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 Municipal Finance Authority (CMFA), to benefit a partnership to be formed by Abode Communities and American Gold Star Manor, a non-profit corporation, in an amount not to exceed $60,000,000. (District 7)
DISCUSSION
Abode Communities (Abode) was developed in 1968, to carry out a goal of building sustainable multi-family affordable housing to address the needs of Southern California's large workforce, low-income families, seniors and individuals with special needs. Abode currently owns 34 properties that are home to more than 6,200 residents. Abode has requested that CMFA issue bonds on its behalf, in an aggregate amount not to exceed $60,000,000. The CMFA is a joint exercise of powers authority, consisting of over 200 California cities, counties, and special districts, whose mission is to support economic development, job creation and social programs throughout the State of California.
The CMFA will issue tax-exempt debt, the proceeds of which will be loaned to a partnership to be formed by Abode and American Gold Star Manor, a nonprofit corporation (AGSM), for the purpose of financing the acquisition and rehabilitation of 348 multi-family rental units, located at 3021 North Gold Star Drive, known as American Gold Star Manor (Project). The Project will be rehabilitated to improve major systems and living spaces, improve energy efficiency, common area amenities, resident services, and accessibility. Rent will also be restricted to households with incomes no greater than 60 percent of the area median income (AMI), although actual income targeting will be closer to 30 percent AMI, due to rental subsidies provided by the U.S. Department of Housing and Urban Development (HUD). The financing of this Project will result in the preservation of 337 affordable senior housing units for 55 years. Seven over-income units and four manager units will not be income-restricted. There will be no permanent tenant relocation. Revenues from the Project to be financed will be the source of funds to repay the tax-exempt debt.
The Project’s affordability covenants are expiring, 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, Program 1.1, encourages providing financial and other assistance to preserve the affordability of at-risk housing units. Abode and AGSM are proposing to preserve the Project’s affordability through the acquisition and rehabilitation of the Project, and are also proposing a financing package that includes tax-exempt bond proceeds, low-income housing tax credits, a seller note, and HUD rental subsidies.
The Internal Revenue Code requires that CMFA seek City Council approval of the debt-issuance, a portion of which will benefit facilities within the City. A TEFRA public hearing notification was published in the Long Beach Press-Telegram on August 1, 2015. The TEFRA hearing was held on August 19, 2015, at 9:00 a.m. The public hearing, as 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 Deputy City Attorney Richard Anthony on -----------August 17, 2015 and by Budget Management Officer Victoria Bell on August 14, 2015.
TIMING CONSIDERATIONS
City Council action is requested on September 8, 2015, to facilitate CMFA’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 is pledged in support of this financing. The Project will provide continued support to our local economy by providing up to 50 jobs during the three-year rehabilitation phase.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
AMY J. BODEK
DIRECTOR OF DEVELOPMENT SERVICES
APPROVED:
PATRICK H. WEST
CITY MANAGER