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HomeMy WebLinkAbout24-Community Development C1\ ~. OF SAN ..RNARDl .0 - RI!QUE r FOR COUNCIL ACt )N From: Kenneth J. Henderson, Director Dept: Communi ty Development Date: September 28, 1988 Subject: RESOLUTION APPROVING CERTAIN CONSENT AND AGREEMENT AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH PUMALO PALMS APARTMENT PROJECT Sy"~psis of Previous Council action: ..:.1 .! , , , In June, 1985, the Mayor and Common Council issued multifamily mortgage 'i revenue bonds in the amount of $9,350,000 (Series 1985) for Fredericks <i Development (Pumalo Palms). On July 21, 1986, the Mayor and Common Council heard the first reading of the amendment to Ordinance Number 3815 and requested an analysis of the advantages and disadvantages of out-of-state trustees for municipal financings. .. On August 4, 1986, the Mayor and Common Council continued this matter to. August 18, 1986. . \ (SYNOPSIS CONTINUED TO NEXT PAGE) $ Recommended motion: Adopt Resolution .. ~ ... Cantlet .......= Support.... ... Itt""": Ken Henderson/Maurice Oliva Iaun:e: (ACCT. NO.) _ (ACCT. DESCRIPTION) Phone: 5065 W.d: 1-7 ,/0 N/A FlnlM8: - Staff Report FUNDING REQUIREMENTS: Amount: __ . .1' , 0 Of ftl Z I J)O 9Bfl .4jO .IUfa'..O.~ill Council No...: ;.jJ ~." 1I..'U Agende Item No. ~ /I SYNOPSIS OF PREVIOUS COUNCIL ACTION CONTINUED. On August 18, 1986, the Mayor and Common. Council adopted Ordinance Number MC-536 amending Ordinance Number 3815 and directed the preparation of an amendment to the Bond Policy Guidelines to specify the teras underwhich an out-of-state trustee would be peraitted. On Sept8Jlber 8, 1986, the Mayor and Common Council and the Community Development Commission adopted Resolution Number 86- 351 and Resolution Number 4924,/l"espectively, amending policy quidelines on Bond sale procedures. On October 20, 1986, the Mayor and Common Council adopted Resolution Number 86-419 approving substitution of out-of-state trustee and authorizing certain documents in connection with Pumalo Palms Project, Fannie Mae Program Bond Issue. On April 20, 1987, the Mayor and Common Council adopted Resolu- tion Number 87-125 approving documents and authorizing certain actions in connection with the sale and issuance of approxi- mately $9,350,000 of multifamily mortgage revenue refunding bonds (Pumalo Palms Project). On October 19, 1987, the Mayor and Common Council adopted Resolution Number 87-832 approving documents and authorizing actions in connection with the remarketing of approximately $9,350,000 of multifamily mortgage revenue refunding bonds (Pumalo Palms Project). = '~'~ CI.., , OF SAN _NARDI.~O - R.QU.,- r FOR COUNCIL AC\.4N STAFF REPORT On June 4, 1985, the City issued its $9,350,000 City of San Bernardino, California, Multifamily Housing Revenue Bonds (Pumalo Palms Project - Fannie Mae Program) series 1985 (the "1985 Bonds"), and on April 29, 1987, the City refunded the 1985 Bonds by the issuance of its $9,350,000 City of San Bernardino, California, Multifamily Housing Revenue Refunding Bonds (Pumalo Palms Project), 1988 Series A (the "Bonds"). On October 19, 1987, the Mayor and Common Council approved its Resolution Number 87-382, which Resolution approved the remarketing of the Bonds. The Bonds were secured by Letters of Credit issued by The Dai-Ichi Kangyo Bank, Limited, Los Angeles Ageney ("Dai-Ichi Kangyo") and California Federal Savings and Loan Association ("California Federal"), respectively. The original developer of the project, Pumalo Palms Investors I, a California limited partnership, and Pumalo Palms Investors II, a California limited partnership (collectively herein the "Developer"), has requested that the parties to the transaction consent to the sale of the Project to Winston and Dorothy Ko, as husba~d and wife (the "Kos"), in accordance with the provisions of the loan agreements, the regulatory agreements and the reimbursement agreements in connection with the Bonds. The Developer has previously provided appropriate convenants in the tax-exempt financing documents 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 Internal Revenue Code of 1986, as amended, (the "Code"). In addition, the documents necessary for the Bonds contain language especially intended for the full and complete protec- tion of th City against liability fro. any covenants or agree- ments within the said Bond documents to assure that, in any event, the bondholders shall look only to the revenues pledged for the Bonds (specifically, the Letters of Cr,edit) and not to the revenues or general funds of the City. TheKos have applied to Dai-Ichi Kangyo and California Federal for necessary credit approval. In addition, the Kosand the Developer have represented to staff of the City that the . current management company for the Project will be retained. Staff recommends that the Mayor and Common Council approve the Consent and Agreement as to form and authorize the Director of Community Development to execute the Consent and Agreement only after the other parties thereto have executed said documents. If this recommendation is approved by the Mayor and C01ll1llon Cou cil, adoption of the attached resolution is in order. Kenneth Director of Community Development JCJH/lab/1154 9129/88 75-0264 SBE00090-87/3024S/es 09/27/88 2:20 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A CERTAIN CONSENT AND A~REEMENT AND AUTHORIZING CERTAIN ACTIORS IN CORRECT lOR WITH THE PUMALO PALMS 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 regularly 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 Ro. 3815, as amended, is intended to finance the development of industry and commerce and to thereby broaden the employment opportunities and to increase the availability 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 - 1 - WHEREAS, the City is authorized and empowered by Health and Safety Code Section 52075, At IaQ. (the -Act-), to finance various types of projects, as defined in the Act, and to issue its special revenue bonds for the purpose of enabling various developers to finance the cost of such projects; and WHEREAS, Pumalo Palms Investors I, a California limited partnership, and Pumalo Palms Investors II, a California limited partnership, or its predecessors, successors or assigns (collectively herein, the -Developer-), has previously submitted a certain application (the -Application-), to the Mayor and Conunon 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 No. 3815, as amended, and the Act, as more fully described in said Application (the -Project-); and WHEREAS, the Project consists of the construction and permanent financing of two multifamily rental housing developments in the City as more fully described in the Application; and WHEREAS, pursuant to Resolution Ro. 85-194 of the Mayor and Common Council, said Mayor and Common Council have on May 23, 1985, previously authorized the execution and delivery of the '9,350,000 City of San Bernardino, California Multifamily Mortgage Revenue Bonds (Pumalo Palms Project - pannie Mae Program) Series 1985 (the - 2 - M1985 BondsM), for the purpose of acquiring, constructing and installing the Project; and WHEREAS, in order to reduce the costs of the financing of the Project, the Cit.y has provided" for the refunding of the 1985 Bonds; and WHEREAS, pursuant to Resolution Ro. 87-382, the Mayor and Common Council have, on October 19, 1987, previously authorized the remarketing of the Bonds; and WHEREAS, in connection wit~ the remarketing of the Bonds, the City approved an Amended and Restated Indenture of Trust, dated as of December 1, 1987 by and between the City and Seattle-First Ifational Bank (the -Trustee-) (the -Indenture-), Loan Origination and Servicing Agreements dated as of December 1, 1987 by and among the City, the Trustee and each of the Developers (the -Loan Agreements-) and First Amended and Restated RegUlatory Agreements and Declaration of Restrictive Covenants dated as of December 1, 1987 by and among the City, the Trustee and each of the Developers (the -Regulatory Agreements-); and - 3 - WHEREAS, the obligation to repay the Bonds has been secured by Letters of Credit (the -Letters of Credit-) issued by The Kai-Ichi Kangyo Bank, Limited, Los Angeles Agency (-Dai-Ichi Kangyo-) and California Federal Savings and Loan Association (-California Federal-), respectively; and WHEREAS, pursuant to Letter of Credit Reimbursement Agreements (the -Reimbursement Agreements.) dated as of December 1, 1987 by and between each of Dai-Ichi Kangyo and California Federal and each of the Developers, the Developers have agreed to reimburse each of Dai-Ichi Kangyo and California Federal for any and all draws made under the respective Letters of Credit; and WHEREAS, the Developers desire to sell the Project (the .Sale.) to Winston and Dorothy Ko, as husband and wife (the .Kos.); and WHEREAS, in order to effect the Sale, the Developers and the Kos have requested that the City and the Trustee enter into a Consent and Agreement as presented to the City at this meeting and on file with the City Clerk (the -Consent and Agreement-); and WHEREAS, the City must also authorize the execution and delivery of certain related legal documents in connection with the Saleand approve same as to fo~ as hereinafter set forth. - .. - NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAR BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. true and correct. The above recitals, and each of them, are Section 2. The form of the Consent and Agreement is hereby approved; and the Director of Community Development of the City, or any other duly authorized officials, is hereby authorized and di rected, for and in the name of the Ci ty, to execute such Consent and Agreement. Said Consent and Agreement shall be executed in substantially the form hereby approved, only upon the execution thereof by the other parties to the Consent and Agreement and with any such changes therein as the officers executing the same may approve prior to the Sale with the approval by the City Attorney of any changes, amendments or modifications, and such approval to be conclusively evidenced by the execution and delivery thereof. Section 3. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the Sale and otherwise to effectuate the purposes of this Resolution. - 5 - Sectio~ 4. The Developer has previously provided appropriate covenants in the tax-exempt financing documents to assure that not le.s 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 Internal aevenue Code of 1986, as amended (the .Code.). Section S. The Developer has previously provided to the City, for recording, a covenant running with the land in form approved by the City Attorney or the City whereunder the Developer waives any entitlement under State law to a density bonus for the property on which the proposed Project is to be constructed. Section 6. The documents necessary for the Bonds contain language especially intended for the full and complete protection of the City against liability from any covenants or agreements wi thin the said BOnd documents to assure that, in any event, the bondholders shall look only to the revenues pledged for the Bonds, and not to the revenues or general funds of the City. - 6 - For this purpose, Bond Counsel has included in all appropriate documents for the type of bond issue being considered, language substantially .s follows: -Non-recourse paragraph: The Issuer's Obligations hereunder and under the Loan Agreement and the Regulatory Agreement are on a 'non-recourse' basis, and paYment of any amounts which . are owed or may become due hereunder or under the Loan Agreement or Regulatory Agreement shall not be enforced against the Issuer or any of its public officials, officers, employees, agents, or other personnel, but only against the property which is sUbject to the Deed of Trust, and any further security which may, from time to time, be hypothecated for this Indenture, the Regulatory Agreement or the Loan Agreement.- -Ezculpation of Issuer: The Issuer will not be liable to the company, to any bondholder, or to any other person for, and the company and the trustee, on behalf of the bondholders, hereby release the Issuer from all liability to the company, any bondholder, or any other person, for losses, costs, damages, ezpenses and liabilities even if such losses, costl, damages, ezpenses and liabilities directly or indirectly result from, arise out of or relate to, in whole or in part, one or more negligent acts or omissions of the Issuer or any of the officer., directors, employees, agents, servants or any other party acting for or on behalf of the Issuer in connection with the issuance of the bonds or performance by the Issuer of its Obligations under the indenture, the loan agreement, the regulatory agreement, or any other agreement related to the indenture. The Issuer's Obligations hereunder are on a 'non-recourse' basis, and paYment of any amounts which are owed or may become due hereunder shall not be enforced against the Issuer or any of its public officials, officers, employees, agents, and other personnel, but only again.t the property which is subject to the Deed of Trust and any other further security which may, from time to time, be hypothecated hereunder.- . - 7 - Section 7. This Resolution shall take effect upon adoption. I HEREBY CERTIFY that the foregoing resolution adopted by the Mayor and COlllllOn Counci I of the San Bernardino at a meeting held on the day of , the following vote, to wit: was duly Ci ty of thereof, 1988, by AYES: Counci I Members RAYS: ABSERT: City Clerk day of The foregoing resolution is hereby approved this , 1988. Mayor of the City of San Bernardino Approyed aa to fo~ and legal content: . - . - STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SU BERNARDIRO ) I, SHAURA CLARK, City Clerk in and for the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of San Bernardino City Resolution No. is a full, true and correct copy of that now on file in this office. I. WITHESS NHEREOF, I have hereunto set my hand and affixed the official .ea1 of the City of San Bernardino this day of , 1988. City Clerk - 9 - SBE00090-86/3023S/es 09/28/88 11:35 CORIEft AND AGREEMEft THIS CORSEft AltO AGREEMERT (the into as of this __th day of October, undersigned parties h.reto and is made following facts: WHEREAS, pursuant to an Amended and Restated Indenture of Trust (the -Indenture-) by and between the City of San Bernardino, Ca1fornia (the .Issuer.) and Seattle-First Rational Bank as trustee (.Trustee-), dated as of Dec8llber 1, 1987,. the Issuer ha. r...rketed '9,350,000 City of San Bernardino, California, Multifamily Housing Revenue Refunding Bonds (Pualo Palma Project) 1988 Series A (the .Bonds.); .Agreement.) is entered 1988 by and among the with reference to the WHEREAS, pursuant to Loan Agreements (the -Loan Agreements.) by and among the Issuer and each of Pumalo Palms Investors I, a California limited partnership, and Pumalo Palms Investors II, a California limited partnership (COllectively herein, the .Developer.), dated as of December I, 1987, Developer has, among other things, agreed to construct two multifamily rental housing developments (the .Project-)in the City; WHEREAS, pursuant to the Loan Agreements, Developer has agreed to repay to the Issuer the amount of such loan to Developer in accordance with the terms and conditions set forth in the Loan Agreements; . WHEREAS, pursuant to Section 4.5 of the Loan Agreements, as security for the payment of the Bonds the Issuer has as.igned to the Trustee the Issuer's rights under the Loan Agreement, inCluding its right to receive payments from Developer thereunder; WHEREAS, the obligation to repay the Bonds has been secured by letters of credit (the .Letters of Credit.) issued by The Oai-Ichi Kangyo Bank, Limited, Los Angeles Agency (.Oai-Ichi Kangyo.) and California Federal Savings and Loan Association (.California Federal.) respectiv.ly; WHEREAS, pursuant to Letter of Credit Reimbursement Agr.ements (th. .Reimbursement Agr....nt..) dated as of December 1, 1987 by and between .ach of Oai-Ichi Kangyo and California Federal and each of the Developers, Developer has agreed to reimburse each of Oai-Ichi Kangyo and California Federal for any and all draws made under the' respective Letter. of ere4it; . - I - WHEREAS, pursuant to First Amended and Restated Jtegulatory Agreements (the .Regulatory Agreements.) dated as of April 1, 1987, the Developer has previously provided appropriate covenants in the taz-ezempt financing documents 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 the individual. of low and moderate income as provided in the Internal Revenue Code of 1986, a. amended (the .Code.). WHEREAS, Developer de.ire. to .ell the Project (the .Sale.)to Win.ton and Dorothy Ko, a. husband and wife (the .Kos.); WHEREAS, pursuant to Section 5.2(b) (4) of the Loan Agreements, the Loan Agreements and the obligations thereunder may not be assiCJned withoutth~ consent of the Issuer, Dai-Ichi KanCJYo and California Federal; WHEREAS, pur.uant to Section 6.02(c) of the Reimbursement ACJreements, the Project may not be tran.ferred without the consent of the I.suer, Dai-Ichi Kangyo and California Federal; WHEREAS, pursuant to Section 10 of the Regulatory Agreement, the Project may be sold only if permitted by the Reimbursement Agreement.. ROW, THEREFORE, in con.ideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledCJed, the partie. hereto aCJree as follows: 1. Consent To Sale Under Loan Agreement. and Reaulatory . Aareements. Upon payment by the Developer of all amounts owing to the Issuer pur.uant to Section 4.3(e) of the Loan Agre_nts, the I..uer hereby consents to the Sale in accordance with Section 5.2(b) of the Loan ACJreements and Section 10 of the ReCJulatory Agre....nts. Each of the Is.uer, the Ko. and the Developer hereby aCJrees to be bound by the applicable provision. of the Loan Agreement. and the Regulatory Agre....nt.. In all other respect., the terms and conditions of the Loan Agreement. and the RegUlatory Agreements shall not be affected, nor the rights and obligations of the parties thereto. 2. Consent to Sale Under Reimbursement Aqreements. Each of Dai-Ichi Kangyo and California Federal hereby con.ents to the Sale by Developez as described in the Recitals hereof. In all other respects, the terlDS and conditions of the Reimbursement Agreements shall not be affected, nor the rights and obligations of the parties thereto. 3. Payment of Other Amounts. The Developer aCJrees: (a) to reimburse the Issuer upon its request for all reasonable espenses, disbursement. and advances incurred' or made by the Is.uer in cQnnection herewith (inClUding, without limitation, the reasonable compensation and the espenses and disbursements of its - 2 - agents and counsel); and (b) to indemnify the Issuer for, and hold it harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with this Agreement, including' the costs and expenses (including reasonable attorneys' fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 4. Evidence of Assianment Under Loan Aareements. By execution of this Consent and Agreement by the parties hereto, the Trustee and the Issuer hereby acknowledge receipt of the evidence of the assignment by the Sale in accordance with Section 5.2(b) (3) o'f the Loan Agreements. 5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute but one and the same instrument. - 3 - IN WITNESS WHEREOF, this Consent and Agreement has been executed as of the date first above written. CITY OF SAN BERNARDINO, CALIFORNIA By Name: Kenneth J. Henderson Title: Director of Community Development THE DAI-ICHI KARGYO BARK, LIMITED, LOS AIIGELZS AGDCY By Name: Title: CALIFORNIA FEDERAL SAVINGS AIID LOAN ASSOCIATION Name: Title: SEATTLE-FIRST IlATIORAL BARK, as Tr\Jstee Bame: Title: DOROTHY KO By Dorothy Ko WIBsmB KO By Wins tOil Ko - 4 - PUMALO PALMS INVESTORS I, a California limited partnership By: FREDRICKS DEVELOPMERT CORPORATION, as general partner By: Title: By: Title: PUMALO PALMS II1VESTORS I I, a California limited partnership By: FREDRICKS DBVELOPMDT CORPORATION, as general partner By: Title: By: Title: /3023S - 5 ~ . (~ ..~ '....... to ",.; .( /1 Utili ilH ~ . , ,.,i~.':- i - , + ,- rll :i iii elll .~ I '" I , I · ~III ~.. iHI I ~ t= u:ril . II . =11 I" I. III Ii. I L.!.. . mr .... ..... .. = .. :~ \ lJ!1 , ; ia r I u': I . ri I: . 1 : .. r I .. rl. d I ~ It ; I 1 . I ! ;- ! ~ . ~I ! I r I! I I l' I' 4 II I ! ~ . Ii I . J 1- 0, I I . ! . N ,Ir. ~ !J .1 ' ,.f i ;.. ! ;! ~ .... .... I . I '+ . . '" I. ' ". ..: . 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