SR - - TEFRA CONDUIT BOND FINANCING1. SUBJECT
Conduit bond financing for Triangle Terrace Apartments
2. SUMMARY
Triangle Terrace Affordable, L.P. ( "the Borrower ") plans to acquire and rehabilitate the Triangle
Terrace Apartments. Proposed financing includes bond proceeds from multifamily housing
revenue bonds issued by the California Statewide Communities Development Authority
( "CSCDA "). 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 RECOMMENDATION I
Adopt Resolution No. 10955 - A Resolution of the City Council of the City of Orange approving
the issuance by the California Statewide Communities Development Authority of multifamily
housing revenue bonds for the Triangle Terrace Apartments
4. FISCAL IMPACT
There will be no cost to the City for the bonds.
5 STRATEGIC PLAN GOAL(S) I
Goal 3: Enhance and promote quality of life in the community.
Strategy c.: Support and enhance attractive, diverse living environments.
TEFRA Hearing - Triangle Terrace
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6. GENERAL PLAN IMPLEMENTATION
Housing Goal 2.0 Assist in the development of adequate housing to meet the needs of Low and
Moderate Income households.
7. DISCUSSION and BACKGROUND
The Borrower, a partnership of Reiner Communities and Orange Senior Housing, Inc. ( "OSH,
Inc. "), plans to acquire and rehabilitate the Triangle Terrace Apartments, a 75 -unit, senior,
federally- subsidized housing project located at 555 South Shaffer Street (the "Project ")
The Project is located on City -owned land and is currently owned by OSH, Inc., which leases the
land from the City. The proposed new ground lease with the Borrower and the commitment
agreement with OSH, Inc. relating to the reinvestment of the proceeds from the sale of the
Project are discussed under separate staff reports.
The Borrower has requested that CSCDA serve as the municipal issuer of multifamily revenue
bonds in an aggregate principal amount not to exceed $14,000,000. The proceeds of the bonds
would be used for the purpose of making a loan to the Borrower to finance the acquisition and
construction of the Project, which would be owned and operated by the Borrower.
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 notice 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.
The City is a member of CSCDA, but would have no financial, legal or moral obligation, liability
or responsibility for the project or the repayment of the bonds. Staff is recommending that
Council adopt the attached Resolution No. 10955 to authorize CSCDA to issue the bonds for the
Project and satisfy the requirements of TEFRA, the Code, and California Government Code
Section 6500.
18. ATTACHMENTS
Resolution No. 10955
RESOLUTION NO. 10955
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ORANGE APPROVING THE ISSUANCE BY
THE CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY OF MULTIFAMILY
HOUSING REVENUE BONDS FOR THE TRIANGLE
TERRACE APARTMENTS.
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 Orange (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, Triangle Terrace Affordable, L.P. or a partnership created by Reiner
Communities (the "Developer "), consisting at least of the Developer or a related entity to the
Developer, including but not limited to Orange Senior Housing, Inc. and one or more limited partners,
has requested that the Authority adopt a plan of financing providing for the issuance of multifamily
housing revenue bonds (the "Bonds ") in one or more series issued from time to time, including bonds
issued to refund such revenue bonds in one or more series from time to time, and at no time to exceed
$14,000,000 in outstanding aggregate principal amount, to finance the acquisition and
rehabilitation of a 75 -unit senior multifamily rental housing project located at 555 S. Shaffer Street,
Orange, California, generally known as Triangle Terrace Apartments (the "Project') and operated
by Living Opportunities Management Company (LOMCO); and
WHEREAS, the Bonds or a portion thereof will be "private activity bonds" for purposes of
the Internal Revenue Code of 1986 (the "Code "); 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; and
WHEREAS, the members of this City Council (this "City Council ") are the applicable
elected representatives of the City of Orange (the "City "); and
WHEREAS, there has been published, at least 14 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; and
CITY COUNCIL MINUTES JULY 12, 2016
11. PUBLIC HEARINGS (Continued)
11.4 Conduit Bond Financing for Triangle Terrace Apartments. (C2500.G.1.5)
NOTE: Mayor Smith recorded an abstention on Items 7.1, 7.2, and 11.4 due to a potential
conflict with her employer. She left the dais prior to Item 7.1 being heard.
Time set for a public hearing to consider the issuance by the California Statewide
Communities Development Authority of multifamily housing revenue bonds for the
Triangle Terrace Apartments.
Triangle Terrace Affordable, L.P. plans to acquire and rehabilitate the Triangle Terrace
Apartments. Proposed financing includes bond proceeds from multifamily housing
revenue bonds issued by the California Statewide Communities Development Authority.
MAYOR PRO TEM OPENED THE PUBLIC HEARING; AND THERE BEING NO
SPEAKERS, MAYOR PRO TEM CLOSED THE PUBLIC HEARING.
RESOLUTION NO. 10955
A Resolution of the City Council of the City of Orange approving the issuance by the
California Statewide Communities Development Authority of multifamily housing
revenue bonds for the Triangle Terrace Apartments.
MOTION — Whitaker
SECOND — Alvarez
AYES — Alvarez, Whitaker, Murphy
ABSENT (RECUSED) — Smith
ABSENT - Nichols
Moved to approve Resolution No. 10955.
12. ADJOURNMENT — The City Council adjourned at 8:30 p.m.
The next Regular City Council Meeting will be held on Tuesday, August 9, 2016, at 6:00
p.m. in the Council Chamber, with Closed Session beginning at 5:00 p.m., if necessary.
cy4/0.41.42 OYP-P-;
MA' v RPHY TERESA E. SMITH
ITY CLERK MAYOR
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