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TO: BOARD OF SUPERVISORS
FROM: Dennis M. Barry, AICP
Community Development Director
DATE: February 14, 2006
SUBJECT: Gateway Apartments Financing, Pittsburg
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
ADOPT Resolution authorizing the issuance of tax-exempt bonds in an amount not to exceed
$6,000,000 for the construction of the Gateway Apartments, Pittsburg and actions related thereto.
FISCAL IMPACT
None. The bonds are entirely secured by a revenue pledge and reserve accounts. In the event of any
default on the part of the borrower the County is not morally or legally obligated to cure. Furthermore,
the County's credit rating is not effected by the performance of the borrower. he County is
compensated for its cost of issuance and annually for monitoring expenses.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
COMMENDATION OF COUNTY ADMINISTRATOR RECO ENDATION OF OARD
COMMITTEE —APPROVE OTHER
SIGNATURE(S): :-
ACTION OF BOAVQ2'u�,c,*' / . PPROVED AS RECOMMENDED THER
VO"EF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT XO »y ) 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.
Contact: Jim Kennedy
5-7225
orig: Community Development
cc: County Administrator ATTESTED/t. W"-O,r I:K OZ40-O-6
County Counsel JOHN SWEETEN, CLER F THE
BOARD OF SUPERVISORS
via: Community Development AND THE COUNTY ADMINISTRATOR
* Domus Development BY , DEPUTY
Jones Hall
* City of Pittsburg
G:\CDBG-REDEV\redev\LNoble\Personal\Board Orders and Greenies\BOARD.Gateway Apartments.2.14.06.doc
1
BACKGROUND/REASONS FOR RECOMMENDATIONS
On October 11, 2005 the Board of Supervisors approved an Inducement Resolution
conditionally stating its intent to issue multi-family mortgage revenue bonds for the
construction of the Gateway Apartments, Pittsburg. Since that time the County has received
the necessary authority from the California Debt Limit Allocation Committee to issue private
activity bonds for the project. The property is to be owned by Gateway Mixed Use
Development, a California limited partnership. The Gateway Apartments are a 28-unit
project located at 125 East 10th Street, Pittsburg. The project is a new construction mixed
income affordable housing project with a mixed use element. The plan of finance is set forth
below:
Construction Period Financing:
Tax Exempt Bond Loan $6,000,000
PittsburgRedevelopment $4,000,000
Deferred Developer Fee $400,000
Tax Credit Equity Investors $353,618
Total $10,753,618
Permanent Financing:
Tax Exempt Bond Loan $1,318,163
PittsburgRedevelopment $8,000,000
Deferred Developer Fee $155,632
Tax Credit Equity Investor $1,279,823
Total $10,753,618
The proposed financing is consistent with County and the City of Pittsburg's policies to
increase the supply of affordable housing. The resolution before you provides the necessary
authority to sell such bonds. The bond sale resolution authorizes a number of actions, a
summary of which is provided as Attachment A. The following is additional background on
the project developer, and the financing.
The Bond Regulatory Agreement as well as Regulatory Agreements for the other financing
sources will result in the following distribution of affordable units for fifty-five years:
Target Group No of Units
Very Low Income 4
@ 50%AMI
Low Income 9
@ 60%AMI
The proposed financing and the credentials of Gateway Mixed Use Development, a
California limited partnership have been thoroughly evaluated by staff. The managing
general partner is associated with Domus Development,a private developer retained by the
Pittsburg Redevelopment Agency to act as master developer of a residential mixed use
project at a gateway point to downtown Pittsburg. Domus Development was formed in 2003
by experienced housing developers and investors Meea Kang and Tawnya Falkner. The
Principals have been involved in the development of over 2700 units in California, most of
them affordable. Recent projects include the Lincoln Court Senior Project on MacArthur
Blvd. in Oakland, and the Heritage Commons infill project in Benicia.
The bonds to be issued will finance the development of the Gateway Apartments. The
bonds will be secured by a pledge of rents and reserve accounts. The bonds will be sold on
a private placement basis. The bonds will be unrated. The proposed issuance of unrated
bonds complies with the County's adopted polices for the issuance such bonds, including
independent financial review of the real estate,large denomination bonds only,sophisticated
investor requirements, and continuing investor requirements. The bonds are to be issued in
two series totaling $6,000,000.
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2
No pledge of County revenues is involved in securing the bonds.
G:\CDBG-REDEV\redev\LNoble\Personal\Board Orders and Greenies\BOARD.Gateway Apartments.2.14.06.doc
3
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Resolution on February 14, 2006 by the following vote:
AYES: Uilkema,Piepho,DeSaulnier,Glover and Gioia
NOES: None j
ABSENT: None o' %-'�imun
ABSTAIN: None
Resolution No. 2006/ �z
A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA
COSTA AUTHORIZING THE ISSUANCE OF COUNTY OF CONTRA COSTA
MULTIFAMILY HOUSING REVENUE BONDS (GATEWAY APARTMENTS) 2006 SERIES
B-1 AND 2006 SERIES B-2, APPROVING AND AUTHORIZING THE EXECUTION AND
DELIVERY OF RELATED DOCUMENTS, AND APPROVING OTHER RELATED
ACTIONS IN CONNECTION THEREWITH
WHEREAS, the County of Contra Costa (the "County") is authorized pursuant to Chapter 7
of Part 5 of Division 31 of the Health and Safety Code of the State of California (the "Act")
to issue revenue bonds to provide funds to finance multifamily rental housing facilities; and
WHEREAS, Gateway Mixed Use Development, A California Limited Partnership (the
"Borrower") has requested that the County issue and sell tax exempt revenue bonds to
assist in the financing of the construction and equipping of a 28-unit rental housing facility
located in the City of Pittsburg to be known as Gateway Apartments (the "Project"); and
WHEREAS, the County now desires to issue two series of bonds (the "Bonds"), to provide
financing for the Project; and
WHEREAS, the Deputy Director-Redevelopment of the Community Development
Department of the County (the "Deputy Director-Redevelopment") has held a public hearing
on the proposed issuance of the Bonds, as required under the provisions of the Internal
Revenue Code applicable to tax-exempt bonds, following published notice of such hearing;
and
WHEREAS, there have been prepared various documents with respect to the issuance of
the Bonds, copies of which are on file with the Deputy Director-Redevelopment, and this
Board of Supervisors now desires to approve the issuance of the Bonds and the execution
and delivery of such documents by the County; and
WHEREAS, all conditions, things and acts required to exist, to have happened and to have
been performed precedent to and in connection with the issuance of the Bonds as
contemplated by this Resolution and the documents referred to herein exist, have
happened and have been performed in due time, form and manner as required by the laws
of the State of California, including the Act;
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the County of
Contra Costa, as follows:
1. The County hereby finds and declares that the above recitals are true and
correct.
2. Pursuant to the Act and the Pledge and Assignment (hereinafter defined), two
series of revenue bonds of the County designated as "County of Contra Costa
Multifamily Housing Revenue Bonds (Gateway Apartments) 2006 Series B-1" and
as "County of Contra Costa Multifamily Housing Revenue Bonds (Gateway
Apartments) 2006 Series B-2" in a collective total aggregate principal amount of
not to exceed $6,000,000 (collectively, the "Bonds") are hereby authorized to be
issued. The Bonds shall be executed by the manual or facsimile signature of the
.Chair of the Board of Supervisors (the "Chair"), the Director of the Community
Development Department (the "Director") or the Deputy Director-Redevelopment
and attested by the manual or facsimile signature of the County Administrator and
RESOLUTION NO. 20061 6
Clerk of the Board of Supervisors (the "County Administrator"), in the form set
forth in and otherwise in accordance with the Pledge and Assignment.
3. The Master Pledge and Assignment relating to the Bonds (the "Pledge and
Assignment") by and among the County, U.S. Bank National Association, as
agent, and U.S. Bank National Association, as holder, in the form on file with the
Deputy Director-Redevelopment, is hereby approved. Any one of the Chair, the
Director and the Deputy Director-Redevelopment (collectively, the "Designated
Officers") is hereby authorized and directed, for and in the name and on behalf of
the County, to execute and deliver the Pledge and Assignment, and the County
Administrator is hereby authorized and directed, for and in the name and on
behalf of the County, to attest the Pledge and Assignment in said form, together
with such additions thereto or changes therein (including, but not limited to,
adding in remarketing provisions with respect to the 2006 Series B-1 Bonds) as
are recommended or approved by the Designated Officer executing the Pledge
and Assignment upon consultation with the Deputy Director-Redevelopment and
Bond Counsel to the County (including such additions or changes as are
necessary or advisable, provided that no additions or changes shall authorize.a
total aggregate principal amount of Bonds in excess of the amount set forth in
Section 2 above), the approval of such additions or changes to be conclusively
evidenced by the execution and delivery of the Pledge and Assignment by the
County. The date, maturity dates (which shall in no event be later than March 1,
2041), interest rate modes, privileges, manner of execution, place of payment,
terms of redemption and other terms of the Bonds shall be as provided in the
Pledge and Assignment as finally executed.
4. The Master Agency Agreement relating to the Bonds (the "Agency Agreement")
between the County and U.S. Bank National Association, as agent, in the form on
file with the Deputy Director-Redevelopment, is hereby approved. Any one of the
Designated Officers is hereby authorized and directed to execute and deliver the
Agency Agreement in said form, together with such additions thereto or changes
therein as are recommended or approved by the Designated Officer executing the
Agency Agreement upon consultation with the Deputy Director-Redevelopment
and Bond Counsel to the County (including such additions or changes as are
necessary or advisable), the approval of such changes to be conclusively
evidenced by the execution and delivery of the Agency Agreement by the County.
5. The Regulatory Agreement and Declaration of Restrictive Covenants relating to
the Bonds, between the County and the Borrower (the "Regulatory Agreement")
in the form on file with the Deputy Director-Redevelopment, is hereby approved.
Any one of the Designated Officers is hereby authorized and directed, for and in
the name and on behalf of the County, to execute and deliver the Regulatory
Agreement in said form, together with such additions thereto or changes therein
as are recommended or approved by the Designated Officer executing the
Agreements upon consultation with the Deputy Director-Redevelopment and
Bond Counsel to the County (including such additions or changes as are
necessary or advisable), the approval of such additions or changes to be
conclusively evidenced by the execution and delivery of the Regulatory
Agreement by the County.
6. The Bonds, when executed, shall be delivered to U.S. Bank National Association,
as the initial holder thereof, upon the funding of the Loan (as defined in the
Pledge and Assignment) with the purchase price for the Bonds.
7. The law firm of Jones Hall, A Professional Law Corporation, is hereby designated
as Bond.Counsel to the County for the Bonds. The fees and expenses of such
firm for matters related to the Bonds shall be payable solely from the proceeds of
the Bonds or contributions by the Borrower.
8. All actions heretofore taken by the officers and agents of the County with respect
to the sale and issuance of the Bonds are hereby approved, confirmed and
ratified, and the proper officers of the County, including the Designated Officers,
are hereby authorized and directed, for and in the name and on behalf of the
County, to do any and all things and take any and all actions and execute any
and all certificates, agreements and other documents, which they, or any of them,
may deem necessary or advisable in order to consummate the lawful issuance
RESOL UTION NO. 2006/4rZ.
and delivery of the Bonds in accordance with this Resolution, including but not
limited to any other certificates, agreements and other documents described in
the Pledge and Assignment, the Agency Agreement, the Regulatory Agreement,
and the other documents herein approved.
9. This Resolution shall take effect immediately upon its adoption.
I hereby certify that this is a true and correct copy of an
action taken and entered on the minutes of the Board of
Supervisors on the date shown
ATTESTED: February 14,2006
John Sweeten, Clerk of the Board of Supervisors
And County Administrator
By Deputy
cc:
RESOL UTION NO. 2006/67ot