HomeMy WebLinkAbout2016-02-09; City Council; 22214; Conduct Public Hearing Under the Tax and Equity Fiscal Responsibility Act in Connection with Proposed Issuance of Revenue Bonds by California Municipal Finance Authority for Quarry Creek Affordable Housing DevelopmentCITY OF CARLSBAD-AGENDA BILL 10
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AB# 22,214 CONDUCT THE PUBLIC HEARING UNDER THE TAX AND DEPT. DIRECTOR ~
MTG. 2/9'/16 EQUITY FISCAL RESPONSIBILITY ACT IN CONNECTION CITY ATTORNEY "'!..JL_
DEPT. CEO WITH THE PROPOSED ISSUANCE OF REVENUE BONDS CITY MANAGER ~ BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY
FOR THE QUARRY CREEK AFFORDABLE HOUSING
DEVELOPMENT
RECOMMENDED ACTION:
That the City Council take the following actions: 1) conduct the public hearing under the requirements
of the Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as
amended, and 2) adopt City Council Resolution No. 2016-030 approving the issuance of the
Bonds by the California Municipal Finance Authority for the benefit of Chelsea Investment Corporation,
a California nonprofit corporation and an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, or a subsidiary or affiliate thereof, to provide for the financing of the Quarry
Creek Affordable Housing Development, which is part of the Quarry Creek Master Plan residential
development, solely for the purposes of satisfying the requirements of TEFRA, the Code and the
California Government Code Section 6500 (and following).
ITEM EXPLANATION:
Chelsea Investment Corporation has requested that the California Municipal Finance Authority (CMFA)
serve as the municipal issuer oftax-exempt revenue bonds ("Bonds") in an aggregate principal amount
not to exceed $15,000,000 to be used for the acquisitiqn, construction, improvement and equipping of
a 64-unit multifamily rental housing development located south of Haymar Drive in the northeast
corner of the Quarry Creek Master Plan (APN 167-040-11 and 167-040-21), Carlsbad, California,
generally known as Quarry Creek (the "Project") and operated by CIC Management, Inc.
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Carlsbad is required
to conduct a public hearing (known as the "TEFRA Hearing") providing for the members of the
community an opportunity to speak in favor of or against the use oftax-exempt bonds for the financing
of the Project. Prior to such TEFRA Hearing, reasonable notice (14 calendar days) must be, and has
been, provided to the members of the community. Following the close of the TEFRA Hearing, an
"applicable elected representative" (City Council) of the governmental unit hosting the Project must
provide its approval of the issuance of the Bonds for the financing of the Project.
The 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. To date, over 200 municipalities have become members of
CMFA.
DEPARTMENT CONTACT: Debbie Fountain 760-434-2935 debbie.fountain@carlsbadca.gov
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FOR CITY CLERKS USE ONLY. \2(" COUNCil ACTION: APPROVED CONTINUED TO DATE SPECIFIC 0
DENIED 0 CONTINUED TO DATE UNKNOWN 0
CONTINUED 0 RETURNED TO STAFF 0
WITHDRAWN 0 OTHER-SEE MINUTES 0
AMENDED 0
TEFRA Hearing
Feb. 9, 2016
Pagel
The CMFA was formed to assist local governments, non-profit organizations and businesses with the
issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The
CMFA's representatives and its Board of Directors have considerable experience in bond financings.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and
the city will have no financial, legal, moral obligation, liability or responsibility for the Project or the
repayment of the Bonds for the financing of the Project. All financing documents with respect to the
issuance of the Bonds will contain clear disclaimers thatthe Bonds are not obligations of the city or the
State of California, but are to be paid for solely from funds provided by the Borrower.
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit
public benefit corporation (the "Foundation"L acts as the Board of Directors for the CMFA. Through
its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its
member communities and donates a portion of these issuance fees to the Foundation for the support
of local charities. With respect to the City of Carlsbad, it is expected that a portion of the issuance fee
attributable to the city will be granted by the CMFA to the Housing Trust Fund of the city. Such grant
may be used for any lawful purpose of the city for the Housing Trust Fund. The Borrower will be the
beneficiary of the CMFA's charitable donation through a 25% reduction in issuance fees.
In order to support the construction of new affordable homes for low income households within the
City of Carlsbad, staff is recommending that the City Council conduct the TEFRA hearing on February 9,
2016 in connection with the proposed issuance of revenue bonds by the CMFA in an amount not to
exceed $15,000,000 for the acquisition, construction, improvement and equipping of a 64-unit
multifamily rental housing project located south of Haymar Drive in the northeast corner ofthe Quarry
Creek Master Plan (APN 167-040-11 and 167-040-2lL Carlsbad, California, generally known as Quarry
Creek (the "Project") and operated by CIC Management, Inc., and adopt the attached City Council
resolution in favor of the issuance of the Bonds by the CMFA.
FISCAL IMPACT:
There is no fiscal impact to the City of Carlsbad other than some minor administrative and staff costs
to prepare the reports and related documents required by the borrower and CMFA to issue the subject
Bonds for the noted development. A portion of the bond issuance fee will be granted to the City of
Carlsbad and deposited into the Housing Trust Fund to financially support other affordable housing
developments within Carlsbad and to contribute to overall affordable housing administrative costs.
As noted above, the city will have no financial, legal, moral obligation, liability or responsibility for the
Project or the repayment of the Bonds for the financing of the project.
ENVIRONMENTAL IMPACT:
Pursuant to the California Environmental Quality Act (CEQA} and the Environmental Protection
Ordinance (Title 19) of the Carlsbad Municipal Code, staff conducted an environmental impact
assessment to determine if the proposed project could have any potentially significant impact on the
environment. Documents referenced for the analysis included the Certified Environmental Impact
Report for Quarry Creek which was certified by the Carlsb.ad City Council in April, 2014 (EIR 11-02, State
TEFRA Hearing
Feb. 9, 2016
Pagel
Clearinghouse #2012021039). The project is consistent with the project description of the
Environmental Impact Report and therefore within the scope identified within that CEQA document.
Master Plan level mitigation measures have been incorporated into the overall design of the Master
Plan project or have been placed as conditions of approval such that all potentially significant impacts
have been mitigated to below a level of significance. No further environmental review is required on
the development project or the bond issuance to finance said project.
PUBLIC NOTIFICATION:
A fourteen calendar day public TEFRA hearing notice was posted in the newspaper on January 26, 2016
and on the city website. Copies of the notice are available in the Office of the City Clerk.
EXHIBITS:
1. City Council Resolution No. 2016-030 approving the issuance of bonds by the CMFA for
the benefit of Chelsea Investment Corporation, solely for the purposes of satisfying the
requirements of TEFRA, the Code, and the California Government Code Section 6500.
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EXHIBITl
RESOLUTION NO. 2016-030
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE ISSUANCE OF THE CALIFORNIA
MUNICIPAL FINANCE AUTHORITY MULTIFAMILY HOUSING
REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO
EXCEED $15,000,000 FOR THE PURPOSE OF FINANCING OR
REFINANCING THE ACQUISITION, CONSTRUCTION, IMPROVEMENT
AND EQUIPPING OF QUARRY CREEK APARTMENTS AND CERTAIN
OTHER MATIERS RELATING THERETO
The City Council of the City of Carlsbad, California, does hereby resolve as follows:
WHEREAS, Quarry Creek CIC, LP, a California limited partnership (the "Borrower"),
has requested that the California Municipal Finance Authority (the "Authority") participate in the
issuance of one or more series of revenue bon'ds issued from time to time, including bonds issued
to refund such revenue bonds in one or more series from time to time, in an aggregate principal
amount not to exceed $15,000,000 (the "Bonds") for the acquisition, construction, improvement
and equipping of a 64-unit multifamily rental housing project located south of Haymar Drive in
the northeast corner of the Quarry Creek Master Plan (APN 167-040-11 and 167-040-21),
Carlsbad, California, generally known as Q!Jarry Creek (the "Project") and operated by CIC ! ,_._
Management, Inc,; and
WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the
"Code"), the issuance of the Bonds by the Authority must be approved by the City of Carlsbad
(the "City") because the Project is to be located within the territorial limits of the City; and
WHEREAS, the City Council ofthe City (the "City Council") is the elected legislative
body of the City and is one of the "applicable elected representatives" required to approve the
issuance of the Bonds under Section 147(f) of the Code; and
WHEREAS, the Authority has requested that the City Council approve the issuance
of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f)
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ofthe Code and the requirements of Section 4 ofthe Joint Exercise of Powers Agreement Relating
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to the California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement"),
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among certain local agencies, including the City; and
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4 WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following
5 notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to
6 approve the issuance of the Bonds by the Authority;
7 NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Carlsbad as
8 follows:
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1. The above recitations are true and correct.
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2. The City Council hereby approves the issuance of the Bonds by the
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12 Authority. It is the purpose and intent of the City Council that this resolution constitute approval
13 of the issuance of the Bonds by the Authority, for the purposes of (a) Section 147(f) of the Code
14 by the applicable elected representative of the governmental unit having jurisdiction over the
15 area in which the Project is to be located, in accordance with said Section 147(f) and (b) Section 4
16 ofthe Agreement.
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3. The issuance of the Bonds shall be subject to the approval of the Authority
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of all financing documents relating thereto to which the Authority is a party. The City shall have
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20 no responsibility or liability whatsoever with respect to the Bonds.
21 4. The adoption of this Resolution shall not obligate the City or any
22 department thereof to (i) provide any financing to acquire or construct the Project or any
23 refinancing of the Project; (ii) approve any application or request for or take any other action in
24 connection with any planning approval, permit or other action necessary for the acquisition,
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construction, rehabilitation, installation or operation of the Project; (iii) make any contribution
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or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to
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the Authority or its membership therein.
5. The City Manager or designee is hereby authorized and directed, jointly
and severally, to do any and all things and to execute and deliver any and all documents which
they deem necessary or advisable in order to carry out, give effect to and comply with the terms
and intent of this resolution and the financing transaction approved hereby.
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6. This resolution shall take effect immediately upon its adoption.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the gth day of February 2016, by the following vote to wit:
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AYES: Council Members Wood, Schumacher, Blackburn, Packard.
NOES: None.
ABSTAIN: None.
ABSENT: Mayor Matt Hall
'LORRAINE WOOD, Mayor Pro Tern
ATTEST:
(SEAL)
,,,, �
AFFIDAVIT OF MAILING
NOTICE OF PUBLIC HEARING
TO: CITY CLERK
DATE OF PUBLIC HEARING: . ~ (q /!G . --~~--~~~~------~---------------
SUBJECT: L6Pf!._A -~ lfeeic ~(e 1-fa._,.sr._'=J
LOCATioN: . {d...Oo G:ur-(s~ Vi C&:!Je:-'Drc\re..
DATE NOTICES MAILED TO PROPERTY OWNERS: N fk.-, . --~-~~~~~--------
NUMBER MAILED: _____.
I declare under penalty of perjury under the laws of the State of California that I am
employed by the City of Carlsbad and the foregoing is true and correct.
CITY CLERK'S OFFICE
~~ --~l~/f~~~fl~lb _________ ~ ~Ufe5J . 1 7 (Date)
SENT TO FOR PUBLICATION VIA E-MAIL TO: ~.Union Tribune .
0 CoastNews
PUBLICATION DATE:
Coast News ____ ~--------------------------
I declare under penalty of perjury under the laws of the State of California that I am
employed by the City of Carlsbad in the City Clerk's Office and the foregoing is true and
00~~ .
Date: [ frey /r b
(
Attachments: 1) Mailing Labels
2) Notice w/ attachments
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Tuesday, February 9, 2016, a public hearing as required
by Section 147(f) of the Internal Revenue Code of 1986 will be held with respect to the proposed
issuance by the California Municipal Finance Authority (the "Authority") of its revenue bonds in
one or more series issued from time to time, including bonds issued to refund such revenue
bonds in one or more series from time to time, in an amount not to exceed $15,000,000 (the
"Bonds"). The proceeds of the Bonds will be used to: {1) finance or refinance the acquisition,
construction, improvement and equipping of Quarry Creek, a 64-unit multifamily rental housing
project located South of Haymar Drive in the northeast corner of the Quarry Creek Master Plan
(APN 167-040-11 and 167-040-21L Carlsbad, California; and {2) pay certain expenses incurred in
connection with the issuance of the Bonds. The facilities are to be owned by the Quarry Creek
CIC, LP, a California limited partnership and operated by CIC Management, Inc.
The Bonds and the obligation to pay principal of and interest thereon and any redemption
premium with respect thereto do not constitute indebtedness or an obligation of the Authority, the
State of California or any political subdivision thereof (including the City of CarlsbadL within the
meaning of any constitutional or statutory debt limitation, or a charge against the general credit or
taxing powers of any of them. The Bonds shall be a limited obligation of the Authority, payable
solely from certain revenues duly pledged therefor and generally representing amounts paid by the
Borrower.
The hearing will commence at 6:00 p.m. or as soon thereafter as the matter can be heard,
and will be held in the City of Carlsbad City Hall, City Council Chamber, 1200 Carlsbad Village Drive,
Carlsbad, California. Interested persons wishing to express their views on the issuance of the Bonds
or on the nature and location of the facilities proposed to be financed or refinanced may attend the
public hearing or, prior to the time of the hearing, submit written comments.
Additional information concerning the above matter may be obtained from, and written
comments should be addressed to, City Clerk, City of Carlsbad, 1200 Carlsbad Village Drive, Carlsbad,
California 92008.
PUBLISH: January 26, 2016
OHSUSA:763596852.2
PROOF OF PUBLICATION
(2010 & 2011 C.C.P.)
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
The San Diego Union Tribune
Formerly known as the North County Times and
UT North County and which newspaper has been
adjudicated as a newspaper 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 numbers
171349 & 172171, 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 ti1t:: fo:iowlr;y
January 26th, 2016
I certify (or declare) under penalty of perjury that
the foregoing is true and correct.
Dated at Oceanside, California
On This 26th, of January, 2016
Jane Allshouse
The San Diego Union Tribune
' Legal Advertising
This space is for the County Clerk's Filing Stamp
Proof of Publication of
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Tuesday, February 9, 2016, a public
heanng as required by Section 147(f) of the Internal Revenue Code of
1986 will be held with respect to the proposed issuance by the Califor-
nia Municipal Finance Authority (the "Authority") of its revenue bonds in
one. or more series issued from time to time, including bonds issued to
refund such revenue bonds in one or more series from time to time, in
an amount not to exceed$ 15,000,000 (the"Bonds"). The proceeds of the
Bonds w1ll be used to: (1) finance or refinance the acquisition, construc-
tion, Improvement and equipping of Quarry Creek, a 64-unit multifamily
rental houSing project located South of Haymar Drive in the northeast
corner of the Quarry Creek Master Plan (APN 167-040-11 and 167-040-
21), Carlsbad, California; and (2) pay certain expenses incurred in con-
nection with the issuance of the Bonds. The facilities are to be owned by
the Quarry Creek CIC, LP, a California limited partnership and operated
by CIC Management, Inc. The Bonds and the obligation to pay princi-
pal of and mterest thereon and any redemption premium with respect
thereto do not constitute indebtedness or an obligation of the Author-
ity, the State of California or any political subdivision thereof (includ-
ing the City of Carlsbad), within the meaning of any constitutional or
statutory debt limitation, or a charge against the general credit or taxing
powers of any of them. The Bonds shall be a limited obligation of the Au-
thority, payable solely from certain revenues duly pledged therefor and
generally representing amounts paid by the Borrower. The hearing will
commence at 6:00p.m. or as soon thereafter as the matter can be heard,
and Will be held in the City of Carlsbad City Hall, City Council Chamber,
1200 Carlsbad Village Drive, Carlsbad, California. Interested persons
wishing to express their views on the issuance of the Bonds or on the na-
ture and location of the facilities proposed to be financed or refinanced
may attend the public hearing or, prior to the time of the hearing, submit
wntten comments. Additional information concerning the above matter
may be obtained from, and written comments should be addressed to,
City Clerk, City of Carlsbad, 1200 Carlsbad Village Drive, Carlsbad, Califor-
nia 92008. pub: 1/26/16