HomeMy WebLinkAbout02-Community Development
. CICr OF SAN BERNARDCo - REQUOT FOR COUNCIL ACOoN
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COMMUNITY DEVELOPMENT
Subject: REINSTATEMENT OF INDUCEMENT RESOLUTION
AND THE SUBMISSION OF MBAC APPLICATION
IN THE AMOUNT OF $8,600,000 FOR THE
SANDALWOOD PARK APARTMENTS PROJECT
KENNETH J. HENDERSON, DIRECTOR
Date: OCTOBER 15, 1986
Synopsis of Previous Council action:
On August 5, 1985, the Mayor and Common Council adopted Inducement Resolution 85-291, declaring
its intention to issue multifamily mortgage revenue bonds.
On December 23, 1985, the Mayor and Common Council adopted a multifamily industrial development
policy which took immediate effect.
On June 6, 1986, the Mayor and Common Council moved to allow a certain Inducement and TEFRA
multifamily industrial development bond (IDB) resolution to expire, including Inducement
Resolution 85-291, in accord with IDB policy adopted December 23, 1985.
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Recommended motion:
~t Resolution.
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Contact penon:
Kenneth J. Henderson
Phone:
383-5065
Supportiilg !late attached:
Staff Report/Resolution
Ward:
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FUNDING REQUIREMENTS:
Amount:
Source:
Finance:
OCil Notes:
75.0262
Agenda Item No
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Clf+ OF SAN BERNARDQO - REQUQT FOR COUNCIL AC~ON
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75.0264
STAFF REPORT
On August 5, 1985, the Mayor and Common Council adopted an Inducement
Resolution, Resolution No. 85-291, for a two hundred, sixteen (216)
unit multifamily rental housing development located near the north-
west corner of Baseline Street and Victoria Avenue for a principal
amount not to exceed $9,300,000. On December 23, 1985, the Mayor and
Common Council adopted its Resolution No. 85-543 which established
certain requirements concerning Inducement Resolutions and TEFRA
Resolutions for such Resolutions adopted after December 23, 1985. On
June 23, 1986, the Mayor and Common Council allowed certain Induce-
ment Resolutions to expire, including Resolution No. 85-291, for the
sole purpose of administrative record-keeping. This Resolution, in
part, reinstates Resolution No. 85-291 as of the date of adoption of
this Resolution and provides that Resolution No. 85-291 be deemed to
have been in full force and effect as of August 5, 1985 and for all
times thereafter. Developer, however, will be required to pay the
inducement related fee of $550,000, inasmuch as Resolution 85-291
expired on June 23, 1986.
On September 27, 1986, the United States Congress adopted its final
version of the Tax Reform Act of 1986, H.R. 3838. House Resolution
No. 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. On
September 30, 1986, the Governor of the State of California adopted a
Proclamation establishing the annual State volume cap for such
private activity bonds to be seventy-five dollars ($75.00) per
capita. On 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, 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).
The Developer has submitted a completed MBAC application for an
amount of $8,600,000 has provided that an escrow in an mount of one
percent (1%) of the principal amount of the bonds be established with
the city and has provided a copy of the financing commitment for the
Project from Mercury Savings and Loan ASsociation. This Resolution
would authorize staff of the City to submit the appropriate materials
to MBAC for the development and to the extent bonds for any other
projects for which MBAC applications have been submitted are not
issued, to request that such unused allocation be assigned for use in
this project.
Staff recommends adoption of the resolution.
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file name: staffrepsandalw
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CIO OF SAN BERNARDOO - REQUQT FOR COUNCIL ACOoN
STAFF REPORT
0 A recap of the application follows:
APPLICANT: Debkar Investment company
PRINCIPALS: Joe Levesque. President
AMOUNT OF FINANCING: Not to exceed $9.300.000
PROJECT: Construction of 216 apartment
units on 10.49 acres.
LOCATION: 10.49 acre site located North of
Baseline. between Victoria and
Sterling Street
TARGET DATE OF FINANCING: Last quarter of 1986
CONSTRUCTION SCHEDULE: Upon receipt of bond proceeds.
RESERVE ~~EVELOPMENT FEE: 1% x 9.300.000 = $93.000
INCREASE IN JOBS: During construction only
RENTAL SCHEDULE: 1 bdrm 1 bath - $410
0 2 bdrm 1 bath - $475
2 bdrm 2 bath - $500
The parcels are zoned R-3-2000 for up to 21,5 units per acre. The project is
10.49 acres with 216 units which equals 20.60 units per acre.
Developer has agreed not to request any density bonus for this project.
The developer will be present to answer any questions you may have.
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75.0264
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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 (SANDAL-
WOOD APARTMENTS PARK 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
variou~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 "Act"); and
WHEREAS, Debkar Investment Company, a California Corporation,
or their predecessors, successors or assigns (the "Applicant"), has
previously submitted a certain application (the "Application"), to
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the Mayor and Common Council of the City of San Bernardino,
California (the "Mayor and Common Council"), for tax exempt
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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 "ProjectW): and
WHEREAS, the Project consists of the construction and
permanent financing of 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 Baseline Street and Victoria Avenue in the
City as more fully described in the Application: and
WHEREAS, pursuant to Resolution No. 85-291 of the Mayor and
Common Council, said Mayor and Common Council have on August 5,
1985, previously accepted the Application and declared its intent
to issue multifamily mortgage revenue bonds in an aggregate princi-
pal amount not to exceed $9,300,000 for the purpose of financing
the Project (the "Inducement ResolutionW): and
WHEREAS, the Inducement Resolution was effective as "official
actionW pursuant to Section 103 of the Internal Revenue Code of
1954, as amended (the WCodeW) on or before September 25, 1985: and
WHEREAS, pursuant to Resolution No. 85-543 of the Mayor and
COmmon Council, adopted on December 23, 1985, said Mayor and COmmon
Council established certain requirements concerning Inducement
Resolutions and TEFRA Resolutions, including, but not limited to,
establishing a six (6) month limit of effectiveness for Inducement
Resolutions and TEFRA resolutions if any such resolutions are
adopted after December 23, 1985: and
WHEREAS, pursuant to an appropriate motion on June 23, 1986,
the Mayor and Common Council allowed certain Inducement Resolu-
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tions, including Resolution No. 85-291 to expire for the sole
purpose of administrative record-keeping I and
WHEREAS, the Mayor and Common Council intend to reinstate
Resolution No. 85-291 by the adoption of this Resolution and said
Resolution No. 85-291 shall hereafter be deemed to have been in
full force and effect as of August 5, 1985 and for all times
thereafter; 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
bonds to be issued for said projects; and
WHEREAS, the City may apply to the Mortgage Bond Allocation
Committee (ftMBAC") for a calendar year 1986 Private Activity Bond
Limit of the State of California of $10,000,000 in accordance with
the procedures established in the Proclamation of the Governor,
dated September 30, 1986, and Resolution No. 86-1 of the California
Debt Limit Allocation Committee ("CDLACft), for use by the City in
connection with the issuance of bonds or other obligations for
qualifying projects, including the Project; and
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 an amount equal to
Eight Million, Six Hundred Thousand Dollars ($8,600,000) and the
Developer has, in accordance with Section 52097.5(b) of the Health
and Safety Code, established escrow in the amount of $86,000, which
escrow amount will be retained and used by the City or otherwise
disposed of in accordance with the rules promulgated by MBAC.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
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SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
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 body constitutes the governing body of the
City and is legally authorized to provide for the issuance of such
special revenue bonds by the City.
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 Mayor and Common Council do hereby reinstate
Resolution No. 85-291 by the adoption of this Resolution and said
Resolution No. 85-291 shall hereafter be deemed to have been in
full force and effect as of August 5, 1985, and for all times
thereafter.
Section 7. The City hereby declares its intention to
exercise the authority referred to in Section 3 by issuing multi-
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family mortgage revenue bonds of the City in such amounts as will
be adequate to implement the City financing of the Project.
Section 8. The bonds shall be payable from the revenues
described in the Ordinance and/or the Act.
Section 9. 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 10. 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
City at a meeting or meetings to be held for such purpose. The
0 City staff, Sabo and Deitsch, a Professional Corporation, as Bond
Counsel to the City, Underwriters, the Applicant and the agents and
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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.i~cluding working with persons who may acquire vested rights
as the result of such actions.
Section 11. 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 12. 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 13. The Applicant 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
o acceptable to the City Attorney and Bond Counsel to assure that not
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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 14. 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 "Agency").
Section 15. 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 ("CEQA"), 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
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
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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 future 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
advance commitment or approval as to any such matter, and the
Applicant is hereby notified that normal planning processing shall
be regujred, 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 16. 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 17. 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-
ment Agency of the City of San Bernardino" as said Policy Guide-
lines are on file with the City Clerk.
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Section 18. At least twenty-one (21) days prior to the
anticipated date for the public hearing as required by TErRA, 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
TErRA hearing will be designat~d 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
c:; public hearing as required by TErRA.
c) Payment of the TErRA 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.
i) Evidence that adequate sewer, water, gas and electric
facilities will be fully installed prior to completion of the
c:> Project and that necessary public streets, sidewalks and curbing
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outside the Project site, if not yet constructed, will be fully
completed within a reasonable time after completion of the Project.
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jl Resumes of the firms providing expert services.
kl Final renderings, floor layouts, site plan and eleva-
tions.
Section 19. 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 Limit to the City for use in the Project in the amount of
$8,600,000. Said application shall be to the effect that the City
requests that to the extent any of the $10,000,000 limit that the
City ~aJ submit MBAC applications for is unused because bonds are
not issued for a particular development, said unused amount be
assigned by CDAC to this project.
<:J Section 20. 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
NAYS:
ABSENT:
CITY CLERK
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of
THE FOREGOING resolution is hereby approved this
, 1986.
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Approved as to form:
City ilttorney
STATE OF CALIFORNIA }
COUNTY OF SAN BERNARDINO}
CITY OF SAN BERNARDINO }
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Mayor, 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.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official seal of the City of San Bernardino this day
of , 1986.
KJH:lb
City Clerk
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