ARA-2009-002RESOLUTION NO. ARA- 2009 -002
A RESOLUTION OF THE ANAHEIM REDEVELOPMENT AGENCY
AUTHORIZING AND APPROVING THAT CERTAIN MULTIFAMILY
HOUSING PROGRAM ( "MHP ") BACKSTOP COMMITMENT IN AN AMOUNT
UP TO $5,900,000 AND AUTHORIZING THE EXECUTIVE DIRECTOR, OR
HER DESIGNEE, TO CARRY OUT SUCH COMMITMENT, AS AND IF AN
MPH SHORTFALL LOAN BECOMES NECESSARY, INCLUDING THE MHP
SHORTFALL LOAN AND THE MHP BACKSTOP NOTE, AND RELATED
DOCUMENTS, AS, IF AND WHEN NECESSARY; APPROVING THE
IMPLEMENTATION AGREEMENT FOR LINCOLN ANAHEIM PHASE B;
AND MAKING CERTAIN OTHER FINDINGS IN CONNECTION THEREWITH
WHEREAS, the Anaheim Redevelopment Agency ( "Agency ") is a public body, corporate and
politic and a community redevelopment agency acting pursuant to the California Community
Redevelopment Law, Part I of Division 24, Section 33000, et seq., of the Health & Safety Code and all
successor statutes and implementing regulations thereto ( "Act "); and
WHEREAS, pursuant to the Act, the City Council ( "City Council ") of the City of Anaheim
( "City ") is the legislative body of the Agency; and
WHEREAS, the Amended and Restated Redevelopment Plan ( "Redevelopment Plan ") for the
Anaheim Merged Project Area ( "Project Area ") was adopted by the City Council of the City of Anaheim
by Ordinance Nos. 5913, 5914, 5915, 5916, 5917, 5918, and 6034; and
WHEREAS, Agency receives tax increment revenues pursuant to Section 33670(b) of the Act
and pursuant to the Redevelopment Plan deposits not less than thirty percent (30 %) of the tax increment
revenues allocated to Agency into its Low and Moderate Income Housing Fund ( "Housing Fund ")
pursuant to Sections 33333.10, 33333.11, 33334.2 and 33334.6 of the Act and to use such funds in order
to increase, improve, and preserve the community's supply of low and moderate income housing
available at an affordable housing cost, including paying principal of and interest on loans; and
WHEREAS, Agency is authorized and empowered under the Act to provide funding for the
production, improvement, or preservation of affordable housing including the construction of new
privately owned apartments and appurtenant improvements with revenues from the Housing Fund; and
WHEREAS, the Anaheim Housing Authority ( "Authority ") is a public body. corporate and
politic and is duly organized and validly existing under the Housing Authorities Law, California Health &
Safety Code Section 34240, et seq., and all successor statutes and implementing regulations thereto
( "Housing Authorities Law "); and
WHEREAS, Authority is empowered to enter into agreements and to carry out affordable
housing projects and programs benefiting Lower Income and Very Low Income persons, families, and
households; and
WHEREAS, in furtherance of the objectives of Authority, Agency, and City to increase, improve
and preserve the community's supply of affordable housing, to develop viable urban communities by
providing decent and safe housing and a suitable living environment, and to expand economic
opportunities, Agency has conveyed to Authority certain parcels of real property generally located at
1275 -1287 East Lincoln Avenue in the City ( "Site ") acquired by the Agency with monies from the
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Housing Fund pursuant to that certain Cooperation Agreement dated as of July 1, 2007 between Agency
and Authority; and
WHEREAS, in furtherance of the Redevelopment Plan and the Agency's Implementation Plan
adopted pursuant Section 33490 of the Act and in order to promote and implement its affordable housing
strategy and goals Authority, Lincoln Anaheim I Housing Partners, L.P., a California limited partnership
( "Phase A Developer "), as to Phase A, and Lincoln Anaheim 1I Housing Partners, L.P., a California
limited partnership ( "Phase B Developer "), as to Phase B, entered into that certain Affordable Housing
Agreement dated as of March 18, 2008 ( "Affordable Housing Agreement "); and
WHEREAS, the Affordable Housing Agreement establishes an overall structure and plan for the
development in two Phases of a new multi- family rental housing development with a total of
146 apartment units (72 units in Phase A and 74 units in Phase B) and associated on -site and off -site and
appurtenant improvements, including a subterranean parking structure and surface parking providing on-
site at least two hundred forty -three (243) resident and guest parking spaces and a community center
(collectively, the "Apartment Complex" or "Project "); and
WHEREAS, the Affordable Housing Agreement contemplates development of the Project in two
Phases by two separate developer entities (Phase A Developer and Phase B Developer) utilizing two
separate financing structures and pursuant to two separate Ground Leases by Authority, as Landlord, to
Phase A Developer and Phase B Developer, respectively, each as Tenant; and
WHEREAS, the Affordable Housing Agreement will be amended, implemented and clarified as
to Phase B by that certain Implementation Agreement (Phase B) entered into by and among Authority,
Agency and Phase B Developer as originally approved by resolutions of the Authority and Agency,
respectively, adopted on December 16, 2008 and as to be further modified as authorized by this
Resolution ( "Implementation Agreement — Phase B "); and
WHEREAS, the Affordable Housing Agreement, and Authority's resolution approving and
relating to the Affordable Housing Agreement and Authority's and Agency's resolutions relating to the
Implementation Agreement — Phase B are on file with the City Clerk, who is also the Authority Secretary
and Agency Secretary, and such are incorporated herein by this reference; and
WHEREAS, in order to provide financing for the Project, and subject to the power granted to
Authority in the Housing Authorities Law, Authority has authorized by resolution of even date herewith
the issuance of bonds designated as "Anaheim Housing Authority Multifamily Housing Revenue Bonds
(Lincoln Anaheim Apartments Project — Phase B), Series 2009A" in one or more series in a cumulative
and aggregate principal amount not to exceed $23,950,000 (collectively, the "Bonds "); and
WHEREAS, the permanent financing structure for the Project includes a redemption of Bonds
from Multifamily Housing Program loan proceeds ( "MHP ") in the aggregate principal amount of
$6,700,000 ( "MHP Loan ") at the conversion of the Project from the construction phase to the permanent
phase ( "Conversion "); and
WHEREAS, in order to carry out the Affordable Housing Agreement, the Implementation
Agreement — Phase B, and the Project, in the event the MHP Loan is not available at Conversion, the
Agency may choose to borrow an amount up to but not to exceed $5,900,000 from Union Bank, N.A.
( "Union Bank "), its assigns, or another lender under the same basic terms and conditions ( "MHP Shortfall
Loan ") to be evidenced by a note ( "MHP Backstop Note ") to provide funds to assist in the financing of
the Project and for other redevelopment purposes; and
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WHEREAS, the basic terms and conditions under which the Agency may choose to borrow, and
Union Bank or another lender may choose to loan to Agency, the MHP Shortfall Loan and by which
Agency will borrow such funds and issue the MHP Backstop Note in exchange therefor are set forth in
that certain form of commitment letter designated "Anaheim Lincoln Phase B Contingent Housing Set -
Aside Note Commitment Term Sheet" on file with the Agency Secretary/City Clerk ( "MHP Backstop
Commitment "); and
WHEREAS, pursuant to the terms and conditions set forth in the MHP Backstop Commitment,
in the event the MHP Shortfall Loan and MHP Backstop Note are required (and Union Bank or other
lender agrees to loan the Agency the MHP Shortfall Loan under the basic terms and conditions set forth in
the MHP Backstop Commitment, and as more fully described in the Implementation Agreement —
Phase B), the MHP Shortfall Loan and MHP Backstop Note will include and be secured by a pledge of
housing set -aside tax increment revenues chargeable to Agency's Housing Fund generated by the Merged
Project Area, subject to pre- existing claims, pledges, and obligations on such tax increment and such
other claims, pledges, and obligations as in the reasonable judgment of the City's Executive Director of
Community Development and Agency's Executive Director (together, "Executive Director ") determines
are necessary and appropriate, all subject to the satisfaction of the terms and conditions set forth in the
MHP Backstop Commitment and thereafter the execution and delivery of the MHP Backstop Note and
related closing documents required in implementation of the MHP Shortfall Loan, including payment of
fees and other costs as may be payable from the proceeds thereof; and
WHEREAS, the basic terms and conditions under which the proceeds of the MHP Shortfall
Loan, if it occurs at all, will be provided to Phase B Developer at or near the Conversion of the Project
from the construction phase to the permanent phase are set forth in that certain Agency Conditional
Commitment- Agreement Re MHP Commitment (Lincoln Anaheim Phase B) ( "Agency Conditional
Commitment Agreement ") to be entered into between Agency and Phase B Partnership and which
Agency Conditional Commitment Agreement will be a part of the Implementation Agreement —Phase B,
as modified and approved pursuant to this Resolution; and
WHEREAS, capitalized terms used in this Resolution are as defined in the MHP Backstop
Commitment, or as referenced from the Affordable Housing Agreement and the Implementation
Agreement — Phase B, unless otherwise defined herein; and
WHEREAS, based upon consultation with the City Attorney, as general counsel to Agency and
Authority ( "General Counsel ") and with special counsel and bond counsel to the City, Agency and
Authority on these matters, Stradling Yocca Carlson & Rauth (together, "Special Counsel "), Agency
hereby finds and determines that unless certain actions are taken from the date of issuance of the Bonds
up to and including the date on which the MHP Backstop Note is issued (if at all), and, as and if requested
or required, an opinion of Special Counsel to the effect that the interest on the MHP Backstop Note is or
will be exempt from gross income for federal tax purposes on the date the MHP Backstop Note is
received by the Agency as of the date the MHP Backstop Note is issued (if at all), the interest on the MHP
Backstop Note shall be subject to federal income taxation, and
WHEREAS, Union Bank is a private lending institution within the meaning of Section 33601 of
the Act, and the MHP Backstop Note may be entered into directly with Union Bank as a borrowing
pursuant to Section 33601 of the Act otherwise than through the issuance of bonds; and
WHEREAS, the Project, the MHP Backstop Commitment, the MHP Shortfall Loan, the MHP
Backstop Note, and the Agency Conditional Commitment Agreement are in the best interest of Agency,
City and Authority, and the health, safety and welfare of its residents, and is of benefit to Agency and its
Merged Project Area and is contemplated by the Agency's Implementation Plan therefor.
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NOW, THEREFORE, THE ANAHEIM REDEVELOPMENT AGENCY DOES HEREBY
RESOLVE AS FOLLOWS:
Section 1 . The foregoing Recitals are true and correct and are a substantive part of this
Resolution. The entering into of the MHP Backstop Commitment and the MHP Shortfall Loan and the
delivery of the MHP Backstop Note by Agency to Union Bank, in order to fulfill Agency's obligations
and objectives pursuant to Act and as provided in the Implementation Agreement — Phase B, in particular
the Agency Conditional Commitment Agreement, and in connection with the execution and delivery of
the MHP Backstop Commitment, and as, if, and when required, the MHP Shortfall Loan and the issuance
and delivery of the MHP Backstop Note, all of which constitute a "redevelopment activity," as such term
is defined in Section 33678 of the Act, are hereby authorized and approved.
Section 2 . Subject to Section 7 below, Agency approves the MHP Backstop Commitment
and the MHP Shortfall Loan and the issuance of the MHP Backstop Note, as, if and when required as
provided in such commitment and the Implementation Agreement — Phase B, under substantially the
terms and conditions set forth in the MHP Backstop Commitment and authorizes the Executive Director,
General Counsel, Special Counsel, and any other appropriate official of the Agency, and the authorized
designees of any of them (together, "Designees "), to complete negotiations of, and to enter into, the MHP
Backstop Commitment between Agency, as borrower, and Union Bank, as lender, with the final form of
the MHP Shortfall Loan and the issuance of the MHP Backstop Note described in the MHP Backstop
Commitment, to the extent necessary or desirable in the determination of the Executive Director under the
terms and conditions set forth in the Implementation Agreement —Phase B, subject to the approval of the
Executive Director and General Counsel and Special Counsel. As, if and when required in the
determination of the Executive Director under the terms and conditions set forth in the Implementation
Agreement —Phase B, subject to the approval of the Executive Director and General Counsel and Special
Counsel, the MHP Shortfall Loan and MHP Backstop Note shall include provisions and shall conform
substantially to MIIP Backstop Commitment, submitted with this Resolution and such other material
terms as in the judgment of the Executive Director are reasonably necessary and appropriate to obtain the
MHP Shortfall Loan represented by the MHP Backstop Note in the amount and in the time required,
subject to and provided that (a) the principal amount of the MHP Backstop Note shall not exceed
$5,900,000.00; (b) the interest rate for said borrowing shall be variable as described in the MHP Backstop
Commitment, but shall in no event exceed twelve percent (12 %) per annum; (c) the term of the MHP
Backstop Note shall be approximately ten (10) years with an amortization schedule as described in the
MHP Backstop Commitment; and (d) debt may be secured by a pledge of tax increment revenues
chargeable to Agency's Housing Fund generated by the Merged Project Area, subject to, and subordinate
to, existing claims, pledges, and obligations on such tax increment having a prior lien on such tax
increment and such other claims, pledges, and obligations that Executive Director (in her reasonable
judgment) determines are necessary and appropriate.
Section 3 . The Executive Director, on behalf of Agency, and the Agency Secretary are
hereby authorized to execute and attest the final MHP Backstop Commitment and as, if, and when
required the MHP Shortfall Loan and MHP Backstop Note, including any related attachments, on behalf
of Agency, with their execution and attestation thereof to constitute conclusive evidence of the Agency's
approval of the terms thereof in accordance with this Resolution. Copies of the final MHP Backstop
Commitment, and as, if, and when required the MHP Shortfall Loan and MHP Backstop Note, and related
attachments each when duly executed and attested, shall be placed on file in the office of the City Clerk,
who is also the Agency Secretary. Further, the Executive Director (or authorized designee) is authorized
to implement the MHP Backstop Commitment, and as, if, and when required the MHP Shortfall Loan and
MHP Backstop Note and take all further actions and execute all documents referenced therein and /or
necessary and appropriate to carry out the transactions represented by the MHP Backstop Commitment,
and as, if, and when required the MHP Shortfall Loan and MHP Backstop Note as provided for therein,
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and the Agency Secretary is authorized to attest to such documents. The Executive Director (or
authorized designee) is hereby authorized, to the extent necessary during the implementation of the MHP
Backstop Commitment, and as, if, and when required the MHP Shortfall Loan and MHP Backstop Note,
to make technical or minor changes and interpretations thereto after execution, as necessary, to properly
implement and carry out the MHP Backstop Commitment, and as, if, and when required the MHP
Shortfall Loan and MHP Backstop Note, provided any and all such changes shall not in any manner
materially affect the rights and obligations of Agency or the maximum funding provided under the final
MHP Backstop Commitment, and as, if, and when required the MHP Shortfall Loan and MHP Backstop
Note.
Section 4 . The Executive Director (or authorized designee) is hereby authorized, on behalf
of Agency, to execute and deliver, and the Agency Secretary is authorized to attest, that certain
Implementation Agreement - Phase B by and among Agency, Authority, and Phase B Developer
approved by the Governing Board on December 16, 2008 as modified to allow for the Agency
Conditional Commitment Agreement and the terms, provisions, and conditions to commit to and as
necessary to implement the MHP Shortfall Loan, including as and if necessary a cooperation agreement
between Agency and Authority related thereto (together, "Implementation Agreement - Phase B with
MHP Shortfall Loan and Cooperation "), along with any and all certificates, agreements and other
documents ancillary to such Implementation Agreement - Phase B with MHP Shortfall Loan and
Cooperation, with additions thereto and changes therein all as approved by General Counsel and Special
Counsel and as the Executive Director (or authorized designee) may recommend and approve in
accordance with the terms of this Resolution.
Section 5 . In addition to the authorization of Sections 2, 3 and 4 above, the Executive
Director (or authorized designee) and Agency Secretary are hereby authorized, on behalf of Agency, to
execute and attest all other documents necessary or appropriate to carry out and implement the MHP
Backstop Commitment, and as, if, and when required the MHP Shortfall Loan and MHP Backstop Note,
and any implementing documents thereto, and to administer Agency's obligations, responsibilities and
duties to be performed under the MHP Backstop Commitment, and as, if, and when required the MHP
Shortfall Loan and MHP Backstop Note. Special Counsel Stradling Yocca Carlson & Rauth is confirmed
to act as bond counsel to Agency in connection with the MHP Backstop Commitment, and as, if, and
when required the MHP Shortfall Loan and MHP Backstop Note.
Section 6 . This Resolution shall take effect upon its adoption, expressly subject to and
conditioned upon Authority of concurrent date herewith adopting a resolution authorizing the Authority
Bonds and approving the Implementation Agreement - Phase B with MHP Shortfall Loan and
Cooperation, and which Implementation Agreement - Phase B with MHP Shortfall Loan and Cooperation
as to Agency is approved by this Resolution. If that referenced Authority resolution is adopted (without
any prejudgment therefor) then this Resolution shall take effect immediately thereafter.
Section 7 . Nothing in this Resolution shall be construed as obligating the Agency to (i)
accept the MHP Shortfall Loan under the terms and conditions set forth in the MHP Backstop
Commitment, or otherwise, (ii) execute and deliver the MHP Backstop Note, or (iii) execute and deliver
Agency Conditional Commitment Agreement. Further, nothing in this Resolution is intended to create
any rights in any third party and no third party shall have any right to enforce any rights or obligations
thereof under this Resolution.
Section 8 . Agency Secretary shall certify to the adoption of this Resolution.
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THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE
GOVERNING BOARD OF THE ANAHEIM REDEVELOPMENT AGENCY THIS TWENTY
EIGHTH (28 TH) DAY OF APRIL, 2009, BY THE FOLLOWING ROLL CALL VOTE:
AYES: Chairman Pringle, Agency Members Hernandez, Sidhu, Kring
NOES: NONE
ABSTAIN: NONE
ABSENT: Agency Member Galloway
ATTEST:
AGENCYSECRETARY
a MAN
APPROVED AS TO FORM:
TALLEY, CITY ATTORNEY
7 oodhead IV, Esq.
City Attorney
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