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HomeMy WebLinkAboutStaff Report 3.A 03/06/2006CITY OF PETALUMA, CALIFORNIA AGENDA BILL &A March 6, 2006 Aeenda Title: Public Hearing and Resolution Approving the Meetine Date: Issuance of Tax -Exempt Bonds By the California Municipal March 6, 2006 Finance Authority for a Multi -Family Housing Project To Be Owned by a Limited Partnership or a Limited Liability Company in Meetine 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 © Public Hearing ❑ New Business ❑ Unfinished Business ❑ Presentation Department: Director: Contact Person: Phone Number: Administrative Services to n Carmi a Bonne Gaebb�rU6 778-4555 Cost of Proposal: $250 (estimated staff me) Account Number: P202300 Amount Budeeted: $250 Name of Fund: PEP/Casa Grande Attachments to Aeenda 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 $8,000,000 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. 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 Reviewed by Admin. Sv s. Dir: I7te 1(416C Todav's Date: Reviewed by City Attornev: nu Date: Revision # and Date Revised: Anvroveo bv Citv Manaeer: 9P Date: File Code: Tefrapepcasah CITY OF PETALUMA, CALIFORNIA MARCH 6, 2006 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 $8,000,000 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. 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 emit • Wellness Center/Community Room • Community Gardens • Bocce Ball Court • Covered Walkways • Support Services Currently, the rents are proposed at 50-60% of Petaluma's Area Median hicome (AMI) which translates into rents ranging from $650 to $800 per month. The term of affordability will run for at least the term of the bonds and the City has placed rent restrictions on both our Low -Mod funds and our HOME funds 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 units 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. a 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 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 not -to -exceed amount of $8,000,000, 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, 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. 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 $8,000,000 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 6th day of March, 2006, by the following vote: AYES: NOES: ABSENT: ABSTAINING: Mayor ATTEST: City Clerk