamily Housing Revenue
Bonds in an Aggregate Principal Amount Not To Exceed $20,000,000 for the Purpose of
Financing or Refinancing the Acquisition, Construction, Improvement and Equipping of
Huntington Beach Senior Housing and Certain Other Matters Relating Thereto."
City of Huntington Beach Page 3 of 3 Printed on 1 211 5/2 0 2 1
p WerlRq Legtstar"
RESOLUTION N0. 2021-76
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH APPROVING CALIFORNIA iMUNICIPAL
FINANCE AUTHORITY ISSUANCE OF THE MULTIFAMILY
HOUSING REVENUE BONDS IN AN AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $20,000,000 FOR THE PURPOSE OF
FINANCING OR REFINANCING THE ACQUISITION,
CONSTRUCTION, IMPROVEMENT AND EQUIPPING OF
HUNTINGTON BEACH SENIOR HOUSING AND CERTAIN OTHER
MATTERS RELATING THERETO
WHEREAS, Beach Housing Partners L.P. (the `Borrower') a partnership of which
Jamboree Housing Corporation (the "Developer) has requested that the Califomia Municipal
Finance Authority (the "Authority`) adopt a plan of financing providing for the issuance of
exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of
the Internal Revenue Code of 1986 (the "Code") in one or more series issued from time to time,
including bonds issued to refund such exempt facility bonds in one or more series from time to
time, and at no time to exceed $20,000,000 in aggregate principal amount (the "Bonds"), to
finance or refinance the acquisition, construction, improvement and equipping of a senior
multifamily rental housing project located at 18431 Beach Boulevard, Huntington Beach,
California (the "Project'); and
WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds by the
Authority must be approved by the City of Huntington Beach (the "City') because the Project is
located within the territorial limits of the City; and
WHEREAS, the City Council of the City (the "City Council") is the elected legislative
body of the Citv and is one of the "applicable elected representatives' required to approve the
issuance of the Bonds under Section 147(f) of the Code; and
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 Huntington Beach, DOES
HEREBY RESOLVE as follows:
Section 1. The foregoing resolutions are true and correct.
Section 2. The City Council hereby approves the issuance of the Bonds by the Authority.
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 purposes of Section 147(f) of the Code by the
RESOLUTION NO. 2021-76
applicable elected representative of the governmental unit having jurisdiction over the area in
which the Project is located and 4 of the Agreement.
Section 3. The issuance of the Bonds shall be subject to the approval of the Authority of
all financing documents relating thereto to which the Authority is a party. The City shall have no
responsibility or liability whatsoever with respect to the Bonds.
Section 4. The adoption of this Resolution shall not obligate the City or any department
thereof to (i) provide any financing to acquire or construct the Project or any refinancing of the
Project; (ii) approve any application or request for or take any other action in connection with
any planning approval, permit or other action necessary for the acquisition, construction,
rehabilitation, installation or operation of the Project; (iii) make any contribution or advance any
funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or
its membership therein.
Section 5. 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 6. This resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting held on the 21" day of December, 2021.
i�
Mavor
REVIEWED AND APPROVED: APPROVED AS TO FORA,1:
g�CityManager City Attorney IA i
INITIATED AND APPROVED:
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Director of Community Development
Res. No. 2021-76
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, ROBIN ESTANISLAU, 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 December 21, 2021 by the following vote:
AYES: Peterson, Bolton, Posey, Delgleize, Carr, Moser, Kalmick
NOES: None
ABSENT: None
RECUSE: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California
City of Huntington Beach
December 21 . 2021
Public Hearing for the Issuance of
Multifamily Housing Revenue Bonds for
Huntington Beach Senior Housing Apartments
Background
c November 2019, the City Council approved
a $3 million Loan Agreement with Jamboree
Housing Corporation to purchase a 0.78 acre
vacant parcel at 18431 Beach Boulevard.
o January 2020. Jamboree purchased property.
o January 2021 . the City Council approved an
Affordable Housing Agreement outlining the
terms for the project:
• Jamboree will build a 43-unit apartment project for seniors
• The project will be affordable for 60 years
• 33 units will be affordable to extremely low-income seniors (30% of median)
• 9 units will be affordable to very low-income seniors (50% of median)
0 1 unit will be for an on-site manager.
Income Limits
30%of Median 50%of Median
Household Size (Extremely Low-Income) (Very Low-Income)
1 S28.250 S47.100
2 $32.300 $53.800
Affordable Rents
Unit Size Tenant Income Level Number of Units Restricted Rent
30% 33 $286
1 Bedroom
50% 9 $1.187
2 Bedrooms Manager Unit 1
Total Number of Units 43
Construction Financing
Sources Total Per Unit
Bonds/Construction Loan 20,900,000 486,047
Tax Credits 3,813,160 88,678
City of HB Loan 3,000,000 69,767
Developer Investment 1,653,796 38,460
Total $29.366.956 $682.953
Permanent Financing
Sources Total Per Unit
Tax Credits 12,710,534 295,594
NPLH (State) 5,856,018 136,186
MHSA (County) 3.603,160 83,794
Bonds/Permanent Loan 3,564,348 82,892
City of HB Loan 3,000.000 69,767
Developer Investment 632,896 14,719
Total $29.366.956 1 $682.953
Request for Bond Approval
The California Municipal Finance Authority (CMFA) requests
authorization to issue up to $20 million in multifamily housing
revenue bonds.
Bond proceeds will be used to construct the Jamboree Senior
Housing Apartments.
,-D The City Council has authority to approve or deny CMFAs request
at this public hearing.
• If approved, the City will not issue the bonds.
• The bonds will be issued by CMFA
• The City will not be responsible for repayment of the bonds.
• The bonds will be the obligation of the developer and the affordable housing
project.
Recommended Action
Open the public hearing, take testimony. and close the public on the
proposed issuance of Multifamily Housing Revenue Bonds.
Adopt Resolution No. 2021-76 approving the issuance of $20 million of
Multifamily Housing Revenue Bonds by the California Municipal
Finance Authority.
Questions?
Moore, Tania
From: Christine Gonzalez <cgonzales@scng.com>
Sent: Thursday, December 2, 2021 3:55 PM
To: Moore, Tania
Cc: Switzer, Donna; Esparza, Patty; Kovac, Charles; Radding, Kim
Subject: Re: Request for Publication - PH Notice - TEFRA - HB Senior Housing
Attachments: 11505251 R.pdf
Cost S300 00. pub HB Wave 12/9
PLEASE NOTE.
Hnlidav Deadlines 21121
Publication Thursda) Dec. 30th, 2021
Submission Deadline 3pm, Wednesday Dec. 22nd.
Approvals and changes loam, Thursday Dec. 23rd.
Publication Thursday Jan. 6, 2021
Submission Deadline 3pm, Wednesday Dec. 29th.
Approvals and changes loam, Thursday Dec. 30th.
OC Register Legal Advertising
Chrissy Gonzalez
1771 S. Lewis St.
Anaheim, CA 92805
714-796-6736
M-F 8:00 a.m. -4:30 p.m.
Lunch 12 Noon to 1:00 p.m.
Closed Sat. and Sun
On Thu, Dec 2,2021 at 9:39 AM Moore, Tania<Tania.Moorena surfcity-hb.org>wrote:
Good morning Chrissy—
Please publish the attached notice of Public Hearing in The Wave on December 9i°.
Thank you,
t
Tania Moore, CIVIC
Senior Deputy City Clerk
City Clerk's Office
714-536-5209
tan ia.moore(a)su rfcity-hb.org
2
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on December 21, 2021, a Public
hearing as required by Section 147(f) of the Internal Revenue Cade of
1986 (the "Code"), will be held by the City Council of the City of
Huntington Beach with respect to a Proposed Plan of fin incing providing
for the issuance by the California Municipal Finance Authority (the
"Authority") of exempt facility bonds for a qualified residential rental
proiect Pursuant to Section 142(a)(7) of the Code in One or more series
Issued from time to time, including bonds issued to refund such exempt
facility bonds in One or more series from time t0 time, in an amount hot
to exceed $20,000,000 in aggregate Principal amount (the "Bonds"). The
proceeds of the Bonds will be used to: (1) finance or refinance the
acQuisition, construction, improvement and equipping of Huntington
Beach Senior Housing, a senior multifamily rental housing protect
located at 19431 Beach Boulevard, Huntington Beach,California; and (2)
pay certain expenses incurred in connection with the Issuance of the
Bonds. The facilities are to be owned by Beach Housing Partners L.P.
(the "Borrower") or a PartnerShip Of which Jamboree Housing
Corporation (the"Developer")or a related Person to the Developer is the
general Partner.
The Bonds and the obligation to Pay Principal of and interest thereon
and any redemption Premium with respect thereto do not constitute
indebtedness or on obligation of 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.
The hearing will commence at 6:00 P.m. Or as soon thereafter a5 the
matter can be heard,and will be held at:
City Council Chambers
2000 Main St reef
Huntington BeOCh,Cali tornio
Via Zoom: httos://hunti natpnbepch.zoom.0 V,,97154130528
By Phone: (669)900-6833
Meeting ID: 971 5413 0528
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 or refinanced may attend the Public hearing or.Prior to the time
of the hearing,submit written Comments.
Additional information concerning the above matter may be Obtained
from, and written comments should be addressed to City Clerk. City of
Huntington Beach,2000 Main Street. Huntington Beach,CA 9264 A copy
of the staff report will be available to interested parties at the City
Clerk's Office or on line of httP://www.huntingtonbecchco.wv on
Thursday, December 16,2021.
Doted: December 9,2021
Published Huntington Beach Wave Dec.9.2021 11505251
t
r p\ 0 ✓
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on December 21 , 2021 , a public hearing as
required by Section 147(f) of the Internal Revenue Code of 1986 (the "Code'), will be held
by the City Council of the City of Huntington Beach with respect to a proposed plan of
financing providing for the issuance by the California Municipal Finance Authority (the
"Authority") of exempt facility bonds for a qualified residential rental project pursuant to
Section 142(a)(7) of the Code in one or more series issued from time to time, including
bonds issued to refund such exempt facility bonds in one or more series from time to time,
in an amount not to exceed $20,000,000 in aggregate principal amount (the "Bonds").
The proceeds of the Bonds will be used to (1) finance or refinance the acquisition,
construction. improvement and equipping of Huntington Beach Senior Housing, a senior
multifamily rental housing project located at 18431 Beach Boulevard Huntington Beach,
California: and (2) pay certain expenses incurred in connection with the issuance of the
Bonds The facilities are to be owned by Beach Housing Partners L P (the 'Borrower') or
a partnership of which Jamboree Housing Corporation (the "Developer") or a related
person to the Developer is the general partner
The Bonds and the obligation to pay principal of and interest thereon and any
redemption premium with respect thereto do not constitute indebtedness or an obligation of
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
The hearing will commence at 6:00 p.m or as soon thereafter as the matter can be
heard, and will be held at
City Council Chambers
2000 Main Street
Huntington Beach, California
Via Zoom: https.//huntingtonbeach.zoom us/i/97154130528
By Phone: (669) 900-6833
Meeting ID: 971 5413 0528
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 or refinanced may attend
the public hearing or, prior to the time of the hearing. submit written comments.
Additional information concerning the above matter may be obtained from, and written
comments should be addressed to City Clerk, City of Huntington Beach. 2000 Main Street,
Huntington Beach, CA 92648. A copy of the staff report will be available to interested
parties at the City Clerk's Office or on line at http://www.huntingtonbeachca.gov on
Thursday. December 16, 2021
Dated: December 9. 2021
Cash No: ISCV22811
AFFIDAVIT OF PL'BLICATION
STATE OF CALIFORNIA, j Proof of Publication
) s.. ------- - ---
County of()range
I am a citi2en of the United States and a rceident
of the County alorcaeid; I am over the age of-
eighteen years, and not a part} to or intcrc.tcd in
the aboxe entitled matter. I am the pnrwipal cltrk
of the Huntington Reach Wave. a newspaper NOTICE OF PUBLIC HEARING
[hat has been adjtaigcd h) be a new. r o1 NOTICE 15 HEREBY GIVEN that on December 21, 2021, o public
NI'c hearing as required by section I47(t) o1 the Internal Revenue Code of
1966 (the "[oche"), will be held by the City Council of the City of
general circulation by the Superior Court of the HunNng!an Beach with respect to a proposed Plan of financing Provdlnq
for the issuance by the California Municipal Finance Authority (,he
"Authority") of exempt facility bonds for a quol.fied residential rental
County of[)range. State of Califlomia,nn July I, protect pursuant to Section 142fm(71 Of the Code in one or more series
issued from time to t,me, including bonds Issued to refund such exempt
199A, Cox NO. A-19591% in and for the (Cili, of facility bonds in one or more series from time to lime, in an omount not
to exceed $20.000,000 in 09 regale urinciool amount (the 'Bonds") The
proceeds Of the Bonds will be used to (1) bnance or refinance the
Numingtnn Heach. County of Orange. Slate of ocauisihOn, crostrucnm. improvement and equipping of Huntington
Beach Senior Housing, a Senior multifamily rental housing protect
C'alifomta; that the notice, of which the annexed located of 19431 Bench Boulevard, Huntington Beach,California: and (2,
pay Certain expenses incurred in connection with The invonce of the
Bonds. Trye locititles are to be owned by Beach Housing PO"olV1 L.P.
is a true printed copy,ha,,been published in each (the "Borrower") or a Partnership of which Jamboree Housing
Cormrahm (the"Developer")Ora related person to the Developer is-he
regular and entire saue of.zld new spaper and general Partner.
The Bonds and the obligation to pay principal of and interest fhereon
not is any supplement thereof on the following and any redemption Premium with respect thereto do nal coml,tute
indebtedness or on obligation of the Authority, the State of California or
any Political subdivision thereof,within the meaning of any constitanomi
dates, I,) w$: or s'otutory debt limitotim, or a charge Pgginst the general credit or
taxirg powers of any of them. The Bonds"If be d limited obligation of
December 9.2021 here cr andity. payable solely from certain revenues duly pledged
ePresenl,nq amounts mid by the Borrower.
"I euriliN bur du,clarc) under the penalty of The hearing will commence at 6.00 p.m. or as soon thereafter as me
matter can be heard,and will be held ot:
perjury under the laws of the State of Califomia City Council Chambers
2000 Main Street
that the foregoing is true and correct-: Huntington Beach,California
Via ZOOM: httpy;/muntrngtonaeech :gam
By hone'- (� 669)900-6833
Fxxuted at Santa Ina. Orange Cnunly. Meet,ngID' 97154130528
Cali litrnla,tin interested persons winning to express their views On me Issuance of
the Bonds or on the nature and location of the facilities proposed to be
financed or refinanced may attend the Public herring or, prior to the time
Ikccmhvr 9, 2021 of the hearing,submit written comments.
Additional information concerning the ObOve matter may be obtained
from, and written comments should be addressed t0 City Clerk, City of
Huntington Beach. 2000 Main Street, Huntington Beach, CA 92648. A copy
of the staff report will be available to interested Parties at the City
Clerk's Office or on hne at hftp://www.huntinglonbeachco.gov on
Thursday. December 16,2021.
U�_Iwmmtur(c Dated. December 9. 2021
Published Huntington Beach Wave Dec 9,2021 11505251
Huntington Reach yyaxc
211Nf S. Towne Cvnlre PI.
knahcim,C A 92806
1114)79tr2209