HomeMy WebLinkAbout18 - Issuance of Multi-Family Housing Revenue Bonds for the Uptown Newport Project18-1
NEWPORT BEACH
City Council Staff Report
COUNCIL STAFF REPORT
CITY OF
January 26, 2016
Agenda Item No. 18
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.
RECOMMENDATION:
a) Conduct a public hearing; and
b) Adopt Resolution No. 2016-16, 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.
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:949-644-3214
TITLE:
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, LLC
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 26, 2016
Page 2
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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 Location
Number
of Units
Aggregate
Maximum Bond
Amount
Uptown Newport I
Apartments
4301 Jamboree Road,
Newport Beach,
California
233 $92,000,000
Uptown Newport II
Apartments
4201 Jamboree Road,
Newport Beach,
California
222 $100,000,000
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.
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 26, 2016
Page 3
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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 (See 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.
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 26, 2016
Page 4
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ATTACHMENT:
Attachment A - Resolution
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
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RESOLUTION NO. 2016-___
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 Location
Number
of Units
Aggregate
Maximum Bond
Amount
Uptown Newport I
Apartments
4301 Jamboree Road,
Newport Beach,
California
233 $92,000,000
Uptown Newport II
Apartments
4201 Jamboree Road,
Newport Beach,
California
222 $100,000,000
WHEREAS, the facilities are respectively known as Uptown Newport I
Apartments and Uptown Newport II Apartments (“Projects”) and operated by Picerne
Management Corporation;
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
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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;
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.
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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 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.
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 ___________, 2016.
Diane B. Dixon,
Mayor
ATTEST:
Leilani I. Brown,
City Clerk
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