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HomeMy WebLinkAbout1986-512 SBEO 0080-12(SBE003-100)/1341S/kl 12/05/86 RESOLUTION NO. 86-51/. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA; RATIFYING THE PUBLICATION OF NOTICE OF PUBLIC HEARING AND MAKING CERTAIN FINDINGS AND DETERMINATIONS IN CONNECTION WITH A PUBLIC HEARING ON THE ISSUANCE OF APPROXIMATELY $8,600,000 PRINCIPAL AMOUNT OF MULTIFAMILY MORTGAGE REVENUE BONDS (MERCURY SAVINGS AND LOAN/SANDALWOOD PARK APARTMENTS PROJECT) WHEREAS, the City of San Bernardino, California (the "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 enabling various developers to finance the cost of 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 - 1 - City and to broaden the tax and revenue base of the City without any liability whatsoever to the City; and WHEREAS, the City is authorized and empowered to issue multifamily mortgage revenue bonds pursuant to Health and Safety Code Section 52000, et seq. (the "Act"); and WHEREAS, Debkar Investment Company, a California corporation owned solely by Joe Levesque, or its successors or assigns (the "Applicant"), has previously submitted a certain application (the "Application"), to the Mayor and Common Council of the City of San Bernardino, California (the "Mayor and Common Council"), for tax-exempt financing for a certain multifamily rental housing development pursuant to Ordinance 3815, as amended, as more fully described in said Application (the "Project"); and WHEREAS, the Project consists of the acquisition of land and construction thereon of a two hundred sixteen (216) unit multifamily rental housing development on two (2) adjacent parcels of land totalling approximately ten and one-half (10.5) acres located near the northwest corner of the intersection of Baseline Street and victoria Avenue in the City, as more fully described in the Application, and shall consist of an appropriate mix of two-bedroom, two-bath uni ts, two-bedroom, one-bath units and one-bedroom, one-bath units, on-site vehicle parking spaces, laundry and recreational rooms, appurtenant landscaping and other improvements; and - 2 - WHEREAS, pursuant to Resolution No. 95-291 of the Mayor and Common Council adopted on August 5, 1985, said Mayor and Common Council has previously declared its intent to issue multifamily mortgage revenue bonds in an aggregate principal amount not to exceed $9,300,000 for the purpose of financing the Project (the "Inducement Resolution"); and WHEREAS, Section 147(f) of the Internal Revenue 1986 (the "Code") requires that a public hearing be connection with the authorization and issuance of any industrial development bonds including such bonds issued for the enabling various developers to finance the cost of rental housing; and Code held in of purpose of multifamily WHEREAS, the City has been requested by the Applicant to hold a public hearing pursuant to the Code for the issuance and sale of multifamily mortgage revenue bonds by the City to provide funds for the financing of the Project of the Applicant to be located wi thin the ci ty as permitted by the Act and the Ordinance and the City Clerk has caused notice of such public hearing to be published; and WHEREAS, the Applicant has requested the City to approve the Applicant's conveyance of its ownership interest in the Project to JMJ Properties, a California corporation owned solely by Joe Levesque, or its sutcessors or assigns (the "Developer"); and - 3 - WHEREAS, it is the intent of the City that the Developer be substituted for the Applicant as the beneficiary of the Inducement Resolution; and WHEREAS, the Mayor and Common Council has held a duly noticed public hearing pursuant to the requirements of Code Section 147(8) on November 17, 1986, and Resolution No. 86-479 was adopted on November 18, 1986, concerning the Project and electing not to proceed with the issuance of the Bonds; and WHEREAS, said Resolution No. 86-479 has heretofore been rescinded by the Mayor and Common Council; and WHEREAS, the City must now approve the findings and determinations to be made in connection with said public hearing and the request of the Applicant. NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The recitals set forth hereinabove are true and correct in all respects. Section 2. The aCknowledge and consent to Mayor and Common Council the development and financing hereby of the - 4 - Project by the Developer as described in the recitals hereof, and the Inducement Resolution of the Ci ty and the not ice of public hearing with respect to the financing of the Project are hereby amended, to the extent necessary, to incorporate the. Developer as the beneficiary of said Inducement Resolution and said notice of public hearing. The Mayor and Common Council hereby further approve the substitution of the Developer as the borrower and recipient of any tax-exempt financings of the City with respect to the Project, and all subsequent proceedings of the City in furtherance of the tax-exempt financing of the Project shall so state that the Project shall be undertaken by the Developer. Section 3. Pursuant to the requirements of Code Section 147(0, the Mayor and Common Council herE'hy ratifies and approves the publication of notice of the public hearing by the City Clerk in connection with the Project referred to in the recitals hereof to be held in accordance with said Code Section 147(f) for the purpose of considering the public benefits and public purposes to be furthered by the financing or financings contemplated by the action of the City pursuant to this Resolution for the issuance by the City of multifamily mortgage revenue bonds by the City for the Project pursuant to Ordinance, as amended, and the Act. The Mayor and Common Council hereby ratifies and approves the action of the City Clerk, which City Clerk caused to be published by at least two (2) insertions, one of which was not less than fourteen (14) days prior to said hearing, in The Sun, a notice of public hearing. - 5 - Section 4. The Mayor and Common Council hereby find and determine that, due to the evidence presented at this meeting concerning the limitations on the City's ability to finance multifamily rental housing developments under the Act and the Code, the public purposes to be furthered by the Project in the provision of much needed housing for low- and moderate-income families and indi vidua Is and very low income fami lies and individuals outweigh any perceived vacancy rate as was described in Section 1.D. of Resolution No. 86-479. The Mayor and Common Council hereby acknowledge that amendments to the Act which were adopted by the Legislature in 1985 and which became effective in 1986, and under certain circumstances were applicable in 1986, provide that all multifamily housing developments financed with tax-exempt bonds must have at least ten percent (10%) of their units as set aside for very low income fami lies and indi vidua Is at affordable rents. The Mayor and Common Council further acknowledge that Congress has approved and adopted the Tax Reform Act of 1986 enacted the Code, which Code amends the Internal Revenue Code of 1956 (the "Prior Code"), and that such amendments impose further restrictions on the financing of multifamily housing rental projects by requiring that either twenty percent (20%) of the units must be rented to the above-mentioned very low income families and individuals or that forty percent (40%) of the units must be rented to families and individuals having income of sixty percent (60%) or less of the area median adjusted gross income, adjusted for family size. Council For the hereby reasons set forth find and determine - 6 - above, the any Mayor and perceived Common current that oversupply in the number of multifamily rental units in the City will be reduced over time as a result of the above-referenced amendments to the Act and the Prior Code that will cause less tax-exempt and conventionally financed multifamily rental projects to be bui 1 t, and even notwi thstanding any such reduction in any perceived oversupply or the assumptions that less multifamily rental units will be constructed in the future as a result of the amendments to the Act and the Prior Code, the financing of the Project will accomplish the necessary pUblic purpose by providing (i) at least forty-four (44) units for rental to families and individuals having incomes of fifty percent (50%) or less of the area median adjusted gross income, with twenty-two (22) of such uni ts to be rented at .. affordable rents," and (ii) decent, safe and sanitary housing to the residents of the City which but for the issuance of the Bonds for the financing of the Project, such units would not otherwise be made available for the segment of the population which is in need of such housing. The City currently has no other viable program that can provide such number of rental units for such very low income families and individuals. Section 5. The City, after having conducted a publ ic hearing, notice of which was duly published in a newspaper of general circulation within the City as said public hearing is required pursuant to the requirements of Section l47(f) of the Code, does hereby find and determine that the purposes and intent of the Ordinance, as amended,. and the Act will be furthered by the issuance - 7 - of multifamily mortgage revenue bonds for the express purpose of providing financing to assist the Developer to develop the Project. The total principal amount of the multifamily mortgage revenue bonds which shall be issued to assist the Developer to develop the Project shall be approximately $8,600,000. The multifamily mortgage revenue bonds shall be issued upon such terms and conditions as shall be set forth in one or more Proj ect Agreements by and among the Ci ty and the Developer or such other documents prepared in connection wi th the issuance and delivery of the multifamily mortgage revenue bonds, and shall be issued solely for the Project but in any event said Agreements shall clearly state that the funds of the City are not liable, nor shall be pledged, for repayment of the multifamily mortgage revenue bonds. Section 6. The Mayor and Common Council hereby find and determine that the public purposes and public benefits as set forth in the Ordinance, as amended, and the Act will be furthered by the issuance of the multifamily mortgage revenue bonds; specifically, that the multifamily mortgage revenue bonds will provide for financing to assist the Developer to develop an approximately two hundred sixteen (216) unit apartment development on the property as described in the recitals hereof, that such financing will thus make the Project a financially viable and productive project and thereby increase the availability of moderately priced rental units for residents of the City and provide employment opportunities within the City. - 8 - Section 7. The Mayor of the City is hereby appointed as the elected official to approve the issuance of the multifamily mortgage revenue bonds pursuant to Section 147 (f) of the Code at such time as the Mayor and Common Council shall have approved the other appropriate multifamily mortgage revenue bond financing documents as referenced in Section 4 of this Resolution. Section 8. It is intended that this Resolution shall constitute the making of certain "findings and determinations" in connection with a public hearing held for the Project within the meaning of Section 147(f) of the Code. The Project of the Developer shall be the beneficiary of such "findings and determinations" for a period up to and including the day six (6) months from the date of adopt ion hereof. If, wi thin such period, the City has not j ssued any multifamily mortgage revenue bonds for the Project, the "findings and determinations" for the Project of the Developer as evidenced by this Resolution shall lapse and the Developer shall be required to apply to the City for a new Inducement Resolution. 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 - 9 - 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 bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the persons serving as the Mayor and Common Council nor any persons executing the bonds shall be liable personally on the bonds or SUbject to any personal liability or accountability whatsoever by reason of the issuance thereof. Section 10. The Developer shall provide appropriate covenants in the tax-exempt financing documents as may hereinafter be submitted to the City for consideration and approval in a form acceptable to the City Attorney and Bond Counsel and to assure that not less than twenty percent (20%) of the multifamily rental housing units included in the Project are to be occupied or reserved for occupancy by the individuals of low and moderate income as provided in the Code. Section 11. Prior to issuance of any bonds pursuant to this Resolution, the Developer shall provide to the City, for recording, a covenant running wi th the land in form approved by the City Attorney of the City whereunder the Developer (i) waives any - 10 - entitlement under State law to a density bonus for the property on which the proposed Project is to be constructed and (ii) agrees not to seek or accept any other forms of public assistance for the purpose of financing the Project including, but not limited to, tax-increment financing from the Redevelopment Agency of the City of San Bernardino. Section 12. The approval as herein granted and the final approval of the project and the financing thereof are specifically condi tioned upon the Mayor and Common Counci 1 approving the fina 1 environmental assessments and other environmental documents prepared or to be prepared pursuant to the provisions of the California Environmental Quality Act of 1970, as amended, with respect to any and all environmental conditions with regard to the operations of the Project as proposed by the Developer in the Application. All such assessments and documents needed to comply with the provisions of CEQA shall be the sole responsibility of the Developer. Adoption of this Resolution shall not be construed as approval of the plans or concept of the proposed development, nor as an indication that the Mayor and Common Council will hereafter take any particular action toward granting any planning, zoning, or other approval relating to a plan of development. The Mayor and Common Counci 1 reserve their right to evaluate any future administrative procedures and appeals based solely on the information available at the time of consideration, including any actions or recommendations by or appeals from the Development Review Committee and the Planning - 11 - Commission. Nothing herein shall be construed as advance commitment or appro~al as to any such matter, and the Developer is hereby notified that normal planning processing shall be required, in accordance with the standard procedures of the City and that Developer will be required to comply with all applicable laws and ordinances of the City, State and federal government. Section 13. The issuance of bonds or other obligations of the City for the Project as authorized and empowered by the Ordinance and/or the Act shall be subject to any changes in applicable laws, ordinances or regulations of the State and federal government including, but not limited to, the imposition of any calendar year volume limitation on the issuance of such multifamily mortgage revenue bonds. The issuance of bonds or other obligations of the City for the Project as authorized and empowered by the Ordinance and/or the Act shall be subject to the obtaining, by the Developer, of a calendar year 1986 private activity bond allocation from a governmental entity other than the City only if any such volume limitation is applicable to the Project. Said allocation is presently required for the Project by the appropriate provisions of the Code. Section 14. The documents necessary for the issuance, sale and delivery of the Bonds shall contain language especially intended for the full and complete protection of the City against liability from any covenants or agreements within the said Bond documents to assure that, in any event, the bondholders shall look - 12 - only to the revenues pledged for the Bonds, and not to the revenues or general funds of the City unless specifically pledged in other than a conduit financing. For this purpose, Bond Counsel shall also include in all subsequent appropriate documents for the type of bond issue being considered, language substantially as follows: "Non-recourse paragraph: The Issuer's obligations hereunder and under the Loan Agreement and the Regulatory Agreement are on a 'non-recourse' basis, and payment of any amounts which are owed or may become due hereunder or under the Loan Agreement or Regulatory Agreement shall not be enforced against the Issuer or any of its public officials, officers, employees, agents, or other personnel, but only against the property which is subj ect to the Deed of Trust, and any further security which may, from time to time, be hypothecated for this Indenture, the Regulatory Agreement or the Loan Agreement." "Exculpation of Issuer: The Issuer will not be liable to the company, to any bondholder, or to any other person for, and the company and the trustee, on behalf of the bondholders, hereby release the Issuer from all liability to the company, any bondholder, or any other person, for losses, costs, damages, expenses and liabilities even if such losses, costs, damages, expenses and liabilities directly or indirectly result from, arise out of or relate to, in whole or in part, one or more negligent acts or omissions of the Issuer or any of the officers, directors, employees, agents, servants or any other party acting for or on behalf of the Issuer in connection with the issuance of the bonds or performance by the Issuer of its obligations under the indenture, the loan agreement, the regulatory agreement, or any other agreement related to the indenture. The Issuer's obligations hereunder are on a 'non-recourse' basis, and payment of any amounts which are owed or may become due hereunder shall not be enforced against the Issuer or any of its public officials, officers, employees, agents, and other personnel, but only against the property which is - 13 - subject to the Deed of further security which may, hypothecated hereunder." Trust and any other from time to time, be As appropriate, the language shall be changed if the security is something other than a deed of trust, and if the documents being utilized are other than a loan agreement and regulatory agreement. Notice of non-recourse and exculpation of the issuer provisions shall be prominently included in any official statement or other equivalent disclosure documents. Section 15. The language shall be subject to revision, as may be appropriate, depending upon the documents involved, the type of security offered, and other similar considerations, but in any event language substantially as specified herein shall be included in all appropriate Bond documents. In the event that Bond Counsel recommends against any such language, Bond Counsel shall specifically advise the City that such language not be included with reasoning therefor. Unless such request is so made by Bond Counsel and approved by the City, such language shall be included in all appropriate Bond documents. Section 16. The approval as herein granted and the final approval of the Project are specifically conditioned upon the conformance of all documents required to be executed and delivered by the City to the "Policy Guidelines on Public and Negotiated Bond Sale Procedures for the City of San Bernardino and the Redevelopment Agency of the City of San Bernardino" as said POlicy Guidelines are on file with the City Clerk. - 14 - . Section 17. This Resolution shall take effect upon adoption. I HEREBY CERTIFY adopted by the Mayor San Bernardino at an held on the Rt-h the following vote, to that the foregoing and Common Council ~n~ar;;lr~fn wit: r'::'~l1'~r n~(""AmhAr resolution of the meeting was duly Ci ty of thereof, 1986 , by AYES: Council Members 'RQ+r~n~. RAilly. Qnip,l FrFl7.;pr !=:+r;f"'klp.r NAYS: ("nlln("'!;l MAmhAr Hprn.:=tnnp.7. ABSENT: ("nl1n,..;l MpmhPT MRrk~ ~.a~~M- City Clerk day of The foregoing resolution is hereby approved this DAr.AmhAr , 1986. 9'ei- Approved as to form: A. ~//L&n ~ ~~ ~ J-f' City Attorney ~ - 15 -