HomeMy WebLinkAbout2007-08-07; City Council; 19123; Robertson Ranch Glen Ridge Bond issuance11
CITY OF CARLSBAD - AGENDA BILL
AB# 19,123
MTG. 8/7/07
HSG/REDEV
Title
DECLARATION OF INTENT BY CMFA TO ISSUE
UP TO $13.5 MILLION IN TAX EXEMPT
PRIVATE ACTIVITY BONDS FOR THE
CONSTRUCTION OF SEVENTY EIGHT (78)
AFFORDABLE APARTMENT UNITS (GLEN
RIDGE) WITHIN THE ROBERTSON RANCH
MASTER PLAN
DEPT. HEAD
CITY ATTY.
CITYMGR. "
RECOMMENDED ACTION:
That the City Council take the following actions: 1) ACCEPT public comment on the intent by the
California Municipal Finance Authority (CMFA), a public entity of the State of California, to issue tax-
exempt multi-family revenue bonds within the jurisdiction of the City of Carlsbad in an amount not to
exceed $13.5 million to finance the construction of seventy eight (78) affordable apartment units
(Glen Ridge) within the Robertson Ranch Master Plan; 2) if acceptable, ADOPT Council Resolution
No.2007?n7. APPROVING the tax-exempt financing and the issuance of the revenue bonds by CMFA
for CIC Glen Ridge, LLC, a California limited partnership to be owned and operated by Chelsea
Investment Corporation.
ITEM EXPLANATION:
The Glen Ridge Apartments represents a 78-unit development located on a 4.74 acre parcel that is
currently referred to as Planning Area 15 in the East Village of Robertson Ranch. It is located on the
north side of Cannon Road, east of future Wind Trail Road and south of future Glen Avenue. The
project is being developed by Chelsea Investment Corporation of Carlsbad and will satisfy the
affordable housing requirement for Phase I of the Robertson Ranch Master Plan. The project includes
one, two and three bedroom units. Of the 78 units, 27 units will be affordable to households earning
35% of the San Diego County Area Median Income (AMI). The remainder of the project, 51 units, will
be affordable to households earning 50% to 55% of the San Diego County AMI.
On March 6, 2007, the City Council approved the Site Development Plan for the development of the
affordable apartments. On March 20, 2007, the City Council took action to approve a loan in the
amount of $1,014,000 to provide financial assistance for the project. The developer subsequently
requested that the City agree to allow the California Municipal Finance Authority (CMFA) to issue tax-
exempt multi-family revenue bonds in an amount not to exceed $13.5 million to assist in financing the
subject project.
The developer would like the issuer of the bonds to be the CMFA which was formed to assist local
governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt
financing aimed at improving the standard of living in California. Although CMFA will be the issuer of
the bonds, the City must still authorize the tax-exempt financing and the issuance of the revenue
bonds by CMFA. The City must hold a public hearing known as a Tax & Equity Fiscal Responsibility
Act or TEFRA hearing to authorize the tax-exempt financing by CMFA.
DEPARTMENT CONTACT: Debbie Fountain 760-434-2935 dfoun(o)ci.carlsbad.ca.us
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
J
D
D
D
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CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER - SEE MINUTES
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Page 2 of AB #_
California Municipal Finance Authority
CMFA was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote
economic, cultural and community development through the financing of economic development and
charitable activities throughout California. In addition to the City of Carlsbad, the Cities of Santa
Clarita, Oakland, El Segundo, Redding, Milpitas and Vallejo and the County of San Diego have
become members of CMFA.
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit
public benefit corporation, acts as the Board of Directors for CMFA. The CMFA representatives and
Board of Directors have considerable experience in tax-exempt bond financing. The joint exercise of
powers agreement between the City and CMFA explicitly provides that the CMFA is a public entity,
separate and apart from the members executing the agreement, and the debts, liabilities and
obligations of the CMFA do not constitute debts, liabilities or obligations of the members executing the
agreement.
The bonds to be issued for the subject project will be the sole responsibility of the Borrower (Chelsea),
and the City will have no contractual, financial, legal or moral obligation or liability for the repayment of
these bonds. All bond documents will contain clear disclaimers that the bonds are not obligations of
the City or CMFA but are paid only from funds provided by the Borrower.
Participation by the City in the CMFA will not impact the City's appropriation limits and will not
constitute any type of indebtedness by the City. Once the City holds the public hearing and adopts the
required resolution following the public hearing, no other participation of the City in the actions of
CMFA or in the bond financing will be required.
Tax Exempt Bond Allocation
The proposed bond issue by CMFA is classified as a private activity bond for the purposes of Section
147(f) of the Internal Revenue Code of 1986. In order for the interest on a private activity bond to be
excluded from the gross income of the owner of the bond (i.e., tax-exempt), an "applicable elected
representative" of the governmental unit issuing the bond must approve the issuance of the bond after
a public hearing following reasonable public notice. Because the CMFA Board of Directors is not an
elected body, Section 147(f)(2)(E)(ii) of the Code provides that a governmental unit with elected
representatives and jurisdiction over the area in which a project to be financed is located, in this case
the Carlsbad City Council, is an "applicable elected representative" with respect to the bond issue.
Prior to any action to authorize issuance of the tax-exempt bonds, the Internal Revenue Code requires
the City to hold a TEFRA public hearing to accept comments on the CMFA's intent to issue the bonds.
At this time, staff and the Developer are requesting that the Council hold the required public hearing to
accept comments on the CMFA's intent to issue the tax exempt bonds for the subject project.
Adoption of the attached resolution approves the tax-exempt financing and issuance of the revenue
bonds by the CMFA for the subject project.
STAFF RECOMMENDATION
Staff recommends that the City Council hold the required TEFRA hearing and then adopt the attached
resolution approving the tax-exempt financing and the issuance of the revenue bonds by the CMFA
for CIC Glen Ridge, LLC, a California limited partnership to be owned and operated by Chelsea
Investment Corporation.
Page 3 of AB#_
ENVIRONMENTAL REVIEW
The Glen Ridge affordable apartment project was reviewed pursuant to the California Environmental
Quality Act (CEQA). Staff analyzed the project and concluded that no potentially significant impacts
would result with the implementation of the project that were not previously examined and evaluated
in the certified Final Program Environmental Impact Report for the Robertson Ranch Master Plan (EIR
03-03), dated April, 2006. The City Council certified the EIR on November 14, 2006. At that time
CEQA Findings of Fact, a Statement of Overriding Considerations, and a Mitigation Monitoring and
Reporting Program were approved. All mitigation measures contained in the adopted Mitigation
Monitoring and Reporting Program that were applicable to the subject project have been completed,
incorporated into the project design or were required as conditions of approval for the project.
The proposed project will have no effects beyond those analyzed in the program EIR, as they are a
part of the program analyzed earlier. This project is within the scope of Final Program EIR 03-03 and
no further CEQA compliance is required.
FISCAL IMPACT
The Council is being asked to hold a public hearing and obtain public comments on CMFA's intent to
issue tax-exempt bonds in an amount not to exceed $13.5 million to finance the construction of
seventy-eight (78) affordable apartment units (Glen Ridge) within the Robertson Ranch Master Plan,
and to approve the tax-exempt financing and the issuance of the revenue bonds by CMFA. The entire
legal obligation to repay the bonds rests with the Developer. Therefore, there will be no fiscal impact
to the City resulting from the issuance of the bonds.
CMFA shares a portion of its issuance fees with its member communities. With respect to the City of
Carlsbad, it is expected that 33.3% of the issuance fee (or approximately $8,438) will be contributed
by CMFA to the general fund of the City to be used for any lawful purpose. A similar amount will be
donated by CMFA to the borrower to reduce its cost of financing.
EXHIBIT
l. City Council Resolution No. 2007-207 approving the tax-exempt financing and the issuance of
the revenue bonds by CMFA for CIC Glen Ridge, LLC, a California limited partnership to be owned
and operated by Chelsea Investment Corporation in an amount not to exceed $13.5 million.
3
CITY COUNCIL RESOLUTION No. 2007-207
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, APPROVING THE ISSUANCE OF TAX-
EXEMPT OBLIGATIONS IN AN AMOUNT NOT TO EXCEED $13.5
MILLION BY THE CALIFORNIA MUNICIPAL FINANCE
AUTHORITY TO FINANCE THE CONSTRUCTION OF SEVENTY-
EIGHT (78) AFFORDABLE APARTMENT UNITS WITHIN THE
ROBERTSON RANCH MASTER PLAN AND DIRECTING CERTAIN
ACTIONS
APPLICANT: CHELSEA INVESTMENT CORPORATION
CASE NO: SDP 06-04
WHEREAS, the California Municipal Finance Authority, a public entity of the State of
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California and a joint powers authority, ("CMFA") intends to issue tax-exempt obligations (the
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"Obligations") for the purpose, among other things, of making a loan to CIC Glen Ridge, a
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California limited partnership, together with its successors or assigns or any limited liability
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company to be established by Chelsea (the "Developer"), the proceeds of which shall be used by
the Developer to finance the acquisition, construction and development of a multifamily housing
15 rental facility to be located on the north side of Cannon Road, east of the future Wind Trail Road
16 and south of future Glen Avenue in the City of Carlsbad, California (the "Project"); and
17 WHEREAS, the CMFA is authorized by Chapter 7 of Part 5 of Division 31 of the Health
18 and Safety Code of the State of California (the "Law") to issue and sell revenue bonds for the
19 purpose of financing the acquisition, construction and development of multifamily rental housing
20 facilities to be occupied in part by low and very low income tenants; and
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WHEREAS, the Obligations will be considered to be "qualified exempt facility bonds"
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under Section 142(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and
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Section 141 (f) of the Code requires that the "applicable elected representative", which is the City
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of Carlsbad, shall hold a public hearing on and approve the issuance of the Obligations; and
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1 CC Resolution No.
Page 2
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WHEREAS, this City Council is the elected legislative body of the City; and
WHEREAS, a notice of public hearing in a newspaper of general circulation in the City
, has been published, to the effect that a public hearing would be held by this City Council on the
6 date hereof regarding the issuance of the Obligations by the CMFA and the nature and location of
7 the Project; and
8 WHEREAS, this City Council held said public hearing, at which time an opportunity was
provided to present arguments both for and against the issuance of such Bonds and the nature and
location of the Project; and
WHEREAS, it is in the public interest and for the public benefit that the City approve the
12 issuance and delivery of the Obligations by CMFA for the purpose of financing the acquisition,
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construction and development of the Project;
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WHEREAS, the City shall not have any liability for the repayment of the Obligations or
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any responsibility for the Project.16
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City
of Carlsbad, California, as follows:
19 1. The City hereby finds and determines that the foregoing recitals are true and correct.
90 2. The City hereby approves the issuance and delivery of the said Obligations by CMFA
in the principal amount not to exceed $13.5 million for the purpose of paying the costs
of financing the acquisition, construction and development of said Project, subject to
22 the review and approval of the documents to be executed and delivered in connection
with the Obligations.
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3. This resolution shall take effect upon its adoption.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City
Council of the City of Carlsbad, California, held on the 7th day of August * 2007, by
the following vote, to wit:
AYES: Council Members Lewis, Kulcbin, Hall, Packard and Nygaard.
NOES: None.
ABSENT: None.
ABSTAIN: None.
ATTEST:
RRACJE M. WOqD^lCity ClerkLX)R
(SEAL)
CLAUDE A. LEWIS , Mayor
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council of the City of Carlsbad (the
"City"), at its regular meeting on July 24, 2007, will hold a public hearing and consider
approval of the issuance by the California Municipal Finance Authority of tax-exempt
multifamily revenue bonds in an estimated amount of Thirteen Million Five Hundred
Thousand Dollars ($13,500,000) (the "Bonds"), the proceeds of which will be used to
assist in the financing of the acquisition, construction and development of a 78-unit
multifamily housing residential facility to be located on the North side of Cannon Road,
East of future Wind Trail Road and North of future Glen Avenue in the City of Carlsbad,
California.
The owner of the Project is expected to be CIC Glen Ridge, a California limited
partnership, or any limited partnership or limited liability company established by
Chelsea Investment Corporation.
All those interested in matters related to the issuance of the Bonds are invited to
attend and be heard at the meeting which will commence at or after 6:00 p.m. and will be
held at City Council Chambers, 1200 Carlsbad Village Drive, Carlsbad, California 92008.
If you have any questions regarding the public hearing, please contact Debbie Fountain,
(760)434-2815.
PROOF OF PUBLICATION
(2010& 2011 C.C.P.)
This space is for the County Clerk's Filing Stamp
STATE OF CALIFORNIA
County of San Diego
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-entitled matter. I am the principal
clerk of the printer of
North County Times
Formerly known as the Blade-Citizen and The
Times-Advocate and which newspapers have
been adjudicated newspapers of general
circulation by the Superior Court of the County of
San Diego, State of California, for the City of
Oceanside and the City of Escondido, Court
Decree number 171349, for the County of San
Diego, that the notice of which the annexed is a
printed copy (set in type not smaller than
nonpariel), has been published in each regular
and entire issue of said newspaper and not in any
supplement thereof on the following dates, to-wit:
Proof of Publication of
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the CityCouncil of the City of Carlsbad (the "City"), at
its regular meeting on August 7,2007, will hold a pub-lic hearing and consider approval of the issuance by
the California Municipal Finance Authority of tax-exempt multifamily revenue bonds in an estimated
amount of Thirteen Million Five Hundred ThousandDollars ($13,500,000) (the "Bonds"), the proceeds ofwhich will be used to assist in the financing of the ac-quisition, construction and development of a 78-unitmultifamily housing residential facility to be located onthe North side of Cannon Road, East of future WindTrail Road and North pf future Glen Avenue in the City
of Carlsbad, California.
The owner of the Project is expected to be CIC GlenRidge, a California limited partnership, or any limitedpartnership or limited liability company established by
Chelsea Investment Corporation.
All those interested in matters related to the issuanceof the Bonds are invited to attend and be heard at themeeting which will commence at or after 6:00 p.m.and wm be held at City Council Chambers 1200Carlsbad Village Drive, Carlsbad, California. 92008. Ifvon have any questions regarding the public hearing,please contact Debbie Fountain, f760) 434-2815.
PUBLISH: July 23, 2007 NCT 2074238 •
CITY OF CARLSBAD
CITY COUNCIL
July 23rd 2007
I certify (or declare) under penalty of perjury that
the foregoing is true and correct.
Dated at SAN MARCOS California
This 23rd, day of July, 2007
Signature
Jane Allshouse
NORTH COUNTY TIMES
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