RECOMMENDATION(S): (CONT'D)
2. authorizing the issuance of County of Contra Costa Multifamily Housing Revenue Construction/Permanent Note, Series 2012B (Berrellesa Palms) and County of Contra Costa Multifamily Housing Revenue Construction Note, Series 2012B (Berrellesa Palms) in an aggregate principal amount not to exceed $14,500,000;
3. approving the form of the Funding Loan Agreement between the County of Contra Costa and Bank of the West, as funding lender;
4. approving the form of the Borrower Loan Agreement between the County of Contra Costa and Berrellesa Palms, L.P., as borrower;
5. approving the form of the Regulatory Agreement and Declaration of Restrictive Covenants between the County of Contra Costa and Berrellesa Palms, L.P., as borrower;
6. approving the form of the Assignment of Deed of Trust and Loan Documents by the County of Contra Costa to Bank of the West, as funding lender;
7. authorizing the County of Contra Costa to execute and deliver the Notes to Bank of the West, as the purchaser of the Notes;
8. appointing Quint & Thimmig LLP as bond counsel for the transaction; and
9. authorizing and directing any authorized officer 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 which the officer may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Notes in accordance with the Resolution.
FISCAL IMPACT:
No impact to the General Fund. At the closing for the Notes, the County will be reimbursed for costs incurred in the issuance process. Reimbursement by the Borrower of the annual expenses of the County for monitoring of the low income housing provisions of the Regulatory Agreement and Declaration of Restrictive Covenants is provided for in the Note documents. The Notes will be payable from and secured solely by revenues (rents, reserves, etc.) of the development being financed that are pledged under the Note documents. No County funds are pledged to secure the Notes. It should be noted, however, that the Berrellesa Palms project has received $1.525 million in Community Development Block Grant funds, $2.95 million in HOME Investment Partnerships Act funds, and $300,000 in Housing Opportunities for Persons with AIDS funds.
BACKGROUND:
The recommended action is the adoption of a Resolution by the Board, as the legislative body of the County, authorizing the issuance of Multifamily Housing Revenue Notes, the proceeds of which will be used to finance the acquisition and construction of Berrellesa Palms, a 49-unit senior housing development located at 301 Buckley Street in Martinez. The development will include 48 units for extremely-low income frail seniors.
The ownership entity for the development will be Berrellesa Palms, L.P., a California limited partnership with RCD Housing LLC serving as managing general partner of the borrower. RCD Housing LLC is an affiliate of Resources for Community Development, a local non-profit housing developer that has developed over 1,750 units of housing over the past 28 years. Union Bank N.A. will be the tax credit investor special limited partner.
On May 8, 2012, the Board of Supervisors adopted Resolution No. 2012/196 expressing the Board’s intent to issue multi-family housing revenue bonds for the development as required by federal tax law. 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. Subsequent to the adoption of that Resolution, the County, as required by Section 147(f) of 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 June 6, 2012 with no comments received from the public. The Board adopted Resolution No. 2012/287 on June 26, 2012 to authorize proceeding with the issuance of the Notes pursuant to Section 147(f) of the Internal Revenue Code.
On September 26, 2012 the California Debt Limit Allocation Committee awarded the County authority to issue the Notes in a maximum principal amount of $14,500,000. The authority will be used to issue and sell the Notes directly to Bank of the West, with the proceeds of the sale of the Notes to be used to fund a loan by the County to Berrellesa Palms L.P. In addition to the proceeds of the Notes, the project will utilize several other forms of financing detailed in Attachment A. The transaction is expected to close by December 21, 2012.
List of Attachments
A – Plan of Finance
B – Funding Loan Agreement
C – Borrower Loan Agreement
D – Regulatory Agreement and Declaration of Restrictive Covenants
E - Assignment of Deed of Trust and Loan Documents
CONSEQUENCE OF NEGATIVE ACTION:
Negative action would prevent the County from issuing Multifamily Housing Revenue Notes in order to provide a loan to Berrellesa Palms L.P. to finance the acquisition and construction of Berrellesa Palms.
CHILDREN'S IMPACT STATEMENT:
No impact.