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cfiJi OF SAN BERNARDOIo - REQUCtT FOR COUNCIL Ac9.0N
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KENNETH J. HENDERSON. DIRECTOR
COMMUNITY DEVELOPMENT DEPARTMENT
Subject: SUBMISSION OF AN MBAC APPLICATION FOR
THE VLACH/PALM CIRCLE APARTMENTS PROJECT
IN THE AMOUNT OF $1.500,000
Date: OCTOBER 14. 1986
Synopsis of Previous Council &ction:
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 Council 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 aodpted 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.
(Continued on. n!xt page)
Recommended moti.on:
<::) Adopt Resolution
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Contact person: Ken Henderson
Supporting data attached: Yes/Staff Report/Resolution
Phone: 383-5065
FUNDING REQUIREMENTS:
Amount:
N/A
Source:
7
N/A
Ward:
Finance:
Ocil Notes:
75..0262
Agenda Item No
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SynOPsis of Previous Council Action (cont'd)
On October 6. 1986. the Mayor and Common Counil denied the request for extending
the life of the inducement resolution to December 15. 1986 and cancelled the TEFRA
Public Hearing for Vlach/Palm Circle Apartment Project.
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CI~ OF SAN BERNARDQO - REQUQT FOR COUNCIL AC'i\ON
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75.0264
STAFF REPORT
On March 3, 1986, the Mayor and Common Council adopted an inducement Resolution
for a forty (40) unit multifamily rental housing development located at 3665 "E" Street
for a principal amount not to exceed $1,955,000. ()n September 27, 1986, the
United States Congress adopted its final version of the Tax Reform Act of 1986,
H.R. 3838. H.R. 3838 makes multifamily mortgage revenue bonds subject to the imposition
of a private activity bond limit. Prior to the passage of H.R. 3838, no such limit
was applicable to multifamily housing. ()n September 30, 1986, the Governor of the
State of California adopted a Proclamation setting the annual State volume cap for such
private activity bonds at seventy-five dollars ($75.00) per capita. ()n October 1, 1986,
the California Debt Limit Allocation Committee adopted procedures to be used by the
State in allocating its 1986 private activity bond limit. Said procedures provided,
in part, that cities with populations of less than two hundred and fifty thousand
(250,000) will be eligible to apply to the State for a private activity bond limit of the
State in an amount up to ten million dollars ($10,000,000) for single family and
multifamily housing.
The Developer has submitted a completed MBAC application and provided that an escrow
in an amount of one percent (1%) of the principal amount of the bonds be opened with
the City. This Resolution would authorize staff of the City to submit the appropriate
materials to MBAC for a private activity bond allocation of $1,'00,000 for the
development and to the extent that bonds for this project are not issued, would request
that such unused allocation be assigned for use in other projects for which MBAC
applications have been submitted.
Staff recommends adoption of the resolution.
CIPt OF SAN BERNARD80 - REQUAT FOR COUNCIL AC~ON
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75-0264
The following is a recap of the project:
Name of Project:
Principals:
Issue Amount:
Location:
Target Date for Financing:
Construction Schedule:
Project Description:
Zoning:
Density:
Development Review
Commission Approval:
Type of Construction:
Reserve and development fee:
Increase in JObs:
Rent Schedule
Market Rents:
Low/moderate income - 80%
or below median income:
Very low income - 50%
or below median income as
required by California law
effective 1-1-86
STAFF REPORT
Palm Circle, Apartment
Leo J. Vlach and Agnes G. Vlach
$1.955.000
3667 North "0" Street
Last quarter 1986
Upon receipt of bond financing proceeds
Construction of 40-unit complex on
1.25 acres.
R-3-1200. 1 unit/1200 square feet
32 units per acre - meeting zoning
requirement
#84-91 and #85-112 no density bonus
requested.
Framed and stuccoed. 3 stories.
1% of 1.955.000 = $19.550.66
During construction only.
1 bedroom/$395 per month
2 bedrooms/$495 per month
2 bedroom (deluxe. only 4'in
project)/$550 per month
1 bedroom/$365 per month
2 bedrooms/$465 per month
1 bedroom/$267.50 per month
2 bedrooms/$335 per month
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RESOLUTION NUMBER
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING 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 (PALM CIRCLE APARTMENTS PROJECT).
WHEREAS, the City of san Bernardino, California (the .City"),
is a .home rule cityW 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
regu1~r}y 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 avail-
ability of mOderately priced rental units for residents of the 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 multi-
family mortgage revenue bonds pursuant to Health and Safety Code
Section 52000, et sea. (the "ActW); and
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WHEREAS, Leo J. Vlach and Agnes J. Vlach, or their prede-
cessors, successors or assigns (the wApp1icantW), has previously
submitted a certain application (the wApp1icationW), to the Mayor
and Common Council of the City of San Bernardino, California (the
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RMayor and Common Council"), for tax-exempt financing for a certain
multifamily rental housing development pursuant to Ordinance No.
3815, as amended, and the Act, as more fully described in said
Application (the RprojectR); and
WHEREAS, the Project consists of the construction and perm-
anent financing of a forty (40) unit multifamily rental housing
development on an approximately one and one-fourth (1.25) acre site
located at 3655 North RE" Street in the City as more fully des-
cribed in the Application; and
WHEREAS, pursuant to an appropriate Resolution of the Mayor
and Common Council adopted on March 3, 1986, said Mayor and Common
Council have previously accepted the Application and declared its
intent to issue multifamily mortgage revenue bonds in an aggregate
principal amount not to exceed $9,155,000 for the purpose of
financing the project (the RInducement ResolutionR);
WHEREAS, the Inducement Resolution was effective as Rofficial
actionR pursuant to Section 103 of the Internal Revenue Code of
1954, as amended (the RCode); and
WHEREAS, the provisions of the Tax Reform Act of 1986 require
that certain industrial development revenue bond financing projects
receive an allocation equal to the aggregate principal amount of
the bonds to be issued for said projects; and
WHEREAS, The City may apply to the Mortgage Bond Allocation
Committee ("MBACR) for a calendar year 1986 Private Activity Bond
Limit of the State of California of $10,000,000 in accordance with
procedures established in the Proclamation of the Governor, dated
September 30, 1986, and Resolution No. 86-1 of the California Debt
Limit Allocation ("CDLACR), for use by the City in connection with
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the issuance
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of bonds or other
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obligations for qualifying pro-
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jects, including the Project7 and
c:> WHEREAS, the City has been requested by the Developer to
submit an application to MBAC for a portion of the calendar year
1986 Private Activity Bond Limit of the State in the amount equal
to One Million Five Hundred Thousand Dollars ($1,500,000) and the
Developer has, in accordance with Section 52097.5(b) of the Health
and Safety Code, established an escrow in the amount of $15,000,
which amount will be retained and used by the City to payor
otherwise dispose of in accordance with the rules promulgated by
MBAC.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
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Section 1. That the recitals set forth hereinabove are true
and correct in all respects.
Section 2. The City is a municipal corporation duly created,
established and authorized to transact business and exercise its
powers, all under and pursuant to 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 the
Ordinance and the Act, the City is legally authorized to issue
special revenue bonds for the construction and permanent financing
of the Project as more fully described in the recitals thereof.
Section 4. This bond constitutes the governing body of the
c:> City and is legally authorized to provide for the issuance of such
special revenue bonds by the City.
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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 bonds shall be payable from the revenues
described in the Ordinance and/or the Act.
Section 7. The bonds shall be and are special obligations of
the City, and, subject to the right of the City to apply monies 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 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 by reason of the issuance
thereof.
Section 8. 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
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City at a meeting or meetings to be held for such purpose. The
City staff, Sabo and Deitsch, 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 9. 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 Applicant and the
City as required by the Ordinance and/or the Act and the industrial
development bond financing program of the City.
Section 10. At the closing of the financing there shall be
paid to the City the fee set forth in Resolution No. 81-108 of the
Mayor and Common Council, adopted March 13, 1981, as amended by
Resolution No 81-410, of the Mayor and Common Council, adopted
September 24, 1981.
Section 11. The Applicant shall provide appropriate covenants
in the tax-exempt financing documents as may hereinafter be
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submitted to the City for consideration and approval in a form
acceptable to the City Attorney and Bond Counsel 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 individuals of low and moderate income as provided in
the Code or such other percentage amount as may be permitted by the
Tax Reform Act of 1986.
Section 12. Prior to issuance of any bonds for the Project as
may hereafter be approved pursuant to the appropriate resolution or
resolutions of the City, the Applicant shall provide for the
recordation of a covenant running with the land in a form approved
by the City Attorney of the City whereunder the Applicant (i)
waives any claim under State law to a density bonus, as defined by
Government Code Sections 65915 and 65915.5, for the property on
which the 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 (the RAgencyR).
Section 13. The approval as herein granted and the final
approval of the Project and the financing thereof are specifically
conditioned upon the Mayor and Common Council approving the final
environmental assessments and other environmental documents pre-
pared or to be prepared pursuant to the provisions of the Califor-
nia Environmental Quality Act of 1970, as amended ("CEQAR), with
respect to any and all environmental conditions with regard to the
operations of the Project as proposed by the Applicant in the
Application. All such assessments and documents needed to comply
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with the provisions of CEQA shall be the sole responsibility of the
Applicant. 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 Council reserve the right to evaluate any further adminis-
trative procedures and appeals based soley 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 Commission. Nothing herein shall be construed as
advane~commitment or approval as to any such matter, and the
Applicant is hereby notified that normal planning processing shall
be required, in accordance with the standard procedure of the City
and that the Applicant will be required to comply with all applic-
able laws and ordinances of the City, State and federal govern-
ments.
Section 14. The issuance of bonds or other obligations of the
City for the Project is 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.
Section 15. 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 Redevelop-
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ment Agency of the City of San Bernardino. as said Policy Guide-
lines are on file with the City Clerk.
Section 16. At least twenty-one (21) days prior to the
anticipated date for the public hearing as required by TEFRA, each
of the following items shall be submitted to the Staff of the City.
After review of the items by the Staff of the City, the date of the
TEFRA hearing will be designated and a notice thereof shall be
published. The items shall include:
a) Evidence that the Applicant is an entity duly formed
and validly existing and has the full right, power and authority
under the laws of the State of California to own the Project Site
and carryon the Project as contemplated by this Resolution.
b) A market feasibility study by an expert as retained by
the Applicant and acceptable to or approved by the City, which
study shall have been paid for and submitted by the Applicant at
least twenty-eight (28) days prior to the anticipated date for the
public hearing as required by TEFRA.
c) Payment of the TEFRA hearing fee of $10,000.
d) A tentative tract map or the approval by the Develop-
ment Review Committee.
e) Environmental clearance.
f) Compliance with all zoning requirements (i.e., obtain-
ing of required conditional use permits).
g) Proof of land ownership or an escrow report including
the full legal description of the property on which the Project is
to be located.
h) Final Project pro forma.
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i) Evidence that adequate sewer, water, gas and electric
c:> facilities will be fully installed prior to completion of the
Project and that necessary public streets, sidewalks and curbing
outside the Project site, if not yet constructed, will be fully
completed within a reasonable time after completion of the Project.
j) Resumes of the firms providing expert services.
k) Final renderings, floor layouts, site plan and eleva-
tions.
Section 17. The Staff of the City is hereby authorized and
directed to submit an application to MBAC requesting that MBAC
assign a portion of the State's calendar year 1986 Private Activity
Bond Li~it to the City for use in the Project in the amount of
$1,500,000. Said application shall be to the effect that the City
requests that to the extent that bonds for the Project are not
<:) issued, any unused allocation be assigned by MBAC to other projects
of the City for which MBAC applications have been submitted.
Section 18. This Resolution shall take affect upon adoption.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San Bernar-
dino at a meeting thereof,
held on the day of , 1986, by the
following vote, to wit:
AYES:
COUNCIL MEMBERS
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NAYS:
ABSENT:
CITY CLERK
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THE FOREGOING resolution is hereby approved this
, 1986.
day
Mayor, City of San Bernardino
Approved as to form:
City Attorney
STATE OF CALIFORNIA }
COUNTY OF SAN BERNARDINO}
CITY OF SAN BERNARDINO }
I, SHAUNA CLARK, City Clerk
dino, DO HEREBY CERTIFY that the
Bernardino City Resolution No.
correct copy of that now on file
in and for the City of San Bernar-
foregoing and attached copy of San
is a full, true and
in this office.
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IN WITNESS WHEREOF, I have hereunto set my hand
official seal of the City of San Bernardino this
of , 1986.
an affixed the
day
City Clerk
KJH:lb
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