City of Sacramento
City Council - 5PM Report
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www.cityofsacramento.org
File ID: 2023-01543 12/12/2023 Public Hearing Item 27.
Mirasol Village Block A: Re-Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing File ID: 2023-01543
Location: 1200 Richards Blvd., District 4, Represented by Councilmember Valenzuela Recommendation: Conduct a public hearing and upon conclusion; 1) adopt a City Council Resolution indicating the City Council has conducted a Re-Tax Equity and Fiscal Responsibility Act public hearing related to the proposed construction and financing of Mirasol Village Block A.
Contact: Christine Weichert, Director, Development Finance, (916) 440-1353, [email protected]; Sacramento Housing and Redevelopment Agency
Presenter: Whitney Hinton, Program Manager, (916) 440-1325, [email protected]; Sacramento Housing and Redevelopment Agency
Attachments:
1-Description/Analysis
2-City Council Resolution - TEFRA
Additional Description/Analysis
Issue Detail: On October 13, 2020, the City Council (Council) conducted a Tax Equity and Fiscal Responsibility Act public hearing, and the Housing Authority Board approved the Housing Authority of the City of Sacramento to provide a bond issuance not to exceed $45 million for the acquisition, construction, and permanent financing at Mirasol Village Block A (Project).
Since then, the tax-exempt bonds were issued in December 2020, the Project has been constructed and is now fully occupied. The next and final step of Project financing is to pay off the construction portion of the loan and convert it to permanent financing. Due to the length of time that has elapsed since the bond issuance, bond counsel has advised the Sacramento Housing and Redevelopment Agency (SHRA or Agency) staff that a re-TEFRA is required to comply with relevant sections of the Internal Revenue Code. There are no other changes to the financial structure of the project as initially approved by the City Council in 2020.
File ID: 2023-01543 12/12/2023 Public Hearing Item 27.
Policy Considerations: The recommended actions are consistent with a) SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies b) the 2021-2029 Housing Element, which encourages the provision of a variety of quality housing types to encourage neighborhood stability, including options for extremely low-income households (Resolution No. 2021-0259); c) the Sacramento Promise Zone Plans and Goals, Sustainably Built Community sub-goal to increase housing types and transit growth to promote livability and connectivity within the Promise Zone (Resolution No. 2015-263); d) the Downtown Housing Initiative and Initiation of the Downtown Specific Plan, to bring 10,000 places to live to Downtown Sacramento by year 2025 (Resolution No. 2015-282); e) the 2007 Asset Repositioning Strategy of the City and County Housing Authorities.
Economic Impacts: The completed Project has created approximately 521 total jobs (292.49 direct jobs and 228.51 jobs through indirect and induced activities) and created $45,701,526 in total economic output ($28,086,239 of direct output and another $17,615,287 of output through indirect and induced activities). The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.
Environmental Considerations:
California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA): A combined Initial Study/Environmental Assessment was prepared for the Mirasol Village (formerly Twin Rivers) Transit Oriented Development and Light Rail Station Project pursuant to CEQA requirements under 14 California Code of Regulations §15070, and NEPA requirements under 24 Code of Federal Regulations §58.36. The Mitigated Negative Declaration and associated Mitigation Monitoring and Reporting Program were adopted, and a Notice of Determination was issued pursuant to CEQA and a Finding of No Significant Impact was prepared pursuant to NEPA. The requested action requires no further environmental review.
Sustainability: The proposed project has been reviewed for consistency with the goals, policies, and targets of the City of Sacramento’s 2035 General Plan. This project will advance Goal H-1.1 - Sustainable Communities. This is accomplished by reducing the use of fossil fuels, promoting energy -efficient building design and site planning, and creating housing that is healthier, safer, more comfortable, and durable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The recommended actions enable the Agency to continue to fulfill its mission of providing a range of affordable housing opportunities in the City and are consistent with the 2021-2029 Housing Element as part of Sacramento’s 2035 General Plan and are consistent with
File ID: 2023-01543 12/12/2023 Public Hearing Item 27.
the 2021-2029 Housing Element as part of Sacramento’s 2035 General Plan and are consistent with the Agency’s previously approved Multifamily Lending and Mortgage Revenue Bond Policies.
Financial Considerations: SHRA has received a one-time issuance fee of 0.25 percent of the bond amount, paid at bond closing, and will receive annual payment for monitoring the regulatory restrictions and administration of the bonds, in the amount of 0.125 percent of the bond amount and $100 per each assisted unit, but not to exceed $25,000 for the term of 55 years. Mortgage revenue bonds do not represent a financial obligation of the Agency, Housing Authority, or City of Sacramento.
The law firm, Orrick, Herrington and Sutcliffe, LLP, serves as bond counsel for the Housing Authority.
Local Business Enterprise (LBE): Local Business Enterprise requirements do not apply to this report. Minority and Women’s Business Enterprise requirements and Section 3 have been applied to all activities to the greatest extent feasible and as required by federal funding and in accordance with SHRA’s Section 3 Economic Opportunity Plan.
RESOLUTION NO. 2023-____
Adopted by the Sacramento City Council
On date of
MIRASOL VILLAGE BLOCK A: APPROVAL OF THE ISSUANCE OF OBLIGATIONS
BY THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO ON BEHALF OF TWIN RIVERS PHASE 1 L.P., A CALIFORNIA LIMITED PARTNERSHIP
BACKGROUND
A. The Housing Authority of the City of Sacramento, a housing authority organized and existing under the laws of the State of California (the "Authority”), proposes 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 Re venue 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 $45,000,000 (the “Obligations”) and to lend the pr oceeds thereof to Twin Rivers Phase 1 L.P. , a California limited partnership or a partnership of which McCormack Baron Salazar, Inc. (the “Developer”) or a related person to the Developer is the general partner, to be used to provide funds to finance or re finance the acquisition, construction and development of a multifamily housing residential facility to be located at 1200, 1240, 1248, 1254, 1262, 1280 Richards Boulevard, 1243, 1261, 1291 Ringlet Avenue and 520 Pipevine Street , in the City of Sacramento, California.
B. Section 147(f) of the Code requires the execution and delivery of the Obligations to be approved by the City Council of the City (the "City Council"), as the elected representative of the City of Sacramento and the host jurisdiction of the subject multifamily housing residential facility, after a public hearing has been held following reasonable and proper notice.
C. A public hearing was held by the City Council on December 12, 2023 , following duly published notic e thereof, and all persons desiring to be heard have been heard.
D. It is in the public interest and for the public benefit that the City Council, as the elected representative of the City of Sacramento and the host jurisdiction of the subject multifamily housing residential facility, approve the execution and delivery by the Authority of the Obligations.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council of the City of Sacramento hereby finds, determines and declares that issuance by the Authority of the Obligations in the maximum principal amount of $45,000,000 for the purposes described above is hereby approved.
Section 2. This resolution shall take effect immediately upon its adoption.
Adopted by the City of Sacramento City Council on December 12, 2023 , by the following vote:
Ayes: Members,
Noes: Members,
Abstain: Members,
Absent: Members,
Attest:
Mindy Cuppy, City Clerk