10632 Bolsa Avenue, LP has requested that the CalPFA serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $15,000,000 of tax-exempt revenue bonds. The proceeds of the Bonds will be used for the acquisition, construction, improvement, and equipping of the Project, to be owned and operated by Mariman & Company as the Borrower. In order for all, or a portion of, the Bonds to qualify as tax-exempt bonds, the City must conduct a Public Hearing (the “TEFRA Hearing”) providing 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” (in this case, City Council) of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.

The Project is an existing affordable housing community with 77 one-, two-, and three-bedroom apartments for large families and seniors earning at, or below, 60% of the area median income (the Garden Grove Manor Apartments). The Bonds will be used to finance the acquisition and rehabilitation of the Project. The rehabilitation is expected to include new exterior wood siding/fascia/mansard with modern durable materials, replacement of deteriorating ground floor patio fencing, replacement/repair of wood trellis surrounding the community building, remodeling the community building and laundry room, replacement of deteriorating carport roofs, repainting of exterior buildings and metal railings, updating balcony drainage, landscaping improvements, railing/flooring repairs, and interior upgrades including new windows, kitchens, baths, flooring, paint, appliances and window coverings. The Project amenities include a swimming pool, clubhouse, and carports. The acquisition and rehabilitation will extend the affordability of the property for 55 years. The Bonds to be issued by the CalPFA for the Project will be the sole responsibility of Mariman & Company, and the City will have no financial or legal 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.

Through its conduit issuance activities, the CalPFA shares a portion of the annual fees it receives with its member communities.  With respect to the City, it is expected that a portion of the annual fee will be granted by the CalPFA to the City’s General Fund. This grant may be used for any lawful purpose of the City. 

Staff recommends that the City Council:

• Conduct a Public Hearing, accept comments, regarding the adoption of the resolution approving the issuance of Bonds by the California Public Finance Authority for the benefit of  10632 Bolsa Avenue, LP to provide for the financing of a 77-unit affordable apartment project for families and seniors located at 10632 Bolsa Avenue, Garden Grove; and
  
  
• Adopt the attached Resolution authorizing the issuance of tax-exempt revenue bonds by California Public Finance Authority and authorizing the City of Garden Grove to join the California Public Finance Authority as an additional member.

By:  Allison Mills, Neighborhood Improvement Manager