HomeMy WebLinkAboutStaff Report 6.A 01/22/2007CITY OF PGTALUNIA, CALIFORNIA
AGENDA BILL
6.A
January 22, 2007
Aeenda Title: Public Hearing and Resolution Approving the Meeting Date:
Issuance of Tax -Exempt Bonds By the California Municipal January 22, 2007
Finance Authority for a Multi -Family Housing Project To Be
Owned by a Limited Partnership or a Limited Liability Company in Meeting Time: ® 3:00 PM
Which Petaluma Ecumenical Properties or an Affiliate Will Serve as ❑ 7:00 PM
A General Partner or Member
Cateeory (check one): ❑ Consent Calendar ❑X Public Hearing ❑ New Business
❑ Unfinished Business ❑ Presentation
Department: Director:Y� Contact Person: Phone Number:
CDD Mike Moor Bonne Gaebble ! 778-4555
Cost of Prouosal: $250 (estimated staff time) Account Number:
P202300
Amount Budgeted: $250 Name of Fund:
PEP/Casa Grande
Attachments to Agenda Packet Item:
Exhibit 1 Resolution
Summary Statement: Petaluma Ecumenical Properties (PEP) is proposing the development of a 58 -unit
senior housing development at 400 Casa Grande Road. Casa Grande Senior Apartments has received all
land use approvals (City Council approval was received on August 1, 2005.) As part of its financial
strategy, PEP is planning to apply for issuance in an amount not -to -exceed $15,000,000 in tax exempt
multi -family housing revenue bonds by the California Debt Limit Allocation Committee (CDLAC). At
this time, PEP is requesting the City of Petaluma's cooperation in the issuance of those bonds by holding a
public hearing required under the Federal Tax Equity and Fiscal Responsibility Act of 1986, a TEFRA
hearing. This hearing provides the public the opportunity to be aware of and comment on the issuance of
bonds for this development.
At its March 6, 2006 meeting, the Council approved the issuance of bonds in the amount of $8,000,000 but
PEP subsequently determined that to be insufficient for the completion of the project. PEP advised
Council at that time that an additional amount might be necessary following final value engineering and
cost analysis.
The requirement for a 14 -day public notice of a TEFRA hearing has been met.
Recommended Citv Council Action/Sueeested Motion: Conduct a Public Hearing and Adopt a
Resolution Approving the Issuance of Tax -Exempt Bonds By the California Municipal Finance Authority
for a Multi -Family Housing Project To Be Owned by a Limited Partnership or a Limited Liability
Company in Which Petaluma Ecumenical Properties or an Affiliate Will Serve as A General Partner or
Member
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Tefrapepeasah
CITY OF PETALUMA, CALIFORNIA
JANUARY 22, 2007
AGENDA REPORT
FOR
Public Hearing and Resolution Approving the Issuance of Tax -Exempt Bonds By the California
Municipal Finance Authority for a Multi -Family Housing Project To Be Owned by a Limited
Partnership or a Limited Liability Company in Which Petaluma Ecumenical Properties or an Affiliate
Will Serve as A General Partner or Member
EXECUTIVE SUMMARY: Petaluma Ecumenical Properties (PEP) is proposing the development of a 58 -
unit senior housing development at 400 Casa Grande Road. Casa Grande Senior Apartments has
received all land use approvals (City Council approval was received on August 1, 2005.) As part of its
financial strategy, PEP is planning to apply for issuance not -to -exceed $15,000,000 tax exempt multi-
family housing revenue bonds by the California Debt Limit Allocation Committee (CDLAC). At this
time, PEP is requesting the City of Petaluma's cooperation in the issuance of those bonds by holding a
public hearing required under the Federal Tax Equity and Fiscal Responsibility Act of 1986, a TEFRA
hearing. This hearing provides the public the opportunity to be aware of and comment on the issuance
of bonds for this development.
At its March 6, 2006 meeting, the Council approved the issuance of bonds in the amount of $8,000,000
but PEP subsequently determined that to be insufficient for the completion of the project. PEP advised
Council at that time that an additional amount might be necessary following final value engineering and
cost analysis.
The requirement for a 14 -day public notice of a TEFRA hearing has been met.
2. BACKGROUND: PEP is the developer, owner, and property manager of 214 units of low-income senior
housing in 10 properties located throughout Petaluma. Their agency houses approximately 230 seniors
and persons with a disability. Their residents must be 62 or older. Current tenants have an average age
of 78 and live on incomes below $15,000 per year. Their waiting list for housing is approximately one
and one-half years. The Casa Grande Senior Apartments will contain the following elements;
• 58 units of housing including one manager's unit
• Community Gardens
• Bocce Ball Court
• Covered Walkways
• Support Services
Currently, the rents are proposed at 50-60% of Petaluma's Area Median Income (AMI) which translates
into rents ranging from $650 to $800 per month. The term of affordability will run for at least the
terni of the bonds and the City has placed rent restrictions on both our Low -Mod funds and our HOME
fimds invested in the project.
The City has provided tax-exempt bond -related assistance to the following affordable housing
communities:
• Park Lane Apartments 90 units of family and senior rentals
• Sunrise of Petaluma Assisted Living 70 emits of senior "assisted living" (15 VL income)
• Vintage Chateau Senior Apartments 244 units of senior rentals
• Downtown River Apartments 80 units of family and senior rentals
As is the case with the existing bond deals, the proposed project stands on its own and the City will have
no obligation whatsoever for the bonds themselves or the project.
3. ALTERNATIVES: A TEFRA hearing, publicly noticed and conducted before the City Council, and the
adoption of the appropriate resolution is required by CDLAC in order for PEP to apply for tax exempt
bonds.
4. FINANCIAL IMPACTS: As with all affordable housing projects, PEP has developed a multi -layer funding
plan. Currently, the prospective funding for the project consists of the following sources:
• Low Income Housing Tax Credits
• Tax Exempt Multi -Family Bonds
• A Loan From The City's Housing Fund
• A HOME Loan
The financing of this project will have no impact on the City's General Fund; all funding sources are
required by law to be utilized specifically for affordable housing.
OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR COMPLETION:
Completion of the project and occupancy by low-income seniors.
6. RECOMMENDATION: Conduct a Public Hearing and Adopt a Resolution Approving the Issuance of Tax -
Exempt Bonds By the California Municipal Finance Authority for a Multi -Family Housing Project To Be
Owned by a Limited Partnership or a Limited Liability Company in Which Petaluma Ecumenical Properties or
an Affiliate Will Serve as A General Partner or Member
-3•
EXHIBIT 1
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING
THE ISSUANCE OF TAX-EXEMPT BONDS BY THE CALIFORNIA MUNICIPAL
FINANCE AUTHORITY FOR A MULTIFAMILY HOUSING PROJECT TO BE OWNED
BY A LIMITED PARTNERSHIP OR A LIMITED LIABILITY COMPANY IN WHICH
PETALUMA ECUMENICAL PROPERTIES OR AN AFFILIATE WILL SERVE AS A
GENERAL PARTNER OR MEMBER
WHEREAS, Petaluma Ecumenical Housing ("PEP") intends to establish a limited
partnership or limited liability company in which PEP or an affiliate will serve as a general
partner or member (the 'Borrower");
WHEREAS, PEP intends that the Borrower will acquire and construct a 58 -unit
multifamily rental housing development (the 'Project') to be located at 400 Casa Grande Road,
Petaluma, California 94954, and has requested the California Municipal Finance Authority (the
"Authority") to issue tax-exempt bonds (the 'Bonds") in the total not -to -exceed amount of
$15,000,000, the proceeds of which shall be used for the purpose of financing the acquisition
and construction of the Project; and
WHEREAS, Section 147(f) of the Internal Revenue Code of 1986 (the "Code") requires
that the "applicable elected representative" with respect to the Project to approve the issuance
of the Bonds with respect to the Project after a public hearing has been held concerning the
issuance and delivery of the Bonds with respect to the Project; and
WHEREAS, the City Council of the City of Petaluma (the "City Council") is the elected
legislative body of the City 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 12 of the Joint Exercise of Powers Agreement,
dated as of January 1, 2004 (the "Agreement'), among certain local agencies, including the City;
and
WHEREAS, the City Council, on March 6, 2006, heretofore approved the issuance of the
Bonds in the total not -to -exceed amount of $8,000,000, but the Borrower subsequently
determined that Bonds in the amount of only $8,000,000 would be insufficient for the completion
of the Project, and has therefor requested that the City Council approve the issuance of Bonds
in the not -to -exceed amount of $15,000,000; 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 at which all those
interested in speaking with respect to the financing of the Project were heard, and now desires
to approve the issuance of the Bonds by the Authority, as provided below;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Petaluma, as
follows:
Section 1. The City Council hereby finds and determines that the foregoing recitals
are true and correct.
0
Section 2. The City Council hereby approves the issuance of the Bonds with respect
to the Project by the Authority. It is the purpose and intent of the City Council that this resolution
constitute approval of the issuance of the Bonds in the not -to -exceed amount of $15,000,000 by
the Authority only for the purposes of (i) Section 147(f) of the Code by the applicable elected
representative of the governmental unit having jurisdiction over the area in which the Project
will be located, in accordance with said Section 147(f), and (b) Section 12 of the Agreement.
Section 3. The issuance and delivery of the Bonds shall be subject to the approval of
and execution by the Authority of all financing documents relating thereto to which the Authority
is a party and subject to the sale of the Bonds by the Authority.
Section 4. The payment of the principal, prepayment premium, if any, and purchase
price of and interest on the Bonds shall be solely the responsibility of Borrower. The Bonds
shall not constitute a debt or obligation of the City.
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 this 22nd day of January, 2007, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAINING:
Mayor
ATTEST:
City Clerk