Agenda Item No. 20
CITY OF YUCAIPA
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Jennifer Crawford, Assistant C' anager
Phil White, Director of Financ
FOR: City Council Meeting of September 23, 2024
SUBJECT: Wildwood Canyon Mobile Home Estates and Valley View Mobilehome Park Revenue Bonds
RECOMMENDATION:
That the City Council conduct a Public Hearing and adopt Resolution No. 2024 -55, approving the issuance of revenue bonds by the Independent Cities Finance Authority with respect to the acquisition and renovation of Wildwood Canyon Mobile Home Estates and the renovation of Valley View Mobilehome Park.
BACKGROUND/DISCUSSION:
Augusta Communities IV LLC (Augusta) plans to finance the acquisition, renovation, and associated costs of an affordable housing project using tax-exempt and taxable revenue bonds issued by the Independent Cities Finance Authority (ICFA). The project includes three manufactured housing communities: Wildwood Canyon Mobile Home Estates and Valley View Mobilehome Park in San Bernardino County, and Idyllwild Trailer Park in Riverside County.
Augusta is a nonprofit limited liability company organized exclusively to further the charitable purpose of its sole member and manager, Augusta Homes, including ownership and operation of housing for the benefit of low-income persons who need affordable, decent, safe, and sanitary housing. Augusta and its affiliates own and operate six manufactured housing communities in San Bernardino, Ventura, and Tulare counties and serve as asset managers for two communities owned by the City of La Habra in Orange County. Augusta was founded in 1998 and currently serves 1,100 households and 3,200 residents.
ICFA is a 71-member unaffiliated Joint Powers Authority focused on financing affordable housing projects within the boundaries of its membership organizations. The Authority provides financing in connection with the improvement, construction, acquisition, creation, rehabilitation, and preservation of affordable housing within the boundaries of its members in connection with projects and programs that are in the public interest and that benefit its members, including making loans to tax-exempt organizations from the proceeds of mortgage revenue bonds to finance manufactured housing projects.
The City of Yucaipa (Yucaipa) has been a member of ICFA since 2002. The debts, liabilities, and obligations of ICFA do not become the debts, liabilities, or obligations of Yucaipa. Underwriting and operational costs of the project are borne by Augusta. Legal documents related to the issuance of bonds will provide that Augusta indemnify, hold harmless, and defend Yucaipa, and each of its officers, officials, employees, and agents.
Augusta has requested that Yucaipa hold a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing in accordance with Chapter 8 of Part 5 of Division 31 of the California Health and Safety Code. The TEFRA hearing provides an opportunity for public input on Augusta's use of tax-exempt bond proceeds within the City of Yucaipa. The TEFRA notice is intended to comply with public notice requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended. The tax-exempt ICFA Bonds will be issued as Qualified 501(c)(3) Bonds and the Project is required to be occupied in part by persons of low and very low income in accordance with California laws and the requirements of Section 145 of the Internal Revenue Code of 1986, as amended.
Valley View Mobilehome Park and Wildwood Canyon Mobile Home Estates — Information Provided by Augusta
Wildwood Canyon is a 147-space all -age community located at 34111 Wildwood Canyon Road in Yucaipa. Residents own their homes but rent their spaces and pay their utility bills. Wildwood's amenities include a community clubhouse, two pools, a playground, a basketball court, a picnic area, a pool house at the lower pool, laundry facilities, and an RV storage area. The average space rent is about $348 per month. Early analysis indicates that approximately 77% of households are very low income and 19% are lower income. A portion of the bond proceeds will be used to acquire Wildwood from its current owner with the balance deposited to its capital reserve fund.
Valley View is a 77-space senior community located at 12995 6th Street in Yucaipa that has been owned by Augusta since 2000. The community has a clubhouse, pool, and RV storage. Approximately 90 people live in Valley View. Approximately 73% of households are very low income and 22% are lower income. The average resident reported sales price of homes increased by about 110% between 2019 and 2023. Most residents own their own homes but rent their spaces and pay their utility bills.
The average space rent for a homeowner is about $425 per month. There are 11 rental homes with an average monthly rent of $961. Renters pay their utility bills. A portion of the bond proceeds will be deposited into Valley View's capital reserve fund.
FISCAL IMPACT:
There is no direct fiscal impact to the City of Yucaipa.
Attachments:
1. Resolution No. 2024-55
2. Notice of Public Hearing
Approved by:
ATTACHMENT
RESOLUTION NO. 2024-55
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA
APPROVING, SUBJECT TO THE TERMS AND CONDITIONS HEREIN
SET FORTH, THE ISSUANCE BY THE INDEPENDENT CITIES
FINANCE AUTHORITY OF TAXABLE MOBILE HOME PARK
REVENUE BONDS AND TAX-EXEMPT MOBILE HOME PARK
REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO
EXCEED $9,500,000 FOR WILDWOOD CANYON MOBILE ESTATES
AND VALLEY VIEW MOBILE HOME PARK, EACH LOCATED IN THE
CITY OF YUCAIPA
WHEREAS, certain cities of the State of California (collectively, the "Members") have entered into a Joint Powers Agreement (the "Joint Powers Agreement") establishing the Independent Cities Finance Authority (the "Authority") and prescribing its purposes and powers, and providing, among other things, for associate members of the Authority (an "Associate Member"); and
WHEREAS, the Authority has been formed for the purpose, among others, of assisting its Members and Associate Members in the raising of capital to finance the capital improvement needs of Local Agencies (as defined in the Joint Powers Agreement), to provide for home mortgage financing with respect to those Members or Associate Members that are either a city or a county of the State of California, to provide financing in connection with the improvement, construction, acquisition, creation, rehabilitation and preservation of affordable housing within the boundaries of the Members and Associate Members, and to provide financing in accordance with the provisions of applicable law in connection with other projects and programs that are in the public interest and which benefit Members and Associate Members including making loans to tax-exempt organizations from the proceeds of mortgage revenue bonds to finance the acquisition of multifamily rental housing, including mobile home parks, under the provisions of Chapter 8 of Part 5 of Division 31 (commencing with Section 52100) of the Health and Safety Code; and WHEREAS, the City of Yucaipa (the "City") is an Associate Member of the Authority; and
WHEREAS, the Authority proposes to issue its (i) Mobile Home Park Revenue Bonds (Augusta Communities Mobile Home Park Pool) (Federally Taxable) (the "Taxable Bonds") and (ii) Mobile Home Park Revenue Bonds (Augusta Communities Mobile Home Park Pool) (the "Tax -Exempt Bonds" and together with the Taxable Bonds, the "Bonds"), each in one or more series; and
WHEREAS, Augusta Communities IV LLC, a California limited liability company (the "Owner"), has requested that the Authority issue and sell the Bonds in an aggregate principal amount of not to exceed $9,500,000; and
WHEREAS, the proceeds from the sale of the Bonds, if any are issued, are intended to be used to make a loan to Owner, or a related party, to be used, along with other funds available to the Owner, finance (i) the acquisition and improvement of a mobile home park with approximately
147 spaces known as the Wildwood Canyon Mobile Estates located in the City at 34111 Wildwood Canyon Road, (ii) the improvement of a mobile home park with approximately 77 spaces known as the Valley View Mobile Home Park located in the City at 12995 6t" Street (collectively, the "Projects"); and (iii) certain costs of issuing the Bonds; and WHEREAS, the Owner will be the owner and operator of the Projects; and WHEREAS, the Tax -Exempt Bonds will be qualified "private activity bonds" for purposes of the Internal Revenue Code of 1986 (the "Code"); and WHEREAS, pursuant to Section 147(f) of the Code, the proposed issuance of private activity bonds is required to be approved by the "applicable elected representative" of the governmental units having jurisdiction over the areas in which the Projects are located, after a public hearing held after reasonable public notice; and WHEREAS, the members the City Council are the applicable elected representatives of the City having jurisdiction over the area in which the Projects are located; and WHEREAS, such public hearing was conducted on the date hereof by the City Council at which time an opportunity was provided to interested parties to be heard with respect to the proposed issuance of the Tax -Exempt Bonds and the Projects; and WHEREAS, it is intended that this resolution shall constitute the approval of the proposed issuance of the Tax -Exempt Bonds required by Section 147(f) of the Code; and WHEREAS, the Projects are required to be occupied in part by persons of low and very low income in accordance with California laws and the requirements of the Code; and WHEREAS, this action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:
Section 1. The City Council approves the issuance of the Bonds by the Authority solely to satisfy the requirements of the Joint Powers Agreement, as the elected representatives of the governmental unit having jurisdiction over the area in which the Projects are located.
Section 2. The issuance and delivery of the Bonds shall be subject to the approval of and execution by the Authority of all financing documents relating thereto to which the Authority is a party and subject to the sale of the Bonds by the Authority. It is the purpose and intent of this City Council that this resolution constitutes approval of issuance of the Bonds for the purposes of Section 147(f) of the Code. 2 4893-2858-9270, v. 3
Section 3. The City shall have no responsibility or liability whatsoever with respect to the Bonds or the Projects. The payment of the principal, prepayment premium, if any, and purchase price of and interest on the Bonds shall be solely the responsibility of Owner. The Bonds shall not constitute a debt or obligation of the City. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct the Projects or to provide any refinancing of the Projects; (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 or operation of the Projects; (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 4. The City Manager, the City Attorney or their designees 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.
Section 5. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED, and ADOPTED this 23rd day of September, 2024.
Justin Beaver, Mayor
ATTEST:
Ana V. Sauseda, MMC
Director of General Services/City Clerk
3 4893-2858-9270, v. 3
ATTACHMENT 2
NOTICE OF PUBLIC HEARING
CITY COUNCIL OF THE CITY OF YUCAIPA
A public hearing will be held before the City Council of the City of Yucaipa on September 23, 2024 at or after 6:00 p.m. in the City Council Chambers located at 34272 Yucaipa Blvd., Yucaipa, California 92399, to consider the proposed issuance by the Independent Cities Finance Authority (the "Authority") of its mobile home park revenue tax-exempt bonds in one or more series in the aggregate principal amount of not to exceed $9,500,000 (consisting of up to $9,500,000 allocated to the Wildwood Canyon Mobile Estates and/or up to $9,500,000 allocated to the Valley View Mobile Home Park each park as further described herein and each allocation made at the discretion of the park owner, but in no event to exceed $9,500,000 in the aggregate) (the "Authority Bonds") pursuant to Chapter 8 of Part 5 of Division 31 of the California Health and Safety Code. Certain requirements of the City to its approval of such issuance are set forth in a draft Resolution of the City Council of the City, a copy of which is on file with the City Clerk as a public record and is available for public inspection. Any approval shall be subject to the provisions set forth in such Resolution, including without limitation Section 1 thereof and Exhibit "A" thereto.
Interested individuals may attend and participate in the public hearing on the date and time listed above. Interested individuals may observe but not participate by watching the livestream at https://vucaipa.` ov/live.
The proceeds from the sale of the Authority Bonds, if any are issued, are intended to be used to make a loan to Augusta Communities IV LLC, a California limited liability company, or a related party of which Augusta Homes, a California nonprofit public benefit corporation, will be the sole member (the "Borrower"), to be used, along with other funds available to the Borrower, to finance (i) the acquisition and improvement of a mobile home park with approximately 147 spaces known as the Wildwood Canyon Mobile Estates located in the City at 34111 Wildwood Canyon Road, (ii) the improvement of a mobile home park with approximately 77 spaces known as the Valley View Mobile Home Park located in the City at 12995 61h Street (collectively, the "Projects"); and (iii) finance certain costs of issuing the Authority Bonds. The Borrower will be the initial owner and operator of the Projects.
This public notice is intended to comply with public notice requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended. The Authority Bonds will be issued as Qualified 501(c)(3) Bonds and the Projects are required to be occupied in part by persons of low and very low income in accordance with California laws and the requirements of Section 145 of the Internal Revenue Code of 1986, as amended.
Further information on this matter may be obtained by calling the City Clerk of the City of Yucaipa, at (909) 797-2489. Written comments may be submitted to the City Clerk of the City of Yucaipa, at 34272 Yucaipa Blvd., Yucaipa, California 92399 via mail or via email to a�au�eua -I ti ucai}�_l.�_��� . Written comments may be submitted any time prior to the hearing. Any person may appear and comment at the hearing. Subsequent to the public hearing, the City Council will consider approving the issuance of the Authority Bonds.
DATED: September 11, 2024
CITY OF YUCAIPA
/s/
Ana V. Sauseda, MMC
Director of General Services/City Clerk