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Home My WebLink AboutItem No. 19 Issuance fo Tax Exempt Bonds Cottages at Mission TrailCity Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 19-057 Agenda Date: 3/12/2019 Status: PassedVersion: 2 File Type: ReportIn Control: City Council / Successor Agency Agenda Number: 19) Issuance of Tax Exempt Bonds for the Cottages at Mission Trail and Resolution Approving the Issuance of Bonds adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE COTTAGES AT MISSION TRAIL APARTMENTS Page 1 City of Lake Elsinore Printed on 5/10/2023 REPORT TO CITY COUNCIL To:Honorable Mayor and Members of theCityCouncil From:Grant Yates, CityManager Prepared by:Barbara Leibold, City Attorney Jason Simpson, Assistant City Manager Date:March 12, 2019 Subject:Issuance of Tax Exempt Bonds for the Cottages at Mission Trail and Resolution Approving the Issuance ofBonds Recommendation adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE COTTAGES AT MISSION TRAIL APARTMENTS Background On August 8, 2017, the City Council approved Resolution No. 2017-101 approving the issuance of bonds by the California Statewide Communities Development Authority (CSCDA) not to exceed $25,000,000, for financing the acquisition, construction and equipping of a 143- unit multifamily rental housing project generally known asthe Cottages at Mission Trail. Bond counsel to the CSCDA has requested the City Council to renew its approval of the issuance of the proposed multi-family housing revenue bonds. As proposed, the CSCDAwillserve as the municipal issuer of tax-exempt multi-family housing revenue bonds in an aggregate principal amount not to exceed $25,000,000 (Bonds). The proceeds of the Bonds will be used for the purpose of making a loan to the Developer/ Borrower, to finance the acquisition, construction and equippingof a 143-unit affordable multifamily housing rental project commonly known as Cottages at Mission Trail located at the intersection of Mission Trail and Sedco. The project will be owned and operated by the Borrower. In addition to Bond proceeds, the project will be funded by a City loan from pledged low and moderate income housing funds pursuant to the Summerly DDA, low and moderate income housing asset funds and Fund 106 –affordable housing in lieu fees. The City Council approved Page 2 of 2 Tax Exempt Bonds for the Cottages at Mission Trail March 12, 2019 Page 2of 2 the loan commitment on June 13, 2017 and, although the project has experienced unexpected delays, the project financing is expected to close within the next thirty (30) days. TheCity finance team and lenders representing the various funding sources are finalizing their review and analysis of the project proforma. Modifications, if any, to the City’s loan commitment will be presented to the City Council at its March 26, 2019 City Council meeting. Discussion In order for all or a portion of the Bonds to qualify as tax-exemptbonds, the City of Lake Elsinore (City) must conduct a public hearing (TEFRA Hearing) providing the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Adoption of the Resolution is solely for the purposes of satisfying the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA), the Internal Revenue Code and the California Government Code Section 6500 et seq. Prior to such TEFRA Hearing, reasonable notice mustbe provided to the members of the community. Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project. The attached public notice was published on February 26, 2019. CSCDA is a joint powers authority sponsored by the League of California Cities (League) and the California State Association of Counties (CSAC). CSCDA was created by the League and CSAC in 1988 to enable local government and eligible private entities access to low-cost, tax- exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California. CSCDA is comprised of more than 530 members, including the City of Lake Elsinore. CSCDA has issued more than $60 billion through 1,400 plus financings since 1988. Fiscal Impact There is no fiscal impact to the City. The Bondswill be issued as limited obligations of CSCDA, payable solely from revenues and receipts derived from a loan to be made by CSCDA to the Borrower with the Bond proceeds. The City bears no liability with respect to the issuance of the Bonds. Further, the City is not a party to any of the financing documents related to the Bond issuance and is not named in any of the disclosure documents describing the Bonds or the proposed financing. Exhibits A -ResolutionApproving Issuance of Bonds B -Notice RESOLUTION NO. 2019-___ A RESOLUTION OF THE CITY COUNCILOF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE COTTAGES AT MISSION TRAIL APARTMENTS Whereas,the California Statewide Communities Development Authority (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 (Agreement), among certain local agencies throughout the State of California, including the City of Lake Elsinore(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,Mission Cottages, LPor a partnership created by Civic Partners(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 financingproviding for the issuance of multifamily housing revenue bonds (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 $25,000,000in outstanding aggregate principal amount, to financeor refinancethe acquisition, construction and development of a 143-unit multifamily rental housing project located in the City of Lake Elsinore, California,at the Intersection of Mission Trail & Sedco Boulevard (APN 365-030-004)generally known as Cottages at Mission Trail Apartments (Project) and operated by US Residential; and Whereas,the Bonds or a portion thereof will be “private activity bonds” for purposes of the Internal Revenue Code of1986 (Code); and Whereas,pursuant to Section147(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(City Council) are the applicable elected representatives of the City of Lake Elsinore(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 Whereas,the Authority is also requesting that the City Councilapprove the issuance of any refunding bonds hereafter issued by the Authority for the purpose of refinancing the Bonds 4155-0924-3151 which financed the Project (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 COUNCILOF THE CITY OF LAKE ELSINOREDOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1.The above recitals are true and correct. Section 2.The City Councilhereby approves the issuance of the Bonds and the Refunding Bonds by the Authority. It is the purpose and intent of the City Councilthat 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 Cityare 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 and Adopted on this 12th day of March, 2019. Steve Manos, Mayor Attest: Mark Mahan, Deputy City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Mark Mahan, Deputy City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2019-___ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of March 12, 2019, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mark Mahan, Deputy City Clerk NOTICE OF PUBLIC HEARING REGARDING ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS FOR COTTAGES AT MISSION TRAIL APARTMENTS NOTICE IS HEREBY GIVEN that, at 7:00 p.m., or as soon thereafter as the matter can be heard, on Tuesday, March 12, 2019, at the Cultural Center, 183 N. Main Street, Lake Elsinore, California, the City Council of the City of Lake Elsinore (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 $25,000,000 in outstanding aggregate principal amount, to finance or refinance the acquisition, construction and development of a 143-unit multifamily rental housing project located in the City of Lake Elsinore, California at the Intersection of Mission Trail & Sedco Boulevard (APN 365-030-004). The facilities are to be owned by Mission Cottages, LP (the “Borrower”) or a partnership created by Civic Partners (the “Developer”), consisting at least of the Developer or a related person to the Developer and one or more limited partners , operated by US Residential, and are generally known as Cottages at Mission Trail Apartments (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 received by the City prior to the hearing. Written comments should be sent to City of Lake Elsinore at 130 S. Main Street, Lake Elsinore, California 92530, Attention: City Clerk. CITY CLERK CITY OF LAKE ELSINORE Posted at City Hall on February 26, 2019 Published in the Press Enterprise on February 26, 2019