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HomeMy Public PortalAbout22 Sawmill Heights Project TOWN OF TRUCKEE California RESOLUTION NO. 2006-22 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TRUCKEE APPROVING NORTHSTAR COMMUNITY HOUSING CORPORATION AND SUCH CORPORATION'S ISSUANCE OF TAX-EXEMPT BONDS AND OTHER INDEBTEDNESS ON BEHALF OF THE TOWN TO FINANCE THE SAWMILL HEIGHTS PROJECT WHEREAS, by its Resolution No. 2003-04, the Town Council preliminarily approved the Town's sponsorship of the 63-20 financing of the Sawmill Heights affordable housing project at Northstar (the "Project"), which will consist of accommodations for approximately 372 individuals consisting of studio, two-bedroom and four-bedroom suites, and WHEREAS, Northstar Community Housing Corporation, a California nonprofit public benefit corporation (the "Corporation") has been formed under the nonprofit corporation laws of the state of California to acquire, construct and operate the Project, and WHEREAS, the Project is located within three miles of and has a substantial connection to the Town, and WHEREAS, the acquisition and construction of the Project will be financed using the proceeds of bonds (the "Bonds") to be issued by the Corporation on behalf of the Town pursuant to an Indenture of Trust between the Corporation and U.S. Bank National Association as trustee (the "Indenture") and a loan by the County of Placer in the amount of $350,000 (the "County Loan" and, together with the Bonds, the "Original Obligations"), and WHEREAS, the Corporation desires that interest on the majority of the Bonds be tax- exempt under the U.S. Internal Revenue Code of 1986 and rulings and regulations promulgated thereunder, including, without limitation IRS Revenue Ruling 63-20 and Revenue Procedure 82- 26 (the "Tax Laws"), and WHEREAS, the Corporation and East West Resort Development V, L.P., L.L.L.P., Northstar Mountain Properties, LLC, or other entities acceptable to the officers of the Town (collectively, the "lndemnitors~) have agreed to indemnify the Town for any costs or liabilities incurred by the Town and relating to the Project or the financing thereof, and WHEREAS, in order for interest on any of the Bonds to be tax exempt under the Tax Laws, the Town must authorize formation of the Corporation and issuance of the Bonds. NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF TRUCKEE as follows: 1. The Town Council authorizes (a) the formation and existence of the Corporation, (b) the Corporation's issuance of the Bonds in one or more series in an aggregate amount not to exceed $26,500,000, (c) the Corporation's borrowing of the County Loan, and (d) the Corporation's incurrence of Qualified Refunding Obligations. As used herein, "Qualified Refunding Obligations" means loans, bonds or other obligations of the Corporation that meet each of the following requirements: (a) they are used to redeem all or a portion of the Original Obligations; (b) their final maturity date is not later than the latest final maturity date of the Original Obligations; and (c) their aggregate principal amount does not exceed the difference between the aggregate principal amount of the Odginal Obligations that remain outstanding and $26,850,000. The Original Obligations and any Qualified Refunding Obligations are referred to collectively herein as the "Obligations." 2. The Town Council further authorizes the Town's entry into the Project Agreement with the Corporation in the form attached to this Resolution as Exhibit A and the Indemnity Agreement by the Indemnitors in the form attached to this Resolution as Exhibit B, each with such changes as the Town's officers may approve, such approval to be evidenced by the Town's execution thereof. 3. The Town Council directs the Town's officers to take such further action as is necessary or appropriate to qualify the Bonds for an exemption from income taxation under the Tax Laws. 4. This resolution does not contemplate or authorize the Town's assumption of any liability whatsoever with respect to the Obligations or the Project. The Town Council directs the Town's officers to take all action necessary or advisable to protect the Town from any liability relating to the Obligations or the Project. 5. The Town Council further directs the Town's officers to incorporate such safeguards as are recommended by the Town's legal counsel to minimize any risks to the Town that may be associated with the Obligations or the Project. The foregoing Resolution was introduced by Council Member Green, seconded by Council Member Susman, at a Regular Meeting of the Truckee Town Council, held on the 4th day of May, 2006 and adopted by the following vote: AYES: Council Member; Green, Susman, Threshie, Vice Mayor Anderson and Mayor Ingalls. NOES: None ABSENT: None Betl~ Ingalls, M;~y0r'~ J~, ToWn Clerk Exhibit A Project Agreement FREE RECORDING PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 27383 REQUESTED BY Town of Truckee WHEN RECORDED MAIL TO: Town of Truckee 10183 Truckee Airport Rd. Truckee, CA 96196 Attention: Tony Lashbrook PROJECT AGREEMENT SAWMILL HEIGHTS THIS PROJECT AGREEMENT (the "Agreement") is made as of May 15, 2006, by and between NORTHSTAR COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation (the "Corporation") and the TOWN OF TRUCKEE, CALIFORNIA (the "Town"). All capitalized terms used herein, unless otherwise defined, shall have the respective meanings provided in the Indenture of Trust dated as of the date hereof (the "Indenture") by and between the Corporation and U.S. Bank National Association, a national banking association, as Trustee. RECITALS: A. The Corporation has been organized under the California Nonprofit Public Benefit Corporation Law, Title 1, Division 2, Part 2 of the California Corporations Code, as amended, to acquire property in order to provide affordable housing facilities for the benefit and on behalf of the Town. B. Pursuant to the Indenture, the Corporation shall issue the Bonds in an aggregate amount not to exceed $26,500,000 and obtain a loan from the County of Placer in the amount of $350,000 (together with the Bonds, the "Original Obligations") for the purpose of acquiring and constructing a residential apartment project with accommodations for approximately 372 individuals consisting of studio, two-bedroom and four-bedroom suites to be operated by the Corporation and known as Sawmill Heights (the "Project"), located within 3 miles of the boundaries of the Town on the property described in Exhibit A to this Agreement, to provide housing at rentals within the means of individuals of low or moderate income, as determined by the Corporation's board of directors from time to time, but subject to the terms of this Agreement. C. As provided in the Indenture, during the initial Private Marketing Phase, all of the Bonds will be privately placed and not be transferable. Upon the satisfaction of certain conditions precedent set forth in the Indenture, the Series A Bonds will be remarketed publicly during the Public Marketing Phase. Should such conditions precedent not be satisfied, the Bonds will be redeemed. D. Concurrently with the execution and delivery of this Agreement, the Corporation, Northstar Mountain Properties, LLC, a Delaware limited liability company, East West Resort Development V, L.P., L.L.L.P., a Delaware limited partnership and the Corporation (collectively, the "Indemnitors") are entering into an Indemnity Agreement and a Bank Qualified Bond Indemnity Agreement, each dated as of the date hereof (together, the "Indemnity Agreements") for the benefit of the Town pursuant to which the Indemnitors agree to indemnify the Town against potential liabilities relating to the Project and the Bonds as provided therein. TERMS For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and the Corporation, on behalf of themselves and their respective successors and assigns, agree as follows: Section 1. Project Operation. a. The Corporation hereby covenants and agrees to operate the Project at standards required to provide decent, safe and sanitary housing facilities at reasonable rental rates, in a sound and economical manner, as provided in the Indenture. In leasing, Units (as hereinafter defined) of the Project, the Corporation shall give priority to individuals m?eting the requirements of Qualified Renters. As used in this Section 1, "Unit" shall mean (i)jn the case of a studio apartment, the entire apartment and (ii) in the case of a multi-bedroom suite, each bedroom in such suite. b. Without limiting the Corporation's obligations under the Indenture or Section l(a) above, as long as any of the Bonds are outstanding, at least 51% of the Units in the Project shall be Qualified Units (as hereinafter defined). As used in this Section 1, "Qualified Unit" shall mean a Unit that is leased at a monthly rent that is affordable to a one or two-person household whose annual income does not exceed 80% of the area median income for Placer County, as determined in a manner consistent with the determination of rents for low- income tenants and area median gross income under Section 8 of the United States Housing Act of 1937. For the purpose of meeting the requirements set forth in this Section l(b), any Unit that is vacant but held open for occupancy in accordance with the restrictions described above shall be considered a Qualified Unit. c. The Corporation may not enter into any lease that provides for rental of a more than one Unit by a single Person (a "Master Lease") unless the form of such Master Lease shall have been approved in advance by a Favorable Opinion of Approved Bond Counsel. "Favorable Opinion of Approved Bond Counsel" means an unqualified opinion of Approved Bond Counsel (as hereinafter defined) to the effect that the Corporation's entry into a Master Lease in such form will not impair the exemption of interest on the Tax-Exempt Bonds from income taxation under the laws of the State of California or the exclusion of interest on the Tax-Exempt Bonds from gross income for purposes of federal income taxation (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of the Bonds). "Approved Bond Counsel" means a law firm that is proposed by the Corporation and approved by the Town Manager in accordance with the following procedure. The Corporation shall submit the name of a law firm of its choice to the Town Manager, who shall have ten days to provide written approval or disapproval of such law firm in his or her reasonable discretion; provided that, if the Town Manager does not disapprove of a law fi~ti, proposed by the Corporation in writing within ten days, the Town Manager shall be deemed to have approved such law firm. d. Nothing herein or in any resolutions of the Town shall be interpreted to require the Town to undertake any responsibility for the operation or management of the Project. As provided in the Indemnity Agreements, the Corporation shall indemnify and hold harmless the Town, its officers, agents and employees and members of its Town Council with respect to any liability or damages arising under actions or claims against the Town as a result of the issuance of the Bonds or the acquisition, construction, operation or management of the Project by the Corporation. Section2. Qualified Refunding Oblit~afions. Should a Private Marketing Redemption Event occur, the Tax-Exempt Bonds shall be redeemed with the proceeds of a loan, bonds or other obligations of the Corporation. Such obligations of the Corporation that meet both of the following requirements shall be referred to as "Qualified Refunding Obligations": (a) their final maturity date is not later than the latest final maturity date of the Original Obligations; and (b) their aggregate principal amount does not exceed the difference between (i) the aggregate principal amount of all Original Obligations that remain outstanding a~d (ii) $26,850,000. The Original Obligations and any Qualified Refunding Obligations are refeixed to collectively herein as the "Obligations." Section 3. Town Benefit. The Corporation covenants and agrees that all activities of the Corporation shall be undertaken for the benefit of the Town. Upon repayment of all of the Obligations, the Town shall acquire title to the Project without cost, as provided in Section 10.05 of the Indenture and Section 4 hereof. Section 4. Acquisition and Cure Rights. a. Defeasance by the Town. The Town shall have the right at any time to obtain unencumbered fee title to and exclusive possession of the Project by delivering to the Trustee an amount that will be sufficient to defease the Obligations and pay reasonable costs incident to such defeasance, including any premiums and prepayment penalties, all in accordance with the tct~s of the Indenture. Any Defeasance by the Town must be done in accordance with the procedures set forth in the Indenture. b. Right to Cure. Upon the occurrence of an Event of Default as defined in Section 7.01 of the Indenture, the Corporation shall cause the Trustee, within five days of such occurrence, to provide notice to the Town, and the Town shall have the option to cure such Event of Default within 90 days after receipt of such notice. As provided in Section 7.02 of the Indenture, amounts advanced by the Town as a result of the exercise of this option to cure monetary defaults hereunder and reasonable, direct expenses of the Town advanced to cure nonmonetary defaults hereunder shall be deemed to be Indebtedness of the Corporation to the Town. In addition to the foregoing and consistent with Section 10.05 of the Indenture, if pursuant to Article VII of the Indenture, the Trustee declares the principal of any Bonds then outstanding to be due and payable immediately and any foreclosure proceeding or other action is commenced under the Indenture or the Deed of Trust that could lead to the sale or other disposition of the property pledged thereunder, the Town is hereby granted an exclusive option to purchase all such property (including the Project), for the amount of the outstanding Obligations and other Indebtedness of the Corporation and accrued interest to the date of default. The Town shall have not less than 90 days from the date it is notified by the Trustee of such action in which to both exercise the option and purchase the property. Nothing herein shall be construed to create any obligation of the Town to cure any Event of Default. Section 5. Funds in Indenture. As required under Section 10.05 of the Indenture, in the event the Town exercises its purchase option under Section 4(b), the Town shall receive a credit towards its defeasance or purchase costs in the amount of any fund or account balances held under the Indenture with the exception of (a) the Rebate Fund and (b) any amount needed to pay additional interest on the Bonds or expenses in connection with such defeasance under Section 10.05 of the Indenture. Section 6. Title. In accordance with the Tax Laws, unencumbered fee title to the Project and any additions thereto and exclusive possession and use thereof will vest in the Town I without demand or further action on its part when all of the Obligations (including the Bonds) are discharged in accordance with the terms of the Indenture. For purposes of this Section 6, such obligations will be discharged when (a) cash is available at the place of payment on the date that the obligations are due (whether at maturity or upon call for redemption) and (b) interest ceases to accrue on the obligations or (c) as otherwise provided in Article X of the Indenture. All leases, management contracts and similar encumbrances on the Project shall terminate upon discharge of said obligations. Encumbrances that do not significantly interfere with the enjoyment of such property are not considered encumbrances for purposes of this Section. Section 7. Indenture Rights~ Approval of Town. The Corporation hereby covenants and agrees that the provisions of the Indenture granting any rights to the Town shall not be amended or modified without the consent of the Town. By execution hereof, the Town hereby consents to the provisions of the Indenture relating to the rights of the Town and confix~iis its approval of the issuance of the Bonds. Section 8. Term. This Agreement shall terminate upon the vesting of fee title to the Project in the Town as herein provided. Section 9. Burden on Property. This Agreement is a burden upon and runs with the property described in Exhibit A hereto and is binding upon the Corporation and upon all persons or entities with any right, title or interest to such property or any part thereof. Section 10. Notices. Any notice, consent, demand or other communication that is permitted or required to be given hereunder shall be in writing and given by first class mail, postage prepaid, to the applicable party at the respective address set forth below, or at such other address as may be provided to the other parties hereinafter listed in writing from time to time, namely: If to the Corporation: Northstar Community Housing Corporation c/o Polar Star Properties 28 2nd Street, Suite 215 Edwards, CO 81632 If to the Town: Town of Truckee 10183 Truckee Airport Rd. Truckee, CA 96196 Attn: Tony Lashbrook Section 11. Construction. This Agreement shall be governed by and interpreted in accordance with the laws of the state of California. If any provision of this Agreement shall be determined to be invalid or unenforceable, such provision shall be deemed void and severed from this Agreement, and the remaining provisions shall continue in full force and effect. This Agreement may be executed in identical counterparts, each of which shall be deemed an original and which together shall constitute one and the same agreement. (Signatures follow immediately.) In witness of the foregoing, each of the undersigned has caused this Agreement to be executed by its duly authorized representative as of the date first written above. TOWN OF TRUCKEE NORTHSTAR COMMUNITY HOUSING CORPORATION By: By: Its: Its: STATE OF CALIFORNIA ) ) SS. COUNTY OF ) On ,2006, before me, ., a Notary Public in and for the state of California, personally appeared ., personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrmnent, and acknowledged to me that he or she executed the same in his or her authorized capacity and that, by his or her signature on the instrument, the person or the entity upon behalf of which he or she acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for said state (Notarial Seal) STATE OF CALIFORNIA ) ) SS. COUNTY OF ) On ,2006, before me, , a Notary Public in and for the state of California, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that he or she executed the same in his or her authorized capacity and that, by his or her signature on the instrument, the person or the entity upon behalf of which he or she acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for said state (Notarial Seal) Exhibit A Legal Description EXHIBIT "A" LEGAL DESCRIPTION MBR # 20051008 RESULTANT PARCEL I All that real property situated in the County of Placer, State of Califomia, being a portion of the lands of Trimont Land Company described in Document No. 92-090695, Official Records Placer County, situated in the east half of Section 32, Township 17 North, Range 17 East, Mount Diablo Base and Meridian and more particularly described as follows: Beginning at a point from which the northeast comer of the aforedescribed Section 32 bears North 20053'05'' East, for a distance of 912.70 feet; thence from said point of beginning South 44014'07'' West, 181.07 feet; thence North 89030'00'' West, 609.34 feet to a point on the easterly line of the Highway Easement recorded as Document No. 2005-0126399, Official Records Placer County; thence continuing along said Highway Easement from a tangent bearing of North 15058'36'' East and along an arc of a curve to the left having a radius of 1020.00 feet for a distance of 79.58 feet through a delta angle of 04°28'13"; thence North 11°30'23'' East, 277.04 feet; thence along an arc of a curve to the right having a radius of 280.00 feet for a distance of 282.77 feet through a delta angle of 57°51'48"; thence North 69°22'11" East, 81.91 feet; thence North 78°27'36'' East, 31.34 feet to a point on the southwesterly property line described in the Deed recorded November 5, 1973 in Book 1535, Page 580, Official Records Placer County; thence leaving said Highway Easement and continuing along said property line South 39005'00'' East, 138.94 feet to an angle point on the said property line; thence leaving said property line South 49033' 14" East, 85.82 feet; thence South 36o43'54'' East, 377.00 feet to the point of beginning. Containing 6.72 acres, more or less. The Basis of Bearings is the line between the northeast comer and east quarter corner of Section 32, Township 17 North, Range 17 East, Mount Diablo Base and Meridian as shown on Record of Survey No. 2392 for Northstar Mountain Properties, LLC, recorded in Book 18 of Maps, Page 14, Official Records Placer County, shown as North 01004'36" West. Page I of 3 EXHIBIT "A" LEGAL DESCRIPTION MBR # 20051008 RESULTANT PARCEL II All that real property situated in the County of Placer, State of California, being a portion of the lands of Trimont Land Company described in Document No. 92-090695, Official Records Placer County, situated in the east half of Section 32, Township 17 North, Range 17 East, Mount Diablo Base and Meridian and more particularly described as follows: The east half of Section 32 and the west half of Section 33. Excepting therefrom all that portion of land shown on the Final Map for "Northstar Unit I-A" filed in Book J of Maps, Page 38, Official Records Placer County. Also excepting therefrom Lot "B" and all that portion lying northerly of the southerly line of Northstar Drive as shown on the Final Map for "Northstar Unit 1-A" filed in Book J of Maps, Page 38, Official Records Placer County. Also excepting therefrom ali that portion described in the Deed recorded November 5, 1973 in Book 1535 of Official Records, Page 580. Also excepting therefrom all that portion described in the Deed recorded December 13, 1973 in Book 1538 of Official Records, Page 28. Also excepting therefrom all that portion described as follows: Beginning at a point from which the northeast comer of the aforedescribed Section 32 bears North 20053'05'' East, for a distance of 912.70 feet; thence from said point of beginning South 44014'07" West, 181.07 feet; thence North 89030'00" West, 609.34 feet to a point on the easterly line of the Highway Easement recorded as Document No. 2005-0126399, Official Records Placer County; thence continuing along said Highway Easement from a tangent bearing of North 15058'36" East and along an arc of a curve to the left having a radius of 1020.00 feet for a distance of 79.58 feet through a delta angle of 04°28'13"; thence North 11°30'23'' East, 277.04 feet; thence along an arc of a curve to the right having a radius of 280.00 feet for a distance of 282.77 feet through a delta angle of 57°51'48"; thence North 69°22'11" East, 81.91 feet; thence North 78027'36" East, 31.34 feet to a point on the southwesterly property line described in the Deed recorded November 5, 1973 in Book 1535, Page 580, Official Records Placer County; thence leaving said Highway Easement and continuing along said property line South 39005'00" East, 138.94 feet to an angle point on the said property line; thence leaving said ~,~. Page 2 of 3 : ~ ~ ,~n~ ~. ~ S:LIOB_ADMIN~0415XLOTLINEADSUS~LEGALDESCOI DOC property line South 49033' 14" East, 85.82 feet; thence South 36o43'54'' East, 377.00 feet to the point of beginning. Containing 570 acres, more or less. The Basis of Bearings is the line between the northeast corner and east quarter comer of Section 32, Township 17 North, Range 17 East, Mount Diablo Base and Meridian as shown on Record of Survey No. 2392 for Northstar Mountain Properties, LLC, recorded in Book 18 of Maps, Page 14, Official Records Placer County, shown as North 01°04'36'' West. Page 3 of 3 Exhibit B Indemnity Agreement INDEMNITY AGREEMENT This Indemnity Agreement (this "Agreement") dated as of May 15, 2006, is entered into by and among Northstar Community Housing Corporation, a California nonprofit public benefit corporation (the "Corporation"), Northstar Mountain Properties, LLC, a Delaware limited liability company ("Northstar"), East West Resort Development V, L.P., L.L.L.P., a Delaware limited partnership ("East West" and, together with Northstar and the Corporation, "Indemnitors") and Town of Truckee, California ("Indemnitee"). All capitalized terms used herein, unless otherwise defined, shall have the respective meanings provided in the Indenture of Trust dated as of May 15, 2006, by and between the Corporation and U.S. Bank National Association, a national banking association, as Trustee (the "Indenture"). RECITALS A. The Corporation was organized for the purpose of acquiring and constructing an affordable housing project, generally known as Sawmill Heights (the "Project"), in order to provide dwelling accommodations for individuals of low or moderate income for the benefit and on behalf of the Indemnitee. B. Pursuant to the Indenture, the Corporation will issue the Bonds in an aggregate principal amount not to exceed $26,500,000 and borrow $350,000 from the County of Placer (the "County Loan" and, together with the Bonds, the "Original Obligations") for the purpose of acquiring and constructing the Project. C. In accordance with the Indenture, during the initial Private Marketing Phase, the Bonds will be privately placed and not be transferable. Should a Public Remarketing Event occur, the Series A bonds will be remarketed publicly during the Public Marketing Phase. Should a Private Marketing Redemption Event occur, the Tax-Exempt Bonds will be redeemed with loans, bonds or other obligations of the Corporation (such refunding obligations, together with the Original Obligations, being referred to herein as the "Obligations"). D. Indemnitee and Indemnitors desire to enter into this Agreement, pursuant to which the Indemnitors agree to indemnify the Indemnitee against liabilities relating to the Indemnitee's involvement in the incurrence of the Obligations and the development of the Project as set forth in the Indenture, the Project Agreement dated as of May 15, 2006, by and between the Corporation and the Indemnitee (the "Project Agreement") and any other documents relating to the Obligations or the Project (collectively, the "Documents"). E. In accordance with the Project Agreement and as part of the consideration for Indemnitee's involvement with the Project and the financing thereof, Indemnitors are willing to indemnify the Indemnitee against liabilities relating thereto. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: (d) This Agreement shall be interpreted in accordance with the laws of the state of California. (e) This Agreement may be executed in several counterparts, and in each case, all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties have not signed the original or the same counterpart. (Signatures follow immediately.) 1 In wimess of the foregoing, each of the parties hereto has caused this Agreement to be executed | by its duly authorized representative as of the date first written above. NORTHSTAR MOUNTAIN PROPERTIES, LLC, a Delaware limited liability company By: Name: Title: EAST WEST RESORT DEVELOPMENT V, L.P., L.L.L.P., a Delaware limited partnership By: Name: Title: NORTHSTAR COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation By: Name: Title: TOWN OF TRUCKEE, CALIFORNIA By: Name: Title: