HomeMy WebLinkAboutRes 2018-27 - Proposed Bond Issuance - The Sands Apt Prjct RESOLUTION NO. 2018-27
STAFF REPORT •
CITY OF PALM DESERT
COMMUNITY DEVELOPMENT DEPARTMENT
DATE: May 10, 2018
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. 2018- 27
recommending that the California Statewide Communities Development Authority
issue bonds for the financing of the 388-unit Sands Apartment project.
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. In addition, 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 and will provide housing for renters and lower-income households.
Executive Summary
Approval of staffs 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 multifamily housing projects. Adoption of a resolution would
allow the California Statewide Communities Development Authority to issue housing bonds
for the financing of the construction of 388-unit Sands Apartment project. There are no fiscal
impacts or commitments to the City of Palm Desert.
G:\Planning\Eric Ceja\Case Res\PP\PP 16-394 Canterra II\CC\CC Staff Report-The Sands(TEFRA).doc
May 10, 2018 - Staff Report
Case No. TEFRA Hearing for The Sands Apartments
Page 2 of 2
Background Analysis
On April 26, 2018, the City Council unanimously adopted a resolution approving a density
bonus for the development of a 388-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 California Statewide Communities Development
Authority (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. 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.
Findings 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 contained in City Council Resolution No. 2018-
27 , attached to this staff report.
Fiscal Analysis
No fiscal impact.
LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER
N/A
Robert W. Hargreaves Ryan Stendell an Moore Lauri Aylaian
City Attorney Director of Community director 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. 2018- 27
2. City Council Public Hearing Notice
G:\Planning\Eric Ceja\Case Files\PP\PP 16-394 Canterra INCC\CC Staff Report-The Sands(TEFRA).doc
CITY COUNCIL RESOLUTION NO. 2018- 27
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, APPROVING THE ISSUANCE BY THE
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
OF MULTIFAMILY 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 10th day of May
2018, hold a duly notice 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 created by 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 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 $90,000,000
in outstanding aggregate principal amount, to finance the acquisition, construction and
development of a 388-unit multifamily rental housing project located at 74-351 Hovley Lane
East, Palm Desert, California, generally known as The Sands Apartments (the "Project")
and operated by Alliance Residential; and
WHEREAS, the Bonds or a portion thereof will be "private activity bonds" for purposes
of the Internal Revenue Code of 1986 (the "Code"); 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
CITY COUNCIL RESOLUTION NO. 2018- 27
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, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM DESERT, CALIFORNIA, 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. This resolution shall take effect immediately upon its passage.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm
Desert, California, at its regular meeting held on the 10th day of May 2018, by the following
vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
SABBY JOHNATHON, MAYOR
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
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CITY Of POIM DESERT
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73-510 FRED WARING DRIVE
j - v PALM DESERT, CALIFORNIA 9 2 260-2 5 78
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info@cityofpalmdcsett.org
MULTIFAMILY HOUSING REVENUE BONDS FOR
THE SANDS APARTMENTS
NOTICE IS HEREBY GIVEN that, at 4:00 p.m., or as soon thereafter as the matter
can be heard, on Thursday, May 10, 2018, 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,
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 multifamily
housing revenue 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 multifamily rental housing project located at 74351 Hovley Lane
East, Palm Desert, California. The facilities are to be owned by The Sands Apartments, LP (the
"Borrower") or a partnership created by 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, operated by Alliance Residential, and are generally known as The Sands Apartments(the
"Project").
Those wishing to comment on the proposed financing and the nature and location
of the Project may either appear in person at the public hearing or submit written comments, which
must be received 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.
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT
Dated: April 26, 2018
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