Cabrillo Economic Development Corporation (CEDC) President Rodney Fernandez said that the deal will extend the affordability of the units for 55 years, and that CEDC “has agreed to pay an annual fee” to offset the city’s loss of property tax due to the nonprofit status of the project.“CEDC feels that in some cases” such as Santa Paula, where city funding is tight, paying the negotiated fee “is the right thing to do... we’re happy to help the city’s economic position. And, as a member of the community CEDC is worried about the long-term affordability” of the Santa Paulan Apartments for future generations of low-income seniors.According to CEDC Project Manager Monica Mejia, since the pass-through bonds are tax exempt, the “City is acting as an issuer and not responsible to pay back” or be responsible for the bonds, which will actually be issued by City Bank. “The city will act as a pass-through entity in the beginning,” and thereafter monitor the Santa Paulan annually to ensure that it remains affordable housing for seniors. “That’s about it,” noted Mejia.The Santa Paulan offers two-bedroom, one-bedroom and studio apartments at the complex that features a swimming pool and community room. The complex was completed 15-years ago, and is currently owned by a limited partnership comprised of CEDC and Edison Capital.The bond would fund the sales transaction as well as rehabilitation, said Mejia. “The walkways, driveways,” and other exterior work is needed, as well as rehabilitation - such as carpet and paint - of some units. “The Santa Paulan is in pretty good shape...it’s been around for 15 years so some of the units” need rehabilitation, and the bond will also fund an upgrade of the heating system, said Mejia.
Council to address sponsorship of Santa Paulan senior housing bond
January 10, 2007
Santa Paula City Council
The City Council will have a somewhat unusual item on their agenda for the January 16 meeting: a public hearing regarding the proposed issuance of up to $10 million in revenue bonds for the “purpose of financing the acquisition and rehabilitation of multifamily rental housing development in the city.”
By Peggy KellySanta Paula TimesThe City Council will have a somewhat unusual item on their agenda for the January 16 meeting: a public hearing regarding the proposed issuance of up to $10 million in revenue bonds for the “purpose of financing the acquisition and rehabilitation of multifamily rental housing development in the city.”In actuality, according to City Manager Wally Bobkiewicz, the city is acting only as the sponsor for the deal that involves the existing Santa Paulan Senior Apartments on Santa Barbara and North 4th streets.“There are different types of tax exempt bonds out there that nonprofits can access, but they always need a public agency to stage the hearing on their behalf,” noted Bobkiewicz. “We do this for various projects... and there is no financial liability to the city on this.”Bobkiewicz added that the city did do some homework on the issue, including the potential for rent increases of the 150 units of the Santa Paulan, which houses low-income senior citizens. “We were very concerned” about potential rent increases and future affordability of the units related to the transaction, but Bobkiewicz said that the city is satisfied with the outcome.
