Loading...
HomeMy WebLinkAboutRes 2019-21 - CSCDA Bond Issuance - Sands Apartment PrjctSTAFF REPORT CITY OF PALM DESERT COMMUNITY DEVELOPMENT DEPARTMENT DATE: May 9, 2019 PREPARED BY: Eric Ceja, Principal Planner REQUEST: Consideration of a proposed plan for bond issuance by the California Statewide Communities Development Authority for The Sands Apartment project located at 74-351 Hovley Lane East. Recommendation Waive further reading and adopt City Council Resolution No. 2019- 21 recommending that the California Statewide Communities Development Authority (CSCDA) issue bonds for the financing of the 384-unit Sands Apartment project. 2. Authorize legal counsel to finalize the Resolution materially consistent with the approvals and take any action necessary to effectuate the Resolution. Strategic Plan This project achieves several priorities under the Land Use, Housing & Open Space chapter and the Transportation chapter of the Strategic Plan. Land Use, Housing & Open Space • Priority No. 2: "Facilitate development of high -quality housing for people of all income levels." As proposed, the apartment project is a "Class A" apartment development that provides a clubhouse, recreational amenities, and private garages. The project will reserve 20 percent (20%) of all units for qualified lower -income households. The project has demonstrated its quality by providing community amenities and an attractive architectural style. The community will provide housing for renters and lower -income households. Executive Summary Approval of staff's recommendation would complete requirements listed by the Internal Revenue Service (IRS) for local agencies to conduct a public hearing for bond issuance for the development of affordable multi -family housing projects. Adoption of a resolution would allow the CSCDA to issue housing bonds for the financing of the construction of the 384-unit Sands Apartment project. There are no fiscal impacts or commitments to the City of Palm Desert. The City Council approved this request in 2018, and the IRS requires annual reapproval. The applicant has stated that the bonds should be issued sometime by July 2019. \\srv-fil2k3\groups\Planning\Eric Ceja\Case Files\PP\PP 16-394 Canterra II\CC\TEFRA\CC Staff Report - The Sands (TEFRA 2019).doc May 9, 2019 - Staff Report Case No. PP/CUP/EA 16-394 TEFRA Hearing for The Sands Apartments Page 2 of 2 Backqround Analvsis On April 26, 2018, the City Council unanimously adopted a resolution approving a density bonus for the development of a 384-unit apartment project, known as The Sands, on a vacant 18-acre site located along Hovley Lane East, east of Portola Avenue. The applicant is requesting bond financing from the CSCDA to construct the project. The CSCDA was formed in 1988 to provide local governments with tools for the timely financing of public benefit projects. For -profit developers may apply with CSCDA for access to tax-exempt bonds to finance the development of low-income multi -family housing. The Sands Apartment project provides 20 percent (20%) of all units at affordable rents and, as such, is eligible for financing with CSCDA. As part of the process to issue bonds, the local agency is required to hold a public hearing and adopt a resolution supportive of the bond issuance. An affordable housing development is a priority of the City Council; therefore, staff recommends that the City Council take public testimony during the public hearing and adopt a resolution supporting the developer's request. Tax-exempt bonds can be issued to the developer, and there is no financial risk or contributions on the part of the City. Findinqs of Approval Findings can be made in support of the request and in accordance with the City's Municipal Code. Findings in support of this project are in City Council Resolution attached to this staff report. Fiscal Analvsis No fiscal impact. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER N/A )Jat Robert W. Hargreaves Ryan Stendell Moore Lauri Aylaian City Attorney Director of Communitytor of Finance City Manager Development APPLICANT: Mr. Lee Newell New Cities Investment Partners, LLC 1850 Mt. Diablo Boulevard, Suite 337 Walnut Creek, CA 94596 ATTACHMENTS: 1. Draft City Council Resolution No. 2019- 21 2. City Council Public Hearing Notice \\srv-fil2k3\groups\Planning\Eric Ceja\Case Files\PP\PP 16-394 Canterra II\CC\TEFRA\CC Staff Report - The Sands (TEFRA 2019).doc RESOLUTION NO. 2019- 21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTI- FAMILY HOUSING REVENUE BONDS FOR THE SANDS APARTMENTS CASE NO: PP/CUP/EA 16-394 WHEREAS, the City Council of the City of Palm Desert did on the 9th day of May 2019, held a duly noticed public hearing to consider the request by The Sands Apartments, LP and New Cities Investment Partners, LLC, and 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 Palm Desert (the "City"), to issue revenue bonds in accordance with Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code for the purpose of financing multifamily rental housing projects; and WHEREAS, The Sands Apartments, LP or a partnership of which New Cities Investment Partners, LLC (the "Developer"), consisting at least of the Developer or a related person to the Developer and one or more limited partners, has requested that the Authority adopt a plan of financing providing for the issuance of multi -family 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 $90,000,000 in outstanding aggregate principal amount, to finance the acquisition, construction and development of a 384-unit multi -family rental housing project located at 74- 351 Hovley Lane East, Palm Desert, California, (the "Project'); and WHEREAS, 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 WHEREAS, the members of this City Council (this "City Council") are the applicable elected representatives of the City; and WHEREAS, 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 WHEREAS, 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 RESOLUTION NO. 2019- 21 WHEREAS, 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 WHEREAS, 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 PALM DESERT, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. The above recitals are true and correct and constitute the findings of the City Council in this case. 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 constitutes 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. Neither the City nor its staff have fully reviewed or considered the financial feasibility of such Project or the expected financing or operation of such Project with regards to any State of California statutory requirements. 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, rehabilitation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; of (iv) take any further action with respect to the Authority or its membership therein. SECTION 5. This resolution shall take effect immediately upon its passage. -2- P6401-0001\2293605v2.doc RESOLUTION NO. 2019- 21 PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 91h day of Mav 2019, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: SUSAN MARIE WEBER, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA -3- P6401-0001 \2293605v2.doc NOTICE, OF PUBLIC HEARING REGARDING ISSUANCE OF MULTIFAMILY HOUSING REVI1.NUI.". BONDS FOR THE SANDS APARTMF.NTS NOTICE IS HEREBY GIVEN that, at 4:00 p.m., or as soon thereafter as the matter can be heard, on Thursday, May 9, 2019, at the Civic Center Council Chamber, 73510 Fred Waring Drive, Palm Desert, California, the City Council of the City of Palm Desert (the "City") will conduct a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 (the "Code'), at which it will hear and consider information concerning a proposed plan of financing providing for the issuance by the California Statewide Communities Development 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, and at no time to exceed $90.000,000 in outstanding aggregate principal amount, to finance or refinance the acquisition, construction and development of a 384-unit multifamily rental housing project located at 74351 I lovley Lane East, Palm Desert. California. The facilities are to be owned by The Sands Apartments, LP (the "Borrower') or a partnership of which New Cities Investment Partners. LLC (the "Developer') or a related person to the Developer is the general partner (the "Project"). Those wishing to comment on the proposed financing or refinancing and the nature and location of the Project may either appear in person at the public hearing or submit written comments, which must be reccived by the City prior to the hearing. Written comments should be sent to City of Palm Desert at 73510 Fred Waring Drive. Palm Desert, California 92260-2578 Attention: City Clerk. CITY CLERK CITY OF PALM DESERT Dated: May 2. 2019 RESOLUTION NO. 2019-2.1 A RESOLUTION OF THE CITY COUNCIL OF THE CiTY OF PALM DESERT APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE SANDS APARTMENTS WHEREAS. the California Statewide Communities Devclopment 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 Palm Desert (the "City"), to issue revenue bonds in accordance with Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code for the purpose of financing multifamily rental housing projects; and WHEREAS. The Sands Apartments, LP or a partnership of'which New Cities Investment Partners, LLC (the "Developer") or a related person to the Developer is the general partner, has requested that 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 $90.000.000 in outstanding aggregate principal amount (the "Bonds*'), to finance or refinance the acquisition, construction and development of a 384-unit multifamily rental housing project located at 74351 I lovley Lane East. Palm Desert, California (the "Project"): and WHEREAS, pursuant to Section 147(t) 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 WHEREAS, the members of this City Council (this "City Council") are the applicable elected representatives of the City; and WHEREAS. 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 spccified in such notice: and WHEREAS, 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 WHEREAS, 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 WHEREAS, 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. TI IEREFORE, BE IT RESOLVED BY TIIE CITY COUNCIL OF THE CITY OF PAI,M DESERT AS FOLLOWS: Section 1. The above recitals are true and correct. 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. This resolution shall take effect immediately upon its passage. ADOPTED by the City Council of the City of Palm Desert at a regular meeting of' said Council held on the 9th day of May. 2019, by the following vote: AYES: NOES: ABSENT: Mayor AT"I EST - City Clerk