The URL can be used to link to this page

Home My WebLink About7/17/2002 - STAFF REPORTS (20) ll DATE: JULY 17, 2002 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 $10,000,000 FOR THE PURPOSE OF ASSISTING NORTHWOODS-PALM SPRINGS APARTMENTS, LLC CONSTRUCT A 104-UNIT APARTMENT PROJECT AT THE SOUTHEAST CORNER OF ARABY ROAD AND EAST PALM CANYON DRIVE RECOMMENDATION: It is recommended that the City Council consider an application by Northwoods- Palm Springs, LLC for tax-exempt bond financing for the construction of Northwoods Palm Springs Apartments at the southeast corner of Araby Road and East Palm Canyon 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: Northwoods Palm Springs Apartments received its development approvals for a 104-unit apartment complex on 4.97 acres at Araby Road and East Palm Canyon Drive in January 2001. The intent of the project was that it be luxury, market rate apartments. After exhausting other financing opportunities, the developers are now attempting to secure tax-exempt bond financing 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 developers also asked for Agency financial assistance, which would have required additional units be set aside for low- and moderate income residents; however, the Agency is not committing any funds to the project. 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: Northwoods Palm Springs Apartments received its development approvals for a 104-unit apartment complex on 4.97 acres at Araby Road and East Palm Canyon Drive in January 2001. There was some opposition from the neighboring condominium residents related to density, traffic, and encroachment into the setback; the last point necessitated a site plan change to accommodate the building height. The design of the project is very clean and the addition of 104 units of new, luxury rental housing was a welcome addition to the city, which has not seen any new apartments constructed in about 10 years. Financing the project through conventional means, however, has been a f struggle. Notwithstanding the rapid increase in home prices and the steady increase in rents over the past three or four years, average rent levels in the Palm Springs area are now enough to preclude a property appraisal that would support the development of new units. The gap problem that exists in the development of affordable housing because of contractually restricted rents also exists (albeit in a slightly reduced form) in the market-rate apartment market because of low "comps" available to appraisers. Staff is recommending the approval of the TEFRA resolution because the 21 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 #1 (formerly 9-F). The bond issue is for a not-to-exceed amount of$10,000,000, or about$96,000 per unit. The Developers had also requested Agency assistance in the amount of $1,000,000, but the Agency has not 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. JOHN . RAY O D irec r of Com unity and Economic Development APPROVE c` City Manager ATTACHMENTS: REVIEWED BY DK OF FINANCE 1. Resolution 2. Public Hearing Notice PROOF OF PUBLICATION This is space for county clerks rilin.g Stannp (2015.5.C.C.P) STATE OF CALIFORNIA County of Riverside _ ----------------------------------------- I am a citizen of the United States and a resident of Proof of Publication of the County aforesaid;I am over the age of eighteen --------------------------------------------- years,and not a party to or interested in the No.192`F PALM sPalNos above-entitled matter.I am the principal clerk of a I NOTICE OF PUBLIC HEARING printer of the,DESERT SUN PUBLISHING NOTICE IS HEREBY GIVEN that the gPain,S rin a COMPANY a newspaper of general circulation, C t council ataid its pubes tar mepeal�d considero �p� printed and published in the city of Palm Springs, 1200��l or the issuanoe by me Caotorma statewide Communities Development Authority (the County of Riverside,and which newspaper has been !'CSCDA)of multrtamily housing revenue bonds adjudged a newspaper of general circulation by the in the aggregate principal amount of not to which ceed $10,000000 the Principal amount q which Superior Court of the County of Riverside,State of wit b- applied to the financingq of the acquisition and new construction of a 104-unit multifamily California under the date of Minch 24,1958.Case ryoir mo,onus n Plafm'stpydcommonly gs�ine lyProjecct")alocat Number 191236; that the notice,of which the ed at the corner of e Palm canyon Dr and Araby annexed is a printed copy(set in type not smaller Dr IF the city of Pain, Springs, CA. than non pariel,has been published in each regular The owner of the Project will be Normwoods - and entire Issue of said newspaper and not in any Palm Springs, a Califai nia Limited liability Comps- ny supplement thereof on the following dates,to wit: All these interested in mtteis related to 'he"au- duly 3"n once of the revenue bonds are invited to attend I - and be heard at tlendmwdltbe held in Cd)r Hall's ------..________________._________—---—-------_--------------- mence at 7:0opm, Council Chambers located at 320 ou have any Canyon Wa Palm S rin s, lease call Mr- questions 9 questions regarding this matterza 800/635-3993 ---------------__—------------------------------------------ h shoot L2Pierre of t c CS All in the year 2002 ext 12 i ly with the bih I certify(or declare)under penalty of perjury that the It s the intention of the City to coin American with Disahea Act (AD) in all re- foregoing is true and correct. spects If, as an attandee or a participant at this 3rd hearing, special assistance is needed beytto ond what is normally provided, Y will accommodate M -very reaADA Cooed n tor, ouncr Doled at Palm Springs,California this-------------day Please contact Phil Kaplan, to the hearing to July 323-3219, at least 3 days p and ea deter- inform us or the particular needs) of------------------------------------,2002 mine if accommodation is feasNle. gy:/s/Patncra A.Sanders Dated July 3,2002_• Qty ClarkPUO' July 3, 2002 Signature RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $10,000,000 AGGREGATE PRINCIPAL AMOUNT OF CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR THE PURPOSE OF ASSISTING NORTHWOODS-PALM SPRINGS, LLC TO CONSTRUCT THE NORTHWOODS PALM SPRINGS APARTMENTS AT THE SOUTHEAST CORNER OF ARABY ROAD AND EAST PALM CANYON DRIVE WHEREAS, the City of Palm Springs is a member of the California Statewide Communities Development Authority; and WHEREAS, Northwoods Palm Springs, LLC, a California limited liability corporation (the 'Borrower"), has requested that the California Statewide Communities Development Authority ("Authority") issue and sell revenue bonds for the purpose of providing financing for the construction of 104-units, including 21 low- income apartment units located at the southeast corner of Araby Road and East Palm Canyon Drive ('Project'); and WHEREAS, the financing of the Project will lessen the governmental burden of the City by providing 21 affordable housing units within the City; and WHEREAS, the Authority proposes to issue its not to exceed $10,000,000 aggregate principal amount Bonds in one series (the 'Bonds") as authorized by law to finance the construction and development by the Borrower of the Project; and WHEREAS, as required by Section 147(f) of the Internal Revenue Code of 1986, as amended, this City Council has on this date conducted a duly noticed public hearing with respect to the proposed issuance of the Bonds and financing the Project, such notice being published in a newspaper of general circulation in the City; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM SPRINGS AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. The California Statewide Communities Development Authority's bond issue, in an amount not to exceed $10,000,000 aggregate principal amount, pursuant to the Law to finance the development and construction of the Northwoods Palm Springs Apartments at the southeast corner of Araby Road and East Palm Canyon Drive, is hereby approved. ADOPTED THIS_day of , 2002. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA City Clerk City Manager REVIEWED AND APPROVED AS TO FORM: