AgdaPkt 2020-02-10 Joint SA PFA - Laserfiche WebLink

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7.A. - Page 2 of 6 Hallmark 2017, L.P. (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 $25,000,000 (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, rehabilitation, improvement and equipping of a 72 -unit affordable multifamily housing rental project located at 531 Woodside Road, Redwood City, California (the "Project"), which will be owned and operated by the Borrower. The subject property was damaged in a fire in 2013. After several years of delays, the owner reported they reached an agreement with their limited partner to buy them out of the partnership and commence with the rebuild. Tax exempt bonds and tax credit financing will be the primary fund source to finance the rebuild. All 72 -units onsite will remain affordable in Redwood City. ANALYSIS In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Redwood City ("City") must conduct a public hearing (the "TEFRA Hearing") providing 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. Adoption of the resolution is solely for the purposes of satisfying the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA), the Internal Revenue Code and the California Government Code Section 6500 (and following). Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Notice of the hearing was published on January 30, 2020 in the San Mateo Daily Journal. 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. 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 Redwood City. CSCDA has issued more than $60 billion through 1,400 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. The City initially held a TEFRA Hearing for this project on February 11, 2019. However, there were delays with finalizing the financing for this project and the TEFRA resolution passed in 2019 is only valid for one year.The owner does not expect to secure financing until after the February 11, 2020 deadline. Therefore, the City must hold another TEFRA Hearing for this project. The owner expects to pull permits in mid- February 2020 and close financing by April 2020. Construction is expected to start in May 2020 and be completed by June 2021. FISCAL IMPACT There is no fiscal impact to the City. The Bonds will be issued as limited obligations of CSCDA, payable solely from revenues and receipts derived from a loan to be made by CSCDA to the Borrower with the Page 2 of 3 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 342