SR - RES-10975 - TEFRA CONDUIT BOND FINANCING1. SUBJECT
Conduit bond financing for Casa Ramon Apartments
2. SUMMARY
840 W Walnut, LP plans to acquire and rehabilitate the Casa Ramon 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
Adopt Resolution No. 10975 - 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 Casa Ramon Apartments
4. FISCAL IMPACT
There will be no cost to the City for the bonds.
5. STRATEGIC PLAN GOAL(S)
Goal 3: Enhance and promote quality of life in the community.
Strategy c.: Support and enhance attractive, diverse living environments.
TEFRA Hearing -Casa Ramon Apartments
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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
Orange Housing Development Corporation (OHDC) and Alden Torch Financial (Alden Torch)
currently own the 75 -unit, federally- subsidized Casa Ramon Apartments located at 840 West
Walnut Avenue. The 15 -year tax credit compliance period is ending for Casa Ramon at which
point Alden Torch will sell its interest in the property.
The appraised value of the property is $22 million. OHDC is not in a position to purchase Alden
Torch's interest in the property without a partner given the acquisition and rehabilitation cost and
resulting need for multiple sources of financing including tax exempt bonds. OHDC Casa
Ramon, LLC (an OHDC affiliate) and C &C Casa Ramon, LLC (a C &C Development Co., LLC
affiliate) have formed 840 W Walnut, LP (the Developer) to acquire and rehabilitate the project.
The Developer has requested that CSCDA serve as the municipal issuer of multifamily revenue
bonds in an aggregate principal amount not to exceed $22,000,000. The proceeds of the bonds
would be used for the purpose of making a loan to the Developer to finance the acquisition and
rehabilitation of the project.
The City of Orange would not provide any financing for the project, but 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) in order for all or a portion of the bonds
to qualify as tax - exempt bonds. 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. 10975 to authorize CSCDA to issue the bonds for the
project and satisfy the requirements of TEFRA, the Code, and California Government Code
Section 6500.
8. ATTACHMENTS
Resolution No. 10975
RESOLUTION NO. 10975
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 CASA RAMON 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, 840 W Walnut, LP or a partnership created by OHDC Casa Ramon, LLC
(the "Developer "), consisting at least of the Developer or a related entity to the Developer 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 $22,000,000 in outstanding aggregate principal amount, to
finance the acquisition and rehabilitation of a 75 -unit multifamily rental housing project located
at 840 W. Walnut Avenue, Orange, California, generally known as Casa Ramon Apartments
(the "Project ") and operated by The John Stewart Company; 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 SEPTEMBER 13, 2016
7. ADMINISTRATIVE REPORTS (Continued)
City Manager Rick Otto mentioned that staff is working on plans to make the inspections
of Mills Act properties more efficient. Councilmember Whitaker asked staff to return with
numbers indicating what it costs the city to complete inspections versus what we charge.
PUBLIC SPEAKER: Al Ricci — Spoke in favor of the Mills Act Contracts and wants to
see no cap on the number of applications. Spoke against the prioritization of properties.
MOTION — Murphy
SECOND - Alvarez
AYES - Alvarez, Whitaker, Smith, Murphy, Nichols
Moved to direct staff to prepare a resolution to amend the Mills Act Program as follows:
Remove the cap of ten Mills Act contracts per year and review the program in one year.
8. REPORTS FROM CITY MANAGER - None
9. LEGAL AFFAIRS - None
10. ITEMS RELATING TO THE SUCCESSOR AGENCY OF THE ORANGE
REDEVELOPMENT AGENCY - None
11. PUBLIC HEARINGS
11.1 Conduit Bond Financing for Casa Ramon Apartments. (C2500.G.1.5)
Time set for a public hearing to consider the issuance by the California Statewide
Communities Development Authority of multifamily housing revenue bonds for the Casa
Ramon Apartments.
THE MAYOR OPENED THE PUBLIC HEARING.
PUBLIC SPEAKERS:
Debbie Lane — Questioned what was going to happen with the residents during the
rehabilitation of the complex.
Todd Cottle — Indicated that the owners will work with the residents and will pay for
temporary housing during construction.
THE MAYOR CLOSED THE PUBLIC HEARING.
RESOLUTION NO. 10975
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 Casa Ramon Apartments.
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CITY COUNCIL MINUTES SEPTEMBER 13, 2016
11. PUBLIC HEARINGS (Continued)
MOTION - Whitaker
SECOND - Murphy
AYES - Alvarez, Whitaker, Smith, Murphy, Nichols
Moved to approve Resolution No. 10975
NOTE: Councilmember Alvarez left the dais at 7:45 p.m.
11.2 Adoption of the 2016 California Fire Code. (A2500.0)
Time set for a public hearing to consider adoption of the 2016 California Fire Code, and
portions of the 2015 International Fire Code.
THE MAYOR OPENED THE PUBLIC HEARING, THERE BEING NO SPEAKERS,
THE MAYOR CLOSED THE PUBLIC HEARING.
RESOLUTION NO. 10977
A Resolution of the City Council of the City of Orange Setting Forth Findings with Respect
to Local Conditions within the City of Orange Justifying Modifications and Changes to the
2016 California Fire Code.
MOTION - Whitaker
SECOND - Smith
AYES - Whitaker, Smith, Murphy, Nichols
ABSENT - Alvarez
Moved to approve Resolution No. 10977
ORDINANCE NO. 08-16 (FIRST READING)
An Ordinance of the City Council of the City of Orange Deleting Chapter 15.32, City of
Orange Fire Code, in its Entirety and adding Chapter 15.32, Adopting and Amending the
2016 California Fire Code and Portions of the 2015 International Fire Code as the City of
Orange Fire Code, to Title 15 (Buildings and Construction) of the Orange Municipal Code.
MOTION - Nichols
SECOND - Murphy
AYES - Whitaker, Smith, Murphy, Nichols
ABSENT - Alvarez
Moved that Ordinance No. 08 -16 be approved for First Reading and same was set for
Second Reading by the preceding vote.
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