HomeMy WebLinkAbout2022-08-30; City Council; ; Public Hearing for the Issuance of Tax-Exempt Bonds by the California Municipal Finance Authority to Benefit Aviara East Housing LP, an Affordable Housing DeveloperCA Review _RK _
Meeting Date: Aug. 30, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Mandy Mills, Housing & Homeless Services Director
mandy.mills@carlsbadca.gov, 442-339-2907
Subject: Public Hearing for the Issuance of Tax-Exempt Bonds by the California
Municipal Finance Authority to Benefit Aviara East Housing LP, an
Affordable Housing Developer
District: 2
Recommended Action
Hold a public hearing, under the requirements of the Tax and Equity Fiscal Responsibility Act
and the Internal Revenue Code of 1986 and adopt a resolution approving the issuance of
housing revenue bonds for the benefit of BRIDGE Housing Corporation on behalf of Aviara East
Housing. The bonds, issued by the California Municipal Finance Authority, are not to exceed $25
million.
Executive Summary
BRIDGE Housing has received city approval to build 70 affordable apartment units at 1380
Laurel Tree Lane. The project, known as Aviara Apartments, was granted authority from the
state of California to issue tax-exempt revenue bonds to finance the project, and BRIDGE
Housing is working with the California Municipal Finance Authority to issue the bonds.
For all or a portion of the bonds to qualify as tax-exempt, the City of Carlsbad is required under
the federal Tax and Equity Fiscal Responsibility Act to conduct a public hearing, known as a
TEFRA hearing, to provide an opportunity for community members to speak in favor of or
against the use of tax-exempt bonds for the financing of the project.
In addition, although the City of Carlsbad is not issuing the bonds or in any way obligated to
repay them, the federal Internal Revenue Code requires that the financing be approved by the
City Council because the proposed project is located within Carlsbad's jurisdictional boundaries.
Discussion
Project background
The City Council approved a loan of $3.1 million from the city’s Housing Trust Fund in 2021 to
assist BRIDGE Housing with the construction of 70 units at 1380 Laurel Tree Lane. The site is
south of Palomar Airport Road and north of Laurel Tree Lane, and it is bisected by Aviara
Parkway, creating a west site and an east site (Location map Exhibit 2). The project’s one-, two-
and three-bedroom units will be restricted to households earning between 30% and 60% of the
Aug. 30, 2022 Item #11 Page 1 of 7
area median income, with one unit designated as a manager’s unit. Rents will be capped at a
percentage of the median income for the area, and based on the size of the apartment.
Residents will have access to a community room, an interior atrium/courtyard, an outdoor
courtyard with seating and barbecue, and central laundry facilities.
Project financing
The developer has secured all financing for the project and is ready to proceed with
construction. A large portion of the project financing includes $16 million in tax-exempt bond
financing. Although the project can only issue and use the bond amount that has been allocated
by the state, this TEFRA action will approve a bond amount not to exceed $25 million. By
approving an amount in excess of what the project has been allocated, we can eliminate the
need to reschedule and hold another TEFRA hearing in case the developer has to go back to the
state for a supplemental bond allocation due to unforeseen increases in construction costs.
The borrower, Aviara East Housing LP, has asked the California Municipal Finance Authority to
issue tax-exempt facility bonds for its qualified residential rental project in accordance with
Section 142(a)(7) of the Internal Revenue Code. The finance authority was formed as a joint
powers authority to help local governments, non-profit organizations and businesses through
the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in
California. The City of Carlsbad is a member of the authority, whose representatives and board
of directors have considerable experience in bond financing.
Public hearing and resolution
Although the finance authority will issue the bonds, the Internal Revenue Code requires an
“applicable elected representative” of the governmental unit hosting the project to approve the
issuance of the bonds.
Once the City Council holds the required TEFRA hearing and adopts the required resolution, no
other participation of the City of Carlsbad in the bond financing will be required.
All parties should clearly understand:
• The debt issued that is financed by the bonds is not debt of the City of Carlsbad in any
way. All repayment of debt is the strict obligation of the borrower.
• All monitoring and administrative actions related to this issuance are the responsibility
of the California Municipal Finance Authority.
• The City of Carlsbad’s participation in the issuance of these state bonds will not impact
the city's appropriation limits and will not constitute any type of indebtedness by the
city.
Options
Staff recommend the City Council conduct the required Tax and Equity Fiscal Responsibility Act
hearing and adopt the attached City Council resolution (Exhibit 1) in favor of the issuance of the
bonds. This action would support the creation of more affordable housing within the City of
Carlsbad. The City Council could choose to not approve the recommended resolution, but there
would be no benefit to the city for doing so and this could result in this planned affordable
housing development not being able to obtain the required financing, which would not advance
the city’s efforts to help create more affordable housing.
Aug. 30, 2022 Item #11 Page 2 of 7
Fiscal Analysis
As noted above, the City of Carlsbad 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.
There is no fiscal impact to the City of Carlsbad for the California Municipal Finance Authority to
issue the bonds for this development.
The Municipal Finance Authority shares a portion of the issuance fees it receives with its
member communities when it issues bonds. The city’s minor administrative and staff costs to
prepare the reports and related documents required by the borrower and the finance authority
will be reimbursed to the City of Carlsbad through a small portion of the bond issuance fee and
be deposited into the Housing Trust Fund.
Next Steps
City staff will forward the approved resolution to the California Municipal Finance Authority so
its staff and BRIDGE Housing can proceed with getting the bonds issued.
Environmental Evaluation
This action does not constitute a project as defined under the California Environmental Quality
Act in accordance with Public Resources Code Section 21065, in that these actions may not
cause a direct physical change in the environment or a reasonably foreseeable indirect physical
change in the environment.
Public Notification
This item was noticed in keeping with the state's Ralph M. Brown Act and it was available for
public viewing and review at least 72 hours before the scheduled meeting date.
A seven-day notice for the Tax and Equity Fiscal Responsibility Act public hearing was posted in
a newspaper of general circulation on Aug. 5, 2022, and on the city website. Copies of the
notice are available in the Office of the City Clerk.
Exhibits
1.City Council resolution
2.Location map
Aug. 30, 2022 Item #11 Page 3 of 7
RESOLUTION NO. 2022-213
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 FOR THE
BENEFIT OF AVIARA EAST HOUSING, LP, OR A SUBSIDIARY OR AFFILIATE
THEREOF, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$25,000,000 FOR THE PURPOSE OF FINANCING OR REFINANCING THE
ACQUISITION, CONSTRUCTION, REHABILITATION, IMPROVEMENT AND
EQUIPPING OF AVIARA EAST HOUSING, A MULTIFAMILY RENTAL HOUSING
PROJECT LOCATED IN CARLSBAD, CALIFORNIA
WHEREAS, BRIDGE Housing Corporation, a California nonprofit public benefit corporation {the
"Sponsor"), on behalf of Aviara East Housing LP, a California limited partnership, or another
ownership entity to be created by the Sponsor, Aviara East GP LLC, or another affiliate of the Sponsor
for the purpose of owning the project described herein (such limited partnership or other ownership
entity being referred to herein as the "Borrower"), has requested that the California Municipal
Finance Authority (the "Authority") issue from time to time one or more series of revenue bonds in
an aggregate principal amount not to exceed $25,000,000 (the "Bonds"), including but not limited to
revenue bonds issued as part of a plan to (1) finance and refinance the acquisition, construction,
improvement and equipping of a 70-unit multifamily rental housing facility (the "Project") to be
owned and operated by the Borrower and located at 1380 Laurel Tree Lane in the City of Carlsbad,
California (the "City"), and (2) pay certain expenses in connection with the issuance of the Bonds; and
WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds by the Authority
must be approved by the City Council of the City of Carlsbad because the Project is located within the
territorial limits of the City; and
WHEREAS, the City Council of the City of Carlsbad 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) of the Code and
the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California
Exhibit 1
Aug. 30, 2022 Item #11 Page 4 of 7
Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement"), among certain local
agencies, including the City of Carlsbad; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following notice duly
given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the
issuance of the Bonds by the Authority;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
l.That the above recitations are true and correct.
2.The City Council hereby approves the issuance of the Bonds by the Authority. It is the
purpose and intent of the City Council that this resolution constitute approval of the
issuance of the Bonds by the Authority, for the purposes of (a) Section 147(f) of the Code
by the applicable elected representative of the governmental unit having jurisdiction
over the area in which the Project is located, in accordance with said Section 147(f) and
(b)Section 4 of the Agreement.
3.The issuance of the Bonds shall be subject to the approval of the Authority of all
financing documents relating thereto to which the Authority is a party. The City of
Carlsbad shall have no responsibility or liability whatsoever with respect to the Bonds.
4.The adoption of this Resolution shall not obligate the City of Carlsbad or any department
thereof to (i) provide any financing to acquire or construct the Project or any refinancing
of the Project; (ii) approve any application or request for or take any other action in
connection with any planning approval, permit or other action necessary for the
acquisition, construction, rehabilitation, installation or operation of the Project; (iii)
make any contribution or advance any funds whatsoever to the Authority; or {iv) take
any further action with respect to the Authority or its membership therein.
5.The officers of the City of Carlsbad are 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.
6.This resolution shall take effect immediately upon its adoption.
Aug. 30, 2022 Item #11 Page 5 of 7
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 30th day of August, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Norby.
None.
Hall.
for
MATT HALL, Mayor
FAVIOLA� Clerk Serv6.nager
(SEAL)
Aug. 30, 2022 Item #11 Page 6 of 7
Exhibit 2
Aviara Apartments Location Map
Aug. 30, 2022 Item #11 Page 7 of 7
TO: CITY CLERK
AFFIDAVIT OF MAILING
NOTICE OF PUBLIC HEARING
DATEOFPUBLICHEA~ING: &A.a . 3D I Z,Ot'l
SU BJ ECT: M /.Jn..._ . f:: ,q,f ti O 1,,,,1, i 7
LOCATION: gg 1200 Carlsbad Village Drive, Carlsbad, CA 92008
D Other: ________________ _
DATE POSTED TO CITY WEBSITE _______ _
DATE NOTICES MAILED TO PROPERTY OWNERS: _________ _
NUMBER. MAILED:
I declare under penalty of perjury under the laws.of the State of California that I ?Im employed by
the City of Carlsbad and the foregoing is true and correct.
DEPARTMENT:□ CITY CLERK'S OFFICE ~ OTHER ~t\~W~\~~\N\---+~MJA~~\{~\'>~~~~ ~¾ -
J M~ iA.i\\\ s {L ~Uv-J..1 VwyJ)J ~
Signature Date
SENT TO FOR PUBLICATION VIA E-MAIL TO: □ Union Tribune on ___ _
~ Coast News on 1 /u / l/Z,
PUBLICATION DATE: Union Tribune --------------
Coast News _ ___,,~__.__,'"-+-_. -~-+-I _,Z,""---01--_'l ____ _
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.
DEPARTME~T: □ CITY CLERK'S OFFICE □ OTHER _______ _
Signature Date
Attachments: 1) Mailing Labels
2) Notice w/ attachments
Kaylin McCauley
Subject:
Attachments:
FW: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 3610779
Proof of Pub Aviara East.pdf
From: Miranda Ganzer <mganzer@joneshall.com>
Sent: Monday, August 8, 2022 2:05 PM
To: Mandy Mills <Mandy.Mills@carlsbadca.gov>; Faviola Medina <Faviola.Medina@carlsbadca.gov>
Cc: Julie Wunderlich <jwunderlich@joneshall.com>; astubbs@cmfa-ca.com; Jeff Williams
<jwilliams@bridgehousing.com>; Ron Lee <rlee@joneshall.com>
Subject: Re: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 3610779
Hello all,
Please find the proof of publication for the above referenced attached.
Thank you.
Miranda Ganzer, PACE Project Coordinator
Jones Hall, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, CA 94111
O:4153915780x243
C: 413 652 5433
mga nzer@jonesha I I .com
www.joneshall.com
From: Mandy Mills <Mandy.Mills@carlsbadca.gov>
Date: Wednesday, August 3, 2022 at 12:56 PM
To: Ron Lee <rlee@joneshall.com>, Faviola Medina <Faviola.Medina@carlsbadca.gov>
Cc: Miranda Ganzer <mganzer@joneshall.com>, Julie Wunderlich <jwunderlich@joneshall.com>,
astubbs@cmfa-ca.com <astubbs@cmfa-ca.com>, Jeff Williams <jwilliams@bridgehousing.com>
Subject: RE: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 3610779
Hi Ron,
I will be out of the office from 8/5-8/19 when we'll need confirmation of publication. Can you please email proof of
publication to Faviola Medina at Faviola.Medina@carlsbadca.gov with a cc to me (that way I'll have it when I get back)?
Thanks,
Mandy
From: Mandy Mills
Sent: Friday, July 29, 2022 2:03 PM
To: Ron Lee <rlee@joneshall.com>
Cc: Miranda Ganzer <mganzer@joneshall.com>; Julie Wunderlich <jwunderlich@joneshall.com>; astubbs@cmfa-
ca.com; Jeff Williams <jwilliams@bridgehousing.com>
Subject: RE: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 36 10779
Great, thanks.
From: Ron Lee <rlee@joneshall.com>
Sent: Thursday, July 28, 2022 4:12 PM
To: Mandy Mills <Mandy.Mills@carlsbadca.gov>
Cc: Miranda Ganzer <mganzer@joneshall.com>; Julie Wunderlich <jwunderlich@joneshall.com>; astubbs@cmfa-
ca.com; Jeff Williams <jwilliams@bridgehousing.com>
Subject: FW: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 3610779
Mandy,
The TEFRA notice will be published in the Coast News on Aug. 5. We will send you proof of publication upon receipt.
Thank you.
Ron
Iii
Ronald E. Lee, Shareholder
JONES HALL, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, CA 94111
Tel. 415.391.5780 x240
www.joneshall.com
From: Miranda Ganzer <mganzer@joneshall.com>
Date: Thursday, July 28, 2022 at 1:31 PM
To: Ron Lee <rlee@joneshall.com>
Cc: Julie Wunderlich <jwunderlich@joneshall.com>
Subject: FW: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 3610779
Hi Ron,
The Aviara East TEFRA notice will be published in the Coast News on August 5. I have requested proof of publication.
Thank you.
Miranda Ganzer, PACE Project Coordinator
Jones Hall, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, CA 94111
O:4153915780x243
C: 413 652 5433
mganzer@joneshall.com
www.joneshall.com
From: siobhan ortolano@dailyjournal.com <si obhan ortolano@dailyjournal.com>
Date: Thursday, July 28, 2022 at 3:24 PM
To: Miranda Ganzer <mganzer@joneshall.com>
2
Cc: siobhan ortolano@dailyjournal.com <siobhan ortolano@dailyjournal.com>
Subject: CNS:Documents for Reference No: AVIARA EAST TEFRA V3, OrderNo: 3610779
Hi Miranda,
All set for 8/5. Copy of Notice is attached. Please confirm.
Thank you,
Siobhan Ortolano
Daily Journal Corp.
3
NOTICE OF PUBLIC MEETING FOR PROPOSED AMENDMENTS
TO CARLSBAD MUNICIPAL CODE CHAPTER 2.42 HISTORIC PRESERVATION COMMISSION
AND TITLE 22 HISTORIC PRESERVATION
NOTICE IS HEREBY GIVEN that the Historic Preservation Commission of the City of Carlsbad will
hold a public meeting at the Council Chamber, 1200 Carlsbad Village Drive, Carlsbad, California,
at 6 p.m. on Monday, Aug. 29, 2022, to consider amendments to the Carlsbad Municipal Code
Chapter 2.42 Historic Preservation Commission and Title 22 Historic Preservation, to revise the
historic preservation ordinance and implement the Mills Act. The Historic Prese rvation
Commission will review and consider the draft ordinance and make a recommendation to the
City Council.
All interested persons are encouraged to submit written comments on, or before, Aug. 29, 2022,
or to attend the public meeting. Copies of the staff report will be available at least 72 hours
before the public meeting. If you have any questions, please contact Mike Strong, Assistant
Community Development Director in the Planning Division at (442)339-2721 or
mike.strong@carlsbadca.gov.
PUBLISH: AUGUST 19, 2022
CITY OF CARLSBAD
HISTORIC PRESERVATION COMMISSION
California Newspaper Service Bureau
Public Notice Advertising Since 1934
Tel 1-800-788-7840 Fax 1-800-474-9444
Local Offices and Representatives in:
Los Angeles, Santa Ana, San Diego, Riverside/San Bernardino,
San Francisco, Oakland, San Jose, Sacramento
Special Services Available in Phoenix
DECLARATION
I am a resident of Los Angeles County, over the age of
eighteen years and not a party to or interested in the
matter noticed.
The notice, of which t he annexed is a printed copy
appeared in the:
COAST NEWS
On t he following dates:
08/05/2022
I certify (or declare) under penalty of perjury that the
foregoing is true and correct.
Dated at Los Angeles, California, this
4th day of August 2022
Signature
3610779
"The only Public No/ice which is jusUfiable
from the standpoint of true economy and the public interest,
is that which reaches those who are affected by ii"
11111111111111~ Ill Ill Ill lllll lllll lllll lllll lllll lllll lllll llll Ill * A O O O O O 6 0 8 5 4 7 9 *
NOTICE OF PUBLIC
HEARING
NO"TTCE lS Hl::REBY GIVEN
to you, hecaust: your interest
may be affected, that the City
Council of the City of Carlsbad
will hold a public hearing
a1 the Council Chambec
I 200 Carlsbad Vilfage Driv;·
Carlsl>ad, Californla,ar 5:00 p.m.
on Tuesday, Augt1$t 30, 2022, a<
required by Section 147(() of the
Internal Revenue Code of 1986
and will be held with respect ro
the. propo!'ied i~su:'\nce by the
California Municipal Finance
Authority (the "Authoriry")
of ll s re"enue bond,;: in one
or more series jn an amoum
1101 to exceed $25,000,000
(the "l.londs"), including but
not liiniteJ to revenue bonds
issued •• port of a plan 10:
( 1 J finance and refinance
the ac4uisidon, consrrucdon
improvement and equipping
ol a 70-unit multifamily rental
housin~ faciliry to be located
•1 1380 Laurel Tree l.ane in
<he City of Carlsbad, California
(the "City"); and (2) pay
cert.tin t!JCperues incurred in
connecrion with the issuance
ol the Bonds. The facilitie:<
are to be owned and operated
by A,·iara East Housing LP, a
California limited partnership,
or ttnothtr ownership entiry
co be created by Aviara ~st
GP LLC, RRIDGE Hou,ing
Corporauun, or an affiliate
thcreoi (such limited
panncrship or ocher ownership
entity, the "Borrower").
The Bonds and the ol>lixarion
ro pay principal thereof and · ·
inten:st thereon and any
redempt:nn premium with
res(H:1:r therero do not constirutc
indebtedness or"" ohligation or
the City, the Arnhoriry, rhe State r.r California or any poluical
subdivision 1hcreof1 within thj incaning or any constitutional
,,r U:\lUl'ory debr limirntion. or ·
a charge ;1gainst 1hc generaJ
credit or raJCing powers of
any of rhem. The Bonds shall
he ~ limited obligation of
tbe ,\uthority, payilble solely
from ten.1in revenues duly
pledged therefor and generally
representing amounts p~id by
the Borrower.
Copi~s of the staff report will be
available by Frid~y. A"gust 2G,
2022. lf you have any questior1$,
please conracr the Housins &
Homelcs, Services Depa"ment
at (442) 339-2811 or~
c~clshndca 1:ov. The hearing
will commence ~t S p.m. or ns
soon chcreafter as che matter
can be hearc! and will be held
"' Cily 11911 Council Chambe,,
1200 Carubad Villase Drive,
Carlsbatj, California. Interested
pcrwru . wishing 10 express
chcir views on the issuance
of the Bonds or on the nature
and loc,irion of the facilJties
proposed to be financed and
, refinanced may attend the
public hearing or, pnor to the
1 rime oi the hearing, .submit
• wrirten comments.
Additional inform:uion
, conl'.crning. the above matter
. may be obrained from and
writcen comments shcoid be
•ddrcssed to Office of the City
· Clc:rk, 1200 Carlsba~ Village
Dm·e, Cadsbad, California
92008.
Oa:ed and puhlishcd: Augu.t s·
2022 '
815/22
CNS•JGI0779#
. 08/05/2022 CN 26808
AVIARA APARTMENTS
AFFORDABLE HOUSING
BOND HEARING
Mandy Mills, Director
Housing & Homeless Services
Aug. 30, 2022
{city of
Carlsbad
Background
AVIARA APTS TAX EXEMPT BONDS
•Aviara Apts. project received authority to issue up to $25 million
of tax-exempt revenue bonds to finance the project.
•Project Developer, BRIDGE Housing, is working with the California
Municipal Finance Authority to issue the bonds.
•Federal Tax and Equity Fiscal Responsibility Act requires a public
hearing on the use of tax-exempt bonds for the project.
•Adopt a resolution approving the issuance of multifamily housing
revenue bonds not to exceed $25,000,000 for the construction of
the Aviara Apts. multifamily rental housing project
{city of
Carlsbad
PROJECT
•New construction of 70 units
•1, 2 and 3 bedroom units
•Affordable for 30-60% median income
AVIARA APTS TAX EXEMPT BONDS
{city of
Carlsbad
FISCAL ANALYSIS
•Not debt of the City of Carlsbad
•No obligation of the City of Carlsbad to repay the debt
•All monitoring and administrative actions are the
responsibility of the California Municipal Finance
Authority.
•Will not impact the city's appropriation limits and will
not constitute any type of indebtedness by the city.
AVIARA APTS TAX EXEMPT BONDS
{city of
Carlsbad
RECOMMENDATION
•Conduct the public hearing
•Adopt a resolution approving the issuance of
multifamily housing revenue bonds in an aggregate
principal amount not to exceed $25,000,000 for the
purpose of financing the Aviara Apts. multifamily
rental housing project
AVIARA APTS TAX EXEMPT BONDS
{city of
Carlsbad