It is recommended that the
City Council take the following actions regarding Hidden Brooks Apartments
Development (the “Development”):
1.
Hold
the TEFRA Hearing for the issuance of up to $25,000,000 in tax-exempt
multifamily housing revenue bonds by California Statewide Community Development
Authority (CSCDA).
The Hidden Brooks Apartments development (the
“Development”) is an existing 201 unit project, located at 463 Wooster Ave.,
San Jose California, situated at the end of a cul-de-sac, just East of Highway
101 and South of Highway 680. The Development sponsor, RHC Communities, or its
still to be formed affiliate, (the “Sponsor”), plans to fund the Development with
the proceeds of up to $25,000,000 tax-exempt multifamily housing revenue
bonds. The Sponsor has submitted an
application to CSCDA requesting that they issue bonds for this Development. CSCDA has requested that the City hold the
TEFRA hearing for this bond issue.
The Development consists of 10 two-story
buildings. The buildings have a gross
square footage of 125,742 sf. The
project is on 7.0 acres and there are 29 units per acre. It includes 200 one-bedroom units at 600
square feet, all identical in structure.
The managers unit is the only two-bedroom unit and is 1070 square feet,
and is adjacent to the recreation building.
The recreation building, is 4,672 square feet, and includes a billiard
room, social room with fire place, men’s and women’s baths, and also houses the
project’s laundry facility.
CSCDA was established in 1988 under the California Government Code as a statewide Joint Powers Authority to provide local governments and private industry access to tax-exempt low-interest financing to achieve public benefit goals. To date, CSDCA has issued more than $11 billion in tax-exempt debt.
Federal law regulating the
use of tax-exempt multifamily bond financing requires that 20% of the project’s
units must be made available to very low-income households (those earning 50%
or less of the area median income) for the period that the bonds are
outstanding. Federal law does not place affordability restrictions on the
remaining units. The units set aside
for very low-income households must remain affordable for a period of not less
than 15 years and must be indistinguishable from other units in size, location
and amenities.
LEGAL ISSUES
A Regulatory Agreement between the CSCDA and the Sponsor will be executed to ensure the continued affordability of low and very low-income units.
PUBLIC OUTREACH
The TEFRA Hearing to be held as part of the action items on the June 19, 2001 Council Agenda is a method of notifying the community of the CSCDA’s intent to issue tax-exempt private activity bonds for this project. The public hearing notice will be published on or about June 1, 2001 in the San Jose Mercury News, announcing the time and location of the public hearing.
The TEFRA hearing will have no
fiscal impact on the City. There are no
city funds in this project. The bonds
issued by CSCDA will be tax-exempt secured solely by the Development’s revenues
and any credit enhancement.
COORDINATION
This report has been prepared by the Finance and Housing Departments in coordination with the City Attorney’s Office.
SCOTT P. JOHNSON
Director, Finance Department
LESLYE CORSIGLIA
Acting Director, Housing Department