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CI1C OF SAN BERNARDIOl - REQUIQT FOR COUNCIL ACQoN
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RESOLUTION
Dept:
COMMUNITY DEVELOPMENT
REC'O. - AolIfflf.c&'FF1EFRA PUBLIC HEARING AND
(VLACH APARTMENT PROJECT
1986 SEP 25 Pil 2: 2 I
From:
KENNETH J, HENDERSON
Date:
SEPTEMBER 24, 1986
Synopsis of Previous Council action:
Ordinance #3815 providing for the issuance of multifamily mortgage revenue bonds,
On December 10, 1985, the Mayor and Common Council continued this item to January 21, 1986,
On January 21, 1986, the Mayor and Common C0uncil continued this item to March 3, 1986,
On March 3, 1986, the Mayor and Common Council adopted Inducement Resolution #86-62 for this
project,
On August 18, 1986, the Mayor and Common Council adopted Resolution #86-62 to extend term of
inducement resolution for this project through November 3, 1986,
On September 8, 1986, the Mayor and Common Council continued TEFRA Public Hearing and adoption
of TEFRA Resolution to October 6, 1986,
Recommended motion:
Adopt Resolution,
Signature
Contact person:
Ken Henderson
Phone:
383-5065
Supporting data attached:
Yes/Staff Report/Resolution
Ward:
7
FUNDING REOUIREMENTS:
Amount:
N/A
Source:
N/A
Finance:
Council Notes:
75~0262
Agenda Item No.
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CIO OF SAN BERNARDGlO - REQUOT FOR COUNCIL Aa:)ON
STAFF REPORT
On July 17, 1986, staff met with Leo Vlach, developer of the
project, regarding bond financing for a forty (40) unit
apartment complex. An inducement resolution with a "life" of
six (6) months was approved by the Mayor and Common Council
on March 3,1986 (inducement expires 9/3/86).
Staff discussed with Mr. Vlach the salient features of the
recently passed Senate tax bill and H.R. 3838, the House tax
bill and indicated that in order to hold the TEFRA pUblic
hearing, he would have to pay the $10,000 lOB fee, with no
assurance that the House/Senate conference committee would
have completed its work on compromise tax legislation. A
TEFRA resolution also has a "life" of six (6) months.
Mr. Vlach indicated he would be willing to go forward with
the TEFRA public hearing and the related fee so the process
for the approval of final bond documents could be expedited
once tax simplification legislation was passed.
The market study and other lOB policy requirements have been
complied with by Mr. Vlach. The construction of forty (40)
units is expected to have no effect on current supply/demand
market characteristics.
Because staff was unable to notice the public hearing four-
teen (14) days prior to the Council meeting, the Mayor and
Common Council adopted Resolution No. 86-62 on August 18,
1986, authorizing an extension of the Inducement Resolution
to November 3, 1986.
On September 8, 1986, the Mayor and Common Council authorized
continuance of the TEFRA public hearing to October 6, 1986,
in order to allow the developer time to approach a bond
underwriter or placement agent.
Mr. Vlach advises staff that although the bond underwriters
contacted seem interested in his project, they are unable to
make a commitment without some assurance of a bond allocation
from the City. Unfortunately, due to the pending Tax Reform
Bill, it would not be prudent to make allocations until the
new legislation is finalized and its effects analyzed. Staff
anticipates the pending legislation to be finalized in late
October.
Mr. Vlach has requested extending the "life" of the induce-
ment resolution and continuance of the TEFRA pUblic hearing
to December 15, 1986, due to the reasons (new tax bill)
outlined above. The extension would provide time for staff
to evaluate the iinal legislation (including its effect on
our volume cap). Then, if the City elects to issue the
estimated $1.9 million bond allocation to this project, the
developer would have enough time to acquire an underwriter,
hold the TEFRA public hearing and arrange for the sale of
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bonds before the Industrial Development Bond deadline on
December 31, 1986.
Staff recommends adoption of resolution extending the "life"
of the inducement resolution to December 15, 1986, and
continuance of TEFRA public hearing to December 15, 1986.
File: VLACHTEFRAHRIG
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AMENDING RESOLUTION
NO. 86-62 TO EXTEND TERM OF INDUCEMENT RESOLUTION FOR MULTI-
FAMILY MORTGAGE REVENUE BONDS FOR VLACH APARTMENTS PROJECT
THROUGH DECEMBER 15, 1986.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. Section 12 of Resolution No. 86-62 is amended to
read as follows:
.Section 12. It is intended that this Resolution shall
constitute such 'official action' toward the issuance of the
bonds within the meaning of the United States Treasury
Regulations, the United States Tax Laws, and any legislation now
or hereafter pending in the Congress of the United States which
may require official action in order for the bonds to be exempt
from federal income taxation. The Project of the Applicant shall
be the beneficiary of such 'official action' up to and including
16 the 15th day of December, 1986. If, by that date, the City has
17 not issued any multifamily mortgage revenue bonds for the Project
18 or held a public hearing for the Project as said public hearing
19 is required pursuant to the certain amendments to Section 103 of
20 the Internal Revenue Code of 1954, as amended (the 'Code') as
21 enacted by Congress under the Tax Equity Fiscal Responsibility
22 Act of 1982 ('TEFRA'), the 'official action' for the Project of
23 the Applicant as evidenced by this Resolution shall lapse..
24 SECTION 2. The City of San Bernardino reaffirms its
25 intention to issue multifamily mortgage revenue bonds of the City
26 for the acquisition of land and the construction, equipping and
27 permanent financing thereon of the Project, as set forth in the
28 original resolution, subject to the provisions of Paragraph 20 of
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Resolution No. 86-62, relating to the Applicant obtaining private
activity bond allocation from a governmental entity other than
the City of San Bernardino. This resolution is adopted to assure
that, so long as the Applicant proceeds diligently on or before
December 15, 1986, and arranges to have the City hold its pUblic
hearing on issuance of the proposed bonds by or before that date,
the official action of the City taken in Resolution No. 86-62
shall remain in full force and effect.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
day of
meeting thereof, held on the
, 1986, by the following vote, to
wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1986.
Mayor of the City of San Bernardino
Approved as to form:
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27 City Attorney
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