HomeMy WebLinkAbout5/7/2003 - STAFF REPORTS (15) DATE: MAY 7, 2003
TO: CITY COUNCIL
FROM: DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT
CONDUCTING A TEFRA (TAX AND EQUITY FISCAL RESPONSIBILITY ACT)
HEARING FOR THE PROPOSED ISSUANCE OF CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY BONDS IN AN AMOUNT NOT TO
EXCEED $28,000,000 FOR THE PURPOSE OF ASSISTING COMMUNITY
MULTIHOUSING, INC. CONSTUCT A 359-UNIT APARTMENT PROJECT AT THE
SOUTHWEST CORNER OF ARENAS ROAD AND HERMOSA DRIVE
RECOMMENDATION:
It is recommended that the City Council consider an application by Community
Multihousing, Inc. for tax-exempt bond financing for the construction of Palm
Springs Apartments at the southwest corner of Arenas Road and Hermosa
Drive, with bonds issued by the California Statewide Communities Development
Authority. Though the City is already a member of the Authority, such an
approval requires the City to conduct the public hearing and approve the
Authority's issuance of indebtedness.
SUMMARY:
Community Multihousing, Inc. is proposing a 359-unit apartment project in
Section 14, at the corner of Arenas Road and Hermosa Drive. The project has
not been submitted to Planning for approval yet. The developer applied in the
April 16, 2003 round of tax-exempt bond approvals through the California Debt
Limit Advisory Commission, in order to beat the deadline on the prevailing wage
exemption under SB 975. SB 975, enacted in 2001, requires the payment of
prevailing wages to all state-funded projects, including affordable housing
projects. Even those funded by tax-exempt bonds or other state housing
money, as well as redevelopment funds, would be subject to prevailing wage
laws. The law allowed an exemption, however, to affordable housing projects
entitled by December 31, 2003. The bonds would be issued by California
Communities, a statewide community development JPA. Federal tax law
requires that the recipient of such financing set aside 20% of its units for low- or
moderate income residents. The City, however, is required to conduct a TEFRA
public hearing required of all tax-exempt bonds; the City is already a member of
the California Statewide Communities Development Authority.
BACKGROUND:
Community Multihousing, Inc, has applied for an allocation of tax-exempt bonds
from the State of California to construct a 359-unit rental housing project in
Section 14 in Palm Springs, at Arenas and Hermosa. The developer, based in
Los Angeles, has constructed and owns several thousand units of rental
housing in the state. This project would feature 80% market rate units and 20%
affordable units (at either 50% or 60% of area median income), but has not yet
been submitted to Planning. The push for the approval of the financing prior to
the entitlement is due to the provision in SB 975, which grants relief on the
prevailing wage requirement to projects that have received their funding and are
entitled by December 31, 2003. /��
Staff is recommending the approval of the TEFRA resolution because the 72
units made available under the bond issue would count toward the Agency's
15% Inclusionary housing" responsibility under Redevelopment Law, which
require that the Agency ensure that 15% of housing units constructed or
rehabilitated within a project area be made available to persons of low-or
moderate income. This project is in Merged Project Area #2 (formerly Baristo
Farrell).
The bond issue is for a not-to-exceed amount of$28,000,000, or$77,994 per
unit. The Developers have not yet requested any Agency assistance, nor has
the Agency made any financial commitment to the project. The City is required
to conduct a TEFRA public hearing required of all tax-exempt bonds; the City is
already a member of the California Statewide Communities Development
Authority.
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JOHNS) RAY ND
Dfreckcrr of Co unity and Economic Development
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APPROVED,—,��=
City Manager
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ATTACHMENTS:
1. Resolution
2. Public Hearing Notice
CITY OF PALM SPRINGS
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the Palm Springs City Council at its regular meeting on May 7,
2003 at City Hall, located at 3200 East Tahquitz Canyon Way, Palm Springs, CA will hold a
public hearing as required by Section 147(f) of the Internal Revenue Code of 1986, and
consider approval of the issuance by the California Statewide Communities Development
Authority (the "CSCDA") of multifamily housing revenue bonds in the aggregate principal
amount of not to exceed $28,000,000, the proceeds of which shall be used for the purpose of
financing the acquisition and construction of a 359-unit multifamily residential rental facility to be
commonly known as the Palm Springs Apartments which is to be located at the Southwest
corner of Arenas Road and Hermosa Drive, Palm Springs, California. The owner of the Project
will be Community Multihousing, Inc., or a limited liability company or limited partnership to be
formed by Community Multihousing, Inc.
All those interested in matters related to the issuance of the revenue bonds are invited to attend
and be heard at the meeting or submit written comments, which must be received by the City
prior to the hearing. If you have any questions regarding this matter, please call Michael
LaPierre of the CSCDA, at 800/635-3993 ext 12. Written comments should be sent to the City
of Palm Springs, 3200 East Tahquitz Canyon Way, California 92262, Attention: City Clerk.
By: /s/ Patricia A. Sanders Dated: April 21, 2003
City Clerk
A-3
Proof of Publication
In Newspaper
STATE OF CALIFORNIA
County of Riverside
Jacquelin K. Welch says:
1. 1 am a citizen of the United States, a
resident of the City of Desert Hot CITY OF PALM SPRINGS
Springs, County of Riverside, State of NOTICE OF PUBLIC NEARING
California, and over the age of 18 years. NOTICE IS NEREBY GIVEN that the Palm Springs City CauacI
2, 1 am the Research & Production at Its negularmeeemg on"7,2003 M City Na%Io atad at 320g
Ea81 Tahqudz Canyon Way,Palm spnngA CA WE hold a pap),
of The Public Record, a hearing as required by section 147(0 OF 1%Internal Rme_riue
00de Of 1 ,
and conslrlor approval Of Poe Issuance by the
newspaper of general circulation printed aRomie S lalewine Communities Oevefopment Authomy (the
and published in the City of Palm 'GSCDA7of multifamily housing revenue bonds in the aggregate
Springs, Count of Riverside, State of Principal amount of not to"Load SOf$28,000,000,the Proceeds
y of which shall be used for#,a Purpose oflMancmg eacgmsNon
California. Said The Public Record is a antl onstrucgon OFa 359-untt multifamily resdenbalrental/aaliry!O be commonly known as me palm spfxgs Apartments which iO
newspaper of general circulation as that to be lcooled at the SOelhWeef comer of Arenas Road and
Hermosa Drive, Palm Springs, Cablomla. The owner of the
term is defined in Government Code Prolact WA be omanun„y MNtrmOusr^g,lx,ora lowerliof t
section 6000, its status as such having companyMultm^using,lmited partnership to be lOrmed by Community
been established by judicial decree of the
Aft those mfemolstl in mmlers related to the isouanoe of the
Superior Court of the State of California in revenuebondsaremvrladtoatendandbehearsa at themete
and for the County of Riverside n C9 Ors omit writes comments,which must be received by the
Proceeding No. Indio 49271 dated this Matter,the hearing If you have any questions regarding
ease 600/96tt39931e#12ca W hanll lomal �nts shoed be entsene I(Me ttto the
March 31 , 1987, entered in Judgment City of,Palm Springs, 32U0 East Tahopou, Canyon way,
Brook No. 129, page 355, on March 31 , Callisma 92262,Attention Orly Clerk,
1987. By 151 Patricia Sanders
3. The Public Record is a newspaper of 01y Clark Daletl'Ap 121,Z003
general circulation ascertained and Apn122,200g
established in the City of Palm Springs in
the County of Riverside, State of
California, Case No, RIC 358286, Filed
June 8, 2001.
4. The notice, of which the annexed is a
true printed copy, was published in the
newspaper on the following publication
dates to wit:
April 22, 2003
1 certify under penalty of perjury that the
above is true and correct.
Dated at Palm Springs, California,
this 22ntl day of April 2003.
Jacquelin K. Welch
Research & Production Assistant f
d
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS APPROVING THE ISSUANCE OF MULTIFAMILY
HOUSING REVENUE BONDS FOR THE PURPOSE OF
FINANCING THE ACQUISITION AND CONSTRUCTION OF THE
PALM SPRINGS APARTMENTS
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") is authorized by the laws of the State of California (the "Law") to execute and deliver
multifamily housing revenue obligations for the purpose of financing the acquisition, construction
and development of multifamily residential rental facilities located within the area of operation of
the Authority which are to be occupied, in part, by very low and low income tenants; and
WHEREAS, Community Multihousing, Inc., or a limited liability company or limited
partnership to be formed by Community Multihousing, Inc. (the 'Borrower") has requested the
Authority to issue and deliver multifamily housing revenue obligations in the anticipated principal
amount of$28,000,000 (the "Obligations"), the proceeds of which shall be used for the purpose
of financing the acquisition and construction of a 359-unit multifamily residential rental facility to
be commonly known as the Palm Springs Apartments which is to be located at the Southwest
corner of Arenas and Hermosa Streets in the City of Palm Springs, California (the 'Project');
and
WHEREAS, the Obligations to be issued and delivered to finance the acquisition and
construction of the Project will be considered "qualified exempt facility bonds" under Section
142 (a) of the Internal revenue Code of 1986, as amended (the "Code"), and Section 147(f) of
the Code requires that the "applicable elected representative" with respect to the Project hold a
public hearing on the issuance and delivery of the Obligations; and
WHEREAS, the City Council of the City of Palm Springs as the "applicable elected
representatives" to hold said public hearing, has held said public hearing at which all those
interest in speaking with respect to the financing of the Project were heard.
NOW, THEREFORE, BE IT RESOLVED as follows:
1. The City Council hereby finds and determines that the foregoing recitals are true
and correct.
2. The City Council hereby approves the financing of the Project by the Authority
with the proceeds of the Obligations.
3. The issuance and delivery of the Obligations shall be subject to the approval of
and execution by the Authority of all financing documents relating thereto to which the Authority
is a party and subject to the sale of the Obligations by the Authority.
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4. The adoption of this Resolution is solely for the purpose of meeting the
requirements of the provisions of the Internal Revenue Code of 1986, as amended, and shall
not be construed in any other manner, with neither the City nor its staff having fully reviewed or
considered the financial feasibility of the Project or the expected operation of the Project with
regards to any State of California statutory requirements, and such adoption shall not obligate,
without further formal action to be taken by this City Council, including, but not limited to, the
approval of the financing documents by the City Council by resolution, (i) the City to provide
financing to the Developer for the acquisition, construction and development of the Project or to
issue the Obligations for purposes of such financing; or (ii) the City, or any department of the
City, to approve any application or request for, or take any other action in connection with, any
environmental, General Plan, zoning or any other permit or other action necessary for the
acquisition, construction, development or operation of the Project.
5. The City Clerk of the City shall forward a certified copy of this Resolution and a
copy of the affidavit of publication of the public hearing notice to:
Thomas A. Downey
Jones Hall, A Professional Law Corporation
650 California Street, 181" Floor
San Francisco, California 94108
6. This resolution shall take effect upon its adoption.
ADOPTED THIS day of 12003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk Mayor
REVIEWED AND APPROVED AS TO FORM:
C a
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