STAFF REPORT
City of Lancaster
PH 1
10/8/2024
TN
Date: October 8, 2024
To: Mayor Parris and City Council Members
From: Chenin Dow, Assistant Director – Community Development Lisa Anderson, Analyst – Housing
Subject: TEFRA Hearing/Approval of Multifamily Housing Revenue Bonds for Terracina at Lancaster Apartments
Recommendation:
Adopt Resolution No. XX pursuant to Section 147(f) of the Internal Revenue Code of 1986 approving the issuance of housing revenue bonds (the “Housing Revenue Bonds”) by the California Municipal Finance Authority (“CMFA”) in an aggregate principal amount not to exceed $55,000,000 to assist in the financing of the acquisition, construction, improvement and equipping of a multifamily rental housing project located at 1743 East Avenue J-4 in the City of Lancaster, California (the “Project”).
G.C. Section 84308: No
Fiscal Impact:
There is no financial impact. The City itself is not issuing the Housing Revenue Bonds, is not obligated to repay the Housing Revenue Bonds and is not pledging or otherwise committing any of the City’s revenue or other assets to secure repayment of the Housing Revenue Bonds. The Housing Revenue Bonds are payable solely from revenue received pursuant to the terms and provisions of certain financing agreements to be executed by the developer.
Background:
Lancaster 690, L.P., a California limited partnership (the “Borrower”), of which USA Properties Fund, Inc. (the “Developer”) or a related person to the Developer is the general partner, has requested that the CMFA adopt a plan of financing providing for the issuance of exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of the Internal 1 7
7 9
Revenue Code of 1986 (the “Code”) in an aggregate principal amount not to exceed $55,000,000 (the “Bonds”), to finance the acquisition, construction, improvement and equipping of a multifamily rental housing project located at 1752 East Avenue J-4, Lancaster, California.
The Borrower requests that the City approve CMFA’s issuance of the Housing Revenue Bonds in order to finance the above-mentioned project. The Housing Revenue Bonds will be tax- exempt private activity bonds for purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the project to be financed is located. In order for the City to approve CMFA’s issuance of the Housing Revenue Bonds, the City must conduct a Tax Equity and Fiscal Responsibility Act (“TEFRA”) hearing to allow for public comment on the use of the tax-exempt bond financing. Notice of the TEFRA hearing was published in the Antelope Valley Press, a newspaper of general circulation in the community, on September XX, 2024, and the public hearing is scheduled for October 8, 2024.
The City has a significant interest in the success of these projects. Therefore, staff recommends adoption of this resolution in order to approve CMFA’s issuance of the Housing Revenue Bonds pursuant to Section 147(f) of the Internal Revenue Code of 1986. Adoption of this resolution does not establish or warrant in any manner the creditworthiness or repayment of the Housing Revenue Bonds.
LA/js
Attachment:
Resolution No. XX