CITY OF PALM DESERT
STAFF REPORT
MEETING DATE: May 8, 2025
PREPARED BY: Jessica Gonzales, Housing Manager
SUBJECT: PROPOSED PLAN FOR BOND ISSUANCE BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR PHASE
I OF THE PALM VILLAS AT MILLENNIUM APARTMENT PROJECT
LOCATED NORTH OF GERALD FORD DRIVE BETWEEN DINAH SHORE
DRIVE AND TECHNOLOGY DRIVE
RECOMMENDATION:
1. Conduct the public hearing under the requirements of Tax and Equity Fiscal Responsibility Act (“TEFRA”) and the Internal Revenue Code of 1986, as amended (the “Code”) in connection with the proposed issuance in one or more series of revenue bonds by the California Statewide Communities Development Authority (“CSCDA”), a joint exercise of powers authority and public entity of the State of California, in an amount not to exceed Sixty Five Million Dollars ($65,000,000) (the “Bonds”), to finance the acquisition, construction and development of Phase I of Palm Villas at Millennium Apartments, 121-units of a 241-unit multifamily affordable rental housing project located north of Gerald Ford Drive between Dinah Shore Drive and Technology Drive, Palm Desert, California (the “Phase I of Project”) and receive public comments.
2. Adopt a Resolution entitled “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT, CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF EXEMPTFACILITY BONDS FOR PHASE I OF PALM VILLAS AT MILLENNIUM,” approving the issuance of the Bonds by CSCDA for the benefit of PD Millennium Partners, L.P., a California Limited Partnership (the "Borrower") a partnership of which Palm Communities (the "Developer") or a related person to the Developer is the general partner, to provide for the financing of the Project. Such adoption is solely for the purpose of satisfying the requirements of TEFRA, the Code, and California Government Code Sections 6500 et seq.
3. Authorize the Mayor or the Executive Director to enter into and execute the Indemnity Agreement, attached hereto in substantial form.
BACKGROUND/ANALYSIS:
On October 13, 2022, the City Council unanimously adopted a resolution approving the development of 241-unit multi-family affordable rental housing project consisting of two phases with Phase I providing 121-units and Phase II providing 120-units, known as Palm Villas at Millennium, located north of Gerald Ford Drive between Dinah Shore Drive and Technology Drive, Palm Desert, California (the “Project”). The Borrower is requesting bond financing from the CSCDA in an aggregate principal amount not to exceed Sixty-Five Million Dollars ($65,000,000) of tax-exempt revenue bonds to construct Phase I, 121-units of a 241-unit multifamily affordable rental housing project (the “Phase I of Project”). CSCDA was formed, to provide local governments with tools for the timely financing of public benefit projects. 513
City of Palm Desert
Palm Villas at Millennium Project - TEFRA Hearing, Bond Issuance
As part of the process to issue bonds, the local agency is required to hold a public hearing and adopt a resolution supportive of the bond issuance. The Bonds to be issued by the CSCDA for the Project will be the sole responsibility of the Borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not obligations of the City and will be paid solely from funds provided by the Borrower. As further confirmation, the City is requesting the Developer to indemnify the City from any action arising directly or indirectly out of or related to the City’s approval of the issuance of the Bonds.
Affordable housing development is a priority of the City Council, and therefore staff recommends that the City Council take public testimony during the public hearing and adopt a resolution supporting the Borrower’s request.
Strategic Plan:
This Project achieves several priorities under the Land Use, Housing & Open Space chapter and the Transportation chapter of the Strategic Plan.
Land Use, Housing & Open Space
Priority No. 2: “Facilitate development of high-quality housing for people of all income levels.”
Legal Review:
This report and resolutions have been reviewed by the Special Legal Counsel.
FINANCIAL IMPACT:
There is no direct fiscal impact to the City resulting from the approval of the Borrower’s request.
Adoption of a resolution would allow CSCDA to issue housing bonds for the financing of the construction of Phase I, 121-units of the Palm Villas at Millennium Project.
ATTACHMENTS:
1. City Council Resolution
2. City Council Public Hearing Notice
3. Indemnity Agreement
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RESOLUTION NO. 2025-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY OF EXEMPT FACILITY BONDS
FOR PHASE I OF PALM VILLAS AT MILLENNIUM
WHEREAS, the California Statewide Communities Development Authority (the "Authority") is authorized pursuant to the provisions of California Government Code Section 6500 et seq. and the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 (the "Agreement"), among certain local agencies throughout the State of California, including the City of Palm Desert (the "City"), to issue revenue bonds in accordance with Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code for the purpose of financing multifamily rental housing projects; and
WHEREAS, PD Millennium Partners LP, a California limited partnership (the “Borrower”) or a partnership of which Palm Communities, a California Corporation (the “Developer”) or a related person to the Developer is the general partner (the “Borrower”), has requested that the Authority 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 Revenue Code of 1986 (the "Code") in one or more series issued from time to time, including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $65,000,000 in outstanding aggregate principal amount (the "Bonds"), to finance or refinance the acquisition, construction and development of Phase I, 122-units of a 241-unit multifamily rental housing project located north of Gerald Ford Drive between Dinah Shore Drive and Technology Drive (APN 694-120- 028), Palm Desert, California (the "Phase I of the Project"); and WHEREAS, pursuant to Section 147(f) of the Code, prior to their issuance, private activity bonds are required to be approved by the "applicable elected representative" of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice.
WHEREAS, the members of this City Council (this "City Council") are the applicable elected representatives of the City.
WHEREAS, there has been published, at least 7 days prior to the date hereof, in a newspaper of general circulation within the City, a notice that a public hearing regarding the Bonds would be held on a date specified in such notice.
WHEREAS, such public hearing was conducted on such date, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds.
WHEREAS, the Authority is also requesting that the City Council approve the issuance of any refunding bonds hereafter issued by the Authority for the purpose of refinancing the Bonds which financed the Project (the "Refunding Bonds"), but only in such cases where federal tax laws would not require additional consideration or approval by the City Council.
WHEREAS, it is intended that this Resolution shall constitute the approval of the issuance of the Bonds required by Section 147(f) of the Code and Section 9 of the Agreement. 515
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM DESERT AS FOLLOWS:
SECTION 1. The above recitals are true and correct.
SECTION 2. The City Council hereby approves the issuance of the Bonds and the Refunding Bonds by the Authority. It is the purpose and intent of the City Council that this resolution constitute approval of the Bonds for the purposes of (i) Section 147(f) of the Code and (ii) Section 9 of the Agreement.
SECTION 3. The issuance of the Bonds shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no responsibility or liability whatsoever with respect to the Bonds.
SECTION 4. Neither the City nor its staff have reviewed or considered the financial feasibility of the Project or the expected financing or operation of Phase I of the Project with regard to any State of California statutory requirements. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct the Project or any refinancing of Phase I of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation, installation or operation of the Project or the Phase I of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or its membership therein.
SECTION 5. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents that they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing approved hereby.
SECTION 6. This Resolution shall take effect immediately upon its passage.
ADOPTED ON May 8, 2025.
JAN C. HARNIK
MAYOR
ATTEST:
ANTHONY J. MEJIA
CITY CLERK
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I, Anthony J. Mejia, City Clerk of the City of Palm Desert, hereby certify that Resolution No. ___ is a full, true, and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Desert on _______________, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Desert, California, on ___________________. _________________________
ANTHONY J. MEJIA
CITY CLERK
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C I T Y O F P A L M
D E S E R T 73-510 FRED WARING DRIVE
PALM DESERT, CALIFORNIA 92260-2578
CITY OF PALM DESERT
PUBLIC HEARING NOTICE
NOTICE IS HEREBY GIVEN THAT A PUBLIC HEARING WILL BE HELD BEFORE THE CITY
COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, REGARDING ISSUANCE OF
EXEMPT FACILITY BONDS FOR PHASE I OF PALM VILLAS AT MILLENNIUM PUBLIC HEARING: NOTICE IS HEREBY GIVEN that the City Council of the City of Palm Desert, California, will hold a Public Hearing at its meeting on May 8, 2025. The City Council meeting begins at 4:00 p.m. in the Council Chamber at 73510 Fred Waring Drive, Palm Desert, California.
Pursuant to Assembly Bill 2449, this meeting may be conducted as a hybrid meeting allowing public access via teleconference or in person. Options for remote participation will be listed on the Posted Agenda for the meeting at https://www.palmdesert.gov/connect/city-council no later than May 2, 2025.
PROJECT DESCRIPTION: The City Council of the City of Palm Desert (the "City") will conduct a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 (the "Code"), at which it will hear and consider information concerning a proposed plan of financing providing for the issuance by the California Statewide Communities Development Authority of exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of the Code in one or more series issued from time to time, including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $65,000,000 in outstanding aggregate principal amount, to finance or refinance the acquisition, construction and development of Phase I, 121-units of a 241-unit multifamily rental housing project located north of Gerald Ford Drive between Dinah Shore Drive and Technology Drive (APN 694-120-028), Palm Desert, California (the “Phase I of the Project”). The facilities are to be owned by PD Millennium Partners LP, a California limited partnership or a partnership of which Palm Communities (the “Developer”) or a related person to the Developer is the general partner (the “Borrower”).
COMMENT ON THIS APPLICATION: Those wishing to comment on this application may either appear in person at the public hearing or submit written comments, which must be received by 10:00 a.m. on the day of the hearing. Written comments should be sent to the City of Palm Desert at 73510 Fred Waring Drive, Palm Desert, California 92260, Attention: City Clerk, or emailed to: [email protected].
Si necesita ayuda con esta notificación por favor llame a la Ciudad de Palm Desert y comuníquese con Damian Olivares (760) 346-0611.
PUBLISH: THE DESERT SUN ANTHONY MEJIA, MMC, CITY CLERK
APRIL 25, 2025 CITY OF PALM DESERT, CALIFORNIA
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INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this “Agreement”) is entered into as of May 8, 2025, by and between PALM COMMUNITIES, a California Corporation (“Palm Communities”), and the CITY OF PALM DESERT, a California municipal corporation (the “City”), with reference to the following facts and circumstances:
R E C I T A L S
WHEREAS, PD Millennium Partners L.P., a California Limited Partnership, a partnership of which Palm Communities or a related person to Palm Communities is the general partner, has requested that the California Statewide Communities Development Authority (the “CSCDA”) 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 Revenue Code of 1986 (the “Code”) in one or more series issued from time to time, including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed Sixty Five Million Dollars ($65,000,000) in aggregate principal amount (the “Bonds”), to finance or refinance the acquisition, construction and development of Phase I, 121-units, of a 241-unit multifamily rental housing project located north of Gerald Ford Drive between Dinah Shore Drive and Technology Drive, Palm Desert, California; and
WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds by CSCDA must be approved by the City because the Project is located within the territorial limits of the City; and
WHEREAS, the City Council of the City (the “City Council”) is the elected legislative body of the City and is one of the “applicable elected representatives” required to approve the issuance of the Bonds under Section 147(f) of the Code; and WHEREAS, the CSCDA has requested that the City Council approve the issuance of the Bonds by the CSCDA in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 9 of the Amended and Restated Joint Exercise of Powers Agreement relating to the CSCDA, dated as of June 1, 1988 (the “Agreement”), among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following notice duly given, held a public hearing regarding the issuance of the Bonds, and on May 8, 2025, adopted Resolution No. ___ of the City approving the issuance of the Bonds.
NOW, THEREFORE, in consideration of the foregoing recitals, and the City’s adoption of Resolution No. ____, Palm Communities and the City agree as follows:
1. Indemnification. From and after the execution of this Agreement, Palm Communities hereby agrees to indemnify, defend (with counsel reasonably acceptable to City) and hold harmless the City and its officers, employees and council members (collectively, the “City Parties”) from and against all legal actions or proceedings, and any other claims, liabilities, losses, judgments, damages, awards, costs and expenses (including reasonable attorneys’ fees and court costs actually incurred by the City Parties) arising directly or indirectly out of or related to the City’s approval of the issuance of the Bonds as provided in Resolution No. ___ of the City and adopted on May 8, 2025.
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2. Governing Law; Interpretation/Construction of Agreement. This Agreement shall be construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. This Agreement shall be construed according to its fair meaning as if prepared by both parties hereto.
3. Modifications; Waivers. No modifications of this Agreement, shall be effective unless it is in writing and is duly authorized and executed by the parties hereto, and similarly no waiver by either party of any provision of this Agreement shall be effective unless it is in writing and is duly authorized and executed by the waiving party.
4. Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
5. Merger of Prior Agreements and Understandings. This Agreement contains the entire understanding between the parties related to the matters covered by this Agreement and all prior or contemporaneous agreements, understandings, representations and statements, whether oral or written, are merged herein and shall be of no further force or effect.
6. Counterparts; Electronic Delivery. This Agreement may be executed in any number of counterparts which, when taken together, shall constitute a fully-executed original. [Remainder of this page intentionally left blank]
[Signatures appear on next page]
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IN WITNESS WHEREOF, Palm Communities and the City have executed this Agreement as of the date first set forth above.
PALM COMMUNITIES,
a California Corporation
By:
Name:
Title:
By:
Name:
Title:
CITY OF PALM DESERT,
a California municipal corporation
By:
Name: Jan C. Harnik
Title: Mayor
ATTEST:
Anthony J. Mejia, City Clerk
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