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HomeMy WebLinkAbout1982-04-06; City Council; 6716-2; Jefferson Senior Housing Project.- -, .__ .--.- . . s,, b4 x CIT’- 3F CARLSBAD - AGENDA dlLL L2-J AB#A TITLE: JEFFERSON SENIOR HOUSING PROJECT - DEPT. HD. MTG, 4/6/= SELECTION OF BOND COUNSEL CITY Al-W v DEPT. cA 1 CITY MGR.* RECOMMENDED ACTION: . That City Council by motion authorise the City Attorney to accept the proposal dated March 2, 1982 as supplemented by letter dated March 22, 1982 from Stradling, Yocca, Carlson, and Rauth on behalf of the City and approve the agreement with Jefferson House Partnership to pay the cost. STATEMENT OF THE MATTER: The City Council at their meeting of February 16, 1982 directed the Director of Building and Housing and the City Attorney to proceed with the steps outlined in the staff report dated February 10, 1982 to accomplish the Jefferson Street Senior Citizen Housing Project. One of the first steps in that process is the retention of bond counsel who will assume the responsibility for preparing all of the legal documents necessary including the development and disposition agreement which will establish the basic terms for the project between the City and the Jefferson House Partnership. We have solicited proposals from qualified bond counsel. After consultation with the developer we have determined for a number of reasons to recommend the firm of Stradling, Yocca, Carlson and Rauth. Their proposal dated March 2, 1982 as supplemented by letter dated March 22, 1982 is attached. We recommend that the City Council by motion authorize the City Attorney to accept the proposal on behalf of the City of Carlsbad. If the project is successfully completed fees for bond counsel will be paid out of the proceeds of the bond issue. If the project is not completed bond counsel will be paid on a hourly basis of the work done to date. To provide for that eventuality it is necessary for the City to enter into an agreement with the Jefferson House Partnership. In a letter to the Partnership dated March 24, 1982 we have outlined the terms for advance of $5,000 to be used by the City for project expenses and for the assumption by the Partnership of our responsibility for paying bond counsel in the event the project is not completed. If the City Council concurs with the terms of the agreement which has been signed by the developer your action is by motion to approve the agreement. Concurrent with these actions we have undertaken to reach agreement with the County for transfer of the land. If the Council concurs with these recommendations we will immediately undertake to work with bond counsel to prepare a draft of the DDA in accordance with the 15 points approved by the City Council at your February 16, 1982 meeting. AB #6716-Supplement #2 Jefferson Senior Housing Project March 6, 1982 FISCAL IMPACT: This action will have no fiscal impact on the City. Bond counsel fees will either be paid out of the project financing or by a developer contribution. EXHIBITS: A: Bond Counsel Proposal of March 2, 1982 B: Bond Counsel Letter of March 22, 1982 c: City Attorney's Letter of March 24, 1982 a Farm R . STMDI.XXQ Nrc~E.Yoccx c. ClUIQ ChRISON W~uuxR.Fbma m x.C:.%XLAAF RICBA~DC. GOODI~JU JOHN J. Mmwav TROW P. C-E. JR. BKN A. ~IIYDX.A?l ~=;~JR+MJ'EN PAULL.G-'ALB M.D. TALBOT Douaus F. Hrow E. KURT YEAOER D-L H . CARLSON -DALI. J. S~EFW&~: 33. .4DA?d ALLI30b BRUCE PEUC~TER LWXKNCE D. FIZENZEL STJUDLING, YOCCA,CARLSON&RAUTH A PROFESSIONAL CORPORATION ATiORNEYS AT LAW SUITE 600,UNlON 6ANK BUILDING 610 NEWPORT CENTER DRIVE POST OFFICE BOX 7660 NEWPORT BEACH, CALIPOENJA 92660-0680 -iELEPYONF. (7141 64C-7035 March 2, 1982 Carlsbad Housing and Redevelopment Commission 1200 Elm Avenue Carlsbad, California 92008 Attention: Mr. Vincent F. Biondo Dear Mr. Biondo: It is our understanding.that the Carlsbad Housing and Redevelopment Commission (the "Commission") may wish to con- sider a proposal pursuant to which this firm would serve as bond counsel for the Commission in connection with its proposed issue of multi-family housing revenue bonds in the approximate principal amount of $1,500,000 (the "Bonds"). We would be very pleased to be engaged in that capacity. This letter describes the services we would be prepared to render as bond counsel and the fee which we would expect to charge for such services. Our primary responsibility as bond counsel is to render an opinion in connection with the issuance of the Bonds to the effect: (i) that the Bonds have been properly authorized and issued and are valid and binding obligations, (ii) that the essential sources of security for the Bonds have been legally provided for, and (iii) that the interest on the Bonds is exempt from federal and California income taxation. However, in the process of reaching the point at which we have prepared a record sufficient to enable us to render this opinion, we are usually called upon to perform a number of related functions. The-services we would expect to render for programs of the Commission would fall into two categories: (a) research and interpretation of applicable laws, conferences with Commission staff and counsel, and consultation with finacial advisors, underwriters, developers and other experts retained by the Commission for planning and developing the housing program, and (b) preparation of documentation and supervision of all steps to be taken prior to the issuance of the Bonds. Carlsbad Housing and Redevelopment Commission March 2, 1982 Page 2 In the first category, or planning stage, we would expect (i) to research applicable laws and ordinances relating to the proposed program# inclading laws relating to the State of Cali-. fornia and the Commission, tax laws, securities laws and other laws that may be applicable: (ii) to attend conferences and consult with Commission staff and counsel regarding such laws; and (iii) to participate with any financial advisors, under- writers, developers and other experts retained by the Commission in structuring and financing. In the second category, that of preparing for the issuance of Bonds, we would draft, receive and review comments on drafts of the bond resolution, rules and regulations of the Commission and other basic documents relating to the security of the Bonds in consultation with the Commission, its counsel, and financial advisors, underwriters, developers and other experts. We would also provide services in connection with relevant provisions of the Internal Revenue Code and tax regulations, including pre- paring various documents relating to the regulations promulgated under the Code. Additional services in the second category would include (i) preparation of the record of proceedings for authorization, sale and issuance of the Bonds: (ii) preparation of documents relating to the financing, including the loan agreements, the sale, service, and administration agreement, and the indenture: (iii) assistance in the preparation 04 the official statement and supporting documentation relating to the offering for sale of the bonds: (iv) review of the mortgage cash flow analysis submitted by the underwriters: (v) partici- pation in the negotiations relating to and drafting of the Bond purchase contracts for the bidding documents: (vi) attendance at information meetings and other conferences scheduled by the Commission, the financial advisors or the underwriters; (vii) consultation with prospective purchasers, their legal counsel and rating agencies: (viii) consultation with counsel to the Commission concerning any legislation or litigation during the course of the financing; (xi) consultation with the trustee and counsel to the trustee: (x) preparation of the form of the Bonds and supervision of their production or printing, signing, authentication and delivery; (xi) rendering of the final approv- ing opinion as to the issuance: and (xii) rendering of necessary .’ - ‘ *,,’ * - ’ . - Carlsbad Housing and Redevelopment Commission March 2, 1982 Page 3 collateral legal opinions as to the inapplicability of the registration requirements of federal securities laws and other matters related to the issuance of the Bonds. Our fee for said services would be computed according to the following schedule and would be payable from Bond proceeds (except if the proceedings were abandoned): Total Principal Amount of Bonds Sold Fee $l,OOO,OOO or less $15,000 $1,000,001 to $5,000,000 $15,000, plus 3/8 of 1% of excess over $l,OOO,OOO $5,000,001 to $10,000,000 $30,000, plus l/4 of 1% of excess over $5,000,000. In addition to the foregoing fee, we would receive reimburse- ment for other out-of-pocket expenses, such as telephone charges, delivery charges, telegrams, traveling expenses, clerical and stenographic overtime, charges for duplicating, and similar charges. In the event the proceedings were to be abandoned, we would be paid a fee based upon the hourly rates of the attorneys undertaking the work. For additional services such as litigation, the preparation of a developer agreement and other documentation outside the scope of work as bond counsel, as requested by the Commission, we will undertake this work at a fee based on the hourly rates of the attorneys in the firm performing the services. The persons in the firm that will be working on this issue and their hourly rates are as follows: John J. Murphy $115.00 Thomas P. Clark, Jr. $105.00 David R. McEwen $100.00 E. Kurt Yeager $ 80.00 B. Adam Allison $ 70.00 ,. - & -4 .- ‘ * I . Carlsbad Housing and Redevelopment Commission March 2, 1982 Page 4 If the services and compensation set forth in this letter are satisfactory to the Commission, its acceptance noted on a duplicate of this letter and delivered to us shall show the agreement between us. Very truly yours, STRADLING, YOCCA, CARLSON & RAUTH 44-d- Fritz Rb Stradling FRS:kh day of TA , 1982. / FRITZ R. STRADLINQ NICK E.Yocca c. CRAIO CARLSON WILLI- R.Rams m K.C. SCHAm RICHARDC.GOODMNV JOHNJ.MURPRY TWOMASP.CLAHIC,JR. BEN A.F~Y~MAN DAVIDR.MCEWEN DEREXW.HUNT PAUL L.GALE M.D. TALBOT Doua~lls F.HIQHAM E.HUETYEAQER DAK~H.CARI.~ON RA??DALLJ.SIIRRMAN B.~AMALLISON BRUCEFEUCHTEE LAWEENCBD.PRENZEL A PROFESSIONAL CORPORATION A-I-TORN EYS AT LAW SUITE 600,UNlON BANK BUlLDlNG 610 NEWPORT CENTER DRIVE JOHNE.BRECJIENRID~E POST OFFICE BOX 7660 NEWPORT BEACH, CALIFOMIA 92860-0680 TELEPHONE (714) 640-7035 OF COUNSEL March 22, 1982 Mr. Vincent F. Biondo City Attorney City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Re: Proposal for Bond Counsel Services Dear Mr. Biondo: This letter will confirm our telephone conversation of March 9, 1982 concerning our proposal of March 2, 1982 to pro- vide bond counsel services to the Carlsbad Housing and Rede- velopment Commission in connection with its proposed issue of muti-family housing revenue bonds. It is my understanding, based upon our telephone con- versation, that the project to be financed consists of forty- eight dwelling units for senior citizens and that the disposi- tion and development agreement which will be required in con- nection therewith will not be intended to address any other project. Under such circumstances, the services described in our letter of March 2, 1982 will include the drafting of such disposition and development agreement; If you should have any further questions concerning our proposal, please do not hesitate to contact either Fritz Stradling or me. \ JJM:pw \k ..-,,;,;:, A,‘- // .- ’ 7 CITY OF CARLSBAD 1200 ELM AVENUE CARLSBAD, CALIFORNIA 92008 (714) 438-5531 VINCENT F. BIONDO, JR. CITY ATTORNEY DANIEL S. HENTSCHKE ASSISTANT CITY Al-fORNEY March 24, 1982 ' ,Jefferson House Partnership Att: Mr. William B. Rick, Managing Partner Rick Engineering Company 5620 Friars Road San Diego, CA 92110 RE: JEFFERSON STREET SENIOR CITIZEN HOUSING PROJECT Dear Mr. Rick: As you know, the City Council at their meeting of February 16, 1982 directed our office to take the steps necessary to retain bond counsel for the above referenced project. Attached is a proposal in that regard dated March 2, 1982 from the firm of Stradling, Yocca, Carlson and Rauth. That proposal has been supplemented by a letter dated March 22, 1982 indicating that the services described in the proposal will include the drafting of the disposition and development agreement for the project. The proposal provides that the fee for bond counsel will be paid out of the proceeds of the bond issue. If, for whatever reason, the project is not completed bond counsel will be paid at an hourly rate based upon work done to date. The City of Carlsbad cannot be responsible for the payment of any of the project costs. If you wish to proceed, Jefferson House Partnership by signing and returning the enclosed copy of this letter you assume that obligation. In addition, as we discussed by phone on March 24, 1982 Jefferson House Partnership will advance $5,000 to the City of Carlsbad. The City will hold the money on account to be used to pay for fees and other expenses of bond counsel in working on the project. When the project is complete any remaining balance in the fund will be applied toward bond counsel's fees. , . Jefferson House Partnership Mr. William B. Rick March 24, 1982 Page 2 It is our intention to ask the City Council to approve the retention of bond counsel and this agreement with you at their April 6, 1982 meeting. If you concur we would appreciate receiving the signed copy of the letter and your check before that date. If you have any further questions concerning the proposal or this letter agreement do not hesitate to call. Very truly yours, Vincent F. Biondo, Jr. City Attorney VFB:rme cc: Director of Building and Housing -9