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HomeMy WebLinkAbout2024-01-09; City Council; Resolution 2024-009RESOLUTION NO. 2024-009 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE REISSUANCE OF TAX-EXEMPT MULTIFAMILY HOUSING REVENUE BONDS AND CERTAIN AMENDMENTS TO THE TRUST INDENTURE FOR THE MARIPOSA APARTMENT PROJECT, A 106-UNIT MULTIFAMILY AFFORDABLE RENTAL HOUSING DEVELOPMENT LOCATED IN CARLSBAD, CALIFORNIA WHEREAS, on June 13, 2003, the City of Carlsbad (the "City") issued its Multifamily Housing Revenue Bonds ("Mariposa Apartments"), 2003 Series A (the "Bonds") in the original aggregate principal amount of $6,000,000, pursuant to the provisions of Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code, to provide for the acquisition and construction of a multifamily rental housing development comprising 106 residential, multifamily affordable apartment units contained in 13 two-story buildings, known as Mariposa Apartments (the "Project") and located in the City of Carlsbad, California; and WHEREAS, the Project is presently owned by CIC Calavera, L.P., a California limited partnership (the "Owner"); and WHEREAS, the Bonds are currently outstanding in the principal amount of $3,650,000; and WHEREAS, the Bonds are subject to mandatory tender on the Remarketing Date of February 1, 2024 and must be remarketed as set forth in that certain Trust Indenture dated as of June 1, 2003 (the "Indenture"), by and between the City, as issuer, and Computershare Trust Company, N.A., as successor trustee (the "Trustee"); and WHEREAS, the Owner has requested that the Indenture be amended to increase the maximum Strike Rate (the remarketing interest rate) permitted therein, to facilitate the remarketing of the Bonds to the final maturity thereof (the "Amendment"); and WHEREAS, in connection with the Amendment, a First Supplement (Attachment A) to Trust Indenture has been prepared, to be entered into by and between the City and the Trustee, in substantially the form submitted to the City Council at this meeting (the "First Supplement to Trust Indenture"); and WHEREAS, the Amendment may cause the Bonds to be "reissued" for federal income tax purposes; and WHEREAS, if the Bonds are reissued, the interest of the Bonds may qualify for tax exemption under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), only if the Bonds are approved in accordance with Section 14 7(f) of the Code; and WHEREAS, pursuant to Section 147(f) of the Code, the reissuance of the Bonds 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 reissuance of the Bonds under Section 147(f) of the Code; and WHEREAS, pursuant to Section 147(f) of the Code, a notice of public hearing has been published in a newspaper of general circulation in the City, to the effect that a public hearing would be held by this City Council on the date hereof regarding the reissuance of the Bonds by the City and the nature and location of the Project; and WHEREAS, the City Council held such public hearing, at which time an opportunity was provided to present arguments both for and against the reissuance of such Bonds and the nature and location of the Project; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. 2. That the above recitations are true and correct. The City Council approves the reissuance of the Bonds by the City, including but not limited to Bonds issued as part of a plan of financing and refinancing of the facilities described herein. It is the purpose and intent of the City Council that this resolution constitutes approval of the reissuance of the Bonds by the City Council, as the applicable elected representative of the governmental unit having jurisdiction over the area in which the Project is located, in accordance with Section 147(f) of the Code. 3.The form of First Supplement (Attachment A) to Trust Indenture (a copy of which is on file with the City Clerk and which is hereby declared to be a part of this Resolution as if fully set forth herein) submitted to the City Council is approved. The Mayor, the City Manager, the Assistant City Manager, any Deputy City Manager, the City Treasurer and the City Clerk or the designee thereof (each, an "Authorized Officer") are each authorized and directed, for and in the name of the City, to execute and deliver the First Supplement to Trust Indenture in the form hereby approved, with such additions thereto and changes therein as the officers executing the same deem necessary, and approval of such additions and changes shall be conclusively evidenced by the execution and delivery of such First Supplement to Trust Indenture by such officer or officers. The First Supplement to Trust Indenture shall be executed and delivered if an Authorized Officer determines, in consultation with Stradling Yocca Carlson & Rauth (the City's Bond Counsel), that the Amendment is necessary and appropriate to accomplish the remarketing of the Bonds to the Maturity Date. 4.The adoption of this Resolution shall not obligate the City of Carlsbad or any department thereof to (i) 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; or (ii)make any contribution or advance any funds whatsoever to the Owner. 5.The Authorized Officers of the City of Carlsbad are 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 transaction approved hereby. 6.This resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 9th day of January, 2024, by the following vote, to wit: AYES: NAYS: ABSTAIN: ABSENT: Blackburn, Bhat-Patel, Acosta, Burkholder, Luna. None. None. None. KEITH BLACKBURN, Mayor SHERRY FREISINGER, City Clerk {SEAL) Attachment A FIRST SUPPLEMENT TO TRUST INDENTURE by and between CITY OF CARLSBAD and COMPUTERSHARE TRUST COMPANY, N.A., as Trustee Relating to $6,000,000 CITY OF CARLSBAD MULTIFAMILY HOUSING REVENUE BONDS (MARIPOSA APARTMENTS) 2003 SERIES A 4861-8388-7249v4/022062-0037 1 FIRST SUPPLEMENT TO TRUST INDENTURE This FIRST SUPPLEMENT TO TRUST INDENTURE (the “Supplement”) is executed and entered into as of February 1, 2024 by and between the CITY OF CARLSBAD (the “City”) and COMPUTERSHARE TRUST COMPANY, N.A., a banking association organized and existing under the laws of the United States, as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”); W I T N E S S E T H : WHEREAS, the Trustee and the City previously executed and entered into a Trust Indenture (the “Indenture”), dated as of June 1, 2003, in connection with the issuance of the $6,000,000 City of Carlsbad Multifamily Housing Revenue Bonds (Mariposa Apartments) 2003 Series A (the “Bonds”); and WHEREAS, the Indenture provides for the remarketing of the Bonds on the remarketing date of February 1, 2024 at a Remarketing Rate not to exceed the Strike Rate (as defined in the Indenture); and WHEREAS, the Remarketing Agent has determined that the Bonds cannot be remarketed for a period extending to the Maturity Date unless the Strike Rate is amended to increase the maximum Strike Rate; and WHEREAS, Section 11.1(xii) of the Indenture expressly permits the City to amend the Indenture (without the consent of any Bond Owners) in connection with the remarketing of Bonds following any mandatory tender of the Bonds pursuant to Section 2.17 if such change is effective only after mandatory purchase; and WHEREAS, the Rating Agency has confirmed that this Supplement will not result in a suspension, withdrawal, or downgrade of the rating on the Bonds; and WHEREAS, the Credit Provider and the Borrower have each consented in writing to this Supplement; such written consents are attached hereto; and WHEREAS, the City desires to amend the Indenture to (a) increase the maximum Strike Rate and (b) provide for and refer to a Tax Certificate of the Borrower and Issuer dated concurrently herewith. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: Section 1. Amendments to Section 1.2 of the Indenture. (a)Commencing upon the Effective Date of this Supplement, the term “Strike Rate” shall mean 4.408% per annum or such other per annum interest rate as may be approved by the Credit Provider in its sole discretion, but in no event higher than 12.00%. 4861-8388-7249v4/022062-0037 2 (b) Commencing upon the Effective Date of this Supplement, the term “TaxCertificate” shall mean that certain Tax Certificate dated the Effective Date, executed and delivered by the Issuer and the Borrower. Section 2. Supplemental Indenture. This Supplement is executed, delivered and effective as of February 1, 2024 (the “Effective Date”) in accordance with Article 11 of the Indenture. Except as expressly set forth in this Supplement, the Indenture shall continue in full force and effect in accordance with its terms. The City, by its execution of this Supplement, requests the Trustee join in the execution and delivery of this Supplement. The Trustee hereby acknowledges receipt of all instruments and documentation necessary to enable the Trustee to execute this Supplement. Section 3. Definitions. Initially capitalized terms not defined herein shall have the meaning ascribed to them in the Indenture. Section 4. Counterparts. This Supplement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 4861-8388-7249v4/022062-0037 S-1 IN WITNESS WHEREOF, the parties hereto have executed and entered into this First Supplement to Trust Indenture by their officers thereunto duly authorized as of the day and year first above written. COMPUTERSHARE TRUST COMPANY, N.A., as Trustee By: Authorized Signatory CITY OF CARLSBAD By: Scott Chadwick, City Manager ATTEST: Sherry Freisinger, City Clerk 4861-8388-7249v4/022062-0037 FANNIE MAE CONSENT Pursuant to Section 11.7 of that certain Trust Indenture dated as of June 1, 2003 (the “Indenture”) between the City of Carlsbad (the “Issuer”) and Computershare Trust Company, N.A., as successor Trustee under the Indenture (the “Trustee”), the undersigned, on behalf of Fannie Mae, consents to the terms and the making of the following: 1.First Supplement to Trust Indenture dated as of February 1, 2024 between the Issuer and the Trustee. FANNIE MAE By: Dated: February 1, 2024 4861-8388-7249v4/022062-0037 BORROWER CONSENT Pursuant to Section 11.7 of that certain Trust Indenture dated as of June 1, 2003 (the “Indenture”) between the City of Carlsbad (the “Issuer”) and Computershare Trust Company, N.A., as successor Trustee under the Indenture (the “Trustee”), the undersigned, on behalf of CIC Calavera, L.P., consents to the terms and the making of the following: 1.First Supplement to Trust Indenture dated as of February 1, 2024 between the Issuer and the Trustee. CIC CALAVERA, L.P., a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation Its: Managing General Partner By: Robert W. Laing, Executive Director/President By: CIC Calavera Hills II, LLC, a California limited liability company Its: Co-General Partner By: Chelsea Investment Corporation, a California corporation, Its: Manager By: Cheri Hoffman, President Dated: February 1, 2024 4861-8388-7249v4/022062-0037