TITLE
Recommendation to receive supporting documentation into the record regarding the Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing, and adopt resolution approving the issuance of revenue bonds by the California Statewide Communities Development Authority (CSCDA), to benefit Springdale West Preservation Limited Partnership, or its affiliates, Springdale West Apartments, in an amount not to exceed $80,000,000. (District 7)
DISCUSSION
Springdale West Preservation Limited Partnership has requested the California Statewide Communities Development Authority (CSCDA) to issue bonds on its behalf, in an aggregate amount not to exceed $80,000,000. The CSCDA is a joint exercise of powers authority consisting of over 500 California cities, counties and special districts, including the City.
The CSCDA will issue tax-exempt debt to help finance the acquisition and rehabilitation of an apartment building located at 2095 W. Spring Street, which is referred to as Springdale West Apartments (Springdale). Springdale was built in the mid-1970s as an affordable housing community intended for very low- and low-income households. It includes 410 one-, two-, and three-bedroom apartment units. The rehabilitation of the property will include updated landscaping, new kitchen appliances, countertops and cabinets, flooring, windows, painting, fencing, and water heaters. Additionally, the developer will construct a swimming pool for use by all tenants.
The project's affordability covenants are due to expire within the next six months, and the existing affordable units are at risk of converting to market rate, as indicated in the City's Certified 2013-2021 Housing Element (Housing Element). The Housing Element, Section V Policy 1.1, encourages providing financial and other assistance to preserve the affordability of at-risk housing units. Springdale West Preservation Limited Partnership is proposing to preserve the project's affordability through the acquisition and rehabilitation of the project, and is also proposing a financing package that includes tax-exempt bond proceeds, low-income housing tax credits, and a seller note. The expected bond issuance date is September 2015.
The Internal Revenue Service Code requires that CSCDA seek City Council approval of the debt-issuance, a portion of which will benefit facilities within the City, without taking a position on the project itself. A TEFRA public hearing notification was published in the Long Beach Press-Telegram on May 8, 2015. The TEFRA hearing was held on May 22, 2015 at 10:00 am. The public hearing, required by Federal tax law regulations, was conducted by the City Treasurer in the sixth floor conference room at City Hall. No public comment was received.
This matter was reviewed by City Attorney Richard Anthony on May 15, 2015 and by Budget Management Officer Victoria Bell on May 19, 2015.
TIMING CONSIDERATIONS
City Council action is requested on June 9, 2015 to facilitate CSCDA's forthcoming debt-issuance.
FISCAL IMPACT
There is no fiscal impact associated with this action. The City has no financial obligation or liability associated with this financing. No City interest or taxing authority was pledged in support of this financing. The project is expected to provide a total of 80 jobs, 50 construction jobs during the rehabilitation phase, and 10 jobs onsite and 20 jobs through third-party vendors.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
AMY J. BODEK
DIRECTOR OF DEVELOPMENT SERVICES
APPROVED:
PATRICK H. WEST
CITY MANAGER