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 Community Development Authority (CSCDA) to benefit Palm Desert Development Company, Ramona Park Senior Apartments, in an amount not to exceed $13,500,000.
(District 9)
DISCUSSION
Palm Desert Development Company, founded in 1979, has requested the CSCDA to issue bonds on its behalf in an aggregate amount not to exceed $13,500,000. The CSCDA is a joint exercise of powers authority consisting of over 500 California cities, counties and special districts, including the City of Long Beach.
The CSCDA will issue tax-exempt debt to help finance the construction of a new affordable senior rental housing development at 3290 East Artesia Boulevard, which is referred to as Ramona Park Senior Apartments. The development provides housing for low- and very low-income seniors, and includes 60 apartment units and amenity space that are designed to provide opportunities for lifelong learning for the residents. The development will also include a pool, circuit training course, community center, kitchen, library, gym, computer lab, dining area, and entertainment areas.
The project is being financed with tax-exempt bond proceeds, low-income housing tax credits, deferred developer fee, a seller loan, and a loan from The Long Beach Housing Development Company (LBHDC), which was approved on June 15, 2011.
The original TEFRA hearing was held on July 14, 2011, and the City Council originally adopted a Resolution approving the issuance of revenue bonds by CSCDA for this project on August 16, 2011. The project was delayed, and affordable housing funding from the LBHDC was put on hold due to the dissolution of redevelopment agencies in California, as a result of AB 1X26.
The recent passage of AB 1484 clarified that certain remaining unspent housing funds (2005 redevelopment bond proceeds) could be used for their intended purpose, affordable housing. As a result, the project is now able to move forward with an affordable housing loan from the LBHDC. In addition, the Successor Agency took action to support the previous LBHDC loan approval on August 21, 2012, and the Oversight Board approved the deal structure on August 27, 2012. Lastly, the California State Department of Finance did not challenge this expenditure of housing funds.
The expected bond issuance date is January 15, 2013. Under applicable Federal tax law the public hearing must be held no earlier than one year from the date of issuance of the bonds, and because the bonds were not issued before July 14th, a new public hearing is needed for the bonds to be tax-exempt.
The Internal Revenue Service Code requires that CSCDA seek approval from the City Council in order for the bonds to be issued, which will benefit facilities within the City. A TEFRA public hearing notification was published in the Long Beach Press-Telegram on September 4, 2012. The TEFRA hearing was held on September 18, 2012. The public hearing, required by Federal tax law regulations, was conducted by the City Treasurer. No public comment was presented.
This matter was reviewed by Assistant City Attorney Charles Parkin on September 28, 2012 and Budget Management Officer Victoria Bell on October 2, 2012.
TIMING CONSIDERATIONS
City Council action is requested on October 23, 2012 to facilitate CSCDA's forthcoming debt issuance.
FISCAL IMPACT
The requested action has no fiscal impact to the General Fund or the Housing Development Fund (SR 135). The bonds are issued as limited obligations of CSCDA, not the City, payable solely out of the revenues and receipts derived from the benefiting project. As a result, no City interest or taxing authority is pledged in support of this financing, and the City has no financial obligation or liability associated with this tax-exempt bond financing.
This project will provide up to 225 jobs during construction of the project.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE RAMONA PARK SENIOR APARTMENTS
Respectfully Submitted,
AMY J. BODEK, AICP
DIRECTOR OF DEVELOPMENT SERVICES
APPROVED:
PATRICK H. WEST
CITY MANAGER