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HomeMy WebLinkAboutCD TEFRA Public Hearing for Tax-Exempt Financing - 55 Fairfax Street____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: 11/19/2018 Disposition: Resolution No. 14602 Agenda Item No: 6.b Meeting Date: November 19, 2018 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Community Development Prepared by: Paul A. Jensen Community Development Director City Manager Approval: ______________ TOPIC: "TEFRA" PUBLIC HEARING FOR TAX-EXEMPT FINANCING - 55 FAIRFAX STREET SUBJECT: PUBLIC HEARING AND CONSIDERATION OF RESOLUTION APPROVING ISSUANCE OF A REVENUE NOTE BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF PROVIDING FINANCING FOR A RESIDENTIAL RENTAL HOUSING FACILITY KNOWN AS CASA VISTA APARTMENTS AT 55 FAIRFAX STREET, PURSUANT TO THE TAX AND EQUITY FISCAL RESPONSIBILITY ACT (“TEFRA”); FILE NO. P18-017 RECOMMENDATION: Hold a public hearing and adopt a resolution approving the issuance of a Note for financing of a loan for the Casa Vista Apartments. BACKGROUND: The Casa Vista Apartments is a 40-unit multi-family residential rental development that is located at 55 Fairfax Street. Constructed in 1964, the 40 units are contained in two, two-story buildings. The 1.4-acre property is also developed with surface parking, along with a central courtyard containing a swimming pool and recreation room. The Casa Vista Apartments is owned by Alto Station, Inc. (BRIDGE Housing Corporation), a California non-profit benefit corporation. BRIDGE Housing Corporation owns and manages affordable housing projects throughout California. One hundred (100) percent of the units in the Casa Vista Apartments are affordable to households qualifying in the low-income category (50 to 80 percent of the median income in Marin County). These units are guaranteed as affordable through 2057. BRIDGE Housing Corporation has applied to the California Municipal Finance Authority (CMFA) to be its issuer for tax-exempt financing for this property. The CMFA was created in 2004 to promote economic, cultural and community development through the financing of economic development and charitable activities in California. The CMFA was formed to assist local jurisdictions with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The Casa Vista Apartments project application to CMFA is expected to be financed in an amount not-to- exceed $4,000,000 in the form of a tax-exempt revenue note (Note) authorized under the Tax and Equity SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 Fiscal Responsibility Act (“TEFRA”). The proceeds of the Note will be used for/on the subject property by BRIDGE Housing Corporation to: a) refinance outstanding debt; b) finance certain, needed capital improvements to the subject property; and c) provide working capital and/or to fund reserves. In order for the Note to qualify as tax-exempt, the Internal Revenue Code requires that an “applicable elected representative” of a governmental unit, the boundaries of which include the site at which the housing project is located, must hold a public hearing on the issuance of the Note and then approve the issuance of the Note. In this case, the City is the applicable governmental unit and the City Council is the elected representative that must hold the public hearing and approve issuance of the Note by the CMFA. A draft resolution approving the issuance has been prepared and is attached for City Council consideration. ANALYSIS: The public hearing and approval of the resolution by the City Council will assist in the financing sought by BRIDGE Housing Corporation, as it will fulfill the requirements of the Federal tax code, but otherwise these actions have no direct impact on the City of San Rafael or the subject property in that: 1.The Note will not constitute a debt or liability or the City, and the loan evidenced by the Note will be payable from funds provided from loan payments by BRIDGE Housing Corporation. 2.As noted above, the Internal Revenue Code mandates that the public hearing be conducted before the Note is issued for all or a portion of the Note to qualify as tax-exempt, therefore the City conducts the public hearing merely as an accommodation to the property owner. The City will not be the issuer of the Note, nor will it be responsible for financing evidenced by the Note. 3.The issuance of the Note will have no impact on, nor would it change the current affordability status of the 40 residential units. Rather, the issuance of the Note will foster a pay-down of the outstanding debt and would be used to finance needed capital improvements to the subject property. 4.The action on this request qualifies for an Exemption from the provisions of the California Environmental Quality Act (CEQA) Guidelines pursuant to Section 15061(b). This CEQA provision states that as a “general rule,” CEQA applies only to projects and actions which have the potential to cause a significant, physical environmental effect on the environment. COMMUNITY OUTREACH: Consistent with TEFRA and the provisions of the San Rafael Municipal Code, a notice of this public hearing was published in the Marin Independent Journal 15 days prior to the hearing. A copy of the notice is attached (Attachment 2). FISCAL IMPACT: The City’s review and action on this request has no fiscal impact on the City of San Rafael. As discussed above, the issuance of the Note for financing will not constitute a debt or liability of the City. OPTIONS: The City Council has the following options to consider on this matter: 1.Adopt the attached resolution as recommended by staff. 2.Continue the matter and direct staff to return with more information. 3.Do not adopt the resolution. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 RECOMMENDED ACTION: Adopt a resolution approving the issuance of a Note to provide financing for the Casa Vista Apartments. ATTACHMENTS: 1.Resolution 2.Public Hearing Notice RESOLUTION NO. 14602 A RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING THE ISSUANCE OF A REVENUE NOTE BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF PROVIDING FINANCING FOR A RESIDENTIAL RENTAL HOUSING FACILITY KNOWN AS CASA VISTA APARTMENTS, AND WITH REGARD TO CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, pursuant Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), certain public agencies (the “Members”) have entered into a Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”) in order to form the California Municipal Finance Authority (the “Authority”), for the purpose of promoting economic, cultural and community development, and in order to exercise any powers common to the Members, including the issuance of bonds, notes or other evidences of indebtedness; and WHEREAS, the City of San Rafael (the “City”) is a member of the Authority; and WHEREAS, the Authority is authorized to issue and sell revenue notes and bonds for the purpose, among others, of financing or refinancing multifamily residential rental housing facilities for low- and very low-income persons and households; and WHEREAS, BRIDGE Housing Corporation, a California nonprofit public benefit corporation, has requested that the Authority borrow funds evidenced by a note (the “Note”) in an amount not to exceed $4,000,000, and to use proceeds of the borrowing to make a loan to Alto Station, Inc., a California nonprofit public benefit corporation (“Alto”), to refinance outstanding debt of Alto, to finance certain capital improvements, to provide working capital and/or to fund reserves all with respect to a 40-unit multifamily residential rental facility owned by Alto currently known as Casa Vista Apartments, located at 55 Fairfax Street in the City (the “Housing Facility”); and WHEREAS, in order for the interest on the loan evidenced by the Note to be tax-exempt, section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), requires that an “applicable elected representative” of a governmental unit, the boundaries of which include the site at which the Housing Facility is located, hold a public hearing on the issuance of the Note and approve the issuance of the Note following such hearing; and WHEREAS, the Authority has determined that the City Council of the City is an “applicable elected representative” for purposes of holding such hearing; and WHEREAS, the Authority has requested that the City Council of the City approve the issuance of the Note by the Authority, following the conduct of the public hearing, in order to satisfy the public approval requirement of section 147(f) of the Code and the requirements of section 4 of the Agreement; and WHEREAS, notice of such public hearing has been duly given as required by the Code, and the 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, financing and nature of the Housing Facility and the Authority’s issuance of the Note therefor; and -2- WHEREAS, it is in the public interest and for the public benefit that the City Council approve the issuance of the Note by the Authority for the aforesaid purposes; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Rafael, as follows: Section 1. The City Council hereby approves the issuance of the Note by the Authority. It is the purpose and intent of the City Council that this Resolution constitute approval of the issuance of the Note (a) by the “applicable elected representative” in accordance with section 147(f) of the Code, and (b) by the City Council in accordance with section 4 of the Agreement. Section 2. The issuance of the Note shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no responsibility or liability whatsoever with respect to the Note or the loan to the Authority that it evidences. Section 3. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing for the Housing Facility; (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 improvement or operation of the Housing Facility; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or its membership therein. Section 4. The Mayor, the City Manager, the Finance Director, the City Clerk and all other proper officers and officials of the City are hereby authorized and directed to execute such other documents and certificates, and to perform such other acts, as may be necessary or convenient to effect the purposes of this Resolution and the issuance of the Note hereby approved. Section 5. This Resolution shall take effect immediately upon its adoption. I, LINDSAY LARA, City Clerk of the City of San Rafael, hereby certify that the foregoing Resolution No. was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on Monday, the 19th day of November 2018, by the following vote, to wit: AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin & Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: McCullough LINDSAY LARA, City Clerk 03042.135:J15368 10/12/18 Legal No. Marin Independent Journal 4000 Civic Center Drive, Suite 301 San Rafael, CA 94903 415-382-7335 legals@marinij.com I am a citizen of the United States and a resident of the County aforesaid: I am over the age of eighteen years, and not a party to or interested in the above matter. I am the principal clerk of the printer of the MARIN INDEPENDENT JOURNAL, a newspaper of general circulation, printed and published daily in the County of Marin, and which newspaper has been adjudged a newspaper of general circulation by the Superior Court of the County of Marin, State of California, under date of FEBRUARY 7, 1955, CASE NUMBER 25566; that the notice, of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit: 11/02/2018 I certify (or declare) under the penalty of perjury that the foregoing is true and correct. Dated this 2nd day of November, 2018. PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA County of Marin Signature PROOF OF PUBLICATION 0006245090 2070419 CITY OF SAN RAFAEL CITY OF SAN RAFAEL CITY CLERK, ROOM 209 1400 FIFTH AVENUE, SAN RAFAEL, CA 94901 SAN RAFAEL, CA 94915-1560 r.BP7-11/10/16 1 r.BP7-11/10/16 2