Item 13 - Consideration of Request Refinance Debt for Gateway Development
A.GENDA REPORT SUMMARY
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TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Man~
INITIATED BY: Warren H. Shafer, Director of Redevelopment service~Y
Pamela C. Wilczak, Redevelopment Project Administrato~
DATE: October 27, 1998
SUBJECT: Consideration of request by Retirement Housing Foundation through the California
Statewide Communities Development Authority to refinance existing debt for the
Gateway Development.
ABSTRACT
Retirement Housing Foundation (RHF) has requested that the California Statewide Communities
Development Authority (the Authority) refinance the existing debt on The Gateway senior housing
development located at 12751 Gateway Park Road. The Authority is a joint powers authority
sponsored by the League of California Cities and the California State Association of Counties, and
Poway is a member agency. The proposed refinancing would be accomplished through the issuance
of taxable bonds, and would allow RHF a consolidation of debt and reduced interest rate. There is
.^..- no direct benefit to the City resulting from the proposed refinancing, although it may reduce the cost
of issuance for financing affordable housing developments in other parts of the State which are
included in this same bond issue. The City of Poway must approve the proposed refinancing for it
to proceed under the terms of the joint powers agreement. David Paul Rosen & Associates has
reviewed this request and has recommended that the City Council approve the proposed refinancing.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
There is no fiscal impact resulting from approval of this item.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report was sent to Retirement Housing Foundation.
RECOMMENDATION
It is recommended that the City Council approve the proposed refinancing of The Gateway using
the California Statewide Communities Authority.
ACTION
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CITY OF POWAY
AGENDA REPORT
TO: Honorable Mayor and Membe~e City Council
FROM: James L. Bowersox, City Mana
INITIATED BY: Warren H. Shafer, Director of Redevelopment Services @lY
Pamela C. Wilczak, Redevelopment Project Administratorr
DATE: October 27, 1998
SUBJECT: Consideration of a request by Retirement Housing Foundation
through the California Statewide Communities Development
Authority to refinance the existing debt for the Gateway
Development.
BACKGROUND
Retirement Housing Foundation (RHF) has made application to the California Statewide
Communities Development Authority (the "Authority") for assistance with refinancing its
existing senior development in Poway, The Gateway. The Authority is a statewide joint
powers authority, sponsored by the League of California Cities and the California State
Association of Counties, and the City of Poway is a member agency. Pursuant to the Joint
Powers Agreement (JPA), the Authority is authorized to assist in the financing/refinancing
offacilities for nonprofit, 501 (c)3 organizations, through the issuance of bonds. RHF is a
qualified nonprofit for the purposes of this program. The City of Poway must approve the
proposed refinancing of The Gateway for it to proceed under the terms of the JPA.
FINDINGS
The Gateway, is a 134 unit, market-rate project located at 12751 Gateway Park Road, and
has been owned and operated by RHF since its opening in June of 1988. The proposed
refinancing would involve the issuance of taxable bonds. Because the proposed bonds
are taxable, RHF is not required to provide any affordable units at The Gateway, as it
would with the tax exempt, 501 (c)3 bonds, or a private activity bond.
The proposed refinancing would allow RHF to secure a lower interest rate by refinancing
existing debt on the property. The refinancing does not provide for RHF to draw any equity
from The Gateway, and is strictly a refinancing of existing debt on the property. The
Gateway refinancing is part of a larger bond issue involving four other RHF properties
throughout the State. The bond issue will be a split-issue, part of which will be taxable
bonds and part tax-exempt bonds. Approving RHF's proposed refinancing would have no
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Retirement Housing Foundation Request to Refinance
Existing Debt for the Gateway Development
October 27, 1998
Page 2
direct benefit to the City. It would allow the issuance costs to be spread over a larger
number of projects, thereby reducing the cost of refinancing other RHF projects in
California which do have affordable units. We have reviewed this request with our Housing
consultant, David Rosen and Associates, and they recommend the City support the
request.
FISCAL IMPACT
There is no fiscal impact resulting from approval of this item.
ENVIRONMENTAL REVIEW
This item is not subject to CEQA review.
PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report was sent to Retirement Housing Foundation.
RECOMMENDATION
It is recommended that the City Council approve the proposed refinancing of The Gateway
using the California Statewide Communities Authority.
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