RECOMMENDATION(S): (CONT'D)
3. ACKNOWLEDGE that for purposes of Section 147(f) of the Internal Revenue Code of 1986, authorizing the issuance of the Bonds to finance the costs of construction of Riviera Family Apartments is subject to the Board of Supervisors approval of all documents related to the Bonds to which the County is a party.
4. ACKNOWLEDGE that adoption of this resolution does not relieve or exempt the borrower from obtaining required permits or approvals, nor obligate the County to incur any obligation or provide financial assistance with respect to the Bonds or the Development.
5. AUTHORIZE and DIRECT any authorized officer of the County to do any and all things, 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 effectuate the intent of 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. In the event that the Bonds are issued, 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 bond issue. 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 through this Board Order is the adoption of Resolution 2017/431 by the Board authorizing the issuance of an additional $1,600,000 in Multifamily Housing Revenue Bonds (the “Bonds”) to finance additional construction costs with tax-exempt financing.
On March 16, 2016, the County received an allocation of $19,200,000 from the California Debt Limit Allocation Committee (“CDLAC”) to finance the acquisition and construction of Riviera Family Apartments, a 58-unit apartment development located at 1515 and 1738 Riviera Avenue (APN Nos. 174-150-076, 174-140-019, 174-140-025) in Walnut Creek (the “Development”). On September 23, 2016, the County issued the Bonds and an additional $1,529,702 in taxable bonds (for a total of $20,729,702) to Riviera Family Apartments, L.P. (the “Borrower”), a California limited partnership to finance the acquisition and construction of the Development. The taxable bonds have not been expended and the Borrower now wishes to convert them into tax-exempt bonds. The issuance of the 2017 Bond shall be subject to the conditions enumerated in Section 1 of the Resolution.
A requirement of the federal tax law is that the prospective financing be subject to a conditional statement of intent to issue bonds to reimburse expenses incurred prior to the date the bonds are issued, i.e. a reimbursement resolution must be adopted by the Board of Supervisors. Also, CDLAC requires that a reimbursement resolution be adopted before an application may be made for such an allocation. The adoption of a reimbursement resolution will not obligate the County or the Borrower without future discretionary actions, but will indicate the intent of the County to issue the bonds if all of the conditions in the reimbursement resolution have been satisfied.
Additional financing for the project includes:
City of Walnut Creek loans: $6 million
County HOME/HOPWA loans: $2 million
State Affordable Housing and Sustainable Communities: $2.3 million
Sponsor equity: $2.3 million
State Proposition 1C Infill Infrastructure Grant: $2.8 million
Low income housing tax credit equity: $16 million
CONSEQUENCE OF NEGATIVE ACTION:
Negative action would prevent the County from meeting the public approval requirement of the Internal Revenue Code for issuing the Bonds. As a result, the Bonds could not be issued by the County.
CHILDREN'S IMPACT STATEMENT:
The Development will provide 58 units of affordable housing appropriate for families. This supports outcome #3: Families are Economically Self Sufficient.