RECOMMENDATION(S): (CONT'D)
3. AUTHORIZE and DIRECT the Chair of the Board of Supervisors, the Vice-Chair of the Board of Supervisors, the County Administrator, the Director of the Department of Conversation and Development, the Assistant Deputy Director of the Department of Conservation and Development, County Counsel and the Clerk of the Board to take any and all actions and execute and deliver any and all certificates, agreements and other documents needed in connection with the modifications to the documents of the Note.
FISCAL IMPACT:
No impact to the General Fund. The County will be reimbursed for any costs incurred in the process of conducting the TEFRA Hearing and Board of Supervisors' approval. The reissuance authorization is for the sole purpose of satisfying the provisions of the Code. No County funds are pledged to secure the Note.
BACKGROUND:
Contra Costa County, through the Department of Conservation and Development, operates a multifamily mortgage revenue bond financing program. The purpose of the program is to increase or preserve the supply of affordable rental housing available to low and very low-income households. The County program may be undertaken within the unincorporated County and within the cities located in the County that have agreed to let the county operate the program in their jurisdiction. The County is authorized to issue multifamily housing revenue notes and bonds pursuant to Section 52075 and following of the California Health and Safety Code.
On January 7, 2020, the Board of Supervisors adopted Resolution No. 2020/7 authorizing the issuance of a multifamily housing revenue note (the "Note") in the principal amount of $38,300,000, and the loan of the proceeds on the sale of the Note to Marina Heights Apartments, LP, a California limited partnership (the "Borrower"), to provide financing for costs of the acquisition and rehabilitation of a 200-unit residential rental housing development located at 2 Marina Boulevard in Pittsburg, known as Marina Heights Apartments (the "Development").
The Borrower and the owner of the Note have agreed to modify some of the documents executed in connection with the issuance of the Note, to increase the principal amount of the Note to remain outstanding following the conversion of the Note from the construction phase to the permanent phase of the financing. The modification of the documents will result in a "reissuance" of the Note for purposes of the Internal Revenue Code of 1986, as amended. In order for the interest on the Note to continue to be tax-exempt, Section 147(f) of the Code requires that the Board of Supervisors approve the reissuance of the Note following the conduct of a public hearing on the financing of the Development.
A public hearing was held by the Department of Conservation and Development on March 8, 2022, where members of the community were given an opportunity to speak in favor of or against the use of tax-exempt financing for the Development. No public comments were received. A notice of the hearing was published in the East County Times (proof of publication attached) on February 28, 2022.
CONSEQUENCE OF NEGATIVE ACTION:
Without the approval of the reissuance, the interest on the Note will become subject to federal income taxes.
CHILDREN'S IMPACT STATEMENT:
Marina Heights Apartments will support outcome number 3: Families are Economically Self Sufficient.