HomeMy WebLinkAbout1986-479
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RESOLUTION NO. 86 479
RESOLUTION OF THE CITY OF SAN BERNARDINO NOTIFYING MORTGAGE
BOND ALLOCATION COMMITTEE THAT CITY HAS DECIDED NOT TO AUTHORIZE
ISSUANCE OF APPROXIMATELY $8,600,000 PRINCIPAL AMOUNT OF
MULTIFAMILY MORTGAGE REVENUE BONDS FOR SANDALWOOD PARK APARTMENTS
PROJECT, AND REQUESTING MORTGAGE BOND ALLOCATION COMMITTEE TO
WAIVE PAYMENT OF ONE PERCENT FEE UNDER PROVISIONS OF HEALTH AND
SAFETY CODE SECTION 52097.5(B).
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. Recitals.
A. Recognizing that the use of tax-exempt financing for
various projects, including to aid in the financing of multi-
family residential projects, results in the dedication of limited
resources to the projects selected for such financing, and that
no such decision should be made without adequate background
information,
the Mayor and Common Council on December 23, 1985,
adopted Resolution No. 85-543 establishing requirements
concerning inducement and TEFRA resolutions concerning
multifamily mortgage revenue bond projects.
B. Among the requirements imposed on requests for mortgage
revenue bond financing for such projects was a requirement for a
market feasibility study completed and paid for one month prior
to the TEFRA hearing to give staff time to review.
C. At the TEFRA hearing held in the matter of the request
of the Sandalwood Park Apartment Project for tax-exempt bond
financing, staff reported to the Mayor and Common Council that
the most recent available information, current as of September,
1986, revealed that there was more than 1380 apartment vacancies
in the City of San Bernardino, and that numerous additional
apartment units are presently under construction.
(Sandalwood's
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1 feasibility study indicated that the market "has become very
2 competitive".)
3 D. The Mayor and Common Council find that use of limited
4 tax-exempt financing resources for financing of additional
5 apartment construction at a time when the City already has a very
6 substantial vacancy rate, indicating that apartments may already
7 be overbuilt within the City, is not in the public interest, and
8 that such tax-exempt financing should be reserved for projects in
9 which a public need clearly exists, as, for instance, in senior
10 citizen housing or single family housing fields.
11 SECTION 2. The Mayor and Common Council of the City of San
12 Bernardino, following a public hearing as required under the
13 provisions of the Internal Revenue Code, have determined that,
14 due to the excessive number of apartment vacancies already
15 existing within the City of San Bernardino, the proposed
16 Sandalwood Apartment Project construction should not be financed
17 with tax-exempt bonds in the City of San Bernardino at this time.
18 Accordingly, the Mayor and Common Council of the City of San
19 Bernardino have rejected a request by the Developer to issue
20 approximately $8,600,000 of City of San Bernardino, California,
21 mortgage revenue bonds for the Sandalwood Park Apartments
22 Project.
23 SECTION 3. The Mayor and Common Council recognize that, as
24 a condition of requesting an allocation of volume cap from the
25 State of California, the Developer was required to place in
26 escrow an amount equal to one percent (1%) of the amount of bonds
27 expected to be issued for the Sandalwood Park Apartments Project,
28 and the Mayor and Common Council take note that such funds were
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placed in escrow with Mercury Savings and Loan Association Escrow
Department, Escrow No. 960007576. The escrow account evidenced a
Letter of Credit No. 115-5052-21 in the amount of $86,000 as
meeting that requirement.
SECTION 4. The Mayor and Common Council believe that the
Developer of Sandalwood Park Apartments Project should not be
required to forfeit $86,000 when the reason the financing of this
development by tax-exempt bonds is not to go to fruition is the
determination by the Mayor and Common Council of the City of San
Bernardino that it is not presently in the public interest to
issue tax-exempt bonds for multifamily housing projects when the
City already has an excessive vacancy factor for apartments. The
Mayor and Common Council of the City of San Bernardino do not
question the ability of the Developer to proceed with the
project, nor do they question the financial strength of the
project. The decision of the Mayor and Common Council was based
solely upon the public policy determination of the Mayor and
Common Council that it is not in the public interest at this time
to use tax-exempt bond financing for this project. Because the
decision has nothing to do with the willingness or ability of the
Developer to proceed with the project, but only a public policy
decision, the Mayor and Common Council urge the Mortgage Bond
Allocation Committee of the State of California to release from
escrow the Letter of Credit and to waive any payment by the
Developer, Sandalwood Park Apartments Project, of the fees
required to be deposited in escrow under the provisions of Health
and Safety Code Section 52097.5(b).
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1 I HEREBY CERTIFY that the foregoing resolution was duly
2 adopted by the Mayor and Common Council of the City of San
3 Bernardino at an "r1 j 011rnpr1 rpg"l".. meeting thereof, held on the
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1 Rt-h
day of
N("YUClomnAr
wit:
, 1986, by the following vote, to
AYES:
Council Members Estrada, Hernandez, Marks
Frazier
NAYS:
Council Members Reilly, Quiel, Strickler
ABSENT:
Nnnp.
~?//HP/~d
/ City Clerk
The foregoing resolution is hereby approved this /c;e,c day
14 of Nf"\UArnhOr
, 1986.
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Approved as to form:
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City At orney
11/18/86
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