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TEFRA PUBLIC HEARING FOR THE GRAND VIEW VILLAGE APARTMENTS LOCATED AT 240 E MINER AVE AND 240 N HUNTER STREET
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Renew the approval for the issuance of multifamily housing revenue bonds by the California Municipal Finance Authority for the benefit of VCOR Limited Partnership (Visionary Home Builders), a California limited partnership, to provide for the refinancing of the Grand View Village Apartments project in an amount not to exceed $23,000,000, for the acquisition, construction, improvement and equipping of 75-unit rental housing facility for low-income households, located in Stockton at 240 E Miner Avenue and 240 North Hunter Street.
Note: The bonds will not be a debt of the City, nor will they obligate the City in any way.
2. Authorize the City Manager, or designee, to take actions that are necessary and appropriate to carry out the purpose and intent of the resolution.
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Summary
The purpose of this hearing is to satisfy the public approval requirement of the Tax and Equity Fiscal Responsibility Act (TEFRA), Section 147(f) of the Internal Revenue Code of 1986 (Tax Code). The City Council is being asked to adopt a resolution that would renew the previous approval of the issuance of multifamily housing revenue bonds by California Municipal Finance Authority (CMFA) in an aggregate principal amount not to exceed $23,000,000 of Bond funds, along with four percent low-income housing tax credits, which was used by VCOR to finance the acquisition, construction, improvement and equipping of 75-unit rental housing development for low-income households, located in Stockton at 240 E Miner Avenue and 240 N Hunter Street (the "Project"). The complex provides housing affordable to households with incomes at or below 80 percent of the Area Median Income (AMI).
The City Council originally granted TEFRA approval for the bond financing of the Project on January 12, 2021. Under the Tax Code, that approval expired on January 11, 2024. A renewal of that approval is required to complete the construction close-out.
The bonds are not a debt of the City, nor will they obligate the City in any way. The role of the City Council is limited to conducting the public hearing to certify the public benefit of this project for the purpose of facilitating refinancing of the project by CMFA.
DISCUSSION
Background
The Grand View Village Apartments project is a fully leased 75-unit new construction rental housing development for low-moderate income households; the project site is located at 240 E Miner Avenue and 240 N Hunter Street and serves as a catalyst for the continued revitalization efforts planned for the downtown area. Bond funds were used to finance the construction and improvements. The development targets households with incomes at or below 80 percent of the AMI. The project includes various-sized units to accommodate individuals as well as larger families. The unit mix consists of 12 one-bedroom units, 39 two-bedroom units, and 24 three-bedroom units. The complex includes a community center and Head Start Preschool facility on the first floor, playground, on-site manager, computer room, business center for the community to utilize, and 10,100 sq. ft. of ground-floor, market-rate retail space. Rents range from $333 to $1,300 per month.
To assist with the acquisition and development of Grand View Village, the City has approved and allocated a total of $2.4 million in project funding from Redevelopment, and Housing Revenue Bond proceeds from the former Redevelopment Agency to the Successor Agency and Community Development Block Grant (CDBG/CHDO) funds. VCOR (Visionary) leveraged City financing to secure additional bond funds through the State Treasurer’s California Debt Limit Allocation Committee (CDLAC), and proceeds from four percent tax credits, as well as funds from the Affordable Housing and Sustainable Communities Program (AHSC).
The City Council previously granted TEFRA approval for this Project on January 12, 2021. Under the Tax Code, the 2020 TEFRA approval expired on January 11, 2024 (three years after the initial bond issuance). A renewal of that approval is required to complete the construction close-out.
Present Situation
The TEFRA Act, Section 147 (f) of the Tax Code, requires that before bonds can be reissued, the local jurisdiction in which a project is to be financed with bonds must: 1) conduct a public hearing and 2) approve the reissuance of the bonds. The City Council is being asked to hold such a public hearing and adopt a resolution that would authorize the reissuance of the bonds by CFMA in an amount not to exceed the aggregate principal amount of $23,000,000.
A TEFRA hearing is mandated by the IRS to provide a reasonable opportunity for interested individuals to express their views on the reissuance of bonds and the nature of the improvements and projects for which the bond funds will be allocated. This hearing is simply an opportunity for all interested persons to speak to or submit written comments on the proposal to reissue the debt and the public benefit of the project, but the City Council has no obligation to respond to any specific comments made or submitted during the hearing.
The CMFA assists local governments, non-profit organizations, and businesses with the reissuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA was created in 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.
Outside of holding the TEFRA hearing and adopting the required resolution, no other participation or activity of the City or the City Council concerning the reissuance or repayment of the Bonds will be required. The Bonds are not a debt of the city, nor will they obligate the City in any way. The role of the City Council is limited to conducting the public hearing to certify the public benefit of this project for the purpose of facilitating refinancing for the project by CMFA.
Public Notice
Legal notice for the TEFRA public hearing is required to be published at least 7 days in advance. The notice for this hearing was published in The Record on June 7, 2024.
FINANCIAL SUMMARY
The City will incur no financial liability as a result of approving the reissuance of the bonds. This action only serves as a public acknowledgment by the local jurisdiction of the project financing.
Attachment A - Vicinity Map