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TEFRA PUBLIC HEARING FOR THE GRAND VIEW VILLAGE APARTMENTS LOCATED AT 228, 240 AND 250 N. HUNTER STREET AND 241 N. SAN JOAQUIN STREET
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve 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 financing 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, to be located in Stockton at 228, 240 and 250 N. Hunter Street, and 241 N. San Joaquin 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 approve 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, will be used by VCOR to finance the acquisition, construction, improvement and equipping of 75-unit rental housing development for low-income households, to be located in Stockton at 228, 240 and 250 N. Hunter Street, and 241 N. San Joaquin Street (the "Project"). The complex will provide housing affordable to households with incomes at or below 80 percent of the Area Median Income (AMI).
The proposed bonds will not be 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 financing for the project by CMFA.
DISCUSSION
Background
The Grand View Village Apartments project is a proposed 75-unit new construction rental housing development for low-moderate income households; the project site is located at 228, 240 and 250 N. Hunter Street, and 241 N. San Joaquin Street and will serve as a catalyst for the continued revitalization efforts planned for the downtown area. Bond funds will be used to finance the construction and improvements. The development will target households with incomes at or below 80 percent of the AMI. The project will include various sized units to accommodate individuals as well as larger families. The proposed unit mix will consist of 12 one-bedroom units, 39 two-bedroom units, and 24 three-bedroom units. The complex will also include 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 10,000 s.f. of ground-floor, market-rate retail space. Rents are expected to 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) is leveraging City financing to secure additional bond funds (CDLAC), and proceeds from four percent tax credits, as well as funds from the Affordable Housing and Sustainable Communities Program (AHSC).
Present Situation
The TEFRA Act, Section 147 (f) of the Tax Code, requires that before bonds can be issued, the local jurisdiction in which a project is to be financed with bonds must; 1) conduct a public hearing and 2) approve the issuance of the bonds. The City Council is being asked to hold such a public hearing and adopt a resolution that would authorize the issuance 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 issuance 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 issue 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 issuance 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 issuance of the Bonds will be required. The proposed bonds will not be 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 financing for the project by CMFA.
City Council has previously approved the issuance of similar bonds for several projects, including:
• $20 million of multifamily housing revenue bonds to assist with the adaptive reuse of Liberty Square (formerly Hunter Street Apartments), located at 804 North Hunter Street, was approved on April 2, 2019.
• $38 million of bonds to finance the construction of new student housing and other improvements for the University of Pacific was approved on September 27, 2016.
• $30 million of multifamily housing revenue bonds to assist with the rehabilitation of the Polo Run Apartments, located at 8166 Palisades Drive, was approved on August 9, 2016.
Public Notice
Legal notice for the TEFRA public hearing is required to be published at least 14 days in advance. The notice for this hearing was published in The Record on December 29, 2020.
FINANCIAL SUMMARY
The City will incur no financial liability as a result of approving the issuance of the bonds. This action only serves as a public acknowledgment by the local jurisdiction of the project financing.
Attachment A - Vicinity Map