REPORT TO COUNCIL
SUBJECT
Title
Adopt a resolution approving the California Statewide Communities Development Authority (“CSCDA”) issuance of tax-exempt bonds relating to the financing of 165 Affordable Housing Units at 1834 Worthington Circle, Santa Clara [Council Pillars: Promote and Enhance Economic and Housing Development]
Report
BACKGROUND
Core Affordable Housing, LLC (or a partnership of which it is the general partner), (the “Borrower”) has requested that the California Statewide Communities Development Authority (“CSCDA”) serve as the municipal issuer of tax-exempt multi-family housing revenue bonds in an aggregate principal amount not to exceed $60,000,000 (the “Bonds”). The proceeds of the Bonds will be used for the purpose of making a loan to the Borrower, to enable the Borrower to finance the acquisition, construction and development of a 165-unit affordable multifamily housing rental project generally known as the Agrihood Senior Apartments, located at 1834 Worthington Circle (or alternatively 90 North Winchester Boulevard), Santa Clara, California (the “Project”).
On January 29, 2019, the City Council approved a rezoning action and an associated Tentative Parcel Map to allow development of the Project. The City’s Architectural Review committee subsequently granted for the Project approval of site and architectural design, completing the City’s discretionary land use entitlement process. The City Council also adopted a resolution approving and authorizing the City Manager to negotiate and execute a Disposition and Development Agreement and all other agreements with the Borrower as required for the development of the Project.
For all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Santa Clara (City) must conduct a public hearing under the Tax Equity and Fiscal Responsibility Act (the “TEFRA Hearing”) to provide the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for financing the Project. Public notice must be provided to the members of the community prior to the TEFRA Hearing. Following the close of the TEFRA Hearing, an “applicable elected representative” of the City must provide its approval of the issuance of the Bonds for financing the Project.
California Statewide Communities Development Authority
CSCDA is a joint powers authority sponsored by the League of California Cities ("League") and the California State Association of Counties ("CSAC"). CSCDA was created by the League and CSAC in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California. CSCDA is comprised of more than 530 members, including the City of Santa Clara. CSCDA has issued more than $63 billion of bonds through 1,500 plus financings since 1988 and consistently ranks in the top 10 of more than 3,000 nationwide public issuers of tax-exempt debt, as measured by annual issuance amount.
DISCUSSION
The CSCDA is a public entity, separate and apart from each member executing such an agreement. The debts, liabilities and obligations of the CSCDA do not constitute debts, liabilities or obligations of the members executing such an agreement. The Bonds to be issued by the CSCDA for the Project will thus 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 solely from funds provided by the Borrower.
There are no costs associated with membership in the CSCDA and the City will in no way become exposed to any financial liability by reason of its membership in the CSCDA. In addition, participation by the City in the CSCDA does not impact the City’s appropriations limits and will not constitute any type of indebtedness by the City. Outside of holding the TEFRA Hearing, adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required.
Conducting the TEFRA Hearing and approving the City’s membership in the CSCDA are procedural actions the City is required to take that will allow implementation of the Project, advancing the City’s goals and objectives related to the production of affordable housing and consistent with the City’s General Plan and existing land use entitlements for the Project site.
FISCAL IMPACT
There is no cost to the City other than administrative staff time and expense.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
As required by TEFRA regulations, a 15-day notice was published on April 22, 2020 in The Santa Clara Weekly.
RECOMMENDATION
Recommendation
1. Hold a Tax Equity and Fiscal Responsibility Act public hearing for the issuance of up to $60,000,000 in tax-exempt private-activity bonds by the California Statewide Communities Development Authority for the benefit of Core Affordable Housing, LLC; and
2. Adopt the resolution approving the issuance of the Bonds by the California Statewide Communities Development Authority not to exceed $60,000,000, for the benefit of Core Affordable Housing, LLC, to provide financing for the acquisition, construction and development of a 165-unit multifamily rental housing project generally known as Agrihood Senior Apartments.
Staff
Reviewed by: Andrew Crabtree, Director of Community Development
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. TEFRA Resolution
2. CSCDA Joint Powers Agreement