01-20-1998 - Brookhollow Apartments - Issuance of Multifamily Housing BondsCity of West Covina
Memorandum
TO: City Council and the City Manager
AGENDA
ITEM No. A-1
DATE January 20, 1998
FROM: Redevelopment Agency Staff ®PRINTED ON RECYCLED PAPER
SUBJECT: BROOKHOLLOW APARTMENTS - ISSUANCE OF MULTIFAMILY
HOUSING BONDS
SUMMARY: Steadfast Properties is seeking multi -family bond financing from a joint
powers authority (CSCDA) to purchase, rehabilitate and create affordable
units at the Brookhollow Apartments. The City will not be liable for the
bond. Before the bond can be issued, the City must: 1) join the joint
powers authority and 2) approve the joint power's authority to issue the
bond, per tax law requirements.
BACKGROUND
The Brookhollow Apartments, located at 2600 S. Avenue, contains 188 units of market -rate
housing. Steadfast Properties, a for -profit, Newport Beach developer, is currently in escrow with
the owners and expects to close by mid -February 1998. Steadfast Properties intends to purchase
and rehabilitate the Brookhollow Apartments using tax-exempt bond financing and 4% tax
credits. Forty percent of the units, orunits, would be restricted for 30 years to low-income
households, (less than 60% of the county median). No City or Redevelopment Agency financial
assistance is requested. 76
California Statewide Communities Development Authority (CSCDA) was created in 1987 by the
League of California Cities and the California State Association of Counties to issue conduit debt
on behalf of cities and counties. The joint powers authority has over 235 member cities, counties
and special districts. In 1995, CSCDA began issuing multi -family housing bonds on behalf of its
members. CSCDA often issues debt for an individual developer with projects in multiple
jurisdictions.
DISCUSSION
CSCDA has applied to the California Debt Limit Advisory Committee on behalf of Steadfast
Properties for $12,000,000 in multifamily housing bond allocation to fund the project. Payment
of the bond's debt service will be made by the developer from the project's cash flow.
Federal tax law requires that the issuer of any tax-exempt, multi -family housing bond obtain the
approval of the legislative body of the jurisdiction where the project is located and hold a public
hearing ("TEFRA hearing" — Tax Equity and Fiscal Responsibility Act) on the matter. The City
of West Covina would have no pecuniary liability or responsibility for the project. In addition,
the City would need to join the CSCDA joint powers authority, for which there is no cost. The
joint powers agreement with CSCDA is attached (Exhibit A).
The Redevelopment Agency has also applied to the California Debt Limit Advisory Committee
for an allocation to fund the Executive Lodge project. The committee will award allocations on
January 28, 1998. According to the committee staff, the Brookhollow Project should not
jeopardize, nor compete with, the Executive Lodge project. To ensure there is no competition,
the Agency has required CSCDA - and it has agreed - to withdraw its application should
Brookhollow, and not the Executive Lodge project, be recommended for allocation.
Furthermore, the City Council's approval of CSCDA's issuance of bonds for the Brookhollow
project will be rescinded automatically should the Executive Lodge project fail to receive an
allocation.
The Brookhollow project would benefit the City by adding 78 affordable units (26 one -bedroom,
46 two -bedrooms and 6 three -bedrooms) to the housing stock with no financial contribution by
the City or Redevelopment Agency. The project does not require financial assistance because
the large number of units - 60% of which are market -rate - allows for sufficient cash flow to
cover greater debt.
FISCAL IMPACT
There is no fiscal impact on the City or Redevelopment Agency.
RECOMMENDATION
It is recommended that the City Council ADOPT the following:
RESOLUTION NO. ?6:2(, -A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF WEST COVINA APPROVING, AUTHORIZING AND -
DIRECTING EXECUTION OF AN AMENDED AND RESTATED JOINT
EXERCISE OF POWERS AGREEMENT RELATING TO THE
CALIFORNIA STATEWIDE COMMUNTIES DEVELOPMENT
AUTHORITY.
RESOLUTION NO. S'a - A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF W T COVINA APPROVING THE ISSUANCE OF
MULTIFAMILY HOUSING REVENUE BONDS BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY.
Exhibit A: Amended and restated Joint Exercise of Powers Agreement relating to the
California Statewide Communities Development Authority
HSG440W DOC
(Space below for use of County Clerk only)
SAN GABRIEL VALLEY TRIBUNE
affiliated with
SGV Newspaper Group
1210 N. Azusa Canyon Road
West Covina, CA 91790
-$/as. 7a as 1o. �
0
q
PROOF OF PUBLICATION
(2015.5 C.C.P.)
STATE OF CALIFORNIA
County of Los Angeles "
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-entited matter. I am the principal clerk of
the printer of SAN GABRIEL VALLEY TRIBUNE, a
newspaper of general circulation which has been
adjudicated as a newspaper of general circulation
by the Superior Court of the County of Los
Angeles, State of California, on the date of
September 10, 1957, Case Number 684891. The
notice, of which the annexed is a true printed copy,
has been published in each regular and entired issue
of said newspaper and not in any supplement
thereof on the following dates, to wit:.
1/6/98
I declare under penalty of perjury that the
foregoing is true and correct.
Executed at West Covina, LA Co. California
this 6 Any of JANUARY 19 98
signature
RECEIVED
JAN 0 9 1998
CITY CLERK'S OFFICE
CITY OF WEST COVINA
Proof of Publication of
1444 W. Garvey Avenue
Post Office Box 1440
West Covina, CA 91793
Phone (626) 814-8400
is
Office of the City Clerk
NOTICE OF PUBLIC HEARING
WEST COVINA CITY COUNCIL
REGARDING
ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS
NOTICE IS HEREBY GIVEN that the City Council of West Covina will be conducting a public
hearing at 7:30 pm, or as soon thereafter as the matter can be heard, on Tuesday, January 20,
1998, in the City Hall Council Chambers, 1444 W. Garvey Avenue.
The hearing is required by Section 147(f) of the Internal Revenue Code of 1986. The City
Council will hear and consider information concerning the proposed issuance by the California
Statewide Communities Development Authority on behalf of the City of multifamily housing
revenue bonds to finance the acquisition and rehabilitation of a 188-unit multifamily rental
housing project located at 2600 South Azusa Avenue, West Covina: known as the Brookhollow
Apartments (the "Project"). The Project will be owned and operated by Steadfast McCord LLC,
a California limited liability company, or an affiliated entity. The proposed. bonds will be in an
aggregate amount not to exceed $16,000,000.
Those wishing to comment on the proposed financing and the nature of the Project may either
appear in person at the public hearing or submit written comments, which must be received by
the City prior to the hearing. Written comments should be addressed to the City Clerk, 1444 W.
Garvey Avenue, P.O. Box 1440, West Covina, California 91793. If, in the future, you wish to
challenge the action(s) taken on this matter, you may be limited to raising only those issues
which you or another individual brought up orally at the public hearing or submitted in writing to
the City at or prior to the public hearing.
If you have any questions, you are urged to contact the Redevelopment Agency at 626 814-8417.
BY ORDER OF THE MAYOR
Benjamin Wong
City Clerk Janet Berry
Dated this 23rd day of 14cember, 1997.
Daily Tribune: Publish 1/6/97