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HomeMy WebLinkAboutMINUTES - 07281992 - 1.59 59 TO: BOARD OF SUPERVISORS Contra FROM: Harvey E. Bragdon �� ; Costa Director of Community Development �•� ��.. i J, DATE: July 28, 1992 County SUBJECT: Multi-Family Mortgage Revenue Bonds SPECIFIC REQUEST(S) OR RECOMMENDATIONS (S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Authorize the Director of Community Development or the Deputy Director - Redevelopment to prepare and submit necessary applications and certifications to the California Debt Limit Allocation Committee for up to $50 million in Private Activity Bond Authority to be used in the issuance of the County's 1992-A Multi-Family Mortgage Revenue Bonds/or the Park Regency Project (Pleasant Hill BART) ; and designate Goldman Sachs as senior manager and M. R. Beal, and Artemis Capital Group as co-managers, and Orrick Herrington & Sutcliffe as Bond Counsel. FISCAL IMPACT None. No General Fund dollars are involved. All costs associated with the issuance and administration of this program are paid from bond proceeds. BACKGROUND/REASONS FOR RECOMMENDATIONS The Federal Government has placed a limit on the volume of "Private Activity Bonds" (single and multi-family bonds, Mortgage Credit Certificates, Industrial Development Bonds, etc. ) which may be sold in each state. In California the task of apportioning this limit among issuers is assigned to the California Debt Limit Allocation Committee, a unit of the State Treasurer's office. CONTINUED ON ATTACHMENT: YES SIGNATURE: 40, RECOMMENDATION OF COUNTY ADMINISTRATOR RECO DATION Od BOARD COMMI EE APPROVE OTHER . SIGNATURE(S) : ACTION OF BOARD ON APPROVED AS RECOMMENDED X OTHER 67 VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A ' UNANIMOUS (ABSENT "�- ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. orig: Community Development / 99 cc: CAO ATTESTED__ County Counsel PH&L BAffCHELOR, CLERK OF Housing Authority THE BOARD OF SUPERVISORS via Community Development AND O NTY AD INISTRATOR Goldman Sachs Orrick, Herrington & Sutcliffe BY , DEPUTY GBW Properties SRA3/multirb.bos Staff has been approached by GBW Properties to provide Multi-family Mortgage Revenue Bond financing for that portion of the Park Regency project which does not currently have multi-family financing. In 1989 the County financed 422 of the 892 units in this project with Multi-family Mortgage Revenue Bonds. The developer now desires to finance the entire project with Multi- family Bonds. The developer will be required to submit a monetary deposit equal to 1% of the requested amount in order to allow the County to make the necessary certifications to the State. In addition, the developer will be required to pay for all costs associated with the issuance and the ultimate administration of this project. The proposed structure for the bonds is anticipated to result in a AAA rating. The proposed structure includes bond insurance and a collateral pledge by Teachers Insurance and Annuity association, a "AAA" rated insurance company. The developer has been working with the investment banking firm of Goldman Sachs in preparing this financing structure and negotiating the terms with the credit enhancement parties. They have requested that Goldman Sachs be designated as the senior manager on this account. Staff concurs. Co-managers are also being designated consistent with the County's MBE/WBE policies. The co-managers are M. R. Beal (an MBE) and Artemis Capital Group (a WBE) . Both firms have strong capability in the marketing of variable rate bonds to institutional buyers. Because the issue will result in a refunding of the 1989-B Multi- family Bonds issued for this project, it is necessary and appropriate to utilize the same bond counsel firm - Orrick, Herrington, & Sutcliffe. The issuance of these bonds will substantially increase the affordability of low income units in the Park Regency project. A total of 179 units will now be available for very low income families at rents of approximately $450-$500. Prior to this proposed financing approximately 85 units were available for very low income families, plus an additional 49 units for moderate income families. Anticipating a mid-September receipt of "Private Activity" Bond Authority, issuance of bonds would occur in early October.