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HomeMy WebLinkAbout020425-09.1 ADMINISTRATIVE STAFF REPORT 9.1 TO: Mayor and Town Council February 4, 2025 SUBJECT: Resolution No. 8-2025, approving the issuance of the California Municipal Finance Authority Exempt Facility Bonds in an aggregate principal amount not to exceed $30,000,000 for the purpose of financing or refinancing the acquisition, construction, improvement and equipping of Walnut Apartments and certain other matters relating thereto BACKGROUND On January 23, 2024, the Town’s Planning Commission approved Major Subdivision SD 9594 and Development Plan DEV22-0009. Those entitlements authorized construction of 167 residential units at 3020 Fostoria Way, commonly known as the Borel property. The project approval includes 43 apartment units, within two apartment buildings, to be set aside for low or very low income households. Those units will be owned and managed by Pacific West Communities, Inc. Pacific West (hereafter “the Borrower”) requested that the California Municipal Finance Authority (“CMFA”) serve as the municipal issuer of Bonds in an aggregate principal amount not to exceed $30,000,000 (the “Bonds”) of tax-exempt revenue bonds. The proceeds of the Bonds will be used to finance or refinance the acquisition, construction, improvement and equipping of the 43 units at 3020 Fostoria Way (the “Project”). In order for the Bonds to qualify as tax-exempt bonds, the Town of Danville must conduct a public hearing (the “TEFRA Hearing”) providing members of the community with an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided 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. DISCUSSION The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 200 municipalities have become members of CMFA. Approval of TEFRA Bond Issuance 2 February 4, 2025 The CMFA was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financings. The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the Town 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 Town or the State of California but are to be paid for solely from funds provided by the Borrower. The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the Town of Danville, it is expected that a portion of the issuance fee attributable to the Town will be granted by the CMFA to the general fund of the Town. Such grant may be used for any lawful purpose of the Town. PUBLIC CONTACT Notice of this hearing was published in a newspaper of general circulation. Posting of the meeting agenda serves as notice to the general public. FISCAL IMPACT None. RECOMMENDATION Adopt Resolution No. 8-2025, approving the issuance of the California Municipal Finance Authority Exempt Facility Bonds in an aggregate principal amount not to exceed $30,000,000 for the purpose of financing or refinancing the acquisition, construction, improvement and equipping of Walnut Apartments and certain other matters relating thereto. Prepared by: David Crompton Chief of Planning Attachment: Resolution No. 8-2025 RESOLUTION NO. 8-2025 APPROVING THE ISSUANCE OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY EXEMPT FACILITY BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $30,000,000 FOR THE PURPOSE OF FINANCING OR REFINANCING THE ACQUISITION, CONSTRUCTION, IMPROVEMENT AND EQUIPPING OF WALNUT APARTMENTS AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, Danville Pacific Associates, LP (the “Borrower”) a partnership of which Pacific West Communities, Inc. (the “Developer”) or a related person to the Developer is the general partner, has requested that the California Municipal Finance Authority (the “Authority”) adopt a plan of financing providing for the issuance of exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of the Internal Revenue Code of 1986 (the “Code”) in one or more series issued from time to time, including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $30,000,000 in aggregate principal amount (the “Bonds”), to finance or refinance the acquisition, construction, improvement and equipping of a multifamily rental housing project located at 3020 Fostoria Way, Danville, California (the “Project”); and WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds by the Authority must be approved by the Town of Danville (the “Town”) because the Project is located within the territorial limits of the Town; and WHEREAS, the Town Council is the elected legislative body of the Town and is one of the “applicable elected representatives” required to approve the issuance of the Bonds under Section 147(f) of the Code; and WHEREAS, the Authority has requested that the Town Council approve the issuance of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”), among certain local agencies, including the Town; and WHEREAS, pursuant to Section 147(f) of the Code, the Town Council has, following notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the issuance of the Bonds by the Authority; now, therefore, be it RESOLVED, by the Town Council of the Town of Danville as follows: Section 1. The foregoing recitations are true and correct. Docusign Envelope ID: 8DA356D8-7BFB-49FF-A618-6FE48165637F PAGE 2 OF RESOLUTION NO. 8-2025 Section 2. The Town Council hereby approves the issuance of the Bonds by the Authority. It is the purpose and intent of the Town Council that this resolution constitute approval of the issuance of the Bonds by the Authority, for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of the governmental unit having jurisdiction over the area in which the Project is located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement. Section 3. The issuance of the Bonds shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The Town shall have no responsibility or liability whatsoever with respect to the Bonds. Section 4. The adoption of this Resolution shall not obligate the Town or any department thereof to (i) provide any financing to acquire or construct the Project or any refinancing of the Project; (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, construction, rehabilitation, installation or operation of the Project; (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 5. The officers of the Town 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 6. This resolution shall take effect immediately upon its adoption. APPROVED by the Danville Town Council at a regular meeting on February 4, 2025, by the following vote: AYES: NOES: ABSTAINED: ABSENT: ______________________________ MAYOR APPROVED AS TO FORM: ATTEST: _______________________________ ______________________________ CITY ATTORNEY CITY CLERK Docusign Envelope ID: 8DA356D8-7BFB-49FF-A618-6FE48165637F