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HomeMy WebLinkAboutMINUTES - 06172003 - C.104 BACKGROUNDlREASONS FOR RECOMMENDATIONS On January 7,2003 the Boars!of Supervisors approved an Inducement Resolution conditionally stating its intent to issue multi-family mortgage revenue bonds for the acquisition and rehabilitation of the Creekview Apartments, San Ramon area (Dougherty Valley). 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 Fairfield Creekview L.P.,a California limited partnership. The ownership entity consists of FF Creekview LLC,a California limited liability company,and Wakeland Housing and Development Corporation,a California non-profit public benefit corporation. FF Properties,the sole member of FF Creekview LLC, is a national developer/owner of multi-family real estate. FF Properties has been in business since 1983 and owns/manages over 40,000 units. The Creekview Apartments are a 350-unit project located at the southwest corner of Bollinger Canyon Road and Harcourt Way. The property is an affordable housing project subject to the provisions of the Dougherty Valley Affordable Housing Program (DVAHP). The required period of affordability is fifty-five years pursuant to the bond program Regulatory Agreement. This is 25 years more than the affordability period minimally required for the DVAHP. The structure of the legal documents for the transaction have been set up to maintain the DVAHP Regulatory Agreement throughout its term, so if the project owner and the bond transaction were to default for any reason the County's DVAHP affordability requirements would be preserved. The proposed financing is consistent with County policies to facilitate the production 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 and the financing. The Bond regulatory Agreement of the County will require that at least 100 of the total 350- units(28.5% of the project)be reserved as units to very low-income households(50%of area median income)for fifty-five years. The remaining 250 units will be affordable to low income tenants(60%of area median income)for fifty-five years. The low income rents required under the bond program are 20-40% less than that allowed by the DVAHP. The proposed financing and the credentials of Fairfield Creekview L.P., a California limited partnership have been thoroughly evaluated by staff. The plan of finance covers the approximate $48 million development costs with $29 million of tax-exempt bond proceeds, approximately $17 million of tax-credit equity, and approximately $2 million in other miscellaneous sources. The Developer has indicated that the cost estimates for the project do not contain a very large contingency,therefore supplemental financing may be necessary. The need would not be determined until the project has been completed and occupied. The conceptual form of such supplementary financing would be in the form of additional bonds to be issued by the County. Based on a project of this size, the Developer has indicated that $3 million of additional bonds could be required. The additional bonds could be issued as tax exempt or taxable securities,and could be publicly sold or privately placed. If privately placed, the supplemental bonds could be purchased by the County with restricted housing funds and held for a short term(2-3 years),and then sold. That structure is the form staff has indicated would be viable,if needed. Because the City of San Ramon will realize the entire benefit of the project with respect to Housing Element obligations,the Developer has requested the City to consider sharing with the County in the provision of any supplemental financing. While no supplemental financing commitments are being made as part of the recommended actions,the bond resolution has been prepared to acknowledge the possibility of additional bonds should they be needed. The resolution does authorize staff to prepare a term sheet that would provide the framework for any subsequent discussions. Any issuance of additional bonds would require the approval of the Board of Supervisors at a later date. The bonds to be issued will finance the development of the Creekview Apartments. The bonds will be secured by a pledge of rents and reserve accounts and will have a guarantee from Freddie Mac. The bonds will be sold on a public basis. The bonds will be rated AAA. The bonds are to be issued in one series-2003 Issue B(Creekview Apartments in an amount not to exceed $29,000,000) No pledge of County revenues is involved in securing the bonds. 2 Wa\Personal\BoardOrders\BOARD.Joint..RDA.hiddencove.5.43 ATTACHMENT A The Bond Sale Resolution authorizes a number of actions, a summary of which follows: 1. Authorizes the issuance of variable rate demand multifamily housing revenue bonds in an amount not to exceed $29,000,000; 2. Approves the form of Indenture between the County and Union Bank as Trustee; 3. Approves the form of Financing Agreement between the County,the Trustee, and the Borrower, Fairfield C reekview, L,P., a C alifornia limited partnership; 4. Approves the form of Bond Purchase Agreement between the County, and Newman and Associates, Inc. (the Underwriter), and the Borrower; 5. Approves form of Regulatory Agreements between the County, the Redevelopment Agency, and the Trustee, and the Borrower; 6. Approve the form of Intercreditor Agreement between the County,the Trustee, the Federal Home Loan Mortgage Corporation, and Union Bank, the construction lender. 7. Approve, the form of Official Statement; 8. Designates Newman & Associates as the Underwriter for the Bonds; 9. Designates Jones Hall, A Professional Law Corporation, as Bond Counsel; 10, Designates Litten Financial Consultants as Financial Advisor to the County; 11. Authorizes the Deputy Director-Redevelopment to prepare a term sheet and related documents with respect to the prospective issuance of additional bonds, if needed, to fully fund project costs; said additional bands to be subject to future action of the Board of Supervisors; and 12. Authorizes the Chair, Vice-Chair, County Administrator, Director of Community Development, Deputy Director-Redevelopment to execute documents and to take such other actions necessary to complete the sale of bonds, and actions related thereto. W:\Personal\BoardOrders\BOARD.Joi-nt.RDA.hiddencove.5.03 3 RESOLUTION NO. 2003/385 A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA AUTHORIZING THE ISSUANCE OF COUNTY OF CONTRA COSTA VARIABLE RATE DEMAND MULTIFAMILY HOUSING REVENUE BONDS (CREEK``VIEW APARTMENTS) SERIES 20038,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, Fairfield Creekview L.P., a California limited partnership (the "Borrower") has requested that the County issue and sell revenue bonds to assist in the financing of the acquisition,rehabilitation and equipping of a 350-unit rental housing facility located in the City of San Ramon to be known as Creekview Apartments(the"Project");and WHEREAS, the County now desires to issue a 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; and WHEREAS, the Borrower has indicated that it may request the County to issue up to $3,000,004 of additional bonds (the "Additional Bonds") for the Project at a later date due to expected increased costs of constructing the Project, and may request the County and the City of San Ramon to initially purchase the Additional Bonds;and WHEREAS, in connection with the issuance of the Additional Bonds, the County and the Borrower may apply to the California Debt Limit Allocation Committee for another private activity allocation for the Project,and the County desires to declare its intent to use the proceeds of the Additional Bonds,if any, issued pursuant to such private activity allocation to reimburse expenditures made with respect to the Project prior to the date of issuance of such Additional Bonds; 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 Indenture (hereinafter defined), revenue bonds of the County designated as "County of Contra Costa Variable Rate Demand Multifamily Mousing Revenue Bonds (Creekview Apartments)Series 2003B" in an aggregate principal amount of not to exceed $29,000,000 (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, the manual or facsimile of the seal of the County shall be reproduced thereon and attested by the manual or facsimile signature of the County Administrator and Clerk of the Board of Supervisors (the"County Administrator"), in the form set forth in and otherwise in accordance with the Indenture. 3. The Trust Indenture relating to the Bonds (the "Indenture") by and between the County and Union Bank of California, N.A., as trustee (the "Trustee"), 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 Indenture,and the County Administrator is hereby authorized and directed,for and in the name and on behalf of the County,to attest the Indenture in said form,together with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing the Indenture upon consultation with the Deputy Director-Redevelopment and Bond Counsel to the County (including such additions or changes as are necessary or advisable in accordance with Section 7 hereof, provided that no additions or changes shall authorize an aggregate principal amount of either series of the 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 Indenture by the County. The date, maturity dates, 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 Indenture as finally executed. 4. The Financing Agreement relating to the Bonds (the "Financing Agreement") among the County, the Trustee and the Borrower,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 Financing Agreement in said form, together with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing the Financing Agreement upon consultation with the Deputy Director- Redevelopment and Bond Counsel to the County (including such additions or changes as are necessary or advisable in accordance with Section 7 hereof), the approval of such changes to be conclusively evidenced by the execution and delivery of the Financing Agreement by the County. 2 5. The Regulatory Agreement and Declaration of Restrictive Covenants relating to the Bonds, among the County, the Trustee 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 farm, 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 in accordance with Section 7 hereof), 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 Intercreditor Agreement relating to the Bonds (the "Intercreditor Agreement") among the County, the Trustee, the Federal Home Loan Mortgage Corporation and Union Bank of California, 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 Intercreditor Agreement in said form, together with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing the Intercreditor Agreement upon consultation with the Deputy Director- Redevelopment and Bond Counsel to the County (including such additions or changes as are necessary or advisable in accordance with Section 7 hereof), the approval of such changes to be conclusively evidenced by the execution and delivery of the Intercreditor Agreement by the County. 7. The Bond Purchase Agreement for the Bonds (the "Purchase Contract") among the County, Newman and Associates, a Division of CMAC Commercial Holding Capital Markets Corp. (the "Underwriter"), and the Borrower 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 accept the offer of the Underwriter to purchase the Bonds contained in the Purchase Contract (when such offer is made and if such offer is consistent with Section 2 of this Resolution) and to execute and deliver the Purchase Contract in said form, together with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing the Purchase Contract upon consultation with the Deputy Director-Redevelopment and Bond Counsel to the County, including such additions or changes as are necessary or advisable in accordance with Section 12 hereof (provided that no such change shall increase the aggregate principal amount of the Bonds over the amount specified in Section 2 above and the Underwriter's fee and/or discount shall not be in excess of .75% of the principal amount of the Bonds sold), the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Purchase Contract by the County. 8. The Official Statement relating to the Bonds(the"Official Statement") 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 the Official Statement in said form, together with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing the Official Statement upon consultation with the Deputy Director-Redevelopment and Bond 3 Counsel to the County, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Official Statement by the County The Underwriter is hereby authorized to distribute copies of the executed Official Statement to persons who may be interested in the purchase of the Bonds and is directed to deliver such copies to all actual purchasers of the Bonds. Distribution by the Underwriter of a preliminary Official Statement relating to the Bonds is hereby approved and authorized.. 9. The Bonds, when executed, shall be delivered to the Trustee for authentication. The Trustee is hereby requested and directed to authenticate the Bonds by executing the Trustee's certificate of authentication and registration appearing thereon, and to deliver the Bonds, when duly executed and authenticated, to the Underwriter in accordance with written instructions executed on behalf of the County by any one of the Designated Officers of the County, which instructions said officer is hereby authorized and directed, for and in the name and on behalf of the County to execute and deliver to the Trustee. Such instructions shall provide for the delivery of the Bonds to the Underwriter in accordance with the Purchase Contract,upon payment of the purchase price therefor. 10. The firm of Newman & Associates, a Division of GMAC Commercial Holding Capital Markets Corp., is hereby designated as Underwriter 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. 11. 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. 12. The financial advisory firm of Litten Financial Consultants is hereby designated as Financial Advisor 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 from the Borrower. 13. 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 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 Indenture, the Financing Agreement,the regulatory Agreement, the Official Statement,the Purchase Contract and the other documents herein approved. 14. The Deputy Director, Redevelopment, is hereby authorized to enter into a term sheet with the Borrower regarding the purchase by the County of all or a portion of the Additional Bonds, subject to the final approval of this Board of the issuance of the Additional Bonds at the appropriate time. 4 15. In the event the County and the Borrower apply and receive another private activity allocation with respect to the Project,the County will apply,or cause the application,of the proceeds of the Additional Bonds issued pursuant to such private activity allocation to reimburse expenditures made with respect to the Project prior to date of issuance of such Additional Bonds. The County expects the maximum principal amount of such Additional Bonds to be$3,000,000. 5 16. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this 17th day of June,2003,by the following vote: AYES: SUPERVISOR GIOIA, UILKEMA, GLOVER & DeSAULNIER NOES: NONE ABSTAINING: NONE ABSENT: NONE DISTRICT III IS VACANT f Chair ATTEST: June 17 , 2003 John Sweeten County Administrator and Clerk Of the Board of Supervisors Deputy Clerk 6