To: Honorable Chair and Commissioners
From: Rick Tooker, Community Development Director
Prepared By: Lark Ferrell, Housing Manager
TITLE:
Title
The Reserve at Napa, 117-Unit Multifamily Senior Housing Project at 710-714 Trancas Street - Reissuance of Bonds
LABEL
RECOMMENDED ACTION:
Recommendationle
Adopt a resolution authorizing the reissuance of "Housing Authority of the City of Napa Multifamily Housing Revenue Bonds (The Reserve at Napa) 2001 Series B," and authorizing the execution, delivery, and approval of other related documents.
Body
DISCUSSION:
In August 2001, the Housing Authority issued $6,000,000 in tax exempt housing revenue bonds. The bond proceeds were loaned to Napa Senior Apartments, L.P. (the "Borrower"), a limited partnership formed by U.S.A. Properties, to construct the Reserves at Napa, a 117-unit affordable senior rental project located at 710-714 Trancas Street (the "Project"). The Housing Authority's obligation under these bonds is limited, payable only from amounts received from the Borrower as payment under the loan.
These bonds were sold as private placement bonds and were structured with a final maturity of August 1, 2031, but were subject to remarketing on August 1, 2016. Accordingly, these bonds should have been remarketed on August 1, 2016 at a new interest rate and sold to either a new buyer or to the current bondholder if they were interested in continuing to own the bonds. If the bonds were not remarketed successfully, the Borrower would be in default of its agreement to pay off the bondholder by August 1, 2016, which would force the Borrower to find another source of financing to pay off the bondholder.
The bondholder and the Borrower both overlooked the remarketing date until recently. Since August 2016, the Borrower has continued to pay the bondholder interest at the original rate of 6.38%, which is well above current market rates. The Borrower and bondholder have agreed to lower the interest rate and extend...
Click here for full text