HomeMy WebLinkAbout23124 RESOLUTION NO. 23124
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, ACTING SOLELY IN ITS
CAPACITY AS HOUSING SUCCESSOR AGENCY,
APPROVING, AUTHORIZING, AND DIRECTING
EXECUTION OF A SUBORDINATION AGREEMENT WITH
UNION BANK WITH RESPECT TO CERTAIN LOANS
PREVIOUSLY MADE BY THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM
SPRINGS TO ASSIST IN FINANCING THE
REHABILITATION OF THE SAHARA MOBILE HOME
PARK. A6230.
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs
(the "Agency") has established an affordable housing set-aside fund, in accordance with
Section 33000 et. seq. of the California Health and Safety Code; and
WHEREAS, AB X1 26 was signed by the Governor of California on
June 29, 2011, making certain changes to the Redevelopment Law, including adding
Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section
34170) to Division 24 of the California Health and Safety Code, suspending most
redevelopment agency activities and, among other things, prohibiting redevelopment
agencies from incurring indebtedness or entering into or modifying contracts; and
WHEREAS, effective February 1, 2012, all existing redevelopment agencies and
redevelopment agency components of community development agencies were
dissolved; however, except for those provisions of the Redevelopment Law that are
repealed, restricted, or revised pursuant to AB X1 26, all authority, rights, powers, duties
and obligations previously vested with the former redevelopment agencies under the
Redevelopment Law, are vested in the successor agencies; and
WHEREAS, at a meeting of January 4, 2012, the City of Palm Springs took
action to designate itself as the Successor Agency and the Housing Successor Agency
to the Community Redevelopment Agency, as provided in California Health and Safety
Code §§ 34173 and 34176; and
WHEREAS, pursuant to Cal. Health & Safety Code §34176, the City expressed
its intention to retain the housing assets and functions previously performed by the
Palm Springs Community Redevelopment Agency and assume all rights, powers,
assets, liabilities, duties, and obligations associated with the housing activities of the
Palm Springs Community Redevelopment Agency; and
WHEREAS, the City of Palm Springs (the "City') previously issued its Mobile
Home Park Revenue Bonds (Sahara Mobile Home Park) Series 2002A and its Mobile
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Home Park Subordinate Revenue Bonds (Sahara Mobile Home Park) Series 2002E
(together, the 'Prior Bonds") pursuant to an Indenture of Trust dated'as of May 1, 2002
(the "Prior Indenture") between the City and Union Bank, N.A. (formerly known as Union
Bank of California, N.A.), in such capacity (the "Prior Trustee"), and loaned the
proceeds of the Prior Bonds (the "Prior Loan") to Millennium Housing Corporation, a
California nonprofit public benefit corporation (the "Prior Borrower"), in order to provide
financing with respect to the acquisition and rehabilitation of the Sahara Mobile Home
Park (the "Project") located in the City; and
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs
(the "Agency") previously entered into an Owner Participation Agreement dated June 5,
2002, as amended by a First Amendment to the Owner Participation Agreement dated
February 20, 2007 (together, the "OPA"), with the Prior Borrower pursuant to which the
Agency provided an initial loan in the amount of $400,000 and a subsequent loan in the
amount of $450,00 (together, the "Agency Loan") to provide additional financing with
respect to the rehabilitation of the Project; and
WHEREAS, the Agency Loan is evidenced by certain promissory notes of the
Prior Borrower (the "Agency Notes') and is secured by a Deed of Trust with Assignment
of Rents and Rider attached thereto containing terms including Security Agreement and
Fixture Filing dated June 5, 2002 (the "Agency Mortgage") encumbering the Project;
and
WHEREAS, as a condition of the OPA, the Borrower also entered into an
Agreement Containing Covenants dated June 5, 2002 (the 'Restrictive Covenant')
encumbering the Project; and
WHEREAS, the Independent Cities Finance Authority, a joint powers authority
organized and existing under the laws of the State of California (the "Authority"),
proposes to issue its Mobile Home Park Revenue Refunding Bonds (Sahara Mobile
Home Park) Series 2012A (the "Series A Bonds'), its Mobile Home Park Subordinate
Revenue Refunding Bonds (Sahara Mobile Home Park) Series 2012E (the "Series B
Bonds) and its Mobile Home Park Subordinate Revenue Refunding Bonds (Sahara
Mobile Home Park) Series 2012C (Federally Taxable) (the "Series C Bonds' and
together with the Series A Bonds and the Series B Bonds, the 'Bonds"); and
WHEREAS, Millennium Housing LLC, a California limited liability company (the
"Owner"), has requested that the Authority issue and sell the Bonds in an aggregate
principal amount of not to exceed $15,500,000 to (i) refund the Prior Bonds, (ii) finance
additional renovations and improvements to the Project and (iii) finance certain costs of
issuing the Bonds; and
WHEREAS, in order to facilitate the issuance and sale of the Bonds, the Owner
has requested that the City, as the successor to the Agency, agree to subordinate the
Agency Loan, the OPA, the Agency Note, the Agency Mortgage and the Restrictive
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Covenant as set forth in a Subordination Agreement (the "Subordination Agreement') to
be entered into with Union Bank, N.A., as trustee; and
WHEREAS, there is now before this City Council (the "City Council") a form of
the Subordination Agreement; and
WHEREAS, the City has determined that the issuance of the Bonds to refinance
the Prior Bonds and to finance additional renovations to the Project will benefit the
tenants residing therein and will benefit the City by improving the affordable housing
available within the City.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY
RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby approves the Subordination Agreement, in
substantially the form on file with the City Clerk, with such changes as are not
inconsistent with the purposes of this Resolution. The Mayor, City Manager, City Clerk,
and any other proper officers and officials of the City are hereby authorized to execute
the same on behalf of the City. The Mayor, City Manager, City Clerk, and any other
proper officers and officials of the City are hereby authorized and directed to take all
steps on behalf of the City to perform and discharge the obligations of the City under
said instrument.
SECTION 2. The adoption of this Resolution shall not obligate the City or any
department thereof to (i) provide any additional financing with respect to the Project or
(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 operation of the Project.
SECTION 3. This Resolution shall take effect immediately upon its adoption.
ADOPTED THIS 18T" DAY OF APRIL, 2012.
David H. Ready, Cit Eger
ATTEST:
ames Thompson, City Clerk
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CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. 23124 is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on 18th day of April, 2012, by the
following vote:
AYES: Councilmember Hutcheson, Councilmember Lewin, Councilmember Mills,
Mayor Pro Tern Foat, and Mayor Pougnet.
NOES: None.
ABSENT: None.
ABSTAIN: None.
mes Thompson, City Clerk A /1b[za1 7-
City of Palm Springs, California