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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
CITY OF ANAHEIM
HOUSING & COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: OCTOBER 4, 2022
FROM: HOUSING & COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ANAHEIM ADOPTING A RESOLUTION PURSUANT TO
SECTION 147(f) OF THE INTERNAL REVENUE CODE OF 1986
APPROVING THE ISSUANCE OF BONDS BY THE ANAHEIM
HOUSING AUTHORITY FOR BUENA ESPERANZA
APARTMENTS
ATTACHMENT (Y/N): YES ITEM # 13
RECOMMENDATION:
That the City Council, following a public hearing, adopt a Resolution pursuant to Section 147(f) of the Internal Revenue Code of 1986 approving the issuance of bonds by the Anaheim Housing Authority for Buena Esperanza Apartments.
DISCUSSION:
Jamboree Housing Corporation (Developer) previously requested that the Anaheim Housing Authority issue tax-exempt bonds in an amount not to exceed $12,200,000 to finance the Developer’s acquisition, rehabilitation, and conversion of the 70-unit Econo Lodge motel located at 2691 W. La Palma Avenue to a Permanent Supportive Housing apartment community. Bond financing has been used periodically to assist in the acquisition/rehabilitation and conversion of apartments for the creation of long term affordable housing and new construction affordable housing projects. To that end, the Anaheim Housing Authority (Authority) adopted a resolution regarding its intention to issue such bonds on July 30, 2019 and subsequently approved the Bond issuance on March 24, 2022.
The Buena Esperanza PSH Apartments (Project) was completed in July 2021 and is now fully leased and operational providing 69 studio units for individuals who are exiting a chronically homeless condition. In February 2022, the Developer reached out to the City requesting an amendment of the bonds to issue an additional $1,360,000 for the Project due to significant cost overruns experienced by the Project during construction. City staff and the City’s financial consultant reviewed and confirmed the cost overruns experienced by the Project which were caused by labor shortages and material cost increases during the COVID-19 pandemic.
This action by the City Council authorizes the Anaheim Housing Authority to provide the additional bond financing for the Project, as required by State and Federal Law. The proposed action fulfills federal tax law requirements under the Tax Equity and Fiscal Responsibility Act (TEFRA). Notice of the public hearing was published in the Anaheim Bulletin on September 22, 2022. In order to move the project forward and complete the Resolution Pursuant to Section 147(f) of the Internal Revenue Code of 1986 approving the issuance of bonds by the Anaheim Housing Authority for Buena Esperanza Apartments
October 4, 2022
California Debt Limit Allocation Committee (CDLAC) application process, staff is requesting approval of the Resolution in accordance with Section 147(f) of the Internal Revenue Code. The proposed additional bond issuance is not to exceed an amount of $1,360,000. The bonds are to be repaid from project revenues; accordingly there is no risk of default to the City or Housing Authority. The Authority will receive 1/8 of 1% of the bond amount at the time issuance, and on an annual basis thereafter, to monitor the affordable units.
The Authority will be considering the amendment to the bonds for the additional bond issuance and is agendized separately on the Housing Authority agenda. Staff is supportive of the request for additional bond financing, and is therefore recommending the City Council approve the additional bond issuance for the Project.
IMPACT ON BUDGET:
There is no budgetary impact. The bonds are to be repaid by the Developer’s project revenues. The Anaheim Housing Authority will receive annual administrative bond fee revenue.
Respectfully submitted,
Grace Ruiz-Stepter
Housing & Community Development Director
Attachment:
1. Resolution