HomeMy WebLinkAbout1999-01-12; City Council; 15009; Poinsettia Gardens Affordable Apartment Project- -
CITY OF CARLSBAD -AGENDA BILL I I3 I ” AB## ~~,f,oo 9 TITLE- DECLARATION OF INTENT TO ISSUE $6.5 MILLION
ii%ii EXEMPT PRIVATE ACTIVITY BONDS FOR THE
DEPT. HD ’
M-l-G. / -1 z-99 CONSTRUCTION OF THE POINSETTIA GARDENS 92 UNIT CITY Am/B
AFFORDABLE APARTMENT PROJECT
DEPT. H/RED ClTYMGR.=
RECOMMENDED ACTION: SDP 98-09
That the City Council take the following actions: 1) ACCEPT public comment on the Council’s declaration
of intent to issue tax-exempt private activity bonds in an amount not to exceed $6.5 million to finance the
construction of ninety-two (92) affordable apartment units within the Poinsettia Properties Specific Plan;
2) if acceptable, ADOPT Council Resolution No. q?-20 APPROVING the Council’s declaration of
intent to issue the subject tax exempt bonds; and, 3) AUTHORIZE the Finance Director, or designee, to
hold the Developer’s Bond Allocation Application Deposit in the amount of thirty two thousand five
hundred dollars ($32,500) and then to release the deposit following City receipt of a written notification
from the California Debt Limit Allocation Committee (CDLAC) authorizing release or forfeiture of the
deposit, in whole or in part, pursuant to CDLAC procedures.
ITEM EXPLANATION:
Backaround
Poinsettia Gardens is a proposed ninety-two (92) unit affordable apartment project to be constructed
within Planning Area 5 of the Poinsettia Properties Specific Plan to satisfy a master development
inclusionary housing obligation. The project will be developed, owned and managed by Poinsettia
Housing Associates, of which Bridge Housing Corporation is the general partner.
In November and December 1998, the City Council approved three significant actions related to the
development and financing of the Poinsettia Gardens Affordable Housing Project. First, the Council
approved an Affordable Housing Agreement with the Master Developer which established the schedule for
development of the subject affordable housing units. Second, the Council approved an agreement with
Poinsettia Housing Associates (Bridge) which will provide financial assistance to the project in the amount
of $920,000. The financial assistance will be provided in the form of a residual receipts loan. Third, the
Council authorized staff to proceed in applying to CDLAC for a tax-exempt bond allocation to assist in
financing the construction of the subject project, and to allow for reimbursement of costs associated with
the bond issuance.
’ Tax Exempt Bond Allocation
To continue the efforts to finance the subject project, there are several additional actions related to the
bond issuance which must be taken by the City Council. Prior to any action to authorize issuance of the
tax-exempt bonds, the Internal Revenue Code requires the City Council, representing the “applicable
elected representative for the area”, to hold a public hearing to accept comments on the City’s intent. If
appropriate, then separate action is required to actually approve the issuance of the tax-exempt bonds. At
this time, staff and the affordable housing developer are requesting that the Council hold the public
hearing to accept comments on the City’s intent to issue the tax exempt bonds for the subject project.
Approval of the attached resolution sets forth the City’s intent to issue bonds. The resolution, however,
does not yet obligate the City to actually issue bonds for the project. Once the City has been granted a
bond allocation from CDLAC, the Council will be required to adopt a “Bond Resolution” authorizing the
actual sale and issuance of the bonds. Action to authorize issuance of the bonds will most likely be
requested in May, 1999.
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Page 2
At this time, in addition to holding the public hearing, staff is requesting that the Council take required
action related to the Developer’s Bond Allocation Application Deposit. Per the requirements of CDLAC,
the Developer is required to place on deposit with the City an amount equal to one half of one percent of
the total amount of the requested bond allocation ($6.5 million). On December 8, 1998, the Developer
made such a deposit to the City in the amount of $32,500. The City is required to hold the deposit until
such time as it receives written notification from CDLAC that the deposit is authorized to be released or
forfeited to either CDLAC or the Developer. Therefore, staff is requesting that the Council authorize the
Finance Director to hold the subject deposit and then to issue a check in the amount of $32,500 to either
CDLAC and/or the Developer, upon written notification from CDLAC.
Staff Recommendation
Staff is recommending that the City Council take the following actions: 1) accept public comment on the
City’s intent to issue tax exempt bonds; 2) if acceptable, approve the attached resolution which sets forth
the City’s declaration of intent to issue bonds for the subject project; and, 3) authorize the Finance
Director to hold the Developer’s Bond Allocation Application Deposit and release it upon written
notification and instruction from CDLAC.
ENVIRONMENTAL REVIEW
An Environmental Impact Report was approved by the City Council for the entire Specific Plan on January
20, 1998 (EIR 96-01). No further environmental review is required as part of the bond issuance.
FISCAL IMPACT
The Council is being asked to take action to declare the City’s intent to issue tax exempt bonds in an
amount not to exceed $6.5 million to assist in financing the Poinsettia Gardens Affordable Apartment
Project. At this time, there is no cost associated with the requested action. If the City Council takes
action at a later date to authorize issuance of the bonds for the subject project, there will be costs
associated with issuance of those bonds (City expenses, bond counsel, underwriting, financial advisor,
etc.). However, these costs will be fully recovered from the proceeds of the bond issuance. It is also
important to note that 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.
EXHIBITS
1. City Council Resolution No. 99 -610 approving the City’s intent to issue tax exempt private
activity bonds in an amount not to exceed $6.5 million, and authorizing release of the developer’s
bond allocation application deposit upon receipt of written notification and instructions from CDLAC.
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CITY COUNCIL RESOLUTION NO. 99-20
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD DECLARING ITS INTENT TO ISSUE TAX-EXEMPT
PRIVATE ACTMTY BOND OBLIGATIONS IN AN AMOUNT
NOT TO EXCEED $6.5 MILLION TO FINANCE THE
CONSTRUCTION OF NINETY-TWO AFFORDABLE
APARTMENT UNITS WITHIN THE POINSETTIA PROPERTIES
SPECIFIC PLAN; AND AUTHORIZING THE FINANCE
DIRECTOR OR DESIGNEE TO HOLD THE DEVELOPER’S
BOND ALLOCATION APPLICATION DEPOSIT IN THE
AMOUNT OF TIHRTY TWO THOUSAND FIVE HUNDRED
DOLLARS, WHICH THE CITY HAS PREVIOUSLY COLLECTED
AND PLACED ON DEPOSIT IN AN ACCOUNT IN A FINANCIAL
INSTITUTION, AND TO RELEASE THE DEPOSIT FOLLOWING
CITY RECEIPT OF A WRITTEN NOTIFICATION FROM THE
CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE
AUTHORIZING RELEASE OR FORFEITURE OF THE DEPOSIT,
IN WHOLE OR IN PART, PURSUANT TO COMMITTEE
PROCEDURES.
APPLICANT: POINSETTIA HOUSING ASSOCIATES
CASE NO: SDP 98-09
WHEREAS, the Master Developer of the Poinsettia Properties Specific Plan,
HSL/BP/Michan, L.L.C, has proposed to construct 92 apartment units affordable to lower
income households as a means to satis@ their affordable housing obligation as permitted by
Carlsbad Municipal Code Section 21.85 of the City’s Inclusionary Housing Ordinance; and,
WHEREAS, the Master Developer will contract with Poinsettia Housing Associates,
a California limited partnership, the general partner of which is BRIDGE Housing Corporation
of Southern California, a nonprofit public benefit corporation (“BRIDGE”), or such other
limited partnership or limited liability of which BRIDGE is the general partner or managing
member, respectively, to construct said affordable apartment units; and,
WHEREAS, the City of Carlsbad (the “City”) intends to issue tax-exempt bond
obligations (the “Obligations”) for the primary purpose of making a loan of the proceeds to
Poinsettia Housing Associates to be used to finance the acquisition, construction and
development of a multifamily housing rental facility to be located at the northwest comer of
Poinsettia Lane and Avenida Encinas, in the City of Carlsbad, California and commonly known
as Poinsettia Gardens Apartments, (the “Project”); and,
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! Council Resolution No.
Page 2
WHEREAS, the City is authorized by Chapter 7 of Part 5 of Division 3 1 of the-Health
and Safety Code of the State of California (the “Law”) to issue and sell revenue bonds for the
purpose of financing the acquisition, construction and development of multifamily rental
housing facilities to be occupied in part by very low income tenants; and
WHEREAS, the Obligations, if issued, will be considered to be “qualified exempt
facility bonds” under Section 142(a) of the Internal Revenue Code of 1986, as amended (the
“Code”); and,
WHEREAS, Section 147(f) of the Code requires that the “applicable elected
representative” with respect to the City hold a public hearing on and approve the City’s intent to
issue the Obligations; and
WHEREAS, the Carlsbad City Council is the elected legislative body of the City and
therefore serves as the appropriate “applicable elected representative” to hold the required
public hearing and accept public testimony on the City’s intent to issue bond obligations; 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 the Carlsbad City
Council on January 12, 1999, regarding the issuance of the Obligations by the City and the
nature and location of the Project; and
WHEREAS, the City Council has held said public hearing on such date, 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 declare
its official intent to issue the subject bond obligations and to reimburse the expenditures
referenced herein.
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Council Resolution No 99-20 --
Page 3
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the
City of Carlsbad, California, as follows:
1. The City hereby finds and determines that the foregoing recitals are true and correct.
2. The City of Carlsbad hereby approves this declaration of intent to issue and deliver
Bond Obligations in an amount not to exceed $6.5 million for the purpose of paying the
costs of financing the acquisition, construction and development of the Project, subject
to review and approval of the documents to be executed and delivered at a later date in
connection with the Bond Obligations.
3. The City of Carlsbad has collected from the Developer and has placed on deposit the amount of
thirty two thousand five hundred dollars ($32,500) which equals one half of one percent of the
amount of private activity bond allocation being requested. The City Council hereby authorizes the
Finance Director or designee to hold said deposit and then to release the deposit following City
receipt of a written notification from the California Debt Limit Allocation Committee authorizing
release or forfeiture of the deposit, in whole or in part, pursuant to the procedures of the Committee.
4. This resolution shall take effect upon its date of adoption.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City
of Carlsbad, California, held on the 12th day of January, 1999 by the following vote, to wit:
AYES: Council Members Lewis, Hall, Finnila, Nygaard and Kulchin
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
5
PROOF OF PUBLld^lON
(2010&2011C.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
North County Times
formerly known as the Blade-Citizen and The
Times-Advocate and which newspapers have been
adjudged newspapers of general circulation by the
Superior Court of the County of San Diego, State of
California, under the dates of June 30, 1989
(Blade-Citizen) and June 21, 1974 (Times-
Advocate) case number 171349 (Blade-Citizen)
and case number 172171 (The Times-Advocate)
for the cities of Escondido, Oceanside, Carlsbad,
Solana Beach and the North County Judicial
District; that the notice of which the annexed is a
printed copy (set in type not smaller than
nonpareil), has been published in each regular and
entire issue of said newspaper and not in any
supplement thereof on the following dates, to-wit:
Dec. 11, 1998
I certify (or declare) under penalty of perjury that
the foregoing is true and correct.
San Marcos
Dated at California, this llth day
of Dec. 1998
Signature
NORTH COUNTY TIMES
Legal Advertising
This space \ the County Clerk's Filing Stamp
Proof of Publication of
Notice of Public Hearing
NOTICE OF PUBLIC HEARING
ISSUANCE OF MULTI-FAMILY REVENUE BONDS
NOTICE IS HEREBY GIVEN thai the City Council ol the City ol Carlsbad (the "City"), at its regular meeting to
be held on Tuesday, January 12,1999, will hold a public hearing and consider approval of the issuance by the
City of tax-exempt multifamily revenue bonds in an estimate amount of Six Million Five Hundred Thousand
Dollars ($6,500,000) (the "Bonds'), the proceeds of which will be used to assist In the financing of the
acquisition, construction and development of a 92-unit multifamily housing residential facility to be commonly
known as the Pcuisettia Gardens Apartments (the "Project'). The Project is expected to be located at the
Northwest comer ol Poinsettia Lane and Avenida Encinas in the City of Carlsbad, California.
The owner of the Project is expected to be Poinsettia Housing Associates, a California limited partnership, the
general partner ol which is expected be BRIDGE Housing Corporation-Southern California, a California
nonprofit public benefit corporation (the "Owner').
All those interested in matters related to the insurance ol 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 the City Council Chambers, 1200
Carlsbad Village Drive, Carlsbad, California 92008. If you have any questions regarding this matter, please
contact Mr. Craig Ruiiz, at the City of Carlsbad Housing and Redevelopment Department, (760) 434-2817.
Legal 60252 December 11,1998
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NOTICE OF PUBLIC HEARING
ISSUANCE OF MULTI-FAMILY REVENUE BONDS
NOTICE IS HEREBY GIVEN that the City Council of the City of Carlsbad (the
“City”), at its regular meeting to be held on Tuesday, January 12, 1999, will hold a public
hearing and consider approval of the issuance by the City of tax-exempt multifamily
revenue bonds in an estimated amount of Six Million Five Hundred Thousand Dollars
($6,500,000) (the “Bonds”), the proceeds of which will be used to assist in the financing
of the acquisition, construction and development of a 92-unit multifamily housing
residential facility to be commonly known as the Poinsettia Gardens Apartments (the
“Project”). The Project is expected to be located at the Northwest comer of Poinsettia
Lane and Avenida Encinas in the City of Carlsbad, California.
The owner of the Project is expected to be Poinsettia Housing Associates, a
California limited partnership, the general partner of which is expected be BRIDGE
Housing Corporation-Southern California, a California nonprofit public benefit
corporation (the “Owner”).
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:OOp.m. and will be
held at the City Council Chambers, 1200 Carlsbad Village Drive, Carlsbad, California
92008. If you have any questions regarding this matter, please contact Mr. Craig Ruiz, at
the City of Carlsbad Housing and Redevelopment Department, (760) 434-28 17.
PUBLISH: December 11,199S
CARLSBAD CITY COUNCIL
From: Craig Ruiz
To: Lee Rautenkranz Date: 12/3/98 4:19PM
Subject: Public Notice
I have an agenda bill that will be on Dec. 8 Council Agenda. The title of the item is “Approval of Financial
Assistance for Poinsettia Gardens Apartments and approval of intention to issue bonds for subject project”
In the resolution (if you have a copy of the Agenda Bill it is hand numbered page 11, #6 and #7), the
Council is taking the following two actions: 1) The City shall hold a public hearing on January 12, 1999 to receive comments on the City’s intent to issue bonds for the subject project and 2) The City Clerk is
hereby directed to publish on or before December 11, 1998 in a paper of general circulation within the City of Carlsbad a notice of public hearing with respect to the public hearing to be held by the City Council on January 12, 1999 regarding the issuance of bonds to finance the subject Project.
Attached is a copy of the text for the legal ad. Also, if you prefer, we can place the ad with the newspaper. Please let me know which you prefer.
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council of the City of Carlsbad (the “City”),
at its regular meeting on January 12, 1999, will hold a public hearing and consider approval of
the issuance by the City of tax-exempt multifamily revenue bonds in an estimated amount of Six
Million Five Hundred Thousand Dollars ($6,500,000) (the “Bonds”), the proceeds of which will
be used to assist in the financing of the acquisition, construction and development of a 92-unit
multifamily housing residential facility to be commonly known as the Poinsettia Gardens
Apartments (the “Project”). The Project is expected to be located at the Northwest corner of
Poinsettia Lane and Avenida Encinas in the City of Carlsbad, California.
The owner of the Project is expected to be Poinsettia Housing Associates, a California
limited partnership, the general partner of which is expected be BRIDGE Housing Corporation-
Southern California, a California nonprofit public benefit corporation (the “Owner”).
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:OOp.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 Mr. Craig Ruiz, City of Carlsbad, (760)
434-28 17.
By: ISI
City Clerk