06-04-2019 - Item 07 - Public Hearing on Issuance on Tax Exempt Bonds For The Cameron Park Apartments And Resolution Approving The Issuance of BondsAGENDA ITEM NO.7
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: June 4, 2019
TO: Mayor and City Council
FROM: David Carmany
Interim City Manager
SUBJECT: PUBLIC HEARING ON ISSUANCE OF TAX EXEMPT BONDS FOR THE CAMERON
PARK APARTMENTS AND RESOLUTION APPROVING THE ISSUANCE OF BONDS
RECOMMENDATION:
It is recommended that the City Council:
1. Conduct a Tax Equity and Fiscal Responsibility Act Hearing in consideration of the issuance of tax
exempt bond financing by the California Statewide Communities Development Authority for the benefit of
Cameron Park Community Partners, LP, to provide financing for the acquisition, rehabilitation, improvement,
and equipping of a 158-unit multifamily rental housing project generally known as Cameron Park
Apartments; and
2. Adopt the following resolution:
RESOLUTION NO.2019-34 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WEST COVINA APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE
BONDS FOR CAMERON PARK APARTMENTS
BACKGROUND:
On April 10, 2019, City staff received a letter from the California Statewide Communities Development Authority
(CSCDA) requesting a Tax Equity and Fiscal Responsibility Act (TEFRA) Public Hearing for the issuance of
$63,000,000 tax-exempt bonds for the Cameron Park Apartments located at 929 West Cameron Avenue. Cameron
Park Community Partners, LP (Community Partners), owner of the Cameron Park Apartments, is seeking financing
for the project through the issuance of $63,000,000 tax-exempt bonds.
Cameron Park Apartments is a 158-unit multifamily apartment complex that includes 156 units restricted to either
50 or 60% Area Median Income (AMI), and 2 non -restricted units for manager/maintenance units. 113 of the units
receive Section 8 subsidies. This project did not receive housing funds from the former Redevelopment Agency.
As such, the Community Development Commission, acting as the Housing Authority for the City of West Covina,
is not involved in monitoring of housing compliance for the affordable units.
Community Partners is seeking new tax-exempt multifamily revenue bonds to acquire the complex and rehabilitate
all 158-units. The rehabilitation project will include improvements to the units such as kitchen and bathroom
upgrades, new flooring, and energy efficient upgrades from new appliances to retrofitting windows. Improvements
also include exterior improvements to the complex such as stucco repair, new roofing, laundry room upgrades, and
community building improvements.
The Cameron Park Community Partners, LP (the `Borrower") has requested that the CSCDA serve as the municipal
issuer of tax-exempt multifamily housing revenue bonds in an aggregate principal amount not to exceed
$63,000,000 (the Bonds). The proceeds of the Bonds will be used for the purpose of making a loan to the
Borrower, to enable the Borrower to finance the acquisition, rehabilitation, improvement and equipping of a
158-unit affordable multifamily housing rental, which will be owned and operated by the Borrower.
According to federal tax law, tax-exempt bonds that will be used to assist multifamily housing projects, like the
ones Community Partners is seeking for the Cameron Park Apartments, require approval by the applicable elected
representatives (City Council), of the jurisdiction acting as the issuer (City); in the case of the Promenade
Apartments, it would be the West Covina City Council. The City acts as a conduit for issuance of the bonds without
having any financial or legal liability or responsibility for the project or repayment of the bonds for the financing of
the project. The primary purpose of the approval requirement is to ensure that private entities such as Community
Partners do not use tax-exempt financing to fund projects that are opposed by the elected local government of the
city or similar jurisdiction in which the project is located.
DISCUSSION:
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of West Covina ("City") must
conduct a TEFRA public hearing providing the members of the community an opportunity to speak in favor of or
against the use of tax-exempt bonds for the financing of the Project. Prior to a TEFRA Hearing, reasonable notice
must be provided to the members of the community. Following the closing of the TEFRA Hearing, an "applicable
elected representative" of the governmental unit hosting the Project must provide its approval of the issuance of the
Bonds for the financing of the Project. The City Council can indicate its approval by adopting Resolution No.
2019-34 (Attachment No. 1). The public notice was published in the West Covina Press on May 23, 2019
(Attachment No. 2).
CSCDA is a joint powers authority sponsored by the League of California Cities ("League") and the California State
Association of Counties ("CSAC"). CSCDA was created by the League and CSAC in 1988 to enable local
government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible
public benefit, contribute to social and economic growth and improve the overall quality of life in local
communities throughout California. CSCDA is comprised of more than 500 members, including the City of West
Covina. CSCDA has issued more than $60 billion through 1,600 plus financings since 1988, and consistently ranks
in the top 10 of more than 3,000 nationwide public issuers of tax-exempt debt, as measured by annual issuance
amount.
LEGAL REVIEW:
The City Attorney's Office has reviewed the attached documents and approved them as to form.
ENVIRONMENTAL REVIEW:
As it involves negligible or no expansion of use beyond that existing, the project will not have a significant effect
on the environment and is therefore categorically exempt from the provisions of the California Environmental
Quality Act.
Prepared by: Paulina Morales, Economic Development and Housing Manager
Additional Approval: Scott Porter, City Attorney
Attachments
Attachment No. 1 - Resolution - TEFRA
Attachment No. 2 - TEFRA Notice