The Borrower has requested that the CMFA serve as the municipal issuer to  participate in the issuance of one or more series of revenue bonds in an aggregate principal amount not to exceed $67,500,000 (the “Bonds”), pursuant to a plan of finance, for: (a) the 2017 Project, as defined below; (b) refunding all or a portion of the Authority’s outstanding Mobile Home Park Senior Revenue Bonds (Caritas Projects) Series 2010A and Mobile Home Park Subordinate Revenue Bonds (Caritas Projects) Series 2010B (collectively, the “2010 Bonds”), issued to finance or refinance the 2010 Project, as defined below; (c) refunding all or a portion of the outstanding City of San Marcos Mobile Home Park Revenue Bonds (Valle Verde Mobile Home Park Project) Series 1999 (the “1999 Bonds”), issued to finance or refinance the 1999 Project, as defined below (together with the 2010 Project and the 2017 Project, the “Project”); (d) financing a debt service reserve fund for the Bonds; and (e) payment of  costs of issuance and certain interest with respect to the Bonds.

• The term “2017 Project” means financing and refinancing all or a portion of the acquisition and improvement of an apartment complex located in the City of Dana Point, California.
• The term “2010 Project” means financing and refinancing all or a portion of the acquisition and improvement of: (a) a 168 space mobile home park known as Bahia Village Mobile Home Park located at 13096 Blackbird Street, Garden Grove, California 92843; (b) an 86 space mobile home park known as Emerald Isle Mobile Home Park located at 13741 Clinton Street, Garden Grove, California 92843; and (c) mobile home parks located in the County of San Bernardino and the City of Palmdale, California.
• The term “1999 Project” means financing and refinancing all or a portion of the acquisition and improvement of a mobile home park located in the City of San Marcos, California.

The 1999 Project and a portion of the 2010 Project are owned and operated by the Corporation; the balance of the 2010 Project is owned and operated by the Company; and the 2017 Project is owned by Silver Lantern and operated and managed by Friendship Shelter, a California nonprofit public benefit corporation and an organization described in Section 501(c)(3) of the Code. In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Garden Grove 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 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.

As mentioned above, the portion of the financing attributable to the Garden Grove facilities is merely a refunding of outstanding bonds issued in 2010 that were used to finance and refinance a 168-space mobile home park known as Bahia Village Mobile Home Park located at 13096 Blackbird Street, Garden Grove, California 92843; and an 86-space mobile home park known as Emerald Isle Mobile Home Park located at 13741 Clinton Street, Garden Grove, California 92843.

The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City 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 City 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 City of Garden Grove, it is expected that that a portion of the issuance fee attributable to the City will be granted by the CMFA to the general fund of the City. Such grant may be used for any lawful purpose of the City.

It is recommended that the City Council:

• Conduct the TEFRA Public Hearing; and

• Adopt the attached Resolution approving the issuance of the Revenue Bonds by the California Municipal Finance Authority.

By:  Nate Robbins, Sr. Program Specialist