RECOMMENDATION(S): (CONT'D)
2. For purposes of Section 147(f) of the Internal Revenue Code of 1986, authorizing the issuance of Multifamily Housing Revenue Bonds (the "Bonds") to finance the costs of the acquisition and construction of the Development subject to Board of Supervisors approval of all documents related to the Bonds to which the County is a party;
3. Declare official intent to issue the Bonds for the Development;
4. 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; and
5. Authorizing and directing 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.
FISCAL IMPACT:
The requested action will have no impact on 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 are provided for in the bond issue. The bonds will be secured solely by revenues (e.g. rents, reserves, etc.) pledged under the bond documents. No County funds are pledged to secure the bonds.
BACKGROUND:
Contra Costa County, through the Conservation and Development Department, operates a multifamily housing revenue bond financing program. The purpose of the program is to increase or preserve the supply of affordable rental housing available to lower income households and very low income households. The County program may be undertaken within the unincorporated County and within the cities. The proposed financing would implement County policies to increase the supply of affordable housing.
The recommended action is the adoption of a Tax Equity and Fiscal Responsibility Act (TEFRA) Resolution by the Board, as the legislative body of the County, declaring the County's intent to issue the bonds and authorizing the issuance of Multifamily Housing Revenue Bonds, which will be used to finance the acquisition and construction of Veterans Square Apartments, a 30-unit rental housing development located at 901 Los Medanos Street (APN 085-182-001) and 295 E. 10th Street (APN 085-196-001) in Pittsburg. The Board of Supervisors previously allocated approximately $2.2 million in HOME Investment Partnerships Program funds for Veterans Square and approved the County submission of an application to the State for $3.6 million in No Place Like Home funds. On December 17, 2019, the Board of Supervisors approved a Reimbursement Resolution (No. 2019/665, Item C.66) for this prospective issuance of bonds.
Veterans Square, L.P. will be the ownership entity of the project. The partnership consists of Satellite Affordable Housing Associates, or an affiliate, as the managing general partner and a to-be-named tax credit equity investor. The partnership proposes the use of housing revenue bonds to develop and construct the development with 29 units of affordable housing plus one manager’s unit. Fifteen units will be reserved for households with incomes at or below 50% of the area median income and fourteen units will be reserved at or below 30% of the area median income.
The main purpose of the proposed Resolution is to acknowledge that a public hearing was held by the Affordable Housing Program Manager on January 21, 2020, with no public comment, and to meet other bond issuance requirements, which are specified in Section 147(f) of the Internal Revenue Code. The proposed bonds cannot be issued until a separate, future resolution is adopted by the Board of Supervisors specifically authorizing the sale of the bonds. Such separate resolution to authorize the sale of bonds would come before the Board after receipt of an allocation from the State of California for Private Activity Bond Authority. An application for Private Activity Bond Authority was submitted to the California Debt Limit Allocation Committee on January 17, 2020. The expected timing for a Bond Sale Resolution would be July 2020.
The proposed resolution would not relieve the Borrower from obtaining other required permits or approvals required by law, nor obligate the County to incur any obligation or provide financial assistance with respect to the Bonds or the Project. Annual expenses of the County related to the monitoring of the Regulatory Agreement are provided for in the bond issue.
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, and prior actions of officers and agents of the County would not be confirmed and ratified. As a result, Veterans Square, L.P. will not be able to commence with the process of applying to the California Debt Limit Allocation Committee for multifamily housing revenue bond authority through the County.
CHILDREN'S IMPACT STATEMENT:
The recommendation supports one or more of the following children's outcomes:
(1) Children Ready for and Succeeding in School;
(2) Children and Youth Healthy and Preparing for Productive Adulthood;
(3) Families that are Economically Self Sufficient;
(4) Families that are Safe, Stable and Nurturing; and
(5) Communities that are Safe and Provide a High Quality of Life for Children and Families.