Loading...
HomeMy WebLinkAbout13 - Issuance of Multi -Family Housing Revenue Bonds for the Uptown Newport Project by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLCCITY OF . 0 WW NtWPORT BEACH .City Council Staff Report January 24, 2017 Agenda Item No. 13 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dan Matusiewicz, Finance Director - 949-644-3123, dmatusiewicz@newportbeachca.gov PREPARED BY: Steve Montano, Deputy Finance Director PHONE: 949-644-3124 Issuance of Multi -Family Housing Revenue Bonds for the Uptown TITLE: Newport Project by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC ABSTRACT: The California Statewide Communities Development Authority (CSCDA) is authorized to issue bonds, notes, and other evidences of indebtedness to public entities and private developers in order to promote economic development, including the provisions and maintenance of multi -family housing. TPG/TSG Venture I Acquisition, LLC (the borrower also known as the Shopoff and Picerne Real Estate Joint Venture Investment Group) is seeking financing from CSCDA for the acquisition, construction and development of the multifamily rental housing projects collectively known as the Uptown Newport Village. The law requires a public hearing be held to allow members of the public and the governing board the ability to comment and approve or disapprove the issuance of bonds for the project. Any project not approved by the local jurisdiction will not be financed through CSCDA. As the Program Participant, the City of Newport Beach will not incur any liability of this CSCDA financing. The City Council approved the project on February 26, 2013, and originally approved the financing resolution and held a public hearing in January 2016. As the financing has not commenced and twelve months have elapsed since the last City Council review, the law requires another review and approval. RECOMMENDATION: a) Conduct a public hearing; b) Staff recommends the City Council find this action is not subject to the California Environmental Quality Act, pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; and 13-1 Issuance of Multi -Family Housing Revenue Bonds for the Uptown Newport Development by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC January 24, 2017 Page 2 c) Adopt Resolution No. 2017-7, A Resolution of the City Council of the City of Newport Beach, California, Approving the Issuance by the California Statewide Communities Development Authority of Multi -Family Housing Revenue Bonds for the Uptown Newport I Apartments and Uptown Newport 11 Apartments. FUNDING REQUIREMENTS: As the Program Participant, the City of Newport Beach will not incur any liability of this CSCDA financing. The bonds issued by CSCDA are limited obligations of the borrower, not CSCDA or the Program Participant. The CSCDA joint powers agreement expressly provides that CSCDA is a public entity separate and apart from the Program Participants, and "its debts, liabilities and obligations do not constitute debts, liabilities or obligations of any party to the joint powers agreement." The Program Participants are not responsible for any repayment of debt by borrowers, nor are they named in any of the bond documents. DISCUSSION: The California Statewide Communities Development Authority, known as "CSCDA" or "California Communities", is a joint powers authority sponsored by the League of California Cities ("League") and the California State Association of Counties ("CSAC"). CSCDA was created by the League and CSAC in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California. CSCDA has issued more than $50 billion through 1,300 plus financings since 1988 and consistently ranks in the top 10 of more than 3,000 nationwide public issuers of tax- exempt debt, as measured by annual issuance amount. TPG/TSG Venture I Acquisition, LLC is seeking financing from CSCDA for the acquisition, construction and development of the following multifamily rental housing projects (collectively known as the Uptown Newport Village) located within the City: Name Number Location of Units Aggregate Maximum Bond Amount Uptown Newport 1 4301 Jamboree Road, 233 $92,000,000 Apartments Newport Beach, California Uptown Newport II 4201 Jamboree Road, 222 $100,000,000 Apartments Newport Beach, California 13-2 Issuance of Multi -Family Housing Revenue Bonds for the Uptown Newport Development by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC January 24, 2017 Page 3 Uptown Newport Village will replace a pair of aging industrial buildings on 25 acres near the airport with a walkable neighborhood of retail shops, restaurants, parks and 1,244 apartment units. The benefits that accrue to private developers seeking CSCDA financing include: Cost effective bond financing for a wide range of public benefit projects. In depth knowledge on the issuance and post issuance compliance requirements of private activity bonds, including the state volume cap process when applicable. Extensive experience in working with all public finance professionals covering the California marketplace. Recognized identity in the tax-exempt marketplace, which is key to marketing the sale of bonds. CSCDA is authorized by its Agreement to issue bonds, notes, and other evidences of indebtedness or certificates of participation in leases or other agreements in order to promote economic development, including the provisions and maintenance of multi -family housing. However, under the terms of the Agreement, CSCDA may not provide financing unless the governing body of the Program Participant where the project is located (City of Newport Beach) approves the project and its financing. Federal tax law and Section 9 of the CSCDA joint powers agreement require that a public hearing be held in the jurisdiction where the project is located. This provides members of the public and the governing board the ability to comment and approve or disapprove the issuance of bonds for the project. Any project not approved by the local jurisdiction will not be financed through CSCDA. The law requires a public hearing for the approval of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) Resolution (Attachment A). ENVIRONMENTAL REVIEW: All significant environmental effects associated with the Uptown Newport Apartments have been adequately addressed in the previously certified Environmental Impact Report No. ER2012-001 (SCH No. 2010051094) ("EIR"), which included a mitigation, monitoring and reporting program and statement of overriding considerations. Although the subject action will not result in a direct or reasonable foreseeable indirect physical change to the environment, the City of Newport Beach intends to use said document for the approval of the subject action. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Notice of this meeting was also published in the Daily Pilot and the item was placed on the Agenda, which was posted at City Hall and on the City website. 13-3 Issuance of Multi -Family Housing Revenue Bonds for the Uptown Newport Development by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC January 24, 2017 Page 4 ATTACHMENT: Attachment A - A Resolution of the City Council of the City of Newport Beach Approving the Issuance by the California Statewide Communities Development Authority of Multifamily Housing Revenue Bonds for the Uptown Newport I Apartments and Uptown Newport II Apartments 13-4 ATTACHMENT A A Resolution of the City Council of the City Of Newport Beach Approving the Issuance by the California Statewide Communities Development Authority of Multifamily Housing Revenue Bonds for the Uptown Newport I Apartments and Uptown Newport II Apartments 13-5 RESOLUTION NO. 2017- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE UPTOWN NEWPORT I APARTMENTS AND UPTOWN NEWPORT II APARTMENTS WHEREAS, the California Statewide Communities Development Authority ("Authority') is authorized pursuant to the provisions of California Government Code Section 6500 et seq. and the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 ("Agreement"), among certain local agencies throughout the State of California, including the City of Newport Beach ("City"), to issue revenue bonds in accordance with Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code for the purpose of financing multifamily rental housing projects; WHEREAS, TPG/TSG Venture I Acquisition, LLC, or related entities, has requested that the Authority adopt a plan of financing providing for the issuance of multifamily housing revenue bonds ("Bonds") in one or more series issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, to finance the acquisition, construction and development of the following multifamily rental housing projects located within the City: Name Uptown Newport I Apartments Uptown Newport II Apartments WHEREAS, the Apartments and Uptown Management Corporation. Aggregate Number Maximum Bond Location of Units Amount 4301 Jamboree Road, 233 $92,000,000 Newport Beach, California 4201 Jamboree Road, 222 $100,000,000 Newport Beach, California facilities are respectively known as Uptown Newport I Newport II Apartments ("Projects") and operated by Picerne WHEREAS, the Bonds or a portion thereof will be "private activity bonds" for purposes of the Internal Revenue Code of 1986 ("Code"); WHEREAS, pursuant to Code Section 147(f), prior to their issuance, private activity bonds are required to be approved by the "applicable elected representative" of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice; 13-6 Resolution No. 2017 - Page 2 of _ WHEREAS, the City Council held a public hearing and previously approved the issuance of the Bonds on January 26, 2016, but the Code requires that the issuance of the Bonds happen within one (1) year of approval by the City, therefore the City is complying with the Code by conducting a new hearing and reapproving the Bonds; WHEREAS, the members of this City Council are the applicable elected representatives of the City; WHEREAS, there has been published, at least 14 days prior to the date hereof, in a newspaper of general circulation within the City, a notice that a public hearing regarding the Bonds would be held on a date specified in such notice; WHEREAS, such public hearing was conducted on such date, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds; WHEREAS, the Authority is also requesting that the City Council approve the issuance of any refunding bonds hereafter issued by the Authority for the purpose of refinancing the Bonds which financed the Project ("Refunding Bonds"), but only in such cases where federal tax laws would not require additional consideration or approval by the City Council; and WHEREAS, it is intended that this resolution shall constitute the approval of the issuance of the Bonds required by Section 147(f) of the Code and Section 9 of the Agreement. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH RESOLVES AS FOLLOWS: Section 1: The above recitals are true and correct and are incorporated into the substantive portion of this resolution. Section 2: The City Council hereby approves the issuance of the Bonds and the Refunding Bonds by the Authority. It is the purpose and intent of the City Council that this resolution constitutes approval of the Bonds for the purposes of (a) Section 147(f) of the Code and (b) Section 9 of the Agreement. Section 3: The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents that 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 approved hereby. 13-7 Resolution No. 2017 - Page 3 of Section 4: The City Clerk shall forward a certified copy of this resolution to: Justin Cooper, Esq. Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, California 94105 Section 5: All significant environmental effects associated with the Uptown Newport Apartments have been adequately addressed in the previously certified Environmental Impact Report into. ER2012-001 (SCH No. 2010051094) ("EIR°), which included a mitigation, monitoring and reporting program and statement of overriding considerations. Although the subject action will not result in a direct or reasonable foreseeable indirect physical change to the environment, the City of Newport Beach intends to use said document for the approval of the subject action. Section 6: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 7: This resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting the resolution. ADOPTED this day of , 2017. Kevin Muldoon Mayor ATTEST: Leiiani I, Brown City Clerk APPROVED AS TO FORM: CIT ATTORNEY'S PfflLE Aaron C. Harp City Attorney 13-8