ACTION:
____________________________
Clerk/Secretary
Department: City Attorney Item No: PH2
Prepared by: Walter Chung, City Attorney Meeting Date: May 14, 2024 Approved by: John Conley, City Manager Agenda Location: Public Hearing SUBJECT: CONDUIT FINANCING FOR THE CARITAS AFFORDABLE HOUSING PROJECT RECOMMENDATION:
1.Open, conduct and close the public hearing under the requirements of TEFRA and the Internal Revenue Code of 1986, as amended (the “Code”).
2.Adopt City Council Resolution 2024- , approving the issuance of tax exempt revenue bonds pursuant to a plan of finance in an aggregate principal amount not to exceed $166,000,000 by the California Municipal Finance Authority for the purpose of financing and refinancing the acquisition and improvement of the acquisition, construction, improvement and equipping of certain properties consisting of mobile home parks and an apartment complex by one or more California limited liability companies whose sole member will be Caritas Affordable Housing, Inc., and certain other matters relating thereto.
PRIOR ACTION: None.
STATEMENT ON THE SUBJECT: The California Municipal Finance Authority (CMFA) was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 200 municipalities have become members of CMFA.
The CMFA was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financings.
The Borrower requested that the CMFA serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $166,000,000 of tax-exempt revenue bonds. The proceeds of the Bonds will be used for (a) pay costs of the 2024 New Money Project (as defined below) and (b) refund all or a portion of the Authority’s outstanding Mobile Home Park Senior Revenue Bonds (Caritas Affordable Housing, Inc.
Projects), Series 2014A (the “2014A Bonds”), and Mobile Home Park Subordinate Revenue Bonds (Caritas Affordable Housing, Inc. Projects), Series 2014B (the “2014B Bonds” and, together with the 2014A Bonds, the “2014 Bonds”), which 2014 Bonds were issued to finance and refinance the 2014 Project (as defined below, and as referred to herein collectively with the 2024 New Money Project, the “Project”).
The term “2024 New Money Project” means all or a portion of the costs of: (a) the acquisition, construction, improvement and equipping of property located at 220 Camino Corto, Vista, California 92083 (the “Estrella Apartment Project”) and at 2441 South El Camino Real, San Clemente, California 92672 (the “San Clemente Project”); (b) certain capital expenditures for the properties comprising the 2014 Project, AGENDA
REPORT
CITY COUNCIL
COMMUNITY DEVELOPMENT COMMISSION
SUCCESSOR AGENCY
BUENA SANITATION DISTRICT
JOINT POWERS FINANCING AUTHORITY
Opened, conducted, and closed the Public Hearing. Approved recommendation, adopted City Council Resolution No. 2024-63.
Vote: 4-0 (Green absent)
MEETING DATE: May 14, 2024 PAGE 2
SUBJECT: CONDUIT FINANCING FOR THE CARITAS AFFORDABLE HOUSING PROJECT 4863-7119-8907, v. 1
including, but not limited to, the replacement of asphalt surfaces in and about such properties (the “Improvement Project”); and (c) certain working capital expenditures as permitted by the Code and the Treasury Regulations promulgated thereunder.
The term “2014 Project” means financing and refinancing all or a portion of the costs of the acquisition, construction, improvement and equipping of: (a) a 285-space mobile home park known as Valley Village Mobile Home Park, located at 6401 Country Club Drive, Rohnert Park, California 94928 (the “2014 Valley Village Project” and, together with the portion of the Improvement Project at the 2014 Valley Village Project, the “Valley Village Project”); (b) a 67-space mobile home park known as Sterling Shores Estates Manufactured Housing Community, located at 5830 Robin Hill Drive, Lakeport, California 95453 (the “2014 Sterling Shores Project” and, together with the portion of the Improvement Project at the 2014 Sterling Shores Project, the “Sterling Shores Project”); (c) a 123-space mobile home park known as Desert Sands Estates Mobile Home Park, located at 4511 25th Street East, Lancaster, California 93535 (the “2014 Desert Sands Project” and, together with the portion of the Improvement Project at the 2014 Desert Sands Project, the “Desert Sands Project”); (d) a 164-space mobile home park known as Aztec Mobile Home Estates, located at 7425 Church Street, Yucca Valley, California 92284 (the “2014 Aztec Project” and, together with the portion of the Improvement Project at the 2014 Aztec Project, the “Aztec Project”); (e) a 100-space mobile home park known as Rancho Brea Mobile Home Estates, located at 1414 West Central Avenue, Brea, California 92821 (the “2014 Rancho Brea Project” and, together with the portion of the Improvement Project at the 2014 Rancho Brea Project, the “Rancho Brea Project”); (f) a 465-space mobile home park known as Friendly Village Mobile Home Park, located at 1301 East Avenue 1, Lancaster, California 93535 (the “2014 Friendly Village Project” and, together with the portion of the Improvement Project at the 2014 Friendly Village Project, the “Friendly Village Project”); (g) a 264-space mobile home park known as Hacienda Mobile Estates, located at 2330 East Avenue J 8, Lancaster, California 93535 (the “2014 Hacienda Project” and, together with the portion of the Improvement Project at the 2014 Hacienda Project, the “Hacienda Project”); (h) a 107-space mobile home park known as Estrella De Oro, located at 220 Camino Corto, Vista, California 92083 (the “2014 Estrella Project” and, collectively with the portion of the Improvement Project at the 2014 Estrella Project and the Estrella Apartment Project, the “Estrella Project”); and (i) a 159-space mobile home park known as Vista Manor Mobile Home Park, located at 200 Olive Avenue, Vista, California 92083 (the “2014 Vista Manor Project” and, together with the portion of the Improvement Project at the 2014 Vista Manor Project, the “Vista Project”).
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Vista must conduct a public hearing (the “TEFRA Hearing”) providing for the 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 such TEFRA Hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.
FISCAL IMPACT: The Bonds to be issued by the CMFA 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 or the State of California but are to be paid for solely from funds provided by the Borrower.
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Vista, it is expected that that a portion of the issuance fee attributable to the City will be granted by the CMFA to the general fund of the City. Such grant may be used for any lawful purpose of the City. The Borrower will be the beneficiary of the CMFA’s charitable donation through a 25% reduction in issuance fees.
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MEETING DATE: May 14, 2024 PAGE 3
SUBJECT: CONDUIT FINANCING FOR THE CARITAS AFFORDABLE HOUSING PROJECT 4863-7119-8907, v. 1
EXHIBITS:
1.City Council Resolution 2024- , approving the issuance of tax exempt revenue bonds pursuant to a plan of finance in an aggregate principal amount not to exceed $166,000,000 by the California Municipal Finance Authority for the purpose of financing and refinancing the acquisition and improvement of the acquisition, construction, improvement and equipping of certain properties consisting of mobile home parks and an apartment complex by one or more California limited liability companies whose sole member will be Caritas Affordable Housing, Inc., and certain other matters relating thereto 05/07/2024 PH2 3 of 7
RESOLUTION NO. 2024-
RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY OF
VISTA, CALIFORNIA APPROVING THE ISSUANCE OF TAX EXEMPT
REVENUE BONDS PURSUANT TO A PLAN OF FINANCE IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $166,000,000 BY THE
CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE PURPOSE OF
FINANCING AND REFINANCING THE ACQUISITION AND IMPROVEMENT
OF THE ACQUISITION, CONSTRUCTION, IMPROVEMENT AND EQUIPPING
OF CERTAIN PROPERTIES CONSISTING OF MOBILE HOME PARKS AND
AN APARTMENT COMPLEX BY ONE OR MORE CALIFORNIA LIMITED
LIABILITY COMPANIES WHOSE SOLE MEMBER WILL BE CARITAS
AFFORDABLE HOUSING, INC., AND CERTAIN OTHER MATTERS
RELATING THERETO
The City Council of the City of Vista does resolve as follows:
1. Findings. The City Council hereby finds and declares the following:
A. One or more California limited liability companies (“LLCs”), whose sole member is or will be Caritas Affordable Housing, Inc. (the “Corporation” and, together with the LLCs, the “Borrowers”), a California nonprofit public benefit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), have requested that the California Municipal Finance Authority (the “Authority”) participate in the issuance of one or more series of tax exempt revenue bonds in a maximum aggregate principal amount not to exceed $166,000,000 (the “Bonds”), pursuant to a plan of financing, to: (a) pay costs of the 2024 New Money Project (as defined below) and (b) refund all or a portion of the Authority’s outstanding Mobile Home Park Senior Revenue Bonds (Caritas Affordable Housing, Inc. Projects), Series 2014A (the “2014A Bonds”), and Mobile Home Park Subordinate Revenue Bonds (Caritas Affordable Housing, Inc. Projects), Series 2014B (the “2014B Bonds” and, together with the 2014A Bonds, the “2014 Bonds”), which 2014 Bonds were issued to finance and refinance the 2014 Project (as defined below, and as referred to herein collectively with the 2024 New Money Project, the “Project”); and
B. The term “2024 New Money Project” means all or a portion of the costs of: (a) the acquisition, construction, improvement and equipping of property located at 220 Camino Corto, Vista, California 92083 (the “Estrella Apartment Project”) and at 2441 South El Camino Real, San Clemente, California 92672 (the “San Clemente Project”); (b) certain capital expenditures for the properties comprising the 2014 Project, including, but not limited to, the replacement of asphalt surfaces in and about such properties (the “Improvement Project”); and (c) certain working capital expenditures as permitted by the Code and the Treasury Regulations promulgated thereunder; and
C. The term “2014 Project” means financing and refinancing all or a portion of the costs of the acquisition, construction, improvement and equipping of: (a) a 285-space mobile home park known as Valley Village Mobile Home Park, located at 6401 Country Club Drive, Rohnert Park, California 94928 (the “2014 Valley Village Project” and, together with the portion of the Improvement Project at the 2014 Valley Village Project, the “Valley Village Project”); (b) a 67-space mobile home park known as Sterling Shores Estates Manufactured Housing Community, located at 5830 Robin Hill Drive, Lakeport, California 95453 (the “2014 Sterling Shores Project” and, together with the portion of the Improvement Project at the 2014 Sterling 05/07/2024 PH2 4 of 7
EXHIBIT 1
RESOLUTION NO. 2024-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
4876-4718-3035, v. 1
Shores Project, the “Sterling Shores Project”); (c) a 123-space mobile home park known as Desert Sands Estates Mobile Home Park, located at 4511 25th Street East, Lancaster, California 93535 (the “2014 Desert Sands Project” and, together with the portion of the Improvement Project at the 2014 Desert Sands Project, the “Desert Sands Project”); (d) a 164- space mobile home park known as Aztec Mobile Home Estates, located at 7425 Church Street, Yucca Valley, California 92284 (the “2014 Aztec Project” and, together with the portion of the Improvement Project at the 2014 Aztec Project, the “Aztec Project”); (e) a 100-space mobile home park known as Rancho Brea Mobile Home Estates, located at 1414 West Central Avenue, Brea, California 92821 (the “2014 Rancho Brea Project” and, together with the portion of the Improvement Project at the 2014 Rancho Brea Project, the “Rancho Brea Project”); (f) a 465- space mobile home park known as Friendly Village Mobile Home Park, located at 1301 East Avenue 1, Lancaster, California 93535 (the “2014 Friendly Village Project” and, together with the portion of the Improvement Project at the 2014 Friendly Village Project, the “Friendly Village Project”); (g) a 264-space mobile home park known as Hacienda Mobile Estates, located at 2330 East Avenue J 8, Lancaster, California 93535 (the “2014 Hacienda Project” and, together with the portion of the Improvement Project at the 2014 Hacienda Project, the “Hacienda Project”); (h) a 107-space mobile home park known as Estrella De Oro, located at 220 Camino Corto, Vista, California 92083 (the “2014 Estrella Project” and, collectively with the portion of the Improvement Project at the 2014 Estrella Project and the Estrella Apartment Project, the “Estrella Project”); and (i) a 159-space mobile home park known as Vista Manor Mobile Home Park, located at 200 Olive Avenue, Vista, California 92083 (the “2014 Vista Manor Project” and, together with the portion of the Improvement Project at the 2014 Vista Manor Project, the “Vista Project”); and
D. The maximum aggregate principal amount of Bonds to be issued for: (a) the Vista Project will not to exceed $12,900,000; (b) the San Clemente Project will not to exceed $16,800,000; (c) the Valley Village Project will not to exceed $33,000,000; (d) the Sterling Shores Project will not to exceed $11,500,000; (e) the Desert Sands Project will not to exceed $10,150,000; (f) the Aztec Project will not to exceed $16,300,000; (g) the Rancho Brea Project will not to exceed $12,350,000; (h) the Friendly Village Project will not to exceed $13,150,000; (i) the Hacienda Project will not to exceed $12,900,000; and (j) the Estrella Project will not to exceed $26,950,000 (but in no event will the combined principal amount of Bonds issued for the Project exceed $166,000,000); and
E. Tthe Vista Project and the Estrella Project are or will be located within the territorial limits of the Chartered City of Vista, California (the “City”), a member of the Authority; and F. Each of the Vista Project and the Estrella Project is, or will be when acquired, owned and operated by one or more of the Borrowers; and
G. Not less than twenty percent (20%) of the residential units of the Vista Project and the Estrella Project shall be occupied by individuals whose income is fifty percent (50%) or less of area median gross income; and
H. Pursuant to Section 147(f) of the Code and the Treasury Regulations promulgated thereunder, the issuance of the Bonds by the Authority and the related plan of financing must be approved by the City because the Vista Project and the Estrella Project are located within the territorial limits of the City; and
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RESOLUTION NO. 2024-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 3
4876-4718-3035, v. 1
I. he 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 by the Authority under Section 147(f) of the Code and the Treasury Regulations promulgated thereunder; and
J. The Authority has requested that the City Council approve the issuance of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and the Treasury Regulations promulgated thereunder, and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (as amended from time to time, the “Agreement”), among certain program participants, including the City; and
K. The Authority’s bond counsel caused a notice to be published in newspaper of general circulationin the City stating that a public hearing with respect to the issuance of the Bonds by the Authority for the Vista Project and the Estrella Project would be held by the City’s City Council on May 14, 2024; and
L. Pursuant to Section 147(f) of the Code, the City has, following notice duly given, held a public hearing on May 14, 2024 regarding the issuance of the Bonds by the Authority, and an opportunity was provided for persons to comment on the matter of the Bonds and of the Vista Project and the Estrella Project; and
M. It is in the public interest and for the public benefit that the City Council approve the issuance of the Bonds by the Authority for the aforesaid purposes;
2. Action.
A. Each of the above recitals are true and correct and are incorporated herein by reference.
B. The City Council hereby approves the issuance of the Bonds by the Authority and the related plan of financing related to the Vista Project and the Estrella Project. It is the purpose and intent of the City Council that this resolution constitutes approval of the issuance of the Bonds by the Authority (a) by the “applicable elected representative” of the governmental unit having geographic jurisdiction of the area which contains the Vista Project and the Estrella Project in accordance with Section 147(f) of the Code and the Treasury Regulations promulgated thereunder, and (b) by the City Council in accordance with Section 4 of the Agreement.
C. The City Council hereby approves the issuance of the Bonds by the Authority and the related plan of financing related to the Vista Project and the Estrella Project. It is the purpose and intent of the City Council that this resolution constitutes approval of the issuance of the Bonds by the Authority (a) by the “applicable elected representative” of the governmental unit having geographic jurisdiction of the area which contains the Vista Project and the Estrella Project in accordance with Section 147(f) of the Code and the Treasury Regulations promulgated thereunder, and (b) by the City Council in accordance with Section 4 of the Agreement.
D. 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 approval by the City 05/07/2024 PH2 6 of 7
RESOLUTION NO. 2024-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 4
4876-4718-3035, v. 1
of the issuance of the Bonds by the Authority relating to the Vista Project and the Estrella Project is neither an approval of the underlying credit issues of the proposed Vista Project and Estrella Project nor an approval of the financial structure of the Bonds. Neither the City nor any department, official or officer thereof shall have any responsibility or liability whatsoever with respect to the Bonds or any portion of the Project. The Bonds shall not constitute an obligation or indebtedness of the City, and the assets and revenues of the City are not being pledged as security for the payment of principal or interest on the Bonds.
E. 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 which 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 transaction approved hereby.
F. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire, rehabilitate or construct the Project or any refinancing of the Project or any portion thereof; (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, rehabilitation or operation of the Project or any portion thereof; (iii) make any contribution or advance any funds whatsoever to the Authority or the Borrowers; or (iv) take any further action with respect to the Authority or the City’s membership therein.
G. This resolution shall take effect immediately upon its adoption.
3. Adoption. PASSED AND ADOPTED at a meeting of the City Council of the City of Vista held on May 14, 2024, by the following vote:
AYES:
NOES:
ABSTAIN:
APPROVED AS TO FORM:
WALTER CHUNG, CITY ATTORNEY
By:
APPROVED
Walter C. Chung
20240502150200
JOHN FRANKLIN, MAYOR
ATTEST:
KATHY VALDEZ, CITY CLERK
By:
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