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CIT~- OF SAN BERNARDIt-''l - REQUE~T FOR COUNCIL ACT.
From: Kenneth J. Henderson, Director
Subject: TEFRA PUBLIC HEARING -- SANDALWOOD PARK
APARTMENT PROJECT
Dept: Communi~y Development
Date: November 17, 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.
On October 15, 1986, the Mayor and Common Council adopted Resolution 86-417 authorizing the
reinstatement of Inducement Resolution 85-291 and submittal of Mortgage Revenue Bond Allocation
Committee application to the State in the amount of $B,600,OOO for Sandalwood Project.
Recommended motion:
OPEN PUBLIC HEARING
CLOSING PUBLIC HEARING
ADOPT RESOLUTION
Contact person:
Kenneth J. Henderson
Phone:
383-5065
Supporting data attached:
Staff Repor~..I~e~-,,-lll~,!c()I'l
Ward:
7
FUNDING REQUIREMENTS:
Amount:
N/A
Source:
Finance:
Council Notes:
Agenda Item No~7~
.
75-0262
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CIT'-. OF SAN BERNARDI~"'" - REQUEr"'" FOR COUNCIL ACT~~N
STAFF REPORT
On August 5, 1985, the Hayor and Common Counci 1 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 Nayor and
Common Council adopted its Resolution No. 85-543 which established
certain requirements concerning Inducement Resolutions and TEFRA
Resolutions for such Resolutions adopted after Decenlber 23, 1985. On
June 23, 1986, the lIayor and Common Council allowed certain Induce-
ment Resolutions to expire, including Resolution No. 85-291, for the
sole purpose of administrative record-keeping.
On September 27, 1986, the United States Congress adopted its final
version of the Tax Reform Act of 1986, B.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
B.R. 3838, no such limit was applicable to multifamily housing. On
September 30, 1986, the Governor of the State of Ca 1 ifornia adopted a
Proclamation establishing the annual State volume cap [or 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).
On October 15, 1986, the Nayor and Common Council adopted Resolution
86-417 authorizing the reinstatement of Inducement Resolution 85-291
and directed staff to subn,j,t an application to Hortgage Bond Alloca-
tion Committee (HBAC) requesting that the Committee assign a portion
of the State's calendar year 1986 Private Activity Bond Limit to the
City for liE;e in this project in the a,mount of $8,600,000. Staff
received notification that the MBAC approved an allocation for the
City at a level of $8.6 million dollars designating Sandalwood Park
Apartments as the recipient.
A complete copy of the Developer's Application for Nultifamily
Mortgage Revenue Bond Financing is attached for your review. Also
attached is a recap which summarizes the project application.
The parcels are zoned R-3-2000 allowing up to 21.5 units per acre
when revie~ of plans were approved on April 15, 1985. The project is
10.49 acres with 216 units which equals only 20.6 units per acre.
The developer did not request a density bonus for this project.
The attached resolution ratifies the publication of Notice of Public
Hearin~ and makes certain findings and determinations in connection'
with a Public Bearing on the issuance of approximately $8,600,000
pr~~cipal amount of Multifamily Mortgage Revenue Bends (Mercury
Savings and Loan/Sandalwood Park Apartments Project).
75.0264
...
...
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"
Staff recommends adoption of above referenced resolution.
,~Ci~~~i,e"to'
Community Development Department
KJH:~\LO: Ib
file: staffrepsandalw
.
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A recap of the application as follows:
Applicant:
J~lJ Properties
Principals:
Joe Levesque, President
(100% owner)
Amount of Financing:
$8,600,000
Purpose:
Construction of 216 apart-
ment units on 10.49 acres,
Location:
10.49 acre site located
north of Baseline, between
Sterling Avenue and Vic-
toria Avenue.
Target Date of Financing:
December, 1986.
Construction Schedule:
Construction started August
Jobs:
Approximately 75 during construction.
Project Costs:
$8,781,767
Increase Tax:
1% of $8,781,767 - $87,817
Reserve and Development Fee:
1% of 8.6 million = $86,000
Rent Schedule:
Unit ~~B~IiEtion
llQ... of Unitt;
Proposed Rent/Month
1 bedroom
2 bedroom
28
144
$410.00
489.50
Low/Moderate Tocome:
1 bedroom
2 bedroom
4
18
$410.00
489.50
Very Low Income:
1 bedroom
2 bedroom
4
18
$268.00
301.50
KJH/MWllb
file: racpsanc1ah'lOod
SBED 0080-12(SBE003-100)/1341S/pd
10/31/86
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO. CALIFORNIA. RATIFYING THE
PUBLICATION OF NOTICE OF PUBLIC HEARING AND
MAKING CERTAIN FINDINGS AND DETERMINATIONS IN
CONNECTION WITH A PUBLIC HEARING ON THE ISSUANCE
OF APPROXIMATELY $8,600,000 PRINCIPAL AMOUNT OF
MULTIFAMILY MORTGAGE REVENUE BONDS (MERCURY
SAVINGS AND LOAN/SANDALWOOD PARK APARTMENTS
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 regular ly 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
ava:lability of moderately priced rental units for residents of the
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City and to broaden the tax and revenue base 0: the Ci::y without any
liability whatsoever to the City; and
WHEREAS, the City is authorized and empowered to lssue
multifamily mortgage revenue bonds pursuant to Health and Safety
Code Section 52000, et seq. (the "Act"); and
WHEREAS, Debkar Investment Company, a California
corporation owned solely by Joe Levesque, or its successors or
assigns (the "Applicant"), has previously submitted a certain
application (the "Application"), to the Mayor and Common Council of
the City of San Bernardino, California (the "Mayor and Common
Council"), for tax-exempt financing for a certain multifamily rental
housing development pursuant to Ordinance 3815, as amended, as more
fully described in said Application (the "Project"); and
WHEREAS, the Project consists of the acquisition of land
and construction thereon of a 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 the intersection of Baseline
Street and Victoria Avenue in the City, as more fully described in
the Application, and shall consist of an appropriate mix of
two-bedroom, two-bath units, two-bedroom, one-bath units and
one-bedroom, one-bath units, on-site vehicle ~arking spaces, laundry
and recreational rooms, appurtenant landscaping and other
impr0vements; and
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WriEREAS. pursuant ~c Resolution NQ, 85-291 of the Mayor and
Common Council adopted on August 5, 1985, said Mayor and Common
Council has previously declared i~s intent. to issue multifamily
mortgage, revenue bonds in an aggregate principal amount not to
exceed $9,300,000 for the purpose of financing the Project (the
"Inducement Resolution"); and
WHEREAS, Section 147(f) ,of the Internal Revenue Code of
1986 (the "Code") requires that a public hearing be held in
,
connection with the authorization and issuance of any industrial
development bonds including such bonds issued for the purpose of
enabling various developers to finance the cost of multifamily
rental housing; and
WHEREAS. the c'i ty has been requested by the Applicant to
hold a public hearing pursuant to the Code for the issuance and sale
of mult if ami ly mortgage revenue bonds by the City to provide funds
. .
,
for the financing of the Project of the Applicant to be located
wi thin the Ci ty . as permitted by the Act and the Ordinance and the
City Clerk has caused notice of such public hearing to be published;
and
WHEREAS, the Applicant has re,quested the City to approve
the Applicant's conveyance of its ownership interest in the Project
to JMJ Properties, a California corporation owned solely by Joe
Levesque, or its successors or assigns (the "Developer"); and
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,
WHEREAS, it is the inten~ of the City that the Developer be
substituted for the Applicant as the beneficiary of the Inducement
Resolution; and
WHEREAS, the City must now approve the findings and
determinations to be made in connection with said public hearing and
the request of the Applicant.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
Section 1. The recitals set forth hereinabove are true
and correct in all respects.
Section 2. The Mayor and Common Council hereby
acknowledge a~d consent to the development and financing of the
Project by the Developer as described in the recitals hereof, and
the Inducement Resolution of the City and the notice of public
hearing with respect to the financing of the Project are hereby
amended, to the extent necessary, to incorporate the Developer as
the beneficiary of said Inducement Resolution and said notice of
public hearing. The Mayor and Common Council hereby further approve
the substitution of the Developer as the borrower and recipient of
any tax-exempt f inanc ings of the City with respect to the proj ect ,
and all subsequent proceedings of the City in furtherance of the
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cax-exemp: financinq cf tne P~cJec: shall so state that the Project
shall be undertaken by the Developer.
Section 3,
Pursuant
to
the
requirements
of
Code
Section 147(f), the Mayor and Corrunon Council hereby ratifies and
approves the publication of notice of the public hearing by the City
Clerk in conneccion 10Iith the Project referred to in the recitals
hereof to be held in accordance 10Iith said Code Section 147(0 for
the purpose of considering the public benefits and public purposes
to be furthered by the financing or financings contemplated by the
action of the City pursuant to this Resolution for the issuance by
the City of multifamily mortgage revenue bonds by the City for the
Project pursuanc to Ordinance, as amended, and the Act.
A public
hearing shall be held at the hour and on the date herein provided
for the Project.
The Mayor and Corrunon Council hereby ratifies and
approves the action of the City Clerk, 10Ihich City Clerk caused to be
published by at least t1ol0 (2) insertions, one of 10Ihich 10Ias not less
\
than fourteen (14) days prior to said hearing, in The Sun, a notice
of public hearing.
Section 4.
The City, after having conducted a public
hearing, notice of 10Ihich 10Ias duly published in a ne10lspaper of
general circulation 10Iithin the City as said public hearing is
required pursuant to the requirements of Section 147(f) of the Code,
does hereby find and determine that the purposes and intent of the
Ordinance, as amended, and the Act 10Iill be furthered by the issuance
of multifamily mortgage revenue bonds for the express purpose of
providing financlng cO assist the Developer to develop the Project.
The total principal amount of the multifamily mortgage revenue bonds
which shall be issued to assist the Developer to develop the Project
shall be approximately $8,600,000. The multifamily mortgage revenue
bonds shall be issued upon such terms and conditions as shall be set
forth in one or more Project Agreemen<:s by and among the City and
the Developer or such other documents prepared in connection with
the issuance and delivery of the multifamily mortgage revenue bonds,
and shall be issued solely for the Project but in any event said
Agreements shall clearly state that the funds of the City are not
liable, nor shall be pledged, for repayment of the multifamily
mortgage revenue bonds.
Section 5.
The Mayor and Common Council hereby find and
determine that the public purposes and public benefits as set forth
in the Ordinance, as amended, and the Act wi 11 be furthered by the
issuance of t~e multi.family mortgage revenue bonds; specifically,
that the multifamily mortgage revenue bonds will provide for
financing to assist the Developer to develop an approximately two
hundred sixteen (216) unit apartment development on the property as
described in the recitals hereof, that such financing will thus make
the Project a financially viable and productive project and thereby
increase the availability of moderately priced rental units for
res idents of the City and provide employment opportunities wi thin
the City.
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,
Section 6,
Tne Mayor of the City is hereby appointed as
the elected official to approve the issuance of the multifamily
mortgage revenue bonds pursuan<:: to Section 147(f) of the Code at
such time as the Mayor and Common Council shall have approved the
other appropriate multifamily mortgage revenue bond financing
documents as referenced in Section 4 of this Resolution.
Section 7.
It is intended that this Resolution shall
constitute the making of certain "findings and determinations" in
connection with a public hearing held for the Project within the
meaning of Section 147(f) of the Code. The Project 'of the Developer
shall be the beneficiary of such "findings and determinations" for a
period up to and including the day six (6) months from the date of
adoption hereof.
If, wi thin such period, the City has not issued
any multifamily mortgage revenue bonds for the Project, the
"findings and determinations" for the Project of the Developer as
evidenced by ~his Resolution shall lapse apd the Developer shall be
,
required to apply to the City for a new Inducement Resolution.
Section 8.
The
bonds
sha 11
be
and
are
special
obligations of the City, and, subject to the right of the City to
apply moneys 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
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.
Californic. 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 propert ies 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.
Nei ther 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 whatsoever by reason of the issuance thereof.
Section 9.
The Developer
shall provide appropr iate
covenants in the tax-exempt financing documents as may hereinafter
be submitted to the City for consideration and approval in a forrr
acceptable to the City Attorney and Bond Counsel and to assure tha:
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 the individuals of low and moderate income as provided
in the Code.
Section 10.
Prior to issuance of any bonds pursuant to
this Resolution, the Developer shall provide to the City, for
recording, a covenant running with the land in form approved by the
City Attorney of the City whereunder the Developer (i) waives any
entitlement under State law to a density bonus for the property on
which the proposed Project is to be constructed and (ii) agrees not
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to seek or accep: 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.
Section 11. 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 prepared
or to be prepared pursuant to the provisions of the California
Environmental Quality Act of 1970, as amended, ....ith respect to any
and all environmental conditions ....ith regard to the operations of
the projec: coo proposed by the Developer in the Application. All
such assessments and documents needed to comply ....ith the provisions
of CEQ~ shall be the sole responsibility of the Developer. 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 their right to evaluate any future administrative procedures
and appeals based solely on the information available at the time of
consideration, including any actions or recommendations by or
appeals from the Development Revie.... Committee and the Planning
Commission. Nothing herein shall be construed as advance commitment
or approval as to any such matter, and the Developer is hereby
notified that normal planning processing shall be required. in
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accordance with the scandarc procedures of the CIty and tha~
Developer will be required to comply with all applicable laws and
ordinances of the City. State and federal government.
Section 12.
The issuance of bonds or other obligations
of the City for the Project as authorized and empowered by the
Ordinance and/or the Act shall be subject to any changes in
applicable laws, ordinances or requlations 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. The issuance of bonds or other obligations
of the City for the Project as authorized and empowered by the
Ordinance and/or the Act shall be subject to the obtaining, by the
Developer. of a calendar year 1986 private activity bond allocation
from a governmental entity ocher than the City only if any such
volume limitation is applicable to the Project.
Said allocation IS
presently required fo~ the Project by the appropriate provisions 0:
,
the Code.
The approval as herein granted and the final
Section 13.
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 Redevelopment
Agency of the City of San Bernardino" as said Policy Guidelines are
on file with the City Clerk.
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Sec:ior. H.
Thi s Resol ut ior. shall take effect upon
adoption.
I HEREBY CERTIFY that
adopted by the Mayor and
San Bernardino at a
held on the day 0:
the following vote, to wit:
the foregoing
Common Council
resolutior.
of the
meeting
AYES:
Council Members
NAYS:
ABSENT:
was duly
Ci ty of
thereof,
1986, by
City Clerk
day of
ThE foregoing resolution is hereby approved this
, 1986.
Approve~ as to'form:
City Attorney
Mayor of the City of
San Bernardino
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.
STATE OF CALIFORNIh )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, SHAUNA CLARK, City Clerk in and for
San Bernardino, DO HEREBY CERTIFY that the foregoing
copy of San Bernardino City Resolution No.
true and correct copy of that now on file in this office.
the
and
is
City of
attached
a full,
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official seal of the City of San Bernardino this day of
, 1986.
City Clerk
,
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SBE003-104/1414S/ak
01/06/86
APPLICATION OF JMJ PROPERTIES , FOR
MULTIFAMILY MORTGAGE REVENUE BOND FINfu~CING
CITY OF SAN BERNARDINO, CALIFORNIA
PART I GENERAL AND BUSINESS INFORMATION
1.1 The legal name of the Applicant is" JMJ PROPERTIES
C/O: Joe Levesque, President
1.2 The Applicant is a California corporation which shall be
engaged in the development, construe tion, leasing and ownership
of a two nundred si xteen (216 ) unit multifamily rental
housing development on real property located on the north side
of R;:l<:;pl inp Street between Sterling Avenue
and Vi ("t"or;,g Avp.:nue in the Ci ty of San Bernardino t
California (the "Project"). The Applicant (.....xwllR~X'l!15
~""'X\l!Jllowns said property) (the "Property") ,and
shall develop the Property and construct the Project thereon.
1.3 The mailing address and the address of the Applicant is as
follows:
JMJ PROPERTIES
? hOC) F l-H g'h 1 ;:mr-l Avf:--.....'i.t.e. A
Rig'hl;mrl r..qlif Q?16.1l
1.1, Employer Tax 1.0. No. of the Applicant is: 33-0169749
1 -
_.J
The principal contacts for the Applicant are: Joe
-.1':!vesoue, President
i.6 Telephone Number of the Applicant is ( 714) 862-0810
1.7
The Applicant is a corporation
existing under the laws of the State of
duly organized and
California
1.7.1 The Applicant
San Bernardino I
of California.
shall conduct business in the City of
California, County of San Bernardinq State
1.7.2 The Applicant was organized on January 31, 1986
l.B The p:.-incipal O"'11ers of the Applicant are: Joe Levesque. ~vner
(Articles of Incorcoration provided. See attached.)
Said O"T1ers may be contacted at the' above-listed addre,s and
telepnone number of the Applicant. Other legal entities ovned or
controlled by the Applicant are: N/~
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1.9 The principal off icers of the Applicant are Joe LevesQue"
'Prpc:;.ir1pnt" ;mn Tim T p"vpsnllP Sprrpt:lrylTreRsllrer Said
officers may be contacted at the above-listed address and
telephone number of the Applicant.
Attached hereto as Exhibit "A" are resumes of the Applicant and
the principal o>mers of the Applicant as identified in
Sec tions 1.8 and 1. 9 herein, which resumes include the real
estate development experience of the aforementioned parties in
Southern California. (SEE ATTACHED EXHIBIT "A")
1.10 The principal o>mers and officers of the Applicant are also the
principal owners and officers of:
Debkar Investment Company
Tnp T PVPc::.qllP "Prpc::.; npnt 100'% Owner
1.11 Employees
1.11.1
1.11.2
The Applicant currently has six-----
(6 ) permanent office employees. Although the
principal objective of the Project is to prov1oe
affordable rental housing to the t:itizens of the City.
the construction and operation of the Project will
create certain employment opportunities within the
Ci ty. The Appl it:an t is engaged in real es ta te
development and has projet:ts in the following counties
in Southern California: N/A
The sole business offit:e of the Applicant is lot:ated at
the above-listed address.
1.12
Professional services will be provided by the following:
1.1:?.1
A" l::'.::
, . 1 ~. 3
The accountant for the Applicant is:
George Rundel. Public At:t:ountant
13141 Algonquin Road
Apple Valley. CA 92307
E-:-incipal Cont.act: George Rundel
Th~ a:torney for the Applicant is:
Bret H. Reed. Jr., a Law Corporation
1300 Dove St., Suite 200
Newport Beach, CA 92660-2416
P~incipal Contat:t:
Bret H. Reed, Jr.
The la~ offices
Corporation, shall
with regard to the
of Sabo & Gonde., a
serve as !lond Couns e 1
tax-exempt financing for
Prcfessiona~
to the Cay
the Project.
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1.12.4
The principal archite=t and civil engineer for the
Project is:
Parkland EnQineerinQ
2286 Lerov Street
San Bernardino. CA 92405
Principal Contact: Mike Bailev
1.12.5
The financial consultant for the Applicant is:
Principal Contact:
1.13 The principal banking accounts of the Applicant shall be held by:
_Mercnrv Srlv;nRQ ~nn T f'l::ln Association
7Rl? F.din~p.r AvpnllP
H1Tntin~tnnRp~rh rA Q?~67
Principal Contact: Robert B. KreeQer. Vice President
1.14 The total development cost of the Project is presently estimated
to be $R.7RI.767 Of said amount, $8,500,000 is anticipated
to be derived from the sale of a tax-exempt bond or other
Obligation with a lender to be obtained hereafter. The source of
funding of the remainder of the Project, SlJl.L..j:.6.2 . "ill be
as follows:
Source
Amount
~p.t Rp.nr~l Tnrnmp
Dpvp10DPr 'Rqni tv
$',1, IF,7
~1.n non
PART II BOND ISSUE
2.1
Tne estimated total amount or the
proposed use of bond proceeds which
S R 7P.l 7(,7 have been identified
are as follows:
financing package and the
proceeds in the .amoun:' of
in Section 1.14 hereinabove
:,1.1
Proie:: cost - S ').,)6R.64,
, . '}
L~~a:, ~=i~:in; and related rees - $180.000
:. L. 3
F:nan::ng costs and fees - $ 69] .R60
2.1.4
Capitalized interest - :$ 521,,702
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2.1.5
Other miscellaneous costs - $
-0-
2..1.6
Land acquisition - $ 1,816,560
Total:
$8.781.767
2.2 The estimated target date for the bond financing pursuant to this
Applica tion is presently anticipated in December of
1986 The es tima ted targe t date for the other sources of
financing is Dprpmhpr ') 1 gRf1 The estimated target for the
obtaining of credi t enhancement, if any, for the bond issue ~s
December 5. 1986 Cons t.ruc tion is to commence as soon as
possible af ter the financing package is completed and is to be
completed by November of 1989
2.3 It is proposed that the financing be in the fom of a
construction loan during the construction period which would have
the traditional construction loan provisions in that drawdowns
would be permitted as construction proceeds upon submission of
requisition vouchers. Upon the completion of construction of the
Project and the certification that all improvements have been
completed, the lender will then permit an interest rate
a.djustment anc a principal amount increase, as warranted, and
convert the construction loan to a permanent financing.
2.4 The present proposal for the financing of the Project anticipates
that the tax-exempt bonds or other obligations will be sold to a
commercial bank or other such lender through a private placement
or that there be a public offering of such securities.
PA.1l.T III FINANCIAL INFOR!1ATION
3.1
The financial statements of
identif ied in Sec tions 1. 8 and
Exhibi t "Bt! hereto.
the
1.9
Applicant and
hereinabove are
all parties
included as
3.2 The Applicant is a small business doing business as a California
corporation pursuant to the laws of the State of California and
the Applicant ""ould be considered a small business with regard to
its relative size in comparison with other such businesses
undertaking projects of this type. Al though the Applicant is a
s~ll business, no federal small business loan guarantees are
proposed 1n connection with the proposed finan=ing as
contemolated by this Application.
PA...:Z: I\' ?ROJ:::~ I~;?ORY:....'..:IOS
4.1 Tne =rojec~ as proposed by th~ Applican: snail incluce tne
acquisition of an approximately ten and one-half
( ]0.49 ) acre parcel of land located on the ""ren side of
Baseline St. bet~een Sterling Ave. and Victoria Ave. in the
City, and the construction and operation there'on of a two
hundred sixteen (216 ) uni t mul tifamily rental hous ing
_development. Tee Project shall include an appropriate mix of
- 4 -
4.2
two, three and four bedroom units, on-site vehicle parking
spaces t laundry and recreation rooms, appurtenant landscaping and
other improvements. The preliminary Project pro forma is
attached hereto as Exhibit OIC" hereto. The Project shall be
located on land more particularly described and included in the
preliminary title report attached hereto as Exhibit "D" hereto.
4.1.1
216
shall
) unit multifamily
have the following
The two hundred sixteen
rental housing development
proposed rent schedule:
(SEE EXHIBIT "C")
Unit Descriotion No. of Units
1 bedroom. 28
2 bedroom 144
3 bedroom
4 bedroom
Proposed Rent/month
$410.00
$489.')0
:)
$
Lo..- and Moderate-
Income Unit Description No. of Units
1 bedroom 4
2 bedroom 18
3 bedroom
4 bedroom
(SEE EXHIBIT "e" - PAGE 2)
Very Lo.. Income
Unit Descriution No. of Units
I bedroom 4
2 bedroom 18
3 bedroom
4 bedroom
10..- and Moderate-
Income Uni t
Proposed Rent per Month
$410.00
$ 489. ')0
$
:)
Very Low Income
Unit Proposed Rent
Der Month
$268.00
$301.50
:)
$
The components and the estimated total cost
parts of the Project which costs are to be
60urces of financing id~ntified in Section
are a5 f 0110...5:
of the functional
financed by all
1.14 hereinabove
4.2.1
Land - $1.81f> Sf>O
4.2.2
Building construction - $4.f>49 f>f>9
4.2.3
Site prepara:ion, engineering and technical 5erv~ces
and City tees - $918.97f,
Io:.a.::
$7 18S 70S
4.2.k
~is=e~ianeOU5 items -
a. construction contingency - $270,090
b. Developer's overhead and profit - :) 195.000
c. Interest during construction - :) S24. 702
d. Real estate brokerage cO\flffii&sion - $ -0-
Total: S 989.792
- 5 -
4.3 Tne estimated construction period for the Project is as follows:
thirty-five (35) months
4.3.1 Construction of the Project would commence as soon as
possible at ter issuance of the taX-exempt obligations
and the estimated draw-dD\o'T1 schedule fDr the tax-exempt
or conventional construction loan, by calendar quarter,
is as f DllD"'s :
Calendar Year
Amount
1987
1988
19R9
40%
"OX
10%
4.3.2
The planned
November
construction
of 1989
shall
be
cDmp1eted
by
4.4 The supervising civil engineer respDnsible fDr the design Df the
PrDject on behalf of the Applicant shall be Mike Bailer
of P:=trkl ;Inn r.nrinppr;no
4.5' The PrDject shall be kno\o'T1 as the "SANDALWOOD PARK APARTMENTS".
4.6 The PrDjec,t is the development Df a ne... multifamily rental
hDusing develDpment and is nDt an expansion or an alteratiDn Df
an existing facility. The necessary infrastructure items and
Dther public imprDvements must be installed Dn the PrDject site
and the Applicant desires to obtain a belo... market rate
tax-exempt cDnstruction and perlIlanent financing of the
imprDvements tD be placed thereDn from a combinatiDn Df sources.
The PrDject shall utilize cDnventiDnal constructiDn methods and
fDr all purpDses Wlder the applicable federal tax laws and the
la...s Df the State Df CalifDrnia prDviding for or permitting the
lssuance Df mDrtgage revenue bDnds for the Project
4.7 The Applicant owns ~XQ.~GX\<IOO.q<lJ,:e~, the Property on which
the Project is proposed to be locatec.. (Any escrow to acquire
the Property shall not exceed $ n/" ).
4.8
The Project ...ill
units of rental
Bernardino.
provide two hundrp.n ~;x~ppn
housing to th~ citizens or
( ? 1 h ) to tal
the Ci ty Df San
i..8.1
Attac:ned hereto as ::'xhi';:jit "E" is an 8-1/2 x 11 inch
map showin~ the ~ite loca:io~ of the proposed P~oje::.
4.9
(SEE EXHIBIT "E")
A':tached hereto a6 Exhibit "F" are 8-1/2
drawings of the layout and rend~rings fDr the
( SEE EXHIBIT "F")
A negative declaratiDn pursuant tD the prDvisions of the
California EnvirDnmental Quality Act Df 1970, as' amended
("CEQ"'''), "'Duld in all prDbability be satisfactDry for the
PrDject as proposed by the Applicant. 'Bo...ever, the PrDject shall
comply ...ith all applicable prDvisiDns of said Act.
':'.5.2
x 11 inch
Project.
- 6 -
4.10
11.11
4.12
4.13
There are no permits. water quality enforcement order,_ air
pollution permits or variances or other evidence of actions
necessary in connection with this Project. A sewer peI1llit for
the service of the two hundred ~ixteen (216) apartments is
now available and will be obtained prior to construction.
There are no local, state or federal pollution control agencies
which impose regulations, standards 'or 'requirements with regard
to the operations of the proposed Project to be undertaken by the
Applicant.
The proposed Project shall comply with all applicable City.
County of San Bernardino, and other regional, county or basin
plans to which this Project shall conform and the appropriate
waste water and air quality requirements which shall be in
conformity with all of the above jurisdictions.
It is presently anticipated that the proposed Project will not
produce any by-products or residues which would involve the
ul tilllllte disposal or the need for a plan to accomplish same.
Recycling or salvage will not be a function of the proposed
Project nor will there be any llIllrket opportunities generated with
regard to same.
4.14 Current land use designation affecting the site of the Project
and status of preparation and review by City Staff of design and
improvement plans for the Project.
Land Use Designation Multifamily zoning
Development Review Commission April 11, 1985
Planning Department (Notice of Completeness Date) April 11. 1985
Planning Commission (Date. Actiorj. COll1l\ents) April 11 lQRS
PART V PUBLIC BE~~FITS
5.1 The City will receive significant benefits by the initiation of
this Project as proposed by the Applicant and particularly
through the utEiza:ion of the financing method as is available
under Ordinance No. 3815. as amended (the "Ordinance"), of the
City and lleal:~ and Safety Code Seccion 52000, ~ ill. (the
"Ac~"). Due tc th~ fa::: that conventional interest rates I 0':'
constru:tion anc. permanent financing fo:" the type of mul~ifamil:'
ren:al housing construction contemplated by the Applicant are at
such a high level on conventionally borrowed funds, if available
at all, 'lei thec the Applicant nor any other persons or legal
entities are able to provide the type of modern and attractive
affordable rental housing that is needed within the City.
- 7 -
5.1.1
The Project will provide
housing opportuni ties for
of San Bernardino.
long-term affordable rental
the inhabitants of the Ci ty
5.1.2
Construction
approximately
the tax rolls
of the Project
$ 8.000.000 of
of the City.
is anticipated to add
assessed valuation to
5.1.3
The useful method of financing provided for in
Ordinance No. 3815 of the City and the Act vis-a-vis
the use of the conventional method will permi t the
Applicant to complete the financing and construction of
the Project within an accelerated time frame. The
method of financing provided in Ordinance No. 3815 and
the Act will provide new sources of financing to the
Applicant and 'such financing will be made available at
lower tax-exempt interest rates.
5.2 The City will benefit, as can be demonstrated pursuant to
Section 1 of Ordinance No. 3815, as amended, of the City and the
Act, in that affordable rental housing opportunities will be
generated by the proposed Project. The Applicant is not
attempting to construct said proposed Project lQerely fcr the
financial inducement that is offered pursuant to the Ordinance.
but rather due to the long-term business reasons that are
significant due to the location of the proposed p'roject and the
real economic benefits available to the community.
There are no detriments that can
regard to this type of financing
will receive substantial benefits
valuation of property, plus the
housing opportunities that will
residents of the City.
be incurred by the Ci ty wi th
for this Project, and the City
through increases in assessed
increased long-term affordable
be available to the local
PAIn VI COMMITMENTS
6.1 The Applicant by the submission of this Application agrees to
comply and/or to assist the City in complying with all state and
federal laws in the issuance of the bonds or other such
t~x-exempt obligations to finance the Pr~jectt including, ~ithout
limitation, the making o.f any required application to a
governmental department for authori;:ation, qualifica:ion or
re;istration of the offer, issuance or sale of the bonds O~ othe~
ca."<:-exempt obli~ation.5, and any amendments thereto, anc any
gennit or othe: authorization 0: such governmental departrren:..
p=ior to the delivery by the City of such bends C": othe:
c~~-exempt obligations.
6.2 The Applicant further commits to cause and/or to assist the City
in causing to be printed any prospectus or other written or
printed communication proposed to be published in connection ",ith
the issuance, offer or sale of bonds or other tax-exempt
obligations, prior to the delivery by the City of such bonds or
- 8 -
other tax-exempt obligations. and. to the extent deemed necessary
by the City, follo"ing delivery of such bonds or other tax-exempt
obligations.
6.3 The Applicant also commits to pay all expenses in connection "ith
the issuance, of fer or sale of the bonds or other tax-exempt
obligations, whether or not such bonds or other tax-exempt
obligations are finally issued, and to hold the City harmless
from any and all expenses related thereto, to pay items on an
ongoing basis so that neither the City, nor its advisors,
attorneys. employees and the like "ill accumulate any claims
against the City.
6.4 The Applicant "ill supply any additional information, agreements
and undertakings as the City may require as a result of
conferences and negotiations "ill be reproduced and supplied to
the City and shall be deemed as supplements or amendments to this
Application.
6.5 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 acceptable to
the City Attorney and Bond Counsel and to assure that not less
than t"enty percent (20':.) of the multifamily rental housing units
included in the Project are to be occupied or reser'ed for
occupancy by the individuals of 10"- and moderate-income as
provided in the lnternal Revenue Code of 1954, as amenoed (the
"'Code") .
6.6 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 "ith the land in a form approved by the City
Attorney of the City "hereunder the Applicant "aives any claim
under state la" to a density bonus, as defined by Government Code
Sections 65915 and 65915.5, for the property on "hich the Project
is to be constructed and (ii) agrees not to seek or accept any
athe= forms of public assistance for the pu~pose of financing the
Project including, but not limi ted to, ta..~-increment financing
from the Redevelopment Agency of the City of San Bernardino (the
"Agency").
6.7 The Aoolicant hereby ackno..dedges and recognizes that acceptance
::If this Ap!Jlica:'ion is iipecifi::ally condi:.ioned upon the Mayor
and Common Coun:~l of the City of San Bernardino, Califoraia (the
"Mayo:- and Cor::=m:1 Counci 1") appr-ovlng the final envir.,onroental
assessments and other envir-onmenta: docwnents prepared or to b~
prepared pursuant to the provisions of CEQA "ith respect to any
and all environmental conditions "ith regard to the operations of
the Project as proposed by the Applicant in the Application. lhe
Applicant a'cknowledges and recognizes that acceptance of this
application 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 of th~ City of San Bernardino,
- 9 -
,
Cal if ornia (the "Mayor and Common Council"). will bereaf ter take
any particular action to....ard granting any planning, zoning, or
other approval relating to a plan of development. The Applicant
acknowledges and recognizes that the -Mayor and Common Council
reserves its right to evaluate any future administrative
procedures and appeals based solely on the information available
at the time of consideration, including any actions or
recommendations by or appeals from the Development Review
Cormni ctee and the Planning Cormnission. The Applicant
acknowledges and recognizes that nothing herein shall be
construed as advance commit.ment or approval as to any such
matter, and the Applicant hereby acknowledges and recognizes that
normal planning processing shall be required, in accordance with
the standard procedures of the City and that Applicant will be
required to comply with all applicable laws and ordinances of the
City, State and federal government.
6.B The Applicant hereby acknowledges ,and recognizes that this
application and the exhibits attached hereto shall be reviewed by
Agency Staff to determine whether or not a Resolution shall
constitute such "official action" toward the issuance of the
bonds within the meeting of the' United States Treasury
Regulations, tbe United States Tax Laws and any legislation now
or hereafter pending in the Congress of the United States whicb
may require official action in order for the bonds to be exempt
from federal income taxation (the "Inducement Resolution"). It
i5 hex'eby acknowledged and recognized that " minimum of forty-two
(42) days will be required by Agency Staff to review the
Application to set an anticipated date for the consideration of
the Inducement Resolution for the project by the Mayor and Common
Council.
6.9 The Applicant bereby acknowledges and recognizes that the Project
of the Applicant shall be the beneficiary of tbe Inducement
Resolution for a period up to and including the day six (6)
months from tbe date of adoption thereof. If, within sucb
period, the City has not issued any mul tifamily mortgage revenue
bonds for the Project or held a public hearing for the Project as
said public hearing is required to be held pursuant to those
certain amendrne~t5 to Section 103 of the Internal Revenue Code 0:
1954, as amended (the "Code"), as enacted by Congress ll."1de: the
Ta.x Equity Fiscal Responsibility Act of 1982 ("TEF1U,"), the
"official actior." fo: the Project of tbe Applic3nt as evidenced
by the Inducement Resolution shall lapse.
6.1C
The Applican~ furth~:- cOrr=lits to assist Agen~y
preparation of the comprehensive analysis or the
analysis shall include a comparison between
benefits of conventional and tax-exempt financing.
Sta:f In the
Proje:-:, wbich
the costs and
6.11 The Applicant hereby represents and wa,rrants tbat tbe undersigned
is familiar witb the "Policy Guidelines on Public and Negotiated
.liond Sale Procedures for the City' of San Bernardino and the
Redevelopment Agency of the Ci ty of San Bernardino" as said
- 10 -
6.12
6.13
~
Policy Guicielines are on t~le ""1.tn tne t.:~ty l.J.erx: aua tonat. a.1.l.
documents required to be executed and delivered by the City shall
conform to said Policy Guidelines.
The Applicant hereby acknowledges and recognizes that the
issuance of bonds or other obligations of the City far the
Project as 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 an the issuance of such multifamily
mortgage revenue bands.
At least twenty-one (21) days prior to the anticipated date far
the public hearing as required by TEFRA. each of the fallowing
items shall be submitted by the Applicant to the Staff of the
Agency. After review of the items by the Staff of the Agency,
the date of the TEFRA hearing will be designated and a notice
thereof shall be published. Said 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 approved by the
City or the Agency, which study shall have been paid far and
submitted by the Applicant at least twenty-eight (28) days prior
to the anticipated date for the public hearing as required by
TEFRA. *See Attachment 6.13(b)
(c), Payment of the TEFRA hearing fee of $10,000.
(d) A tentative tract map or the approval by the Development
Review Committee.
(e) Environmental clearance.
(f) Compliance with all zoning requirements (i.e., obtaining of
required conditional use pe~its).
(g) Proof of land ownership or an es:rowreport including the
full legal descrlption of the property an w~ich the Project is to
be located.
(h)
TITLE POLICY ENCLOSED. SEE EXHIBIT "D".
:inal ?roJoe:r. 0, ro forma. II "
SEE EXHIBIT C . PAGE TWO.
(i) ::'vioence tnat adequate se....e:.- t water t gas and ~lectric
facilities will be fully installed prior to completion of tne
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. BUILDING PERMITS ENCLOSED. SEE ATTACfu~ENT 6.l3(i).
- 11 -
.
(j.) Re"sumes of the firms providing expert services.
(SEE EXHIBIT "A")
(k) Final renderings, floor layouts, site plan and elevations.
(SEE EXHIBITS "E" AND "F")
6 .14 The Appl icant hereby acknowledges and recognizes that the Mayor
and Common Council may, upon the conclusion of the TEFRA hearing,
adopt a Resolution D),aking cert.ain findings and df!tenninations in
connection with the Project as required by Section 103(k) of the
Code (the "TEFRA Resolution"). The Project of the Applicant
shall be the beneficiary of the TEFRA Resolution for a period up
to and including the day six (6) months from the date of adoption
thereof. If, within such period, the City has not issued any
mul tifami1y mortgage revenue bonds for the Project the "findings
and determinations" for the Project of the Applicant as evidenced
by the TEFRA Resolution shall lapse and the Applicant shall be
required to apply to the City for a new .Inducement Resolution.
PART VII FEE SCHEDULE
7.1 The Applicant acknowledges that the City requires a
non-refundable application fee of 550 for each Project to be
considered for eligibility, to be paid when the basic documents
are requested. With the submittal of this Application, 5500 is
payable to the City. If this Application is accepted, an
addi tional fee of $10.000 is payable for administrative costs.
The Applicant acknowledges that the cOIlllll:j.tments in Part VI above
are in addition to these fixed amounts. Thus, in the event that
:::0 clos;.n;; occurs, the City shall be r.eimbursed for its
processing costs.
7.2 The Applicant shall provide for the payment to the City, of the
expense of monitoring compliance with federal and State
requirements for low- and moderate-income utilization as required
by State and federal law. Such payment shall be at the rate of
one-eighth of one percent (1/8%) of the total principal amount of
the bonds issued, shall cOIlllllence after Project construction has
been completed and shall be payable continuing throughout until
all of the bonds have been redeemed or have matured. Such
monitoring expenses shall be on ongoing obligation of the
Applican t.
7.3 The Applicant shall provide for the payment of all expenses in
connection with the market feasibility study of the Project to be
conducted by a City or Agency-approved expert. Such paymen:must
be made by the Applicant at leas t twenty-eigh t (28) days' prior to
the anticipated date for the TEFRA hea~ing.
7.4 All fees 0: the City may be capitalized and included in "the bond
issue as acceptable to the bond purchaser.
7.5 The Applicant acknowledges that the City derives its entire
support from the fees for its services. The total function of
the City is conducted on a self-supporting basis, and involves no
state general reve~ues or expenditures from taxes from the 'state
- 11 -
or any of its political subdivisiont. No indebtedness or taxing
power of the City is involved. Project revenues are the sole
secutity for honds of the City. The federal guarantees, if any,
enhance these revenues and income and the security of the bonds.
7.6 Pursuan t to Resolution No. 81-108 of the City, as amended by
Resolution No. 81-410 of the City, one percent (11.) of the
principal amount of the bond issue shall be deposited in the City
Treasury in the Industrial Revenue Bond Reserve and Development
Fund, which shall be used in such manner as the Mayor and Common
Council may direct from time to time.
,
- 13 -
PART VIII SIGNATURE
8.1 The undersigned, as the authoriz:ed principal of the Applicant as
noted ,belo.., holds the prime responsibility for the financing to
be taken for the proposed Project, and certifies that the
Wldersigned has the authority to bind the Applicant to contract
terms; that this Application to the best kno..ledge or belief of
the Wldersigned, contains no false or incorrect information or
data, and this Application, including exhibits and attachments
hereto, is truly descriptive of the proposed projecs. The
Wldersigned also represents by the execution of this Application
familiarity ..ith Ordinance No. 3815, as amended, of the City of
San Bernardino.
"APPLICANT"
JMJ PROPERTIES
a California Corporation
v--t--
JOE LEVESQUE
President
- 14 -
KARXET STUDY PAID / /
TEFRA Hl'....llH1G FEE PD. -r-/
AMOUNT S - - -
CHECK #
CITY OF SAN BERNARDINO
HIlLTIFAHILY MORTGAGE REVDllJE BOND
PROJECT PROFORMA
PARI A: DEVELOPER INl'ORKATION
1.
Name of Developer:
JMJ PROPERTIES
2. Address of Developer: 2600 E. Highland Ave., Ste~ A, Highland, CA 92346
),
Legal Status of Developer:
Individual
Partnerehip
Corporation X
Other
4,
Contact Person:
Joe Levesque
Phone:
714/862-0810
PAl'.! E; l'RC.TZCT ::N'FO:?~"lATION ( USI! separate torm for each project)
1. Project Name: SANDALWOOD PARK APARTMENTS
2. Project Ad,lress: 2568 E. Baseline St., San Bernardino
286-151-13
286-163-47
3.
Parcel Nunber:
CellBUS Tract:
4.
No. Acres
10.49
Sq. Ft.
456,944
5.
Status of Land: .....lL-
Owned
Optioned (Expiration Date _)
6. Value of J.and S 1,816,560.
7.
Number of Total Units:
216
NUJ:lber of Affordable Units 45+
B. Type of construction: Hood Frame/Stucco
NUJ:lber of Stories: 2
Density 20.5 dulac.
".-......
9. T'ming: Anticipated Construction Surt August
1S~
Anticipated Completion
March
19 -1L7
10. Estimated loan Amount: $8,600,000
Per Unit: S
19.814
11. Es t ima ted Cash FlO\< (est II 5 yr.)
Year 1 Year 2 Year 3 Year 4 Year 5
A. Gross Income Sl, 234,320 1. 296.080 1 . 160 RR4 1,4?R 9?8 1.S00.374
B. Less: Vacancy II 5 ,; S 61. 760 64.804 68.044 71. 446 75,018
C. Other Income $ 25,920 27,216 28,576 30,004 31,504
D. Less: Opera t ing Expenses $ 359,172 359,172 359,172 359,172 359, 172
N~t Operating Income
(Lines A-B~C-D)
S 839,308 899,320 960,244 1,028.314 1,097,~.8
Debt Service
S 494,500 494,500 494,500 494,500 494.5QO
(Loan Amt. S8,600,OOO )
(Rate
5.75%)
(ienn 30 yrs. )
II