Agenda Item
City Council
Item #: 10.1. 4/12/2022 File #: 22-0142
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Susan Galvan, Interim Community Development Director
1. SUBJECT
Public Hearing to consider conduit bond financing for the Villa St. Joseph Apartments Project.
2. SUMMARY
Mercy Housing California 107, L.P., plans to develop the Villa St. Joseph Apartments, a 50-unit affordable housing project to be located at 480 S. Batavia Street. Proposed financing includes bond proceeds from multifamily housing revenue bonds issued by the California Municipal Finance Authority. The City is required to conduct a public hearing for the requested bond issuance to comply with state and federal law. The City would have no obligation, liability or responsibility for the project or the repayment of the bonds.
3. RECOMMENDED ACTION
Adopt Resolution No. 11382. A Resolution of the City Council of the City of Orange approving the issuance of revenue bonds by the California Municipal Finance Authority in an aggregate principal amount not to exceed $20,000,000 to finance a multifamily rental housing facility for the benefit of Mercy Housing California 107, L.P., or an affiliate thereof, and certain other matters relating thereto.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments.
6. DISCUSSION AND BACKGROUND
Mercy Housing California, a California nonprofit corporation (the “Sponsor”),on behalf of Mercy Housing California 107, L.P., a California limited partnership, or another entity (such limited partnership or other entity, the “Borrower”)to be created by the Sponsor or by an affiliate of the Sponsor, has requested that California Municipal Finance Authority (CMFA) serve as the municipal issuer of one or more series of tax-exempt revenue bonds in an aggregate principal amount not to exceed $20,000,000 (the “Bonds”). The proceeds of the Bonds would be used for the purpose of making a loan to the Borrower to finance the acquisition, construction, renovation, improvement and equipping of a 50-unit multifamily rental housing facility for very-low income seniors (the “Project”),to City of Orange Printed on 4/7/2022Page 1 of 2
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Item #: 10.1. 4/12/2022 File #: 22-0142
be owned and operated by the Borrower and located at 480 S. Batavia Street.
In order for all or a portion of the bonds to qualify as tax-exempt bonds, the City of Orange is required to conduct a public hearing to comply with the Tax Equity and Fiscal Responsibility Act (“TEFRA”) and the Internal Revenue Code of 1986, as amended (the “Code”). The TEFRA Hearing provides members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Prior to this TEFRA Hearing, a public hearing notice was published to provide the required public notice. Following the close of the TEFRA Hearing, an “applicableelected representative”of the governmental unit hosting the Project (i.e., the City Council) must provide its approval of the issuance of the Bonds for the financing of the Project.
The City is a member of CMFA, but would have no financial, legal or other obligation, liability or responsibility for the Project or the repayment of the Bonds. Staff is recommending that the City Council adopt the attached Resolution to authorize CMFA to issue the Bonds for the Project and satisfy the requirements of TEFRA, the Code, and California Government Code Section 6500.
The proposed entitlements and preliminary award of City funds for the Project are discussed under separate staff reports.
7. ATTACHMENTS
· Resolution No. 11382
City of Orange Printed on 4/7/2022Page 2 of 2
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