Agenda

Return

C. 53

To:	Board of Supervisors
From:	John Kopchik, Director, Conservation & Development Department
Date:	October 16, 2018

Contra

Costa

County

Subject:

Multifamily Mortgage Revenue Bonds - Pinecrest Apartments Redemption and Sale of Bonds for Antioch Renovation (Pinecrest and Terrace Glen), Antioch

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 10/16/2018

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Kara Douglas 925-674-7880

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: October 16, 2018
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ADOPT Resolution No. 2018/489 approving documents to facilitate a redemption of bonds and sale of Pinecrest Apartments, and to authorize the sale of Multifamily Housing Revenue Bonds in a principal amount not to exceed $10,816,192 to finance the acquisition and rehabilitation of two multifamily rental housing facilities (Pinecrest and Terrace Glen Apartments) for the Antioch Scattered Site Renovation project (the "Development").
1. FIND and DECLARE that the recitals contained in the proposed Resolution are true and correct.

2. APPROVE the sale of Pinecrest Apartments by Pinecrest Affordable Housing L.P. (the "Current Owner").

RECOMMENDATION(S): (CONT'D)

3. APPROVE the form of, and authorize the County to execute, the Termination Agreement between the County, and Wells Fargo Bank, National Association (the "2000 Trustee"), and the Current Owner to terminate the current Regulatory Agreement recorded on Pinecrest Apartments.
4. AUTHORIZE the issuance of County of Contra Costa Multifamily Housing Revenue Bonds (Antioch Scattered Site Renovation), Series 2018A in an aggregate principal amount not to exceed $10,816,192.
5. APPROVE the form of, and authorize the County to execute, the Indenture of Trust between the County and Wells Fargo Bank, National Association (the "Bank").
6. APPROVE the form of, and authorize the County to execute, the Loan Agreement among the Bank, the County and Antioch Recap L.P. (the "Borrower").
7. APPROVE the form of, and authorize the County to execute, two Regulatory Agreements and Declaration of Restrictive Covenants between the County and the Borrower, one for each site.

8. APPROVE the form of, and authorize the County to execute, the Assignment of Deed of Trust and Loan Documents by the County to the Bank.
9. APPOINT Quint & Thimmig, LLP as bond counsel for the transaction.
10. AUTHORIZE and DIRECT the Designated Officers of the County to do any and all things and take any all actions, and execute and deliver any and all certificates, agreements, and other documents which the officer may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with the Resolution. Authorized officers include the Chair of the Board of Supervisors, the Vice-Chair of the Board of Supervisors, County Administrator, the County Director of Conservation and Development, the County Assistant Deputy Director of Conservation and Development, the County’s Community Development Bond Program Manager, County Counsel, and other officers of the County.

FISCAL IMPACT:

No impact to the General Fund. At the closing for the Bonds, the County is reimbursed for costs incurred in the issuance process. Annual expenses for monitoring of Regulatory Agreement provisions ensuring units in the Development will be rented to low income households are accommodated in the documents for the Bonds. The Bonds will be solely secured by and payable from revenues (e.g. Development rents, reserves, etc.) pledged under the Bond documents. No County funds are pledged to secure the Bonds.

BACKGROUND:

The recommended action is the adoption of Resolution No. 2018/489 by the Board, as the legislative body of the County, approving documents to facilitate a redemption of bonds and the sale of Pinecrest Apartments in Antioch in association with a bond refinancing. The Resolution also authorizes the issuance of Multifamily Housing Revenue Bonds, the proceeds of which will be used to finance the acquisition and rehabilitation of two apartment complexes together known as Antioch Scattered Sites Renovation and consisting of Pinecrest Apartments, a 24 unit residential housing development located at 1945 and 1949 Cavallo Road and Terrace Glen Apartments, a 32 unit residential development located at 104-106 West 20th Street and 35-107 West 20th Street, Antioch.

In 2000, the County issued bonds for the acquisition and rehabilitation of Pinecrest Apartments. In order to move forward with the proposed Antioch Scattered Sites Renovation project, the existing bonds must be redeemed, and the regulatory agreement terminated.

The ownership entity for the development is Antioch Recap, L.P., a California limited partnership with RCD GP III, LLC serving as general partner and Red Stone Equity Partners LLC serving as the tax credit investor limited partner. RCD GP III, LLC is an affiliate of Resources for Community Development, a local non-profit housing developer that has developed 445 units of housing in Contra Costa County.

The County, as required by Section 147(f) of the Internal Revenue Code, held a noticed public hearing to permit interested parties to comment on the proposed financing and the Development. That hearing was held on March 6, 2018 with no comments received from the public. The Board adopted Resolution No. 2018/106 on March 20, 2018 to authorize proceeding with the issuance of the Bonds pursuant to Section 147(f) of the Internal Revenue Code. On June 5, 2018, the Board of Supervisors adopted Resolution No. 2018/189 expressing the Board's intent to issue multifamily housing revenue bonds for the Development. That Resolution authorized the submittal of an application by the County for tax-exempt private activity bond authority from the California Debt Limit Allocation Committee.

On May 16, 2018, the California Debt Limit Allocation Committee (CDLAC) awarded the County authority to issue the Bonds in a maximum principal amount of $9,260,000. On September 19, 2018, CDLAC awarded an additional $1,556,196 for a total bond authority of $10,816,192. That authority will be used to issue and sell the Bonds directly to Wells Fargo Bank, National Association. In addition to the proceeds of the Bonds, the Development is proposed to utilize $1.3 million in a new allocation of HOME Investment Partnerships Act funds (a separate item on the October 16, 2018 Board agenda addresses the HOME funds). The transaction is expected to close on or about November 1, 2018.

Pursuant to Section 5852.1 of the California Government Code the County is sharing the good faith estimate of the costs of the bonds provided by Borrower's counsel. The disclosures are included in Attachment A.

CONSEQUENCE OF NEGATIVE ACTION:

Negative action would prevent the County from issuing the Multifamily Housing Revenue Bonds in order to provide a loan to Antioch Recap, L.P. to finance the acquisition and rehabilitation of Pinecrest Apartments and Terrace Glen Apartments.

CHILDREN'S IMPACT STATEMENT:

The two apartment complexes making up the Antioch Renovation development provide 56 units of affordable rental housing appropriate for families. This supports outcome #3: Families are Economically Self Sufficient.