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Home My WebLink About6.1 ParkSierraMortgageRevBds 'P'J; ~,- \' r- . ..,..... ./ ~. , , !" - , ,- , !, t , ~- ., CITY CLERK File # D~I:3][Q]-[k][Q] AGENDA STATEMENT CITY COUNCIL MEETING DATE: February 3, 1998 Subject: Public Hearing to Authorize the Dublin Housing Authority to Issue Mortgage Revenue Bonds for the Purpose of Financing Park Sierra at Iron Horse Trail, a Multifitmily Residential Development (Report by Ophelia Basgal, Executive Director) Exhibit Attached: Resolutio!l Approving the Issuance of Bonds by the Dublin Housing Authority for the PurpOse of Providing :fimincing for a Multifitmily Residential Rental Housing Development to be Constructed by Park Sierra LLC < < , Recommendation: f\ / 4tfi y 1) Open Public Hearing - 2) Receive Staff Presentation 3) Receive Public Testimony 4) Close Public Hearing 5) Dehberate 6) Adopt Resolution . Financial Statement: No Financial Impact on the City or Housing Authority. Costs of Bond Issuance Paid by Developer. Ongoing Bond Payments Made by Developer, Supported by Fannie Mae. . Background: On November 18, 1997, the Dublin Housing Authority adopted a resolution (the "inducement resolution") declaring its intent to issue revenue bonds in order to finance the Park Sierra at Iron Horse Trail project proposed by Shea Homes. An inducement resolution is required by the federal tax code for all projects seeking private activity bond financing from a local or state government. As stated in the inducement resolution itse~ adoption of the resolution does not commit the Housing Authority to issuing the bonds. It simply "starts the clock" on the costs that may be reimbursed from a bond sale, should a sale occur. The Park Sierra project consists of283 units, 57 (20%) of which will be rented to very low-income tenants in accordance with the federal tax code and state law. Rents for the very low-income units are established at 30% of50% of median income, adjusted for household size. The U.S. Department of Housing and Urban Development (HUD) publishes the median income figures used in setting the rents. The 57 units will remain affordable for the longer of 15 years or as long as the bonds are outstanding. Subsequent to the November 18th meeting, Housing Authority staff and City staff met with representatives of Shea Homes and negotiated a sale price for the parcel ofland owned by the Housing Authority adjacent to the Park Sierra site. The Housing Authority Commission authorized the sale of its land to Shea Homes at its meeting of January 6, 1998. COPIES TO: ITEM NO. 6.1 K2/G/cc-mtgsl2-3-98/as-dha.doc f;, ~ ~~. r ~ ,. i ,: i: ( ,. t ~' l r: f- . t. !<: ~. -, - :. '~)'. ....." i PUBLIC HEARING REQUIREMENT Shea Homes has told staff that it would like the Housing Authority to submit an application to the State of California Debt Limit Allocation Committee (CDLAC) for private activity bond financing. The application is due Tuesday, February 17th. In order to submit an application the following must be completed and evidence of completion included with the application: . . Inducement Resolution Adopted . TEFRA Hearing Held . Resolution Approving Issuance of Bonds . Resolution Authorizing Application to CDLAC November 18, 1997 Subject Action Subject Action Housing Authority Agenda The TEFRA (Tax Reform and Fiscal Responsibility Act) hearing is required by the federal tax code. It gives any interested party the opportunity to comment on the financing of the project using tax exempt bonds. It is not a land ~ approval he3rlng. In accordance with the tax code, the TEFRA hearing was publicly noticed in the Valley Times on January 20, 1998. Upon closing the hearing, a resolution approving the issuance of the bonds must be adopted (attached). Ahhough the Dublin Housing Authority will be the bond issuer, the tax code requires that the. elected representatives of the local government, Le., the City Council, adopt the resolution approving the financing. In a separate action tonight, the Housing Authority will consider a resolution authorizing staff to file the application with CDLAC. LIKELmOOD OF RECEIVING AN ALLOCATION OF BOND AUTHORITY At this time, staff does not know how much tax-exempt bond authority will be assigned by CDLAC to muhifamily housing (as opposed to other eligible uses of tax-exempt bond authority). Current estimates . range from $800-950 million. Approximately $500 million of applications 'have been received for the January CDLAC meeting and CGMS, the Housing Authority's financial advisor, has strongly recommended that we submit our application for the March meeting as funds may be depleted after that time. In 1997, funds for multifamily housing bonds essentially were exhausted by summer. NEXT STEPS The subject action will be the final one for the City Council with respect to bond financing for this project. If the project receives an allocation from CDLAC, the Housing Authority Board of Commissioners will be required to adopt one final resolution authorizing the issuance of the bonds. This resolution will not be presented to the Housing Authority until all the documentation for the project financing is substantially complete and the bonds are ready to be sold. The CDLAC meeting at which our application will be considered will occur in late March. CDLAC requires that bonds be sold within 90 days of receipt of allocation. Therefore, the final bond financing resolution will come before the Housing Authority sometime in Mayor June. IMPACT ON LAND USE APPROVALS As was mentioned at the November 18 Housing Authority meeting, none of the actions pertaining to the public financing of the project affect the land use approval process. If Shea Properties does not secure the appropriate land use approvals from the City, the public financing of the project will not go forward. City planning staff estimate that final action of the Shea Properties' land use submissions will occur in APril. or May. If approval is granted, this will allow adequate time to meet CDLAC time requirements for issuance of the bonds. -;2.- ~.t i ......... - .. ; , . " ,t- , ~ J , " t f [: :t f ~,. . {, '~ . . CITY OF DUBLIN Resolution No. A RESOLUTION, OF THE CITY (;OUNCIL OF THE CITY OF DUB~~N ~~~~~VI~G ',THE ISSUANCE OF BONDS BY THE DU I. U I-N AUTHORITY fOR THE PURPOSE OF. PROVIIiIN~G FINANCINO FOR A MULTIFAMILY RESIDENTIAL , RENTAL -;'HOUSING DEVSLOPMENT TQ BE CONSTRUCTED BY PARK SIERRA LlC ~'~1 ~;:;; ~ ~." ~i r '. WHEREAS, the Dublin Housing Authority (the "Authority") is authorized by Chapter 1 of Part 2 of Division 24 of the Health and Safety Code of the State of California. as amended (the IIActll), to issue and sell revenue bonds for housing ;, purposes specified in the Act; a.nd WHEREAS, Park Sierra LLC, a California limited liability company (the -Park Sierra-) has requested that the Authority issue and sell revenue bonds In the maximum prlncipa~ amount of $33,500,000 (the "6ond6") for the purpo5e of making a Joan to Park Sierra or an assignee thereof (the "Developer") to enable the Developer to finance the costs of the acquisition and development of a 283 unit multifamily housing rental development to be known as Park Sierra at Iron House Trail (the "Project-), to be constructed on an approximately 14.32 acre site located on the west side of Dougherty Road. 1/4 mile north of Dublin Boulevard in the City of Dublin (the "City"); and WHEREAS, a portion of the housing units in the Project will be rented to persons and families of very low income as required by the Act and the Internal Revenue Code of 1986, as amended (the "Code-); and WHEREAS, the Bonds will be considered to be "exempt facility bonds- under Section 142(a) of the Code, and Seotion 147(f} of the Code (equires that the .~. .applic~ble elected representative- with respect to the Authority approve the issuance of the Bonds following the holding of a public hearing with respect thereto; and WHEREAS, the Authority has determined that the City Council of the City Is the "applicable elected representatIve" to hold such hearing and approve the issuance by the AuthOrity of tha Bonds; and WHEREAS, notice of said public hearing has been duly given as required by the Code, and this City Council has heretofore held such public hearing at which all interested persons were given an opportunity to be heard on all matters relative to the location, operatIon and financing of the Project and the Authority's issuance of the Bonds thereforei and WHEREAS, it is in the public interest and for the public benefit that the City Council approve the issuance of the Bonds by the Authority for the aforesaid purposes. i ~. ! ~ { r , f l: l ~. ~. t ~ l , ~. t. ..~"'.. - . NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of . Dublin. as follows: Section 1. The City Council of the City of Dublin hereby approves the issuance of the Bonds by the Authority under the Act and the Code for the purpose of providing funds to make a loan to the Developer to enable the Developer to finance ~p~~ ; . Soction 2. This Resolution shall take effect Immediately upon its adoption. PASSED, APPROVED, AND ADOPTED, by the City Council of the City of Dublin on February 3, 1998. ( AVES: NA YS: ABSENT: ATTEST: Mayor . City Clerk 04002:.01 :J3469 1/13198 . 2