HomeMy WebLinkAbout05.Z- Successor Agency RESOLUTION (ID#3211) DOC ID: 3211 A
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Conveyance of Property
From: Lisa Connor M/CC Meeting Date: 05/19/2014
Prepared by: Lisa Connor, (909) 663-1044
Dept: Successor Agency Ward(s): 3
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Acting as the
Successor Agency to the Redevelopment Agency of the City of San Bernardino Authorizing the
Consent to Subordinate Its Tax Regulatory Agreement to the Loan of the Department of Housing
and Urban Development in Connection with the Refinancing of the HUD Loan on the Glen Aire
Mobile Home Park and Such Actions as Are Necessary to Accomplish the Foregoing. (#3211)
Current Business Registration Certificate: Not Applicable
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Financial Impact:
Account Budgeted Amount: <<Insert Amount>>
Account No. <<Insert Account No.>>
Account Description: <<Insert Account Description
Balance as of. «Inert Date>>
Balance after approval of this item: <<Insert Amount>>
Please note this balance does not indicate available funding. It does not include non-encumbered
reoccurring expenses or expenses incurred,but not yet processed.
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
None.
Background:
The Glen Aire Mobile Home Park(Park) is part of the original eight mobile home parks acquired
in the mid 1990's by the Redevelopment Agency of the City of San Bernardino (Agency). The
Park was acquired by the Agency with a loan provided by the San Bernardino Joint Powers
Financing Authority from the proceeds of certain lease revenue bonds.
Prior to the acquisition of the Parks, the Agency expended funds for the initial analysis of the
feasibility of the park purchase project, due diligence investigation of each park, and
administrative and consulting fees. The Agency agreed to enter into Loan Agreements secured
by Notes for each Park for the various fees and expenses incurred. The loan agreements and
notes are not secured by a deed of trust on the Parks. The liens of the Agency on the Parks are
solely tax regulatory agreements. There are no Agency deeds of trust recorded as liens against
the Parks. The deed of trust securing the loans is recorded against other properties owned by the
California Mobile Home Park Corporation (Corporation). This action was taken several years
ago in order not to affect the lien ratio on the Parks for U.S. Department of Housing and Urban
Development(HUD) financing purposes.
Updated: 5/8/2014 by Jolena E.Grider A Packet Pg. 393
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3211
As originally contemplated, the Agency transferred operations of the Parks to the Corporation in
1996. At the request of the Agency, between 2001 and 2003, the Housing Authority of the
County of San Bernardino (County Housing Authority) refinanced the Agency's outstanding
bonds with mortgage revenue bonds secured by GNMA securities backed by HUD. Red
Mortgage Capital Group is the facilitator of the HUD loan for the Parks. The County Housing
Authority issued Series B bonds to assist in financing, and the Agency assisted in the financing
by removing its deeds of trust as liens on the Parks, and recording its tax regulatory agreements
in third position.
In 2010, the Corporation changed its name to Affordable Community Living Corporation
(ACLC). During the year, ACLC requested that the Agency subordinate the regulatory
agreements and other liens for two other parks: the Sequoia Plaza Mobile Home Park and
Rancho Meridian Mobile Home Park in order to cause the refinancing of those parks. At that
time, the Agency subordinated its regulatory agreements to the new HUD financing, maintaining
the same lien position that it originally had. The refinancing of the HUD loan resulted in a
reduction of the interest rate on the senior loan, and thus resulted in additional funds to repay the
County Housing Authority's second lien bonds.
Current Issue•
Recently, the ACLC informed the Successor Agency that HUD had provided a preliminary
commitment to refinance the HUD loan on the Park and is requesting that the Successor Agency
subordinate the lien of the Agency Tax Regulatory Agreement to the refinancing of the HUD
loan. Refinancing of the HUD loan will result in a lower interest rate providing the ACLC a
greater opportunity to pay the Series B Bonds. The ACLC will take no money out of the
refinancing other than for the payment of reasonable refinancing costs. The anticipated closing
of the subordination is July 2014 with the following terms:
Loan Terms Existing Proposed
Loan Amount $3,082,901 $3,262,600
Interest Rate 7% 3.85%
Loan Term(Years) 27.5 39
Monthly Principal Interest $21,096 $13,428
Annual Principal Interest $253,156 $161,140
First Year Debt Service Savings $92,017
Five Year Debt Service Savings $460,083
Ten Year Debt Service Savings $920,167
This subordination will not affect the lien position of the Agency as the Agency Tax Regulatory
Agreement will continue to be in third position. More important, the subordination will not
affect the distribution of funds to the Successor Agency since the subordination does not involve
liens for monetary security.
When the subordination of the Agency Tax Regulatory Agreements occurred in 2010 for the
Sequoia Plaza and Rancho Meridian Mobile Home Parks, the Agency required ACLC to commit
to the following terms:
Updated: 5/8/2014 by Jolena E.Grider A Packet Pg. 394
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3211
1. It will not take any new money out of the refinancing other than for the payment of
reasonable refinancing costs.
2. The refinancing of the HUD loans will result in a lower interest rate on the HUD Loan thus
providing additional funds to pay the County Housing Authority Series B Bonds.
3. ACLC will pay all Successor Agency/City Attorney's fees for the transaction, thus
eliminating all costs to the Successor Agency and City.
Successor Agency staff has indicated that the same requirements will be necessary for an
approval of the refinancing of the Park at this time.
City Attorney Review:
Supporting Documents:
reso 3211 (PDF)
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Updated: 5/8/2014 by Jolena E.Grider A Packet Pg. 395
RESOLUTION NO.
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3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL ACTING
AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
4 OF THE CITY OF SAN BERNARDINO AUTHORIZING THE CONSENT
5 TO SUBORDINATE ITS TAX REGULATORY AGREEMENT TO THE
LOAN OF THE DEPARTMENT OF HOUSING AND URBAN
6 DEVELOPMENT IN CONNECTION WITH THE REFINANCING OF
THE HUD LOAN ON THE GLEN AIRE MOBILE HOME PARK AND
7 SUCH ACTIONS AS ARE NECESSARY TO ACCOMPLISH THE
e FOREGOING. L
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9 WHEREAS, on January 9, 2012, the Mayor and Common Council of the City of S E
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10 Bernardino ("Council") adopted Resolution No. 2012-12 confirming that the City of San =
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11 Bernardino would be the Successor Agency to the Redevelopment Agency of the City of San o
12 Bernardino ("Successor Agency") effective February 1, 2012, pursuant to AB1X 26 (The
Redevelopment Agency Dissolution Act); and
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WHEREAS, on January 23, 2012, the Council adopted Resolution No. 2012-1
14 providing for the City to become the Housing Successor and to perform housing function 1°
15 previously performed by the Agency; and
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WHEREAS, pursuant to Health & Safety Code Section 34181(c) of AB1X 26 the
17 Oversight Board is to direct the transfer of housing responsibilities, including all rights, powers,
1B duties, obligations and assets,to the Housing Successor; and
19 WHEREAS, the former Redevelopment Agency ("Agency") acquired the Glen Aire N
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20 Mobile Home Park (Park) with funds loaned to the Agency from the proceeds of the San
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21 Bernardino Joint Powers Financing Authority's mortgage revenue bonds (1995 Bonds) issued
22 for the Park in 1995; and
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23 WHEREAS, the purchase of the Park by the Agency was to further low and moderate a
24 income housing within the City of San Bernardino; and,
25 WHEREAS, prior to the purchase of the Park, the Agency expended Agency funds on
26 behalf of the mobile home park conversion program, without any formal intent or
27 documentation to provide for any reimbursement or recoupment of such expended funds, for(i)
28 the initial analysis of the Park, (ii) due diligence investigation, engineering and financial
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(_ 52.a
CV 1 analysis for the converted Park, (iii) administrative and consultant expenses to implement the
2 program, and(iv)payment of the Park conversion consultant fees and expenses; and
3 WHEREAS, in May, 1996, the Agency caused the formation of the California Mobile
4 Home Park Corporation, formerly The San Bernardino Mobile Home Park Corporation
' (Corporation) and eight subsidiaries thereof representing each of the parks it purchased through
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the conversion program; and
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WHEREAS, the sole purpose of the Corporation and its subsidiaries is to provide low
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income .housing to the residents within the City of San Bernardino and other cities within the a
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State of California; and
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WHEREAS, the Agency transferred its ownership interest in the Park to the Glen Aire
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Mobile Home Park Corporation; and
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WHEREAS, in an attempt to recoup a portion of its expenditures incurred prior to the
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purchase of the Parks, the Agency required the Corporation to execute a note and deed of trust ,
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is (the "Park Reimbursement Obligation") securing the Park Reimbursement Obligations for the 2
benefit of the Agency; and
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WHEREAS, in 1999, control of the Corporation and its subsidiaries was transferred to
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an independent non-profit board of directors to alleviate the further costs and time associated N
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19 with Agency administration of the Corporation; and
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20 WHEREAS, in connection with the issuance by the County of San Bernardino Housing o
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21 Authority ("County Housing Authority") of its $27,195,000 mortgage revenue notes (the "1999
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22 Notes"), the Agency reconveyed the deeds of trust upon receipt of a new deed of trust securing s
23 the Park Reimbursement Obligations; and
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24 WHEREAS, the County Housing Authority assisted the Corporation with refinancing a
25 portion of the 1999 Notes and pursuant to that transaction, the County Housing Authority issued
26 GNMA Collateralized Bonds ("Refunding Bonds")for the Park; and
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2 Packet Pg. 397 `
I WHEREAS, the Corporation applied a portion of the proceeds of the Refunding Bonds
2 to pay the Park Reimbursement Obligations in full upon the issuance of each series of the
3 Refunding Bonds; and
4 WHEREAS, the purpose of the expenditures made by the Agency prior to the transfer
5 of the Park to the Corporation has been satisfied, as the Park has been acquired, partially
6 rehabilitated, and transferred to a non-profit corporation which is organized to ensure the Park is
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reserved for low-and moderate-income tenants; and
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WHEREAS, the Agency then loaned funds to the Corporation pursuant to the 2001 0-
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Loan Agreement and 2001 Note evidencing such obligation; and
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WHEREAS, the Agency entered into a Subordinate Tax Regulatory Agreement dated o
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November 1, 2001, recorded in the records of the County Recorder for the County of San
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Bernardino on July 9, 2002, as Instrument Number 2002-0352537; to restrict certain units in the
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14 Park to low- and moderate-income tenants as long as such Regulatory Agreement does not
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15 violate any provision of the FHA documents which are recorded against the Park in connection c
with the issuance of the Bonds; and
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WHEREAS, on May 14, 2012 the Oversight Board recommended that the Successol Cn
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18 Agency approve the Subordination of the Redevelopment Agency of the City of San Bernardino M
Tax Regulatory Agreement Liens Existing on the Property Comprising the Glen Aix
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Mobilehome Park within the City of San Bernardino to the New Lien of HUD in Order to o
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Provide for a Refinancing of the Current Lien of the Department of Housing and Urban
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Development Existing on the Subject Properties. E
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WHEREAS, the Corporation has informed the Successor Agency that they desire t w
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24 refinance the HUD Loan and have requested that the Successor Agency agree to subordinate the
Series B Tax Regulatory Agreement in order for the new HUD loan to remain a senior lien on
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the Park; and
26 WHEREAS, the Corporation has represented to the Successor Agency that; 1) the
27 refinancing of the HUD loan by the Glen Aire Mobile Horne park Corporation will result in
28 lower interest rate providing the Corporation a greater opportunity to pay the Series B Bonds;
3 Packet Pg.398
I and 2) the Corporations will take no money out of the refinancing other than for the payment o
2 the reasonable refinancing costs; and
3 WHEREAS, the Successor Agency has duly considered the terms of such transactions as
4 contemplated herein and desire to consent to the subordination of the Series B Tax Regulator
5 Agreement subject to review of the new HUD loan documents by Successor Agency staff an
6 legal counsel; and payment of any Successor Agency costs associated with the subordination an
any outstanding Successor Agency fees.
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NOW THEREFORE, BE IT RESOLVED THAT THE MAYOR AND COMMON
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COUNCIL ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT 0)
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AGENCY OF SAN BERNARDINO HEREBY FINDS, DETERMINES AND DECLARES =
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AS FOLLOWS: o
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Section 1. The Successor Agency hereby consents and agrees to subordinate it
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Series B Tax Regulatory Agreement to the new respective HUD loan, subject to and conditioned
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upon the review and satisfaction of Successor Agency staff and legal counsel.
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Section 2. The Executive Director of the Successor Agency or any other officer o
15 employee of the Successor Agency designated by the Executive Director is hereby authorized t
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16 do all such acts and things necessary to accomplish the subordination of the Series B Tax
17 Regulatory Agreement to the new HUD Loan
18 Section 3. This Resolution shall take effect upon the date of its passage and adoption.
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4 ;Packet Pg 399
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL ACTING
2
AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO AUTHORIZING THE CONSENT
3 TO SUBORDINATE ITS TAX REGULATORY AGREEMENT TO THE
LOAN OF THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT IN CONNECTION WITH THE REFINANCING OF
5 THE HUD LOAN ON THE GLEN AIRE MOBILE HOME PARK AND
SUCH ACTIONS AS ARE NECESSARY TO ACCOMPLISH THE
6 FOREGOING
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
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Community Development Commission of the City of San Bernardino at a 0
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meeting thereof, held on the day of ,2014, by the following vote to wit: _
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Commission Members: Ayes Nays Abstain Absent o
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12 MARQUEZ
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13 BARRIOS a
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14 VALDIVIA =
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15 SHORETT
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16 NICKEL 0
17 JOHNSON
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18 MULVIHILL M
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20 Georgeann Hanna, City Clerk L
21 The foregoing resolution is hereby approved this day of 2014.
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24 R. Carey Davis, Mayor
City of San Bernardino
25 Approved as to form:
26 Gary D. Saenz, City Attorney
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5 Packet Pg.406