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HomeMy WebLinkAbout5.7 Approval of a Plan of Finance Including the Issuance of Revenue Bonds by the California Municipal Finance Authority for the Regional Street Senior Affordable Housing Projectr DUBLIN CALIFORNIA STAFF REPORT CITY COUNCIL Agenda Item 5.7 DATE: October 15, 2024 TO: Honorable Mayor and City Councilmembers FROM: Colleen Tribby, City Manager SU B.ECT- Approval of a Plan of Finance Including the Issuance of Revenue Bonds by the California Municipal Finance Authority for the Regional Street Senior Affordable Housing project Prepared by: Jason Earl, Senior Management Analyst EXECUTIVE SUMMARY: Eden Housing, Inc. requested that the California Municipal Finance Authority (CMFA) serve as the municipal issuer of bonds in an amount not to exceed $50,000,000 of tax-exempt revenue bonds. The bond proceeds will be used to finance the acquisition, construction, development, and equipping of a 113-unit multifamily rental housing facility known as the Regional Street Senior Affordable Housing Project. The project will be owned and operated by Eden Housing or their controlled affiliate and located at 6541-6543 Regional Street. The City Council is being asked to adopt a resolution to approve the financing of the Project by the CMFA. STAFF RECOMMENDATION: Adopt the Resolution Approving a Plan of Finance Including the Issuance of Revenue Bonds by the California Municipal Finance Authority for the Purpose of Financing and Refinancing the Acquisition and Construction of a Multifamily Rental Housing Development Known as Regional Street Senior Affordable Housing Project at 6541-6543 Regional Street. FINANCIAL IMPACT: The bonds to be issued by the California Municipal Finance Authority (CMFA) for the Project will be the sole responsibility of the Eden Housing, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the bonds. All financing documents with respect to the issuance of the bonds will contain clear disclaimers that the bonds are not obligations of the City or the State of California but are to be paid for solely from funds provided by the borrower. The Board of Directors of the California Foundation for Stronger Communities, a California non- profit public benefit corporation (the "Foundation"), acts as the Board of Directors for the CMFA. Page 1 of 4 1 Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Dublin, it is expected that a portion of the issuance fee attributable to the City will be granted by the CMFA to the City's General Fund. Such grant may be used for any lawful purpose of the City. Eden Housing will be the beneficiary of the CMFA's charitable donation through a 25% reduction in issuance fees. DESCRIPTION: Background The Regional Street Senior Affordable Housing Project will provide 113 units on a 1.3-acre site located at 6541-6543 Regional Street within the Transit Oriented District of the Downtown Dublin Specific Plan (DDSP) (Figure 1). The City facilitated the donation of the site to Eden Housing as part of the Community Benefit Program Agreement for the Avalon West Project on St Patrick Way. Figure 1. Location Map West Dublin BART Additionally, the City Council reserved units from the DDSP Development Pool and authorized the commitment of $5 million in Alameda County Measure A-1 Bond funds to the Project. The City was also awarded a $3.3 million Local Housing Trust Fund grant from the California Department of Housing and Community Development for the Project, and on November 23, 2021, the Planning Commission approved a Site Development Review Permit for the Project. Since that time, Eden Housing has been pursuing their building permits and has assembled all the financing necessary to move forward with construction, as well as bond financing. Bond Financing The California Municipal Finance Authority (CMFA) was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. Such financing consists of both taxable and tax-exempt bond issuances for local governments, non- profit organizations, and businesses, to fund projects that improve the standard of living in communities. The CMFA's representatives and its Board of Directors have considerable Page 2 of 4 2 experience in bond financing, and to date, over 200 municipalities, including the City of Dublin, have become members of the CMFA. For the Regional Street Project, the CMFA will serve as the municipal issuer of tax-exempt revenue bonds in an aggregate principal amount not to exceed $50,000,000. The bond proceeds will be used to finance the acquisition and construction of the Project. In accordance with the Tax and Equity Fiscal Responsibility Act, the CMFA is scheduled to conduct its own public hearing on the Project on October 14, 2024. That hearing provides members of the community an opportunity to speak on the use of tax-exempt bonds to finance the Project. In accordance with Section 147(f) of the Internal Revenue Code and Section 4 of the CMFA Joint Exercise of Powers Agreement, the City Council must provide its own approval of the issuance of the bonds for the financing of the Project. Analysis There are no costs or any financial liability associated with membership in the CMFA and the City will in no way become exposed to any financial liability by reason of its recommendation and approval of up to $50,000,000 of tax-exempt revenue bonds. The bond proceeds will be used to finance the acquisition, construction, development, and equipping of the 113-unit multifamily rental 100% affordable housing development known as the Regional Street Senior Affordable Housing project to be owned and operated by Eden Housing, Inc. Participation by the City in the CMFA will not impact the City's appropriations limits and will not constitute any type of indebtedness of the City. Outside of adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the bonds will be required. The resolution approving the issuance of the bonds by the CMFA for the benefit of Regional Street Investors, LP., to finance the Regional Street Senior Affordable Housing project is included as Attachment 1. STRATEGIC PLAN INITIATIVE: Strategy 3: Housing Inclusivity and Affordability Objective a: Implement the goals, policies, and programs in the 2023-2031 Housing Element. Objective b: Support efforts to produce housing affordable at all levels of income. Objective d: Support development of housing types to support essential workers, younger buyers, and seniors. ENVIRONMENTAL DETERMINATION: The California Environmental Quality Act (CEQA), together with State Guidelines and City of Dublin CEQA Guidelines and Procedures require that certain projects be reviewed for environmental impacts and that environmental documents be prepared. The proposed tax exempt revenue bond is exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15061(b)(3) as the tax exempt revenue bond is not a project and would not have a significant effect on the environment, and therefore is exempt from the requirements of CEQA. Page 3 of 4 3 NOTICING REQUIREMENTS/PUBLIC OUTREACH: The City Council Agenda was posted. ATTACHMENTS: 1) Resolution Approving a Plan of Finance Including the Issuance of Revenue Bonds by the California Municipal Finance Authority for the Purpose of Financing and Refinancing the Acquisition and Construction of a Multifamily Rental Housing Development known as Regional Street Senior Affordable Housing Located at 6451-6543 Regional Street Page 4 of 4 4 Attachment I RESOLUTION NO. XX — 24 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING A PLAN OF FINANCE INCLUDING THE ISSUANCE OF REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF FINANCING AND REFINANCING THE ACQUISITION AND CONSTRUCTION OF A MULTIFAMILY RENTAL HOUSING DEVELOPMENT KNOWN AS REGIONAL STREET SENIOR AFFORDABLE HOUSING LOCATED AT 6541-6543 REGIONAL STREET WHEREAS, Eden Housing, Inc., a California nonprofit public benefit corporation (the "Sponsor"), on behalf of Regional Street Investors, L.P., a California limited partnership, or another ownership entity created by Regional Street, LLC, a California limited liability company, its general partner (the "General Partner"), or by another affiliate of the Sponsor (such limited partnership or other ownership entity, the "Borrower"), has requested that the California Municipal Finance Authority (the "Authority") undertake a proposed plan of finance that includes the issuance and reissuance from time to time of one or more series of revenue bonds in an outstanding principal amount not to exceed $50,000,000 (the "Bonds") to finance and refinance the acquisition, construction, development and equipping of a 113-unit qualified residential rental project (the "Project") to be owned and operated by the Borrower and located at 6541-6543 Regional Street within the City of Dublin, California (the "City"); and WHEREAS, an "applicable elected representative" of the jurisdiction in which the Project is to be located is required to approve the proposed plan of finance for the Project under Section 147(f) of the Internal Revenue Code (the "Code"); and WHEREAS, the City Council of the City of Dublin (the "City Council"), is the elected legislative body of the City and is an "applicable elected representative" for purposes of Section 147(f) of the Code; and WHEREAS, the Authority has requested that the City Council approve the proposed plan of finance in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement"), among certain local agencies, including the City; and WHEREAS, pursuant to California Environmental Quality Act (CEQA) and CEQA Guidelines Section 15061(b)(3), the proposed tax exempt revenue bond is not a project and would not result in any physical changes it can be seen with certainty that the tax exempt revenue bond would not have a significant effect on the environment, and therefore is exempt from the requirements of CEQA; and WHEREAS, pursuant to Section 147(f) of the Code, the Authority has, following notice duly given, held a public hearing on October 14, 2024 regarding the issuance of the Bonds, and the City Council now desires to approve the proposed plan of finance for the Project. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Dublin, as follows: Section 1. The foregoing recitals are true and correct. Reso. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 1 of 2 5 Section 2. The City Council hereby approves the proposed plan of finance for the Project that includes the issuance and reissuance from time to time of one or more series of revenue bonds in an outstanding principal amount not to exceed $50,000,000. It is the purpose and intent of the City Council that this resolution constitute approval of the proposed plan of finance for the Project for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of a governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement. Section 3. The officers of the City of Dublin are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby. Section 4. The City Clerk shall forward a certified copy of this Resolution to the Authority in care of its counsel: Ronald E. Lee, Esq. Jones Hall, APLC 475 Sansome Street, Suite 1700 San Francisco, CA 94111 Section 5. This resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED this 15th day of October 2024, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk Reso. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 2 of 2 6 October 15, 2024 SB 343 Senate Bill 343 mandates supplemental materials that have been received by the City Clerk's office that relate to an agenda item after the agenda packets have been distributed to the City Council be available to the public. The attached documents were received in the City Clerk's office after distribution of the October 15, 2024, Regular City Council meeting agenda packet. Item 5.7 7 DUBLIN CALIFORNIA THE NEW AMERICAN BACKYARD CITY MANAGER'S OFFICE MEMORANDUM DATE: October 15, 2024 TO: Honorable Mayor and City Councilmembers FROM: Colleen Tribby, City Manager SUBJECT: Item 5.7: Approval of a Plan of Finance Including the Issuance of Revenue Bonds by the California Municipal Finance Authority for the Regional Street Senior Affordable Housing project The October 15, 2024, City Council Meeting includes Revenue Bond funding for the Regional Street Affordable Housing Project. After the agenda was posted, the City received the Transcript of the Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing, which was held by the California Municipal Finance Authority on October 14th' and it was too late to it include in the City Council Agenda packet. The Transcript of the TEFRA Hearing is attached for your reference. 8 California Municipal Finance Authority Multifamily Housing Revenue Bonds (The Regional Street Apartments) TRANSCRIPT OF THE TEFRA HEARING October 14, 2024 2:00 p.m. This noticed public hearing is required by section 147(f) of the Internal Revenue Code of 1986, as amended. The hearing is on the proposed issuance by the California Municipal Finance Authority of a multifamily housing revenue bond (the "Bond") in an amount of up to $50,000,000. Proceeds from the sale of the proposed Bond will be used to finance or refinance the acquisition, rehabilitation, improvement and equipping of a multifamily rental housing project located at 6543-6541 Regional Street, Dublin, California. The Mayor or City Council of the City may consider providing a letter or resolution approving the issuance of the Bonds by the California Municipal Finance Authority sometime following the holding of the public hearing. Any comments provided at this hearing will be made available to the Mayor and/or City Council prior to signing a letter or resolution approving the issuance of the Bonds. If there are parties present who wish to voice their opinion and provide comments on the proposed issuance of the Bonds, I would ask that they be recognized now. I will then let each person provide any written or oral testimony that they may wish to provide on this matter. Opened hearing: 2:00 PM Speakers present: None Closed hearing: 2:10 PM By: Name: Conor O'Brien Title: Financial Advisor, California Municipal Finance Authority c , Date: October 14, 2024 [Note: Attach summary of any oral testimony provided at the hearing, and a copy of any written submittals, to this Transcript; and if oral testimony or written submittals have been received, provide a copy of this Transcript and the attachments to the Mayor prior to his consideration of providing a letter approving the issuance of the Bond by the California Municipal Finance Authority for the facility.] 9