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HomeMy WebLinkAbout1985-037 l,020/20/0326S/mcm 01/12/85 RESOLUTION NO. R" 17 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DECLARING ITS INTENTION TO ISSUE ITS MULTIFAMILY MORTGAGE REVENUE BONDS; DIRECTING THE PREPARATION OF CERTAIN DOCUMENTS; AND MAKING CERTAIN OTHER FINDINGS AND DETERMINATIONS IN CONNECTION THEREWITH (PERRIS HILL PROJECT) WHEREAS, the City of San Bernardino, California ("City"), is a "home rule city" duly organized and existing under and pursuant to a Charter adopted under the provisions of the Constitution of the State of California; and WHEREAS, pursuant to its home rule powers, the City duly and regularly enacted Ordinance No. 3815 (the "Ordinance") to finance various types of projects, as defined in the Ordinance, and to issue its special revenue bonds for the purpose of paying the cost of financing such projects, and has amended the same from time to time; and WHEREAS, said Ordinance No. 3815, as amended, is intended to finance the development of industry and commerce and to thereby broaden the employment opportunities and to increase the availability of moderately priced rental units for residents of the City and to broaden the tax and revenue base of the City; and - 1 - WHEREAS, there has been presented to the Mayor and Common Council an Application, attached hereto as Exhibit "A" and incorporated herein by reference by Deljit Sarkaria and Elaine Sarkaria, as a husband and wife joint tenancy, (the "Applicant"), requesting the issuance of multifamily mortgage revenue bonds in the principal amount not to exceed $8,350,000 for the purpose of financing, on behalf of the Applicant, a certain proj ect, to wit: the acquisition of land, and the construction and financing of a two hundred (200) unit multifamily rental housing development on a nine and one-half (9.5) acre site located approximately five hundred (500) feet southwest from the intersection of Highland Avenue and Del Rosa Avenue in the City of San Bernardino. The Project shall consist of two hundred (200) two-bedroom, two-bath rental units, on-site vehicle parking spaces, laundry and recreational rooms, appurtenant landscaping and other improvements. NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AS FOLLOWS: Section 1. That the recitals set forth hereinabove are true and correct in all respects. Section 2. The City of San Bernardino, California, is a municipal corporation duly created, established and authorized to transact business and exercise its powers, all under and pursuant to - 2 - the Constitution and laws of the State of California, and the City Charter of the City, and the powers of the City include the power to issue bonds for any of its corporate purposes. Section 3. Pursuant to the Charter of the City and Ordinance No. 3815, as amended, of the City, the City is legally authorized to issue special revenue bonds for the construction and permanent financing for the Project as more fully described in the recitals hereof. Section 4. This body constitutes the governing body of the City and is legally authorized to provide for the issuance of such special revenue bonds by the City. Section 5. The Project referred to in the recitals hereof constitutes a project which may be financed by the issuance of such special revenue bonds by the City and located within the jurisdiction of the City. Section 6. The Council does hereby declare its intention to issue multifamily mortgage revenue bonds of the City for the acquisition of land and the construction, equipping and permanent financing of the Project under and in accordance with the Ordinance, in amounts sufficient to pay the costs of financing the Project and of paying the costs of issuance for the multifamily mortgage revenue bonds and for the establishment of the necessary - 3 - reserve funds to provide for the financing of said Project. Project is presently identified as the perris Hill Apartments. Said Section 7. The City hereby declares its intention to exercise the authority referred to in Section 3 hereof by issuing bonds of the City in such amounts as wi 11 be adequate to implement the City financing of the Project. Section 8. The bonds shall be payable from the revenues described in said Ordinance No. 3815, as amended. Section 9. The bonds shall be and are special obligations of the City, and, subject to the right of the City to apply moneys as provided in the applicable laws, are secured by such revenues as are specified in the proceedings for the issuance of such bonds and funds and accounts to be held by the trustee or fiscal agent, and are payable as to principal, redemption price, if any, and interest from the revenues of the City as therein described. The bonds are not a debt of the City, the State of California or any of its political subdivisions, and neither the City, the State, nor any of its political subdivisions is liable thereon, nor in any event shall the bonds be payable out of the funds or properties other than all or any part of the revenues, mortgage loans, and funds and accounts as in this Resolution set forth. The meaning of restriction. bonds do not constitute an indebtedness within the any constitutional or statutory debt limitation or Neither the persons serving as the Mayor and Common - 4 - Council nor any persons executing the bonds shall be liable personally on the bonds or subject to any personal liability or accountability by reason of the issuance thereof. Section 10. The details of such bonds, including the establishing of the aggregate face amount of such obligations, shall be authorized by indenture, resolution or resolutions of the City at a meeting or meetings to be held for such purpose. The City Staff, Timothy J. Sabo, a Professional Corporation, as Bond Counsel to the City, Underwriters, the Applicant and the agents and representatives of same are hereby authorized and directed to prepare or cause to be prepared the necessary legal documents, including the Project Agreement, Resolution of Issuance, and such other documents as may be necessary to effect said Project and the issuance of industrial development revenue bonds therefor and to present same to said Mayor and Common Council. The Mayor of the City is hereby authorized and directed to coordinate the efforts of all concerned relating to the issuance and sale of the bonds, and the City Staff, consultants, legal counsel to the City and Bond Counsel as referenced above are hereby directed to take such steps as shall be appropriate to implement such sale and delivery of the bonds including working with persons who may acquire vested rights as the result of such actions. Section 11. The issuance of multifamily mortgage revenue bonds may be authorized by appropriate resolution or resolutions of the City at a meeting or meetings to be held for such purpose, subject to the execution of appropriate agreements by the Developer - 5 - and the City as required by the Ordinance and the industrial develepment bend financing pregram ef the City; previded. further. that this Reselutien shall be subject to. and co.nditiened upen the Develeper submitting a fermal Applicatien to. the City in accerdance with the adepted Guidelines ef the City tegether with the payment ef the applicable applicatien fees and ether ameunts as required pursuant to. the industrial develepment bend financing pregram ef the City and cempliance with all ether previsiens ef said pregram. Sectien 12. It is intended that this Reselutien shall censtitute such "efficial actien" teward the issuance ef the bends wi thin the meaning ef the United States Treasury Regulatiens. the United States Tax Laws. and any legislatien new er hereafter pending in the Cengress ef the United States which may require efficial actien in erder fer the bends to. be exempt frem Federal inceme taxatien. Sectien 13. At the clesing ef the financing there shall be paid to. the City the fee set ferth in Reselutien No.. 81-108 ef the Mayer and Cemmen Ceuncil. adepted March 13. 1981, as amended by Reselutien No.. 81-410, ef the Mayer and Cemmen Ceunci 1, adepted September 24. 1981. Sectien 14. adeptien. This Reselutien shall take effect upen - 6 - I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Counc il of the City of San Bernardino at a rAglllFlr meeting thereof, held on the 21st day of .1F1nllAry , 1985, by the following vote, to wit: AYES: Council Members Castaneda, Reilly, Hernandez, Marks, Quiel, Frazier, Strickler NAYS: None ABSENT: None .A?/M}?!~M Cittf Clerk of January , 1985. The foregoing resolution Approved as to form: ~~~~ - 7 - l,020-l7/0323S/mcm 01/12/85 APPLICATION OF DALJIT SARKARIA AND ELAINE SARKARIA FOR MULTIFAMILY MORTGAGE REVENUE BOND FINANCING CITY OF SAN BERNARDINO, CALIFORNIA PART I GENERAL AND BUSINESS INFORMATION 1.1 The legal names of the Appl.cants a:" "Daljit Sarkari a and Elaine Sarkaria." 1. 2 The Applicant is a husband and wifE joint tenancy which shall be engaged in the development, construct1on, leasing and ownership of a two hundred (200) unit multifamily rental housing development located near the southwes. corner of the intersection of Highland Avenue and Del Rosa Avenue i. the City of San Bernardino, California (the "Project"). The,' ?licant currently owns the property necessary for the proposed multifa,~ily rental :,ousing development (the "projec t") and shall develop said property an~ construct the Project thereon. 1.3 The mailing address and the address of the Applicant is as follows: Daljit and Elaine Sarkaria Post Office Box 5986 Orange, California 92667 1.4 Employer Tax LD. No. has been applied for. 1.5 Mr. Wilmer Engevik is the principal contact for the Applicant. 1.6 Telephone Number (714) 793-8948. 1.7 The Applicant is a husband an wife jo nt tenancy. 1. 7.1 The Applicant shaL own pn.perty and conduct business in the County of San Bernardino State of California. 1. 7.2 Not applicable. 1.8 Not applicable. 1.9 Mr. Wilmer Engevik, will have primar). responsibility for conducting the business of the Applicant. 1.10 Business ventures of the Ap~licant. The Sarkarias own approximately 2,000 rental units throughout Southern' California. - 1 - 1~11 Employees 1.11.1 1.11.2 The Applicant currently has twenty (20) employees. Although the principal objective of the Project is to provide affordable rental housing to the citizens of the City of San Berna :dino, the construction and operation- of the Project will create certain employment opportunities within the City. The business offices of Applicant shall be located at 1040 Eas t Chapman Avenue, OrE Ige, California 92666 1.12 Professional services will be provided)f the following: 1.12.1 1.12.2 1.12.3 1.12.4 1.12.5 Michael Paul, CPA ,hall se've as Applicant and is located at Los Alamitos, California 926fl. the accountant for the 5030 Kattella Avenue, GeorgI! or. Poppe, 5030 Kattella Avenue, Los Alami tos, Californ_,' 92660 is the at torney for the Applicant. The Law Offices of Timothy J. Sabo, Corporati'ln, shall serve as Bond Counsel regard to the tax-exempt financing for the a Professional to the City with Project. Principal Civil EI.gineer - Main Street, Suite 2(A), (714) 824-5307. W. J. McKeever, Inc. 647 North Riverside, California 92501, Principal ArchiteLt - Thomas Lehrack, 130 North Magnolia, Fullerton, California 92633, (714) 522-8221. 1.13 The principal banking accounts of the Applicant shall be held by Security Pacific National Bank at thE! Anaheim Commercial Center in Anaheim. 1.14 The source of funding for the Projec is anticipated to be derived from a variety of sources "ncludinl the private placement of a tax-exempt bond or other 01 igation with a lender to be obtained hereafter. PART II BOND ISSUE 2.1 The estimated total amount of the financing package and the proposed use of bond procee( ~ is as follows: 2.1.1 2.1. 2 2.1.3 2.1.4 Project C0st - $6,050,000 Legal, printing and related fees - $100,000 Financing costs and fees - $900,000 Capitalized interest - $1,250,000 - 2 - 2.1.5 Other miscellaneous costs - $50,000 Total: $8,350,000 2.2 The estimated target date for the financing is presently anticipated in the firs t quarter of 1985, wi th cons truc tion to conunence as soon as possible after the financing package is completed and to be completed in one (1) construction phase which shall take between twelve (12) and eighteen (18) months to complete. 2.3 It is proposed that the financing be in the form of a construction loan during the construction period which would have the traditional construction loan provisions in that drawdowns would be permitted as construction proceeds upon submission of requisition vouchers. Upon the completion of construction of the Project and the certification that all improvements have been completed, the lender will then permit an interest rate adjustment and a principal amount increase, as warranted, and convert the construction loan to a permanent financing. 2.4 The present proposal for the financing of the Project anticipates that the tax-exempt bonds or other obligations will be sold to a conunercia1 bank or other such lender through a private placement or that there be a public offering of such securities. PART III FINANCIAL INFORMATION 3.1 The financial statement of the Applicant is included as Exhibit "A" hereto. PART IV PROJECT INFORMATION 4.1 The Project as proposed by the Applicant shall include the construction and operation of a two hundred (200) unit multifamily rental housing development on a nine and one-half (9.5) acre site located approximately five hundred (500) feet southwest from the intersection of Highland Avenue and Del Rosa Avenue. The Project shall include two hundred (200) two-bedroom/two-bath units, on-site vehicle parking spaces for approximately four hundred ten (410) spaces, laundry rooms, appurtenant landscaping and other improvements. The Project shall be located on land more particularly described and included as Exhibit "B" hereto. 4.1.1 The two hundred (200) unit multifamily rental housing development shall have the following proposed rent schedule: Unit Description Proposed Rent/month ,) [- ~!, 2 bedroom - 2 bath $520 '150 'IN 4.2 The components and the estimated total cost of the functional parts of the Project are as follows: 4.2.1 Land - $1,000,000 - 3 - 4.2..2. 4.2..3 4.2..4 4.2..5 4.2..6 Building construction - $6,300,000 Site preparation - $1,000,000 Engineering and construction technical services included in City fees - included in construction Total: $8,300,000 Miscellaneous items - included in construction Total: $8,300,000 4.3 The estimated construction period for the Project is as follows: 4.3.1 4.3.2. Construction of the Project would commence as soon as possible after issuance of the tax-exempt obligations. The planned construction shall occur in one (1) phase and be completed within twelve (12.) to eighteen (18) months from the date of commencement. 4.4 The supervising civil engineer responsible for the design of the Project on behalf of the Applicant shall be Mr. William McKeever of W. J. McKeever, Inc. 4.5 The Project shall be known as "Perris Hill Apartments". 4.6 The Project is the development of a multifamily rental housing development and is not an expansion or an alteration of an existing facility. The necessary infrastructure items and other public improvements must be installed on the Project site and the Applicant desires to obtain a below market rate tax-exempt cons truction and permanent financing of the improvements to be placed thereon from a combination of sources. 4.7 The property on which the Project is proposed to be located is currently owned by the Applicant. 4.8 The Project will provide two hundred (2.00) units of affordable rental housing to the citizens of the City of San Bernardino. 4.8.1 4.8.2. Attached as Exhibit "B" is an 8-1/2. x 11 inch map showing the site location of the proposed Project. A description of the plant process - not applicable. 4.9 A negative declaration pursuant to the provisions of the California Environmental Quality Act of 1970, as amended, would in all probability be satisfactory for the Project as proposed by the Applicant. However, the Project shall comply with all applicable provisions of said Act. - 4 - 4.10 4.11 4.12 4.13 PART V 5.1 There are no permits, water quality enforcement orders, air pollution permits or variances or other evidence of actions necessary in connection with this Project. A sewer permit for the construction of the Project has previously been obtained. There are no local, state or federal pollution control agencies which impose regulations, standards or requirements with regard to the operations of the proposed Project to be undertaken by the Applicant. The proposed Project shall comply with all applicable City of San Bernardino, County of San Bernardino, and other regional, county or basin plans to which this Project shall conform and the appropriate waste water and air quality requirements which shall be in conformity with all of the above jurisdictions. It is presently anticipated that the proposed Project will not produce any by-products or residues which would involve the ultimate disposal or the need for a plan to accomplish same. Recycling or salvage will not be a function of the proposed Project nor will there be any market opportunities generated with regard to same. PUBLIC BENEFITS The City of San Bernardino will receive significant benefits by the initiation of this Project as proposed by the Applicant and particularly through the utilization of the financing method as is available under Ordinance No. 3815, as amended, of the City of San Bernardino. Due to the fact that conventional interest rates for construction and permanent financing for the type of multifamily rental housing construction contemplated by the Applicant are at such an extremely high level on conventionally borrowed funds, if available at all, neither the Applicant nor any other persons or legal entities are able to provide the type of modern and attractive affordable rental housing that is needed wi thin the City of San Bernardino. 5.1.1 The Project will provide long term affordable rental housing opportunities for the inhabitants of the City of San Bernardino. 5.1.2 Construction of the Project approximately $7,000,000 to valuation to the tax rolls of the is anticipated $8,300,000 of City. to add assessed 5.1.3 The useful method of financing provided for in Ordinance No. 3815 of the City vis-a-vis the use of the conventional method will permit the Applicant to complete the financing and construction of the Project within an accelerated time frame. The method of financing provided in Ordinance No. 3815 will provide new sources of financing to the Applicant and such financing will be made available at lower tax-exempt interest rates. - 5 - 5.2 The City will benefit, as can be demonstrated pursuant to Section 1 of Ordinance No. 3815, as amended, of the City of San Bernardino, in that affordable rental housing opportunities will be generated by the proposed Project. The Applicant is not attempting to construct said proposed Project merely for the financial inducement that is offered pursuant to the Ordinance, but rather due to the long-term business reasons that are significant due to the location of the proposed Project and the real economic benefits available to the community. There are no detriments that can be incurred by the City with regard to this type of financing for this Project, and the City of San Bernardino will receive substantial benefits through increases in assessed valuation of property, plus the increased long-term affordable housing opportunities that will be available to the local residents of the City. PART VI COMMITMENTS 6.1 The Applicant by the submission of this Application agrees to comply and/or to assist the City in complying with all state and federal laws in the issuance of the bonds or other such tax-exempt obligations to finance the Project, including, without limitation, making of any required application to a governmental department, for authorization, qualification or registration of the offer, issuance or sale of the bonds or other tax-exempt obligations, and any amendments thereto, and any permit or other authorization of such governmental department, prior to the delivery by the City of such bonds or other tax-exempt obligations. 6.2 The Applicant further commits to cause and/or to assist the City in causing to be printed any prospectus or other written or printed communication proposed to be published in connection with the issuance, offer or sale of bonds or other tax-exempt obligations, prior to the delivery by the City of such bonds or other tax-exempt obligations, and, to the extent deemed necessary by the City, following delivery of such bonds or other tax-exempt obligations. 6.3 The Applicant also commits to pay all expenses in connection with the issuance, offer or sale of the bonds or other tax-exempt obligations, whether or not such bonds or other tax-exempt obligations are finally issued, and to hold the City harmless from any and all expenses related thereto, to pay items on an ongoing basis so that neither the City, nor its advisors, attorneys, employees and the like will accumulate any claims against the City. 6.4 The Applicant will supply any additional information, agreements and undertakings as the City may require as a result of conferences and negotiations and copies of such additional information shall be forwarded to the City by the Applicant and shall be deemed to be supplements or amendments to this Application. - 6 - . PART VII SIGNATURE 7.1 The undersigned a, authorized principals of the Applicant as noted below, hold the ~."1I\e responsibility for the financing to be taken for the proposed Project, and certify that the undersigned have the authority to bind the Applicant to contract terms; that this Application to the best knowledge or belief of the undersigned, contains no false or incorrect information or data, and this Application, including exhibits and attachments hereto, is truly desc'riptive of the proposed Project. The undersigned also represent by the execution of this Application familiarity with Ordinance No. 3815, as amended, of the City of San Bernardino. PART VIII FEE SCHEDULE 8.1 The Applicant acknowledges that the City requires a non-refundable application fee of $50 for each roject to be considered for eligibility, to be paid when the basi documents are requested. With the submittal of this Application, $5 ( is payable to the City. If this Application is accepted an addi ional fee of $10,000 is payable for administrative costs. The API'licant acknowledges that the commitments in P&rt VI above are in addition to these fixed amounts. Thus, in the event that no closin" occurs, the City shall be reimbursed for its processing costs. 8.2 All fees of the l'ity may be capitalized and included in the bond issue as acceptabl, to the bond purchaser. 8.3 The Applicant acknowledges that the City derives its entire support from the fees for its services. The total function of the City is conducted on a self-supporting basis, and involves no state general revenues or expendi tures f rom taxes f rom the s ta te or any of its political subdivisions. No indebtedness or taxing power of the City is involved. Project revenues are the sole security for bonds of the Ci ty. The federal guarantees, if any, enhance these revenues and income and the security of the bonds. 8.4 Pursuant to Resolution No. 81-108 of the City, as amended by Resolution No. 81-410 of the City, one percent (1%) of the principal amount of the bond issue shall be deposited in the City Treasury in the Industrial Revenue Bond Reserve an. Development Fund, which shall be used in such manner as the Mayor ,md Common Council may direct from time to time. "API .ICANT" DALJIT SARKAR.A AND ELAINE a Husband a d Wife Joint By: By: - 7 - ~.:/ 76 ~~ FRl ..J~ m , ~ ~iST Indian RI