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| CITY COUNCIL AGENDA ITEM NO. 11
Meeting Date: January 14, 2003
Subject/Title: Issuance of Multifamily Housing Revenue Bonds by the California Statewide
Communities Development Authority
Submitted by: Dennis Beougher, City Attorney
Approved by: John Stevenson, City Manager
Approve the attached resolution approving the issuance of multifamily housing revenue bonds by California Statewide Communities Development Authority (“CSCDA”) in an amount not to exceed $35,000,000 for the purpose of providing financing for the acquisition, construction and development of approximately 178-unit multifamily residential rental project, generally known as Shady Willow Apartments.
Pursuant to the provisions of the Joint Powers Act, commencing with Section 6500 of the California Government Code (the "JPA Act"), a number of California cities and counties have entered into a joint exercise of powers agreement (the "Agreement") pursuant to which CSCDA was organized. Currently over 220 cities (including the City), 54 counties and 50 districts or agencies of some type are Program Participants of CSCDA.
CSCDA is authorized by its Agreement to issue bonds, notes, other evidences of indebtedness or certificates of participation in leases or other agreements in order to promote economic development, including the provision and maintenance of multifamily housing. However, under the terms of the Agreement, CSCDA may not approve a financing unless the governing body of the Program Participant in whose jurisdiction the project is located (or to be located) approves the project and its financing.
Furthermore, Section 147(f) of the Internal Revenue Code of 1986 requires that the proposed financing be approved by a governmental unit having jurisdiction over the area in which the facility to be financed is located. A financing will be treated as having been approved by a governmental unit if “the applicable elected representative” of such governmental unit approves such issue after a public hearing following reasonable public notice of such hearing.
A notice of public hearing has been published as required by law. A resolution (the "TEFRA Resolution") has been attached for your review and to be considered by the City Council in connection with the proposed financing of a multifamily housing project for Brentwood Shady Willow, L.P. and related entities (including AHDC, Inc.), to be accomplished through the issuance of bonds by the CSCDA.
The attached resolution outlines the required actions to be undertaken by a city member (i.e., the "Program Participant") of the CSCDA in order for such financing to proceed. These financings are structured so that neither the CSCDA nor the City of Brentwood has pecuniary liability.
The foregoing will be deemed satisfied if the governing body of the Program Participant (1) holds a public hearing (upon at least 14 days prior notice published in a newspaper of general circulation within its jurisdiction) and (2) adopts the TEFRA Resolution approving the financing to be undertaken through CSCDA.
The City still retains all rights to approve the project or to deny the project through the appropriate zoning and design review process.
RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
WHEREAS, the California Statewide Communities Development Authority (the "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 (the "Agreement"), among certain local agencies throughout the State of California, including the City of Brentwood (the "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, Brentwood Arbor Ridge L.P. (collectively, with any related entity, the "Borrower") has requested that the Authority issue multifamily housing revenues bonds in an aggregate principal amount not to exceed $35,000,000 (the "Bonds") for the purpose of providing financing for the acquisition, construction and development of an approximately 178-unit multifamily residential rental project located in Brentwood, California, to be generally known as the Arbor Ridge Apartments (the “Project”); and
WHEREAS, the Bonds will be "private activity bonds" for purposes of the Internal Revenue Code of 1986 (the "Code"); and
WHEREAS, pursuant to Section 147(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 (this "Council") are the applicable elected representatives of 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 the date hereof; and
WHEREAS, such public hearing was conducted on said date by the City Council, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds; 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, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BRENTWOOD AS FOLLOWS:
Section 1. The above recitals are true and correct.
Section 2. The Council hereby approves the issuance of the Bonds by the Authority. It is the purpose and intent of the Council that this resolution constitute approval of the Bonds for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of the governmental unit having jurisdiction over the area in which the project is located, in accordance with said Section 147(f), and (b) Section 9 of the Agreement.
Section 3. The officers of the City are 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. The City Clerk of the City shall forward a certified copy of this Resolution and a copy of the affidavit of publication of the hearing notice to:
Ana Marie del Rio, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Section 5. The adoption of this Resolution does not (1) relieve or exempt the Borrowers from obtaining any other permits or approvals which may be sought from the City in connection with the Project nor (2) evidence any intent on the part of the City to incur any obligation whatsoever with respect to the Bonds.
Section 6. This resolution shall take effect immediately upon its passage.
PASSED, APPROVED AND ADOPTED by the City Council of the city of Brentwood at a regular meeting on the 14th day of January, 2003 by the following vote:
City of Brentwood City Council
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Brentwood, CA 94513
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