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HomeMy WebLinkAbout12-Community Development ~IT'i OF SAN BERNARDI~ - REQUE~ FOR COUNCIL AcT16N I'r'qr- From: Kenneth J. Henderson, Director Rl;C'D.-AO",""jeet:f RESOLUTION APPROVING DOCUMENTS AND 'AUTHORIZING ACTIONS IN CONNECTION Dept: Community Development l:~7 ocr -G /.:: '. iWITH THE REMARKETING OF APPROXI- . MATELY $9,350,000 PRINCIPAL AMOUNT OF Date: October 7,1987 MULTIFAMILY MORTGAGE REVENUE RE- FUNDING BONDS (PUMALO PALMS PROJECT) Synopsis of Previous Council action: In June, 1985, the Mayor and Common Council issued multifamily mortgage revenue bonds in the amount of $9,350,000 (Series 1985) for Fredericks Development (Pumalo Palms). On July 21,1986, the Mayor and Common Council heard the first reading of the amendment to Ordinance Number 3815 and requested an analysis of the advantages and disadvantages of out-of-state trustees for municipal financings. On August 4,1986, the Mayor and Common Council continued this matter to August 18, 1986. On August 18, 1986, the Mayor and Common Council adopted Ordinance MC-536 amending Ordinance Number 3815 and directed the preparation of an amendment to the Bond Policy Guidelines to specify the terms under- which an out-of-state trustee would be permitted. (SYNOPSIS CONTINUED TO NEXT PAGE) Recommended motion: ADOPT RESOLUTION ~\,:t:~"'1 Contact person: Ken Henderson/Maurice Oliva Phone: 5065 Supporting data attached: Yes/Staff Report Ward: 7 Source: (ACCT. (ACCT. N/A NO.) N/A DESCRIPTION) N/A FUNDING REQUIREMENTS: Amount: Finance: Council Note.: ^M_". 10__ ... J~ c ~_. / SYNOPSIS OF PREVIOUS COUNCIL ACTION continued... On September 8, 1986, the Mayor and Common Council and the Community Development Commission adopted Resolution Number 86-351 and Resolution Number 4924, respectively, amending policy guidelines on Bond sale procedures. On October 20, 1986, the Mayor and Common Council adopted Resolution Number 86-419 approving substitution of out-of- state trustee and authorizing certain documents in connection with Pumalo Palms Project, Fannie Mae Program Bond Issue. On April 20, 1987, the Mayor and Common Council adopted Resolution Number 87-125 approving documents and authorizing certain actions in connection with the sale and issuance of approximately $9,350,000 of Multifamily Mortgage Revenue Refunding Bonds (Pumalo Palms Project). flab 0527 10-7-87 'CI* OF SAN BERNARDI~ - REQUE~ FOR COUNCIL ACn6N STAFF REPORT In June, 1985, the Mayor and Common Council authorized the issuance of multifamily housing revenue bonds in the amount of $9,350,000 (Series 1985) (the "1985 Bonds"). The 1985 Bonds were issued on behalf of Fredericks Development Corporation for the development of Pumalo Palms project which included the construction of 328 new rental units, three (3) swimming pools and other amenities. The 1985 Bonds were to be backed by Fannie Mae Securities. The Pumalo Palm project, marketed as Shadow Ridge, is located on 15.49 acres generally on the south side of pumalo Street, west of Arden and bordered by Highway 30 on the south. The project itself is fully complete and as of April, 1987, was experiencing a health occupancy level of approximately ninety-three percent (93%). Under Section 4.1 of the existing 1985 Bond financing agreement, the assignment of the mortgage loan to Fannie Mae was to have been transferred by the seller, California Federal. Unfortunately, California Federal advised staff that the deadline of April 1, 1987, by which Fannie Mae Securities pass through certificates were to be issued to the trustee, was not obtainable due to "administrative problems and a misunderstanding of bond documents". Therefore, Fredericks Development Corporation and California Federal requested the City of San Bernardino to take whatever steps necessary to issue refunding bonds to maintain the ability to finance the project with tax-exempt bonds. In April, 1987, the Mayor and Common Council authorized the issuance of the $9,350,000 City of San Bernardino, California Multifamily Housing Revenue Refunding Bonds (Pumalo Palms project) 1987 Series A (the "1987 Bonds"). At the time the 1987 Bonds were issued, Fredericks Development Corporation was not able to obtain a letter of credit due to the short amount of time available to arrange for financing. Staff has been advised that Fredericks Development Corporation has obtained a commitment for a "triple A" letter of credit from the Dai-Ichi Kangyo Bank, Ltd., Los Angeles Agency. Because of the delivery of this letter of credit, it is necessary that the 1987 Bonds be remarketed as contemplated when the 1987 Bonds were issued. Staff recommends that the Mayor and Common Council adopt the attached Resolution approving certain documents and authorizing certain actions in connection with the remarketing of the 1987 Bonds for the alo Palms (Shadow Ridge) project. 0. Kenneth J. Henderson Director of Community Development flab /0526 10-7-87 75-0264 L -- "j j 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING CERTAIN DOCUMENTS AND 3 AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH THE REMARKETING OF APPROXIMATELY $9,350,000 PRINCIPAL AMOUNT OF MULTIFAMILY MORTGAGE 4 REVENUE REFUNDING BONDS (PUMALO PALMS PROJECT) 5 WHEREAS, the City of San Bernardino, california (the 6 "city"), is a "home rule city" duly organized and existing under 7 and pursuant to a Charter adopted under the provisions of the 8 Constitution of the State of California; and 9 WHEREAS, pursuant to its home rule powers, the city duly 10 and regularly enacted Ordinance Number 3815 (the "Ordinance) to 11 finance various types of projects, as defined in the Ordinance, 12 and to issue its special revenue bonds for the purpose of 13 enabling various developers to finance the cost of such projects, 14 and has amended the same from time to time; and 15 WHEREAS, said Ordinance Number 3815, as amended, is 16 intended to finance the development of industry and commerce and 17 to thereby broaden the employment opportunities and to increase 18 the availability of moderately priced rental units for residents 19 of the City and to broaden the tax and revenue base of the City 20 without any liability whatsoever to the City; and 21 WHEREAS, the City is authorized and empowered by Health and 22 Safety Code section 52075, et ~ (the "Act"), to finance 23 various types of projects, as defined in the Act, and to issue 24 its special revenue bonds for the purpose of enabling various 25 developers to finance the cost of such projects; and 26 WHEREAS, pumalo Palms Investors I, a California limited 27 partnership, and Pumalo Palms Investors II, a California limited 28 partnership, to its predecessors, successors or assigns 10-7-87 -J- ""' '-' ......, :J ) 1 (collectively herein, the "Developer"), has previously submitted 2 application (the "Application"), to the Mayor and Common Council 3 of the City of San Bernardino, California (the "Mayor and Common 4 Council"), for tax-exempt financing for a certain multifamily 5 rental housing development pursuant to Ordinance NUmber 3815, as 6 amended, and the Act, as more fully described in said Application 7 (the "Project"); and 8 WHEREAS, the Project consists of the construction and 9 permanent financing of two multifamily rental housing 10 developments in the City as more fully described in the 11 Application; and 12 WHEREAS, pursuant to Resolution Number 85-194 of the Mayor 13 and Common Council, said Mayor and Common Council have on May 23, 14 1985, previously authorized the execution and delivery of the 15 $9,350,000 City of San Bernardino, California, Multifamily 16 Mortgage Revenue Bonds (Pumalo Palms Project -- Fannie Mae 17 Program) Series 1985 (the "1985 Bonds"), for the purpose of 18 acquiring, constructing and installing the Project; and 19 WHEREAS, in order to reduce the costs of the financing of 20 the Project, the City has provided for the refunding of the 1985 21 Bonds; and 22 WHEREAS, pursuant to Resolution Number 87-125, the Mayor 23 and Common Council have, on April 20, 1987, previously authorized 24 the execution and delivery of the $9,350,000 city of San 25 Bernardino, California, Multifamily Housing Revenue Refunding 26 Bonds (Pumalo Palms Project) 1987 Series A (the "Bonds"); and 27 WHEREAS, in connection with the issuance of the Bonds, the 28 City approved an Indenture of Trust, dated as of April 1, 1987, 10-7-87 -2- '- """'\ -- -....~J ,) 1 by and between the city and Seattle-First National Bank (the 2 "Trustee") (the "Indenture"), the Loan Origination and Servicing 3 Agreement dated as of April 1, 1987, by and between the city, the 4 Trustee and the Developer (the "Loan Agreement") and a First 5 Amended and Restated Regulatory Agreement and Declaration of 6 Restrictive Covenants dated as of April 1, 1987, by and among the 7 City, the Trustee and the Developer (the "Regulatory Agreement"); 8 and 9 WHEREAS, the City issued and delivered an initial Bond (the 10 "Initial Bond") on April 29, 1987, (the "Closing Date"), which 11 Initial Bond bore interest at a rate of interest per annum as 12 initially established on the Closing Date until the Mandatory 13 Tender Date (as defined in the Indenture) in accordance with the 14 terms of the Indenture; and 15 WHEREAS, the Mandatory Tender Date shall be the date upon 16 which the initial owner of the Initial Bond shall either tender 17 the Initial Bond to the Tender Agent or provide notice to the 18 Tender Agent of its intent to retain the Bonds which shall then 19 bear interest at the rate as of the Mandatory Tender Date; and 20 WHEREAS, if the Initial Bond is not tendered in accordance 21 with the Indenture for which the notice of intent to retain such 22 Bond was received by the Tender Agent in a timely manner the 23 Bonds shall be deemed to be tendered as of the Mandatory Tender 24 Date and may be remarketed by the Remarketing Agent; and 25 WHEREAS, as of the Mandatory Tender Date, any Bonds which 26 have not been redeemed by the Agency on said date pursuant to the 27 extraordinary mandatory redemption provisions of the Indenture 28 shall bear interest at the rate to be determined by the 10-7-87 -3- .... 1....... " '0.,../ ...., 1 Remarketing Agent (as defined herein); and 2 WHEREAS, the purpose stated above will be accomplished by 3 the remarketing at this time by Miller & Schroeder Financial, 4 Inc., (the "Remarketing Agent"), of an approximate aggregate 5 principal amount equal to $9,350,000 of the Bonds pursuant to the 6 Indenture, as supplemented by the Supplemental Indenture (as 7 hereinafter defined): and 8 WHEREAS, the City must also authorize the execution and 9 delivery of certain related legal documents in connection with 10 the remarketing of the Bonds and approve same as to form as 11 hereinafter set forth; and 12 WHEREAS, all acts, conditions and things required by the 13 Act, and by all other laws of the State of california, to exist, 14 to have happened and to have been performed precedent to and in 15 connection with the remarketing of the aforesaid multifamily 16 residential mortgage revenue bonds exist, have happened, and have 17 been performed in regular and due time, form and manner as 18 required by law, and the City is now duly authorized and 19 empowered, pursuant to each and every requirement of law, to 20 issue such multifamily residential mortgage revenue bonds for the 21 purpose, in the manner and upon the terms herein provided. 22 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF 23 SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE 24 AND ORDER AS FOLLOWS: 25 Section 1. The above recitals, and each of them, are true 26 and correct. 27 Section 2. The Director of Community Development of the 28 City of San Bernardino, or such other person as the Mayor and 10-7-87 -4- c . ',*,-, ....,,/ 1 Common Council may from time to time designate, is hereby 2 designated to administer the Program as shall be undertaken by 3 the Developer. 4 Section 3. The form of the Supplemental Indenture, dated 5 as of November 1, 1987, by and between the City and Seattle-First 6 National Bank (the "Trustee"), securing the Bonds (the 7 "Supplemental Indenture"), as presented to the City at this 8 meeting and on file with the City Clerk is hereby approved; and 9 the Mayor and the City Clerk, or any other duly authorized 10 officials, are hereby authorized and directed, for and in the 11 name of the City, to execute such Indenture. Said Indenture 12 shall be executed in substantially the form hereby approved, with 13 such changes therein as the officers executing the same may 14 approve prior to the issuance and delivery of the Bonds with the 15 approval by the City Attorney and Bond Counsel of any changes, 16 amendments or modifications, and such approval to be conclusively 17 evidenced by the execution and delivery thereof. 18 Section 4. The form of the Amended Loan Origination and 19 Servicing Agreement dated as of November 1, 1987, by and between 20 the City, the Trustee and the Developer (the "Loan Agreement"), 21 as presented to the city at this meeting and on file with the 22 City Clerk is hereby approved; and the Mayor and the City Clerk, 23 or any other duly authorized officials are hereby authorized and 24 directed, for and in the name of the City, to execute the Loan 25 Agreement with the Developer. The Loan Agreement shall be 26 executed in substantially the form hereby approved, with such 27 changes therein as the officers executing the same may approve 28 with the approval thereof by the city Attorney and Bond Counsel, 10-7-87 -5- - \.. . '-' "\ ,j 1 and such approval to be conclusively evidenced by the execution 2 and delivery thereof. 3 Section 5. The Preliminary Reoffering Memorandum relating 4 to the Bonds is hereby authorized and directed to be prepared by 5 the purchaser of the Bonds with such changes thereto as may be 6 approved by the Director of Community Development of the City of 7 San Bernardino, the City Attorney and Bond Counsel and the 8 distribution of such Preliminary Reoffering Memorandum is hereby 9 authorized, and such Preliminary Reoffering Memorandum may be 10 converted to a Final Reoffering Memorandum together with such 11 changes or modifications as deemed desirable by Bond Counsel, the 12 City Attorney and the Director of Community Development of the 13 City of San Bernardino. The Mayor or the Director of Community 14 Development of the city of San Bernardino, or any other duly 15 authorized officials, are hereby authorized to execute and 16 deliver said Final Official Statement, and the execution thereof 17 shall be deemed to be final approval of same by the City. 18 Section 6. The form of the Amendment to the First Amended 19 Regulatory Agreement and Declaration of Restrictive Covenants, 20 dated as of November 1, 1987, by and among the City, the Trustee 21 and the Developer (the "Regulatory Agreement"), presented at this 22 meeting and on file with the City Clerk is hereby approved, and 23 the Mayor and the city Clerk, or any other duly authorized 24 official, are hereby authorized and directed for and in the name 25 and on behalf of the City to execute such Regulatory Agreement in 26 said form with such changes therein as the officers executing the 27 same may approve with the approval thereof by the City Attorney 28 and Bond Counsel, and such approval to be conclusively evidenced 10-7-87 -6- \.- \.... '-.; .,I J 1 by the execution thereof. 2 section 7. The form of the Bonds as set forth in the 3 Supplemental Indenture (as the Supplemental Indenture may be 4 modified as hereinbefore provided) is hereby approved. The Mayor 5 and the City Clerk, or any other duly authorized official, are 6 hereby authorized and directed to execute, in the name and on 7 behalf of the City and under its seal, such Bonds in the 8 aggregate not to exceed the principal amount set forth 9 hereinabove in accordance with the Supplemental Indenture. 10 section 8. The Director of community Development of the 11 city of San Bernardino or other city official are hereby 12 authorized and directed to execute one or more requisitions 13 authorizing the Trustee under the aforesaid Supplemental 14 Indenture to pay the Costs of Issuance for the Bonds from the 15 Funds and Accounts established under and pursuant to the 16 supplemental Indenture. 17 section 9. The officers of the city are hereby authorized 18 and directed, jointly and severally, to do any and all things to 19 execute and deliver any and all documents, including the Bonds, 20 which they may deem necessary or advisable in order to consummate 21 the issuance, sale and delivery of the Bonds, and otherwise to 22 effectuate the purposes of this Resolution; and any such actions 23 as previously taken by such officers in furtherance of the 24 issuance and delivery of the Bonds are hereby ratified and 25 confirmed. 26 Section 10. The Developer has previously provided 27 appropriate convenants in the tax-exempt financing documents to 28 assure that not less than twenty percent (20%) of the multifamily 10-7-87 -7- - - ~ .---, .'''\ v ~ '-' 1 rental housing units included in the Project are to be occupied 2 or reserved for occupancy by the individuals of low and moderate 3 income as provided in the Code.. 4 Section 11. The Developer has previously provided to the 5 City, for recording, a covenant running with the land in form 6 approved by the City Attorney or the City whereunder the 7 Developer waives any entitlement under State law to a density 8 bonus for the property on which the proposed project is to be 9 constructed. 10 Section 12. Adoption of this Resolution shall not be 11 construed as approval of the plans or concept of the proposed 12 development, nor as an indication that the Mayor and Common 13 Council will hereafter take any particular action toward granting 14 any planning, zoning, or other approval relating to a plan of 15 development. The Mayor and Common Council reserves its right to 16 evaluate any future administrative procedures and appeals based 17 solely on the information available at the time of consideration, 18 including any actions or recommendations by or appeals from the 19 Development Review Committee and the Planning Commission. Nothing 20 herein shall be construed as advance commitment or approval as to 21 any such matter, and the Developer is hereby notified that normal 22 planning processing shall be required, in accordance with the 23 standard procedures of the City and that the Developer will be 24 required to comply with all applicable laws and ordinances of the 25 City, State and Federal government. 26 Section 13. The approval as herein granted and the final 27 approval of the Project are specifically conditioned upon the 28 conformance of all documents required to be executed and 10-7-87 -8- ,.-. l., ~".,\ '-.; '-.I J 1 delivered by the City to the Policy Guidelines. 2 section 14. The above mentioned documents necessary for 3 the remarketing of the Bonds shall contain language especially 4 intended for the full and complete protection of the City against 5 liability from any covenants or agreements within the said Bond 6 documents to assure that, in any event, the bondholders shall 7 look only to the revenues pledged for the Bonds, and not to the 8 revenues or general funds of the City unless specifically pledged 9 in other than a conduit financing. For this purpose, Bond 10 Counsel shall also include in all subsequent appropriate 11 documents for the type of bond issue being considered, language 12 substantially as follows: 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 "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 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 subject 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 10-7-87 -9- c ~ "'>, ,....". ~ .......,; ..) 1 2 3 4 5 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 I employees I agents, and other personnel, but only against the property which is subject to the Deed of Trust and any other further security which may, from time to time, be hypothecated hereunder." 6 As appropriate I the language shall be changed if the 7 security is something other than a deed of trust, and if the 8 documents being utilized are other than a loan agreement and 9 regulatory agreement. Notice of non-recourse and exculpation 10 of the issuer provisions shall be prominently included in any 11 official statement or other equivalent disclosure documents. 12 section 15. The language shall be subject to revision, 13 as may be appropriate, depending upon the documents involved, 14 the type of security offered I and other similar 15 considerations, but in any event language substantially as 16 specified herein shall be included in all appropriate Bond 17 documents. In the event that Bond Counsel recommends against 18 any such language, Bond Counsel shall specifically advise the 19 City that such language not be included with reasoning 20 therefor. Unless such request is so made by Bond Counsel and 21 approved by the city, such language shall be included in all 22 appropriate Bond documents. 23 Section 16. This Resolution shall take effect upon 24 adoption. 25 26 27 28 IIII IIII 10-7-87 -10- c c " .,j ,J 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 a meeting thereof I held on 5 following vote, to wit: 6 7 4 the AYES: 8 9 10 11 12 13 day of NAYES: ABSENT: day of , 1987, by the Councilmembers City Clerk The foregoing resolution is hereby approved this , 1987.