HomeMy WebLinkAbout1985-05-07; Housing & Redevelopment Commission; 40; Multi-Family Residential Mortgage Revenue Bonds.” ,
. ‘, HOUSING AND-EDEVELOPMENT COMMlSd -:N - AGENDA BILL
, * AB# 4. TITLE: MULTI-FAMILY RESIDENTIAL MORTGAGE DEPT. HDh!!!%e
MTG. 5/7las REVENUE BONDS, $16.5 MILLION -
LINCOLN SEASCAPE CITY ATTY
DEPT. RED CITY MGR. w
RECOMMENDED ACTION:
City of Carlsbad Housing and Redevelopment Commission adopt Resolution
No. 046 authorizing the issuance of Multi-Family Residential Mortgage Revenue
Bonds (Lincoln Seascape), and authorizing the execution of necessary
documents.
ITEM EXPLANATION
On March 19, 1985, the City Council approved Resolution No. 7940 authorizing
the issuance of multi-family housing revenue bonds for the Seascape Village
project. The State ceiling of $900,000,000 for this type of bonds was exhausted
just prior to issuance of this program. The City’s Bond Counsel is
recommending that the Housing and Redevelopment Commission now approve the
issuance of the bonds. The Housing and Redevelopment Commission is not subject
to the State ceiling that is applicable to the City.
Lincoln Seascape, the applicant, will offer 42 units (20%) to eligible low and
moderate income renters.
The City Attorney and the Director of Building and Planning and the City’s
Bond Counsel, Stradling, Yocca, Carlson and Rauth, have reviewed the
documents and found them to be consistent with the General Plan, the City’s
Housing Element, Council’s affordable housing goals and applicable state
and federal regulations.
Staff recommends that the Housing and Redevelopment Commission authorize
the execution of certain documents pertaining to this $16.5 million multi-family
revenue bond issue,
FISCAL IMPACT
Costs incurred by the City will be recovered as part of the mortgage revenue
bond issue. The one-tenth of one percent of the aggregate principal amount
of the bonds is estimated to be $16,500. In addition Bond Counsel fees of
$41,000 and Underwriting fees of $412,500 are estimated to be paid from bond
proceeds. Estimated developer cost is 7 to 10 percent of the issue.
EXHIBITS
1 - Letter from Bond Counsel dated April 30, 1985
2 - Resolution No. 046
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STRADLING,YOCCA,CARLSON &RAUTN
A PROFESSIONAL CORPORATION
*COTT E. MCCONNELL ATTORNEYS AT LAW
RENA c. STONE RANDALL J. SHERMAN 660 NEWPORT CENTER DRIVE, SUITE 1600
*R”CE FEUCHTER POST OFFlCE BOX 7660 u*F?x J. H”Es*CH KIRK F. MALDONADO NEWPORT BEACH, CALIFORNIA 92660-6401 PEG, A. GROUNDWATER
DONALD J. HAMMAN TELEPHONE (714) 640-7035
JOHN J. SwlGnRT, JR.
NEILA R. SERNSTElN
TONY L. LOWE CHRlSTOPHER J. KlLPATRlCK
NANCY RADER WHITEHEAD
LEWIS G, FELDMAN
SYLWA D. LAUTSCH CLARK H. LISENSON ERNEST w. HLATTE 111 LAWRENCE 8. COHN
ANN 0. CATRON
April 30, 1985
Mr. Martin Orenyak Carlsbad Redevelopment Agency 1200 Elm Avenue Carlsbad, California 92008
JOHN E. SRECKENRIDGE
DARYL H. CARLSON
OF COUNSCL
TELECOPIER
(714) s-lo-7332
RECEIVED
KY’ 11985
CITY OF CARLSBAD Building Department
Re: Lincoln Seascape Project
Dear Marty:
As you are aware, on March 19, 1985, the City Council approved the issuance of multifamily housing revenue bonds for the Seascape Village project. During the past week, your staff, our office and all other participants in the financing have made every effort to close the transaction before the 1985 State ceiling of $900,000,000 for multifamily revenue bonds was exhausted. Unfortunately, the $900,000,000 ceiling was hit at approximately 9:00 p.m. last evening before we were able to close the financing. Unless the State ceiling is increased by legislation, we cannot close the financing for the project under the terms of the existing City Council resolution.
There is now pending before the Legislature Assembly Bill 53, which proposes to increase the ceiling from $900,000,000 to $1,500,000,000; however, no one is anticipating that bill to be approved until the month of June at the earliest and perhaps as late as July or August. In the face of the uncertainty with respect to the enactment of AB 53, I have recommended to you and to Vince Biondo, at the urging of Newman and Associates, the Underwriter, and Lincoln Seascape, a California Limited Partnership, the Developer, that the City's Housing Authority approve the issuance of the bonds. The Housing Authority is not subject to the State ceiling that is applicable to the City. The Housing Authority is authorized to issue multifamily housing revenue bonds in accordance with Health and Safety Code Section 34312.5 on substantially the terms and conditions as the City is authorized to issue bonds.
Mr. Martin Orenyak April 30, 1985 Page Two
In speaking with the Underwriter and the Developer, it is our hope that the Housing Authority could adopt the enclosed resolution and approve the issuance of bonds on May 7.
An issuance of the bonds by the Housing Authority offers two advantages to the City. The primary advantage is that this transaction can be concluded roughly within the originally anticipated time span without disappointing any investors. As you know, the Underwriter had already sold bonds in anticipation of the closing of the transaction. David Smith of Newman and Associates has indicated that, if the Housing Authority authorizes the issuance of the bonds by May 7, he will be able to hold his orders with the purchasers of the bonds and close the transaction with the existing purchasers.
The second advantage to the City is that the state law governing the issuance of bonds by the Housing Authority imposes slightly stricter standards with respect to the low and moderate income units which might well be of some benefit to the low and moderate income residents of the City. The major additional restriction is that the Developer recertify the income of the low and moderate income tenants on an annual basis and, if a person no longer qualifies as a low and moderate income tenant, the Developer is then obligated to rent the next available unit to a person who does qualify.
As you and I have discussed, no one thought that the ceiling would be reached as early as April 29. In view of this unanticipated development, converting this issue to a Housing Authority offers the City a vehicle for completing this financing within the expected time frame on substantially the same terms as originally approved by the City Council.
I would appreciate it if you would send me a copy of the resolution creating the Housing Authority so that I may review it from a legal standpoint to make sure that all necessary prerequisites for utilizing the Housing Authority as a bond issuer are covered in the resolution.
If you have any further questions regarding this matter, please call.
Very truly yours,
STRADLING, YOCCA, CARLSON & RAUTH w Robert J. Whalen
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27 WHEREAS, the City has previously adopted a resolution on
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RESOLUTION NO. !I46
A RESOLUTION OF THE HOUSING AND REDEVELOPMENT COMMISSIO OF THE CITY OF CARLSBAD, CALIFORNIA AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF MULTIFAMILY HOUSING REVENUE BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $16,500,000 FOR THE PURPOSE OF MAKING A LOAN TO PROVIDE FUNDS TO PROVIDE THE INTERIM AND PERMANENT FINANCING OF THE COST OF DEVELOPING A MULTIFAMILY RENTAL PROJECT, DETERMINING AND PRESCRIBING CERTAIN MATTERS RELATING THERETO, AND APPROVING AND AUTHORIZING THE EXECUTION OF RELATED DOCUMENTS, AGREEMENTS AND ACTIONS. (SEASCAPE VILLAGE PROJECT).
WHEREAS, by the provisions of Chapter 1 of Part 2 of
Division 24 of the Health and Safety Code of the State of
California (the "Act") the Housing and Redevelopment Commission
of the City of Carlsbad (the *Commission") is authorized to issue
multifamily mortgage revenue bonds for the purpose of making
loans or otherwise providing funds to finance the development of
affordable multifamily rental housing in order to meet a
substantial housing need identified in the community; and
WHEREAS, the Commission desires to make a loan (the .
"Developer Loan") to Lincoln Seascape, A California Limited
Partnership (the "Developer"), to finance the construction of a
208 unit multifamily rental housing development (the "Project"),
and in order to do so intends to sell and issue not to exceed
$16,500,000 of .its Multifamily Housing Revenue Bonds, Series 1985
B (Seascape Village Project) (the "Bonds"); and
WHEREAS, the Commission has now determined to make the
Developer Loan to provide funds to assist in the financing of the
Project for the purpose of providing housing for low and moderate
income persons or families: and
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the Project, which resolution constituted an official action of
the City, and then adopted Resolution No. 7940 on March 19, 1985
authorizing the issuance of Bonds for the Project: and
WHEREAS, the City is now unable to issue bonds for the
Project under applicable law and the Commission now desires to
issue Bonds for the Project under substantially the same terms
and limitations as were imposed by the City under its December
18, 1984 and March 19, 1985 resolutions; and
WHEREAS, there have been prepared and presented to the
City Council for consideration at this meeting the following
instruments:
1. The form of Indenture of Trust (the "Indenture"),
including the form of Bond;
2. The form of Loan Agreement;
3. The form of Regulatory Agreement and Declaration of
Restrictive Covenants (the "Regulatory Agreement");
4. The form of Bond Purchase Contract:
5. The form of the Deed of Trust, Assignment of Rents
and Security Agreement (the "Deed of Trust");
6. The form of the Developer Agreement;
7. The form of Official Statement relating to the
Bonds; and
8. The form of Intercreditor Agreement.
WHEREAS, it appears that each of the documents and
instruments referred to above which is now before this meeting is
in appropriate form and is an appropriate instrument to be
executed and delivered for the purposes intended: and
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WHEREAS, Newman and Associates, Inc. and PaineWebber
Incorporated (collectively, the "Underwriter") have expressed
their intention to purchase the Bonds, and the Commission finds
that the public interest and necessity require that the
Commission at this time make arrangements for the sale of the
Bonds: and
WHEREAS, pursuant to Section 103(k) of the Internal
Revenue Code of 1954, as amended, the City Council of the City
has held a public hearing regarding the issuance of the Bonds;
NOW, THEREFORE, the Board of Commissioners of the
Housing Commission of the City of Carlsbad hereby FINDS,
DETERMINES, ORDERS and RESOLVES as follows:
SECTION 1: Finding and Determination. It is hereby
found and determined that it is necessary and desirable for the
Commission to assist in the financing of the Project through the
issuance and sale of the Bonds in order to aid in the development
of dwelling units to be occupied by low and moderate income
persons in the community.
SECTION 2: Authorization of the Bonds. For the purpose
of raising moneys with which to make the Developer Loan in order
to effectuate the construction and permanent financing of the
Project, the Commission hereby determines to issue the Bonds, in
a principal amount not to exceed $16,500,000, with the exact
principal amount to be such amount as is necessary to finance the
Developer Loan for the Project. The Bonds shall be in
substantially the form set forth in the Indenture, with such
appropriate variations, omissions, insertions and provisions as
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are permitted or required by the Indenture, which shall be
appropriately completed when the Bonds are prepared.
The Bonds shall be limited obligations of the Commission
and shall be payable as to principal, premium, if any, and
interest, and the obligations of the Commission under the
Indenture shall be paid and satisfied, solely from the revenues,
receipts and other moneys pledged therefor under the Indenture.
SECTION 3. Execution and Delivery of the Bonds. The
Bonds shall be executed on behalf of the Commission by the manua:
or facsimile signature of the Chairman, and the official seal of
the Authority, or a facsimile thereof, shall be impressed or
imprinted thereon and attested with the manual or facsimile
signature of the Secretary of the Commission.
SECTION 4. Approval of Indenture. To provide for the
details of the Bonds, and to prescribe the terms and conditions
upon which they are to be issued, secured, executed,
authenticated and held and upon which the Developer Loan is to bt
made and serviced, the Chairman and the Secretary are hereby
authorized to execute and deliver the Indenture, in substantiall:
the form presented to this meeting or with such changes as may bt
approved by the officers of the Commission executing the same,
upon consultation with the City Attorney, their execution thereoi
to constitute conclusive evidence of their approval of all
changes from the form of Indenture presented to this meeting,
which form of Indenture is hereby in all respects approved and
incorporated by reference and made a a part hereof.
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SECTION 5. Approval of Loan Agreement. To provide for
the details of the making of the Developer Loan, and the duties
and obligations of the Developer, the Chairman and the Secretary
are hereby authorized to execute and deliver the Loan Agreement,
in substantially the form presented to this meeting or with such
changes as may be approved by the officers of the Commission
executing the same, upon consultation with the City Attorney,
their execution thereof to constitute conclusive evidence of
their approval of all changes from the form of Loan Agreement
presented to this meeting, which form of Loan Agreement is hereb
in all respects approved and incorporated by reference and made
part hereof.
SECTION 6,' Approvaleement. To
provide for certain conditions and terms of the operation of the
Project and the duties and obligations of the Developer, the
Chairman and the Secretary are hereby authorized to execute the
Regulatory Agreement, in substantially the form presented to this
meeting or with such changes as may be approved by the officers
of the Commission executing the same, upon consultation with the
City Attorney, their execution thereof to constitute conclusive
evidence of their approval of all changes from the form of
Regulatory Agreement presented to this meeting, which form of
Regulatory Ageement is in all respects approved and incorporated
by reference and made a part hereof. Based upon information
available from County of San Diego, State of California and
federal housing programs, it is hereby found and determined that
it is not feasible to make any of the units to be reserved for
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1 low and moderate income individuals-or families in the Project
2 available to very low income households except in the manner and
3 to the extent set forth in the form of Regulatory Agreement.
4 SECTION 7. Approval of Bond Purchase Contract. The
5 form of Bond Purchase Contract presented to this meeting is
6 hereby approved in all respects and incorporated herein by
7 reference and made a part hereof, and the Chairman is hereby
a authorized to execute and deliver to the Underwriter a Bond
9 Purchase Contract in substantially such form or with such changes
10 as may be approved by the officer of the Commission executing the
11 same, upon consultation with the City Attorney, such execution to
12 constitute conclusive evidence of the approval by such officer of
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13 all changes from the form of Bond Purchase Contract presented to
$2 g-i;: 14 this meeting, which form of Bond Purchase Contract is in all
g:p Vx$ 15 respects approved and incorporated by reference and made a part
"0 k->w _ a%Qjg 16 hereof.
pB-2 55 2 5 17 SECTION 8. Approval of the Deed of Trust. The form of
E 3 18 the Deed of Trust presented to this meeting is hereby approved in
19 all respects and incorporated herein by reference and made a part
20 hereof, and the Chairman is hereby authorized to execute and
21 deliver the Deeds of Trust in substantially such form or with
22 such changes as may be approved by the officer of the Commission
23 executing the same, upon consultation with the City Attorney,
24 such execution to constitute conclusive evidence of the approval
25 by such officer of all changes from the form of the Deed of Trust
26 presented to this meeting, which form of the Deed of Trust is in
27 all respects approved and incorporated by reference and made a
28 part hereof.
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-SECTION 9. Approval of Developer Agreement. The form
of Developer Agreement presented to this meeting is hereby
approved in all respects and incorporated herein by reference an
made a part hereof, and the Chairman and the Secretary are hereb
authorized to execute and deliver a Developer Agreement in
substantially such form or with such changes as may be approved
by the officer of the City executing the same, upon consultation
with the City Attorney, such execution to constitute conclusive
evidence of the approval by such officer of all changes from the
form of Developer Agreement presented to this meeting, which for
of Developer Agreement is in all respects approved and
incorporated by reference and made a part hereof.
SECTION 10. Approval of Official Statement. The form
of Official Statement presented to this meeting is hereby in all
respects approved and incorporated herein by reference and made
part hereof and the Underwriter is authorized to distribute the
Official Statement in connection with the sale of the Bonds, and
the Chairman is hereby authorized to execute and deliver a final
Official Statement in substantially such form or with such
changes therein as may be approved by the officer of the
Commission executing the same, upon consultation with the City
Attorney, such execution to constitute conclusive evidence of th
approval by such officer of all changes from the form of Officia
Statement presented to this meeting, which form of Official
Statement is in all respects approved and incorporated by
reference and made a part hereof.
SECTION 11. Approval of Intercreditor Agreement. The
form of Intercreditor Agreement substantially in the form
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submitted to this meeting is herby approved, and the Chairman an
the Secretary are hereby authorized to execute and deliver an
Intercreditor Agreement in substantially such form or with such
changes therein as may be approved by the officers of the
Commission executing the same, upon consultation with the City
Attorney, such execution to constitute conclusive evidence of th
approval by such officers of all changes from the form of
Intercreditor Agreement presented to this meeting, which form of
Intercreditor Agreement is in all respects approved and
incorporated by reference and made a part hereof.
SECTION 12. Selection of trustee. The Bank of
California, N.A. is hereby selected to serve as the Trustee unde
the Indenture, provided that, if necessary, the Director of
Building and Planning of the City is hereby authorized and
directed to select a substitute trustee to serve as Trustee unde
the Indenture, provided that such Trustee must comply with the
qualification requirements set forth in Section 901 of the
Indenture. The Trustee is hereby requested and directed to
authenticate the Bonds by executing the Trustee's Certificate of
Authentication appearing thereon and to deliver the Bonds, when
duly executed and authenticated, to the parties named in the Bon
Purchase Contract, in accordance with written instructions
executed on behalf of the Commission by the Director of Building
and Planning for the City or another duly appointed designee of
the Chairman, which instructions said officer is hereby
authorized and directed, for and in the name and on behalf of th
Commission, to execute and deliver to the Trustee. Such
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instructions shall provide for the delivery of the Bonds in
accordance with the Bond Purchase Contract, upon payment of the
purchase price thereof.
SECTION 13. Actions Ratified and Authorized. All
actions heretofore taken by the officers and agents of the
Commission and the City with respect to the sale and issuance of
the Bonds are hereby approved, confirmed and ratified, and the
officers of the City and the Commission, including, in
particular, the Director of Building and Planning, or any
representative of the Commission duly designated by the Chairman
is hereby authorized and directed, for and .in the name and on
behalf of the Commission, to do any and all things and take any
and all actions and execute and deliver any and all certificates,
agreements and other documents, including but not limited to
those described in the Bond Purchase Contract, which they, or any
of them, may deem necessary or advisable in order to consummate
the lawful issuance and delivery of the Bonds and the making of
the Developer Loan in accordance with the Act and this
resolution. Should the Chairman or the Secretary be unavailable
to execute any of the documents required to issue the Bonds, any
member of the Agency may sign in the place of the Chairman or
Secretary.
SECTION 14. Conflicting Resolutions Revealed. All
resolutions or parts thereto in conflict herewith are, to the
extent of such conflict, hereby repealed.
SECTION 15. Severability. If any section, paragraph OL
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
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of such section, paragraph or provision shall not affect any
remaining provisions of this resolution.
SECTION 16. Effective Date. This resolution shall
take effect on the date of its adoption.
PASSED AND ADOPTED on this Jth day of May
1985 by the following vote to wit:
AYES: Commissioners Casler, Lewis, Xulchin, Chick and Pettine NOES: None
ABSENT: None
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ASLER, Chairman
(SEAL)
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e=&--&- L F. D. ALESHIRE, Secretary
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