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HomeMy WebLinkAboutCandlewood Apts./Res 533PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVAL OF REDEVELOPMENT AGENCY RESOLUTION NO. 533 DECLARING ITS INTENT TO REIMBURSE EXPENDITURES FOR THE ACQUISITION AND REHABILITATION OF PROPERTY FROM THE PROCEEDS OF BONDS SUBMITTED BY: DAVID YRIGOYEN, DIRECTOR OF REDEVELOPMENT/HOUSING DATE: SEPTEMBER 14, 2006 CONTENTS: REDEVELOPMENT AGENCY RESOLUTION NO. 533 Recommendation: By Minute Motion, that the Redevelopment Agency approve Resolution No 5J3 declaring its intent to reimburse expenditures for the acquisition and rehabilitation of the Candlewood Apartments from the proceeds of tax- exempt bonds. Executive Summary: Approval of the Resolution will allow the Agency to reimburse funds expended for the acquisition of the Candlewood Apartments, as well as rehabilitation costs, from the proceeds of tax-exempt bonds to be issued by the Agency or the Palm Desert Financing Authority. Discussion: The Candlewood Apartments, located at 74-002 Shadow Mountain Drive, have been identified as existing affordable housing that is at risk. The Agency acquired the subject property on August 2, 2006. The housing bonds are expected to be issued by the Agency or the Authority within the next few months for the purpose of reimbursing the housing fund for amounts spent on the acquisition and rehabilitation of the Candlewood Apartments prior to the issuance of the bonds. The housing bonds will also finance other affordable housing purposes. The attached Resolution declares the intent of the Agency to make the reimbursements and will allow the Agency to reimburse the cash expended from the housing fund on the acquisition and rehabilitation with bond funds. P6402-00010136280. doc G NRDA'%MarLa HunOWPDATAI,SCOMSlaH Rpts`.091406 Hsng Bonds Remb DOC Staff Report Approval of Redevelopment Agency Resolution Declaring Its Intent to Reimburse Expenditures for the Acquisition of Property and Immediate Rehabilitation from the Proceeds of Bonds Page 2 September 14, 2006 Staff is recommending that the Redevelopment Agency approve the Resolution. Submitted by: -� -`Dave Yrigoy Director o development/Housing DY:AKS:mh ADDroval: pment Paul S. Gibson, Director of Finance A' Carlos L. Orte , Executive Director RDA O*�0(7&tJBY N VERIFIED BY Original on file with City Jerk's Office P6402-0001 \913628v1.doc 2 RESOLUTION NO. 5n A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY DECLARING ITS INTENT TO REIMBURSE EXPENDITURES FOR THE ACQUISITION AND REHABILITATION OF PROPERTY FROM THE PROCEEDS OF BONDS THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The Palm Desert Redevelopment Agency has acquired the property known as the Candlewood Apartments, located at 74-002 Shadow Mountain Drive, in the City of Palm Desert. Section 2. The Agency used moneys on hand in the Agency's low and moderate income housing fund to pay for the acquisition of the subject property and intends to pay for certain rehabilitation costs of the property from the housing fund. The Agency intends that such payments be reimbursed to the low and moderate income housing fund from the proceeds of bonds or other obligations to be issued by the Agency or by a related public entity. The Agency expects that all such expenditures will be reimbursed with proceeds of such bonds. Section 3. Section 1.150-2 of the Treasury Regulations governs the allocation of expenditures of a reimbursement bond. A reimbursement bond is that portion of an issue of bonds (or other obligations) allocated to reimburse an original expenditure (i.e., an expenditure for a governmental purpose that is originally paid from a source other than a reimbursement bond) that was paid before the date of issue of the bonds. Section 1.150-2 provides rules to determine when an allocation of proceeds of bonds to reimburse an original expenditure will be treated as an expenditure of those proceeds. Section 4. In order for such an allocation of those proceeds to be treated as an expenditure, the issuer (or in certain cases, a conduit borrower) of the bonds must, in accordance with Section 1.150-2, adopt an official intent for the original expenditure. The official intent is a declaration of intention by the issuer to reimburse the original expenditure with proceeds of bonds. Such official intent is declared in Section 2 hereof. Section 5. The maximum principal amount of bonds or other obligations expected to be issued by the Agency or by a related public entity to pay for such acquisition and rehabilitation costs of the subject property is $4,000,000. P6402100011913627v 1.doc Section 6. This official intent is not declared as a matter of course and is not declared in an amount substantially in excess of the amounts expected to be necessary to reimburse the expenditures described in Section 2 hereof. PASSED, APPROVED and ADOPTED this 14th day of September 2006 by the following vote, to wit: AYES: NOES: ABSENTS: ABSTAINS: Jim Ferguson, Chairman Attest: Rachelle D. Klassen, Secretary P6402100011913627v1.doc 2