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TEFRA PUBLIC HEARING FOR PLYMOUTH PLACE APARTMENTS LOCATED AT 1320 NORTH MONROE STREET
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Conduct the public hearing under the requirements of TEFRA and the Internal Revenue Code of 1986, as amended (the “Tax Code”).
2. Approve the issuance of multifamily housing revenue bonds by the California Municipal Finance Authority (CMFA) for the benefit of Retirement Housing Foundation, a California nonprofit public benefit corporation (the “Sponsor”), on behalf of Plymouth Place RHF Partners, L.P., a California limited partnership (the “Borrower”) to provide for the financing of the Project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Tax Code and the California Government Code Section 6500 (and following).
Note: The bonds will not be a debt of the City, nor will they obligate the City in any way.
It is also recommended that the City Council 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. 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 $15,000,000. Bond funds will be used by RHF Partners, L.P., a California limited partnership, to finance the acquisition, construction, improvement and equipping of 65-unit rental housing development for low-income households, located in Stockton at 1320 North Monroe Street (the "Project") (Attachment A - Vicinity Map). 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 Borrower has requested that the CMFA issue one or more series of revenue bonds in an aggregate principal amount not to exceed $15,000,000, including but not limited to revenue bonds issued as part of a plan to finance the acquisition, rehabilitation, improvement and equipping of a 65-unit multifamily rental housing facility for low-income households, located at 1320 North Monroe Street, in the City of Stockton, California, commonly known as Plymouth Place Apartments.
In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Stockton must conduct a public hearing (the “TEFRA Hearing”) providing for 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. Prior to the 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.
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 $15,000,000.
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:
• $32 million of multi-family housing revenue bonds for Visionary Homebuilders Grand View Village project, located at 228, 240 and 250 North Hunter Street, and 241 North San Joaquin Street, was approved December 17, 2019.
• $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.
• $16 million of multifamily housing revenue bonds to assist with the rehabilitation of the Village East Apartments, located at 2501 East Lafayette Street, was approved on March 29, 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 June 28, 2021.
FINANCIAL SUMMARY
The City will incur no financial, legal, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project 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. The proposed bond will not be a debt to the city.
Attachment A - Vicinity Map