HomeMy WebLinkAboutMINUTES - 06052001 - C.162 TO: BOARD OF SUPERVISORS
FROM: Dennis M. Barry, AICP, Director of Community Development
DATE: June 5, 2001 '
SUBJECT: Bond Sale Resolution — Hilltop Commons Apartments, Richmond/San Pablo
Area
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND
JUSTIFICATION
RECOMMENDATIONS
ADOPT resolution authorizing the sale of Multi-Family Mortgage Revenue Bonds for the
acquisition and rehabilitation of the Hilltop Commons Apartments, Richmond/San Pablo area,
and actions related thereto.
FISCAL IMPACT
None. County is compensated for costs incurred in issuance process and for costs of monitoring
compliance with Regulatory Agreement.
BACKGROUND/REASONS FOR RECOMMENDATIONS
See next page.
CONTINUED ON ATTACHMENT: _X_ SIGNATURE: ,
6,KCCOMMENDATION OF COUNTY ADMINISTRATOR R COMME DATION OF
BOARD COMMITTEE L.—APPROVE OTHER
SIGNATURE(S).
r
CTION OF BOARD ON APPROVED AS
RECOMMEN
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT
THIS IS A TRUE AND
CORRECT COPY OF AN
X UNANIMOUS (ABSENT None ) .ACTION TAKEN AND
AYES: NOES: ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD
OF SUPERVISORS ON THE
DATE SHOWN.
Source: Jim Kennedy
335-1255
ATTESTED June 5, 2001
JOHN SWEETEN, CLERK OF THE
cc: County Administrator's Office BOARD OF SUPERVISORS AND
County Counsel COUNTY ADMINISTRATOR
Community Development
Via: Community Development _
Steadfast Development BY , DEPUTY
Klein Financial
Orrick Herrington & Sutcliffe
Newman & Associates
W:\Personal\BOARDORDERS\G.5.hiI hop.bond.ale 1
BACKGROUND/REASONS FOR RECOMMENDATIONS
On March 20,2001 the Board of Supervisors adopted a Resolution authorizing a proceeding that would lead to
the sale of tax-exempt multi-family mortgage revenue bonds for the acquisition/rehabilitation of the Hilltop
Commons Apartments. Since that date the County has secured the necessary private activity bond authority in'
the amount of$26.22 million, allowing the actual issuance of bonds to go forward.
Hilltop Commons is a 324-unit project located at 15690 Crestwood Drive in an unincorporated area North of
Hilltop,in the San Pablo/Richmond area (project is at Northeast quadrant of San Pablo Ave.and the Richmond
Parkway). The property was built in 1987,and contains 324-units(204 one-bedroom and 120 two-bedrooms)on
a 14.7 acre site. The ownership entity is limited partnership of Steadfast Properties, and Foundation for Social
Resources. Steadfast is a Southern California based developer who has developed/rehabilitated over 8,100 units
in California over the last 5 years,including over 4,900 utilizing tax exempt bonds and/or Low Income Housing Tax
Credits. The President of Steadfast Properties is Rodney Emery. Foundation for Social Resources is a non-profrt
partner,who will act as managing general partner,and undertake after school and adult education programs on
site.
The proposed acquisition/rehabilitation of the Hilltop Commons project would result in 52% of the units(169 of
324 units) being reserved as affordable units for 55 years. Half of the affordable units would be reserved forvery
low income households earning 60%of the area median income or less,and half of the affordable units would be
reserved for low income households earning 60%of the area median income or less. The remaining 48%of the
project would be market rate units. Project rents.are expected to be:
Rent Range"
Very Low Income $586.00—760.00
Low Income $713.00--851.00
Market Rate Units $959.00—1,328.00
*Variable based on household size and unit size.
The plan of finance involves the issuance by the County of tax exempt and taxable bonds in an aggregate amount
not to exceed $34,505,000. The County was requested to consider a short-term loan to the project during the
rehabilitation and project stabilization period. Staff and its financial advisor, LB Share and Associates, have
reviewed the basis for this request, and the terms offered. To maximize the financial value of the County
assistance,and to preserve the integrity of the County's investment the County participation will be the purchase
of $2 million of taxable subordinate bonds, which will be guaranteed to be repurchased by Newman and
Associates in 2 1/2 years. The funds being used to purchase the taxable bonds are restricted County funds that
are derived from the prior issuance by the County of private activity revenue bonds (the Private Activity Bond
Special Revenue Fund),which are primarily multi-family and single-family mortgage revenue bonds. The County
will earn a 5% rate of return. In addition, the County will receive additional consideration in the form of owner
contributions to County designated initiatives. The financing would result in $7,500/unit in renovation and
upgrades including:painting,appliances,fixtures,and heating improvements. Energy efficiency is a key theme of
the renovation program.
The bonds to be issued will finance the acquisition and rehabilitation of the Hilltop Commons Apartments. The
bonds will be secured by a pledge of rents and reserve accounts. The bonds will be unrated. The issuance of
unrated bonds complies with County adopted policies for the issuance of 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 four series in an aggregate amount not to
exceed $36,970.000.
No pledge of County revenues is involved. The Bond Sale Resolution authorizes a number of actions,a
summary of which is included as Attachment A.
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RESOLUTION NO. 2001/229
OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA, CALIFORNIA
RESOLUTION AUTHORIZING THE ISSUANCE AND DELIVERY OF
MULTIFAMILY HOUSING REVENUE BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $36,970,000 TO FINANCE A
PORTION OF THE ACQUISITION AND REHABILITATION OF A
MULTIFAMILY RENTAL HOUSING PROJECT GENERALLY KNOWN AS
HILLTOP COMMONS APARTMENTS; DETERMINING AND PRESCRIBING
CERTAIN MATTERS AND APPROVING AND AUTHORIZING THE
EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS RELATED
THERETO; RATIFYING ANY ACTION HERETOFORE TAKEN AND
APPROVING RELATED MATTERS IN CONNECTION WITH SAID BONDS.
WHEREAS,the County of Contra Costa (the "County") is authorized pursuant to
Section 52075 and following of the California Health and Safety Code (the "Act") to issue
revenue bonds for the purpose of financing, among other things, the acquisition and
rehabilitation of multifamily rental housing projects;
WHEREAS, the proceeds of such bonds may be loaned to a nongovernmental
owner of multifamily housing, who shall be responsible for the payment of such bonds, to allow
such nongovernmental owner to reduce the cost of operating such housing and to assist in
providing housing for low income persons;
WHEREAS, the County desires to participate in the financing of the acquisition
and rehabilitation of a 324-unit multifamily rental housing development generally known as
Hilltop Commons Apartments (the "Project"), which will be owned and operated by Steadfast
Hilltop Commons, L.P., a California limited partnership, and entities related thereto (collectively,
the "Borrower"), and in order to do so intends to sell and issue not to exceed $36,970,000 of its
multifamily housing revenue bonds in one or more series (as more fully described herein, the
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'Bonds"), and to loan the proceeds thereof to the Borrower, thereby reducing the cost of the Project
and assisting in providing housing for very low income persons;
WHEREAS, there have been prepared and presented at this meeting the following
documents required for the issuance of the Bonds, and such documents are now in substantial form
and appropriate instruments to be executed and delivered for the purposes intended:
(1) Trust Indenture (the "Indenture") to be entered into between the County and
the trustee named therein (the "Trustee"), providing for the authorization and issuance of the
Senior Bonds (as hereinafter defined);
(2) Loan Agreement relating to the Senior Bonds (the "Loan Agreement") to be
entered into between the County and the Borrower;
(3) Interest Rate Protection Agreement (the "Hedge Agreement") to be entered
into between Newman Financial Services, Inc. and the Trustee;
(4) Subordinate Indenture (the "Subordinate Indenture") to be entered into
between the County and the trustee named therein (the "Trustee"), providing for the
authorization and issuance of the Subordinate Bonds(as hereinafter defined);
(5) Subordinate Loan Agreement relating to the Subordinate Bonds (the
"Subordinate Loan Agreement")to be entered into between the County and the Borrower;
(6) Regulatory Agreement and Declaration of Restrictive Covenants (the
"Regulatory Agreement"), to be entered into among the Borrower, the County and the
Trustees;
(7) Bond Placement Agreement (the "Placement Agreement") to be entered into
among the County, the Borrower and Newman & Associates, Inc., as placement agent for
the Senior Bonds(the"Placement Agent");
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(8) Private Placement Memorandum (the "Placement Memorandum") to be used
by the Placement Agent in connection with the placement of the Senior Bonds; and
(9) Subordination and Intercreditor Agreement(the "Subordination Agreement")
to be entered into between the County and the Trustee;
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the
County of Contra Costa, as follows:
Section 1. This Board hereby specifically finds and declares that the
statements, findings and determinations of the County set forth above are true and correct.
Section 2. Pursuant to the Act and the Indentures described herein,the County is
hereby authorized to issue the Bonds. The Bonds shall be designated as "County of Contra Costa
Multifamily Housing Revenue Bonds (Hilltop Commons Apartments Project) 2001 Series A," in an
aggregate principal amount not to exceed $26,220,000 and "County of Contra Costa Taxable
Multifamily Housing Revenue Bonds (Hilltop Commons Apartments Project) 2001 Series A-T," in
an aggregate principal amount not to exceed $8,500,000 (collectively, the "Senior Bonds"); and
"County of Contra Costa Subordinate Multifamily Housing Revenue Bonds (Hilltop Commons
Apartments Project) 2001 Series B," in an aggregate principal amount not to exceed $2,000,000 and
"County of Contra Costa Subordinate Multifamily Housing Revenue Bonds (Hilltop Commons
Apartments Project) 2001 Series C," in an aggregate principal amount not to exceed $250,000
(collectively, the "Subordinate Bonds"). The Senior Bonds shall be in the form set forth in and
otherwise in accordance with the Indenture and the Subordinate Bonds shall be in the form set forth
in and otherwise in accordance with the Subordinate Indenture. The Bonds shall be executed by the
manual or facsimile signature of the Chair of the Board of Supervisors, and attested by the manual or
facsimile signature of the County Administrator and Clerk of the Board of Supervisors (the"Clerk").
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The Bonds shall be issued and secured in accordance with the terms of the Indentures presented at
this meeting, as applicable, and the payment of the principal of, redemption premium, if any, and
interest on,the Senior Bonds and the Subordinate Bonds, respectively, shall be made solely from the
amounts and assets pledged thereto under the applicable Indenture. The Bonds shall not be deemed
to constitute a debt or liability of the County.
Section 3. The form of Indenture, on file with the Clerk, is hereby approved
and an Authorized Issuer Representative (as defined in the Indenture) is hereby authorized and
directed to execute and deliver the Indenture in substantially said form, with such changes
therein as such officers may require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof. The date, maturity date or dates(which shall not extend beyond
July 1, 2041), interest rate or rates (which shall not exceed 12% per annum), interest payment dates,
denominations, form, registration privileges, manner of execution, place of payment, terms of
redemption and other terms of the Senior Bonds shall be as provided in the Indenture as finally
executed.
Section 4. The form of Loan Agreement, on file with the Clerk, is hereby
approved and an Authorized Issuer Representative is hereby authorized and directed to execute
and deliver the Loan Agreement in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof.
Section 5. The form of Hedge Agreement, on file with the Clerk, is hereby
approved and an Authorized Issuer Representative is hereby authorized and directed to execute
and deliver the Hedge Agreement in substantially said form, with such changes therein as such
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officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof.
Section 6. The form of Subordinate Indenture, on file with the Clerk, is
hereby approved and an Authorized Issuer Representative is hereby authorized and directed to
execute and deliver the Subordinate Indenture in substantially said form, with such changes
therein as such officers may require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof. The date,maturity date or dates(which shall not extend beyond
July 1, 2041), interest rate or rates (which shall not exceed 12% per annum), interest payment dates,
denominations, form, registration privileges, manner of execution, place of payment, terms of
redemption and other terms of the Subordinate Bonds shall be as provided in the Subordinate
Indenture as finally executed.
Section 7. The form of Subordinate Loan Agreement, on file with the Clerk,
is hereby approved and an Authorized Issuer Representative is hereby authorized and directed to
execute and deliver the Subordinate Loan Agreement in substantially said form, with such
changes therein as such officers may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof.
Section 8. The form of the Regulatory Agreement, on file with the Clerk, is
hereby approved and an Authorized Issuer Representative is hereby authorized and directed to
execute and deliver the Regulatory Agreement in substantially said form, with such changes
therein as such officers may require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof.
Section 9. The County is hereby authorized to sell the Senior Bonds to the
purchasers thereof, as placed by the Placement Agent and as approved by an Authorized Issuer
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Representative pursuant to the terms and conditions of the Placement Agreement. The form of the
Placement Agreement, on file with the Clerk, is hereby approved and an Authorized Issuer
Representative is hereby authorized and directed to execute and deliver the Placement
Agreement in substantially said form, with such changes therein as such officers may require or
approve, such approval to be conclusively evidenced by the execution and delivery thereof..
Section 10. The form of the Placement Memorandum, on file with the Clerk, is
hereby approved and the Board hereby approves the distribution of the Placement Memorandum to
prospective purchasers of the Senior Bonds. Any Authorized Issuer Representative is authorized to
execute the Placement Memorandum and to certify on behalf of the County that the Placement
Memorandum as to the sections therein entitled "THE ISSUER" and "ABSENCE OF
LITIGATION" (as such section relates to the Issuer or issuance of the Bonds) are true and accurate
in all material respects.
Section 11. The form of Subordination Agreement, on file with the Clerk, is
hereby approved and an Authorized Issuer Representative is hereby authorized and directed to
execute and deliver the Subordination Agreement in substantially said form, with such changes
therein as such officers may require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof.
Section 12. The County is hereby authorized to sell the Subordinate Bonds to the
purchasers thereof, as approved by an Authorized Issuer Representative pursuant to the terms and
conditions of the Subordinate Indenture. The County is hereby authorized to purchase the Series B
Subordinate Bonds, in an amount not to exceed $2,000,000, bearing interest at a rate of 5% per
annum; provided that such Bonds shall be subject to repurchase by the Borrower or the Placement
Agent, or an affiliate of either of them, not later than January 1, 2004. The funds authorized for
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purchase of the Series B Subordinate Bonds by the County is County Fund No. 111100-0595, the
Private Activity Bond Special Revenue Fund.
Section 13. The Bonds, when executed, shall be delivered to the respective
Trustee for authentication. Each Trustee is hereby requested and directed to authenticate the Senior
Bonds and the Subordinate Bonds, respectively, by executing the Trustee's certificate of
authentication appearing thereon, and to deliver said Bonds, when duly executed and authenticated,
in accordance with written instructions executed and delivered on behalf of the County by an
Authorized Issuer Representative, which instructions are hereby authorized and directed to be
executed and delivered to the Trustees. Such instructions shall provide for the delivery of the Bonds
upon payment of the purchase price thereof.
Section 14. The Board hereby appoints Orrick, Herrington & Sutcliffe LLP,
San Francisco, California, as bond counsel, and LB Share Associates, as financial advisor.
Section 15. All actions heretofore taken by the officers and agents of the County
with respect to the financing of the Project and the sale and issuance of the Bonds are hereby
approved,ratified and confirmed,and any Authorized Issuer Representative is 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 and deliver any and all certificates, agreements and other documents,
including but not limited to those described in the Indentures, the Placement Agreements and the
other documents herein approved, which such officer, or any of them, may deem necessary or
advisable in order to consummate the lawful issuance and delivery of the Bonds and to effectuate the
purposes thereof and of the documents herein approved in accordance with this resolution and
resolutions heretofore adopted by the County and otherwise in order to carry out the financing of the
Project.
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Section 16. All further consents, approvals, notices, orders, requests and other
actions permitted or required by any of the documents authorized by this resolution, whether
before or after the issuance of the Bonds, including without limitation any of the foregoing
which may be necessary or desirable in connection with any default under or amendment of such
documents, any transfer or other disposition of the Project, any addition or substitution of
security for the Bonds or any redemption of the Bonds, may be given or taken by an Authorized
Issuer Representative without further authorization by this Board of Supervisors, and such
Authorized Issuer Representative is hereby authorized and directed to give any such consent,
approval, notice, order or request and to take any such action which such officer may deem
necessary or desirable to further the purposes of this resolution and the financing of the Project.
Section 17. This Resolution shall take effect upon its adoption.
PASSED AND ADOPTED THIS 5th day of June, 2001.
AYES: GIOIA, GERBER, DeSAULNIER, GLOVER and UILKEMA
NOES: NONE
ABSENT: NONE
[Seal] -
hair of the f3oard of Supervisors
ATTEST: John Sweeten, County Administrator
and Clerk of the Board of Supervisors
By._ _.-u c7n - '
Deputy Clerk
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s
CLERK'S CERTIFICATE
1, Gina Martin , Deputy Clerk of the Board of Supervisors
of the County of Contra Costa, hereby certify that the foregoing is a full, true and correct copy of
a resolution duly adopted at a regular meeting of the Board of Supervisors of said County duly
and regularly held at the regular meeting place thereof on June 5, 2001, of which meeting all of
the members of said Board of Supervisors had due notice and at which a majority thereof were
present; and that at said meeting said resolution was adopted by the following vote:
AYES: GIOIA, GERBER, DeSAULNIER, GLOVER and UILKEMA
NOES: NONE
ABSENT: NONE
An agenda of said meeting was posted at least 72 hours before said meeting at
651 Pine Street, Martinez, California, a location freely accessible to members of the public, and
a brief general description of said resolution appeared on said agenda.
I further certify that I have carefully compared the same with the original minutes
of said meeting on file and of record in my office; that the foregoing resolution is a full, true and
correct copy of the original resolution adopted at said meeting and entered in said minutes; and
that said resolution has not been amended, modified or rescinded since the date of its adoption,
and the same is now in full force and effect.
WITNESS my hand and the seal of the County of Contra Costa this 51h day of
June , 2001.
John Sweeten, County Administrator and
Clerk of the Board of Supervisors
[SEAL]
By. �.
Deputy Clerk
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