TOOLS TO REVITALIZE CALIFORNIA COMMUNITIES
CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION JANUARY 2006
State Treasurer Phil Angelides, Chair
CDIAC 05-10 CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION
915 Capitol Mall, Room 400
Sacramento, CA 95814
P.O. Box 942809
Sacramento, CA 94209-0001
(916) 653-3269 TOOLS TO REVITALIZE CALIFORNIA COMMUNITIES
CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION
JANUARY 2006
CDIAC 05-10 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
MEMBERS
Phil Angelides, State Treasurer and Chair Arnold Schwarzenegger, Governor Michael Genest, Director, Department of Finance Steve Westly, State Controller Dave Cox, State Senator Mike Machado, State Senator Judy Chu, State Assembly Member Donna Linton, Assistant County Administrator, Alameda County José Cisneros, Treasurer/Tax Collector, City and County of San Francisco
Additional information concerning this report or the programs of the California Debt and Investment Advisory Commission (CDIAC) may be obtained by calling (916) 653-3269 or by visiting the Commission’s website at www.treasurer.ca.gov/cdiac.
All rights reserved. No part of Tools to Revitalize California Communities may be reproduced without credit given to CDIAC. Permission to reprint with written credit given to CDIAC is hereby granted. TABLE OF CONTENTS
Preface ...... iii Role of CDIAC in State and Local Debt Financing ...... 1 Overview of Community Revitalization Financing ...... 5 Types of Community Revitalization Financing...... 7 Select Community Revitalization Programs in California ...... 9 A. Program Matrix ...... 9 B. Real Estate Development ...... 13 C. Education ...... 41 D. Health ...... 49 E. Business Development ...... 59 F. Infrastructure ...... 71 G. Pollution Control...... 83 H. Other ...... 87
Appendix Contact Information for State Community Revitalization Programs ...... 89
i T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
... TWO CENTRAL GOALS OF SMART
INVESTMENTS ARE PROMOTING
SUSTAINABLE DEVELOPMENT
PATTERNS AND FOSTERING
COMMUNITY REVITALIZATION. PREFACE
The June 1999 report entitled Smart reference guide provides an overview of Investments cites the growing gap between community revitalization financing, looks “the two Californias.” Smart Investments at the types of public investment tools notes that the growing gap is increasingly available for community revitalization, and reflected in how and where we live - with gives basic information on selected public the economic and social distance ever investment programs available in growing between our older cities, inner- California. To better enable the reader to ring suburbs, and rural communities, on the relate to the available uses of these funds, one hand, and wealthy urban enclaves and real-life success stories are provided thriving suburbs, on the other. whenever possible. Lastly, this guide gives contact information to obtain further Smart Investments further recognizes that details on these programs. two central goals of smart investments are promoting sustainable development pat- terns and fostering community revitaliza- tion. These two goals are fundamentally linked. Public investment policy plays a central part in achieving these goals. This
iii T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
AS THE STATE’’S CLEARINGHOUSE
FOR PUBLIC DEBT FINANCING
INFORMATIONINFORMATION,, CDIACCDIAC HAS
COMPILED DATA ON ALL PUBLIC
DEBT ISSUED IN CALIFORNIA SINCE
JANUARY 1, 1982. ROLE OF CDIAC IN STATE AND LOCAL DEBT FINANCING
The California Debt and Investment since January 1, 1982. All issuers of state Advisory Commission (CDIAC) provides and local government debt are required to information, education, and technical submit information on a proposed bond assistance on public debt, investments, sale to CDIAC 30 days prior to the sale date. and economic development financing to Issuers also must submit a report of final local public agencies and other public sale no later than 45 days after the sale finance professionals. CDIAC was created in with a copy of the final official statement. 1981 with the passage of Chapter 1088, The data reported to CDIAC include the sale Statutes of 1981 (AB 1192, Costa). This leg- date, name of the issuer, the type of sale, islation established the California Debt the principal amount, the type of debt Advisory Commission as the State’s clear- instrument, the source or sources of repay- inghouse for public debt issuance informa- ment, the purpose of the financing, the tion and required it to assist state and local credit rating of the issuer, the members of agencies with the monitoring, issuance, the financing team, and issuance costs and and management of public debt. CDIAC’s fees. Depending on market conditions, name was changed to the California Debt 2,500 to 4,000 reports are received each and Investment Advisory Commission with year. Data from these reports is the basis the passage of Chapter 833, Statutes of for statistical information used for debt 1996 (AB 1197, Takasugi) and its mission issue analysis, research projects, and edu- was expanded to cover public investments. cation.
POLICY RESEARCH CDIAC engages in a wide range of activities in three general program areas: data col- CDIAC’s mandated duties include some that lection, policy research, and technical are intended to improve the market for, and assistance. indeed the marketability of, public debt issued in California. Such functions include DATA COLLECTION efforts to maintain contact with partici- As the State’s clearinghouse for public debt pants in the municipal debt industry, to financing information, CDIAC has compiled undertake or commission studies of various data on all public debt issued in California aspects of the market in order to provide
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guidance to state and local debt issuers, interest and have practical relevance to and to recommend legislative changes in public finance practitioners. These projects matters affecting public debt issuers. To are typically designed to: (1) keep fulfill these functions, CDIAC’s Policy issuers/investors apprised of emerging Research Unit draws on information from trends in public finance; (2) develop ways CDIAC’s debt issuance database, public and of reducing issuance costs; (3) provide private experts throughout the municipal financing options for local issuers; (4) industry, public and private finance groups, raise the issuers’/investors’ sophistication periodicals and journals, and other existing levels with regard to debt issuance and resources. With the assistance of the public investments, respectively; and (5) Executive Director, CDIAC determines the preserve the integrity and viability of the issues that are addressed by the Policy public finance market by alerting policy Research Unit. Research staff remain makers to potential problem areas. knowledgeable of developments and TECHNICAL ASSISTANCE events in the municipal and other financial markets in order to provide the Executive CDIAC’s technical assistance program has Director and the Commission with input and three components. The first component is advice on making such deter- the publication of reference materials, minations. Since 1996, issue briefs, statistical reports, technical CDIAC also has been guidelines, and other research findings and charged with providing briefs. One of its most notable publications education and assis- is the California Debt Issuance Primer tance to local govern- (Primer), which contains information on ment officials on public the types of debt instruments available and investments. This mandate the roles and responsibilities of municipal has led to publication of several debt issuers and private industry profes- reports and to statutory requirements for sionals. The Primer provides a comprehen- cities and counties to provide copies of sive overview of and reference document certain local investment reports to CDIAC for the debt issuance process in California. twice annually. The second component is CDIAC’s seminar CDIAC selects projects that are of current program. Since 1984, CDIAC has organized
2 Role of CDIAC in ...... State and Local ...... Debt Financing
educational seminars focusing on public In addition to the educational seminars, finance matters. Offered throughout the CDIAC has acted as co-sponsor of public year at various locations in the State, CDIAC finance-related conferences, symposia, seminars are designed to: (1) introduce and seminars conducted by private compa- public officials who are new to the field of nies and statewide associations. Such co- public finance to the debt issuance and sponsorships allow CDIAC to contribute its investment processes; (2) strengthen the expertise to the event, increase contacts expertise of public officials who are famil- with experts from public and private sec- iar with the municipal debt issuance tors, and keep abreast of current matters process and the investment of public funds; affecting public finance and the debt and (3) inform public officials about cur- issuance process. rent topics that may affect public finance, public debt issuance, and the investment of The third component of CDIAC’s technical public funds. The majority of officials who assistance program involves responding to participate are from local agencies, while inquiries concerning California debt the remainder represents state and federal issuance and public fund investment. CDIAC agencies. receives daily contacts from representa- tives of public and private entities and the In 2000, CDIAC began a new series of edu- media for data on debt issuance and infor- cational courses on the tools for community mation on the nature and application of revitalization. CDIAC has co-hosted semi- specific debt and public fund investment nars and panels designed to provide local instruments. CDIAC staff responds to over government officials with select tools that 2,000 such requests for information or would assist them with community revital- assistance each year. ization. Tools presented include loans, grants, and programs offered for specific purposes including school facilities, affordable housing, industrial development facilities, health facilities, pollution control facilities, brownfield remediation and redevelopment, community planning, and small business financing.
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POINT OF CONTACT Jane W. Thompson, Executive Director CDIAC Phone Number: (916) 653-3269 Web site: www.treasurer.ca.gov/cdiac E-mail Address: [email protected] Mailing Address: 915 Capitol Mall, Room 400 Sacramento, CA 95814
4 OVERVIEW OF COMMUNITY REVITALIZATION FINANCING
WHAT IS ECONOMIC players are involved in the strategies and DEVELOPMENT? activities that help revitalize a community. According to the National Council for Urban Community revitalization prevents the Economic Development, economic devel- spread of blight and urban sprawl and opment is “a process that influences the makes a community more attractive, there- growth and restructuring of an economy to by increasing land and property values, enhance the well-being of a community.” A which will attract private investors and new thriving local economy is the foundation for business. improving the quality of life in a communi- GOALS OF COMMUNITY ty. Quality of life can be interpreted to REVITALIZATION include the ability to offer community resi- The goal of a community revitalization pro- dents the opportunities for jobs and good gram is to transform distressed or deterio- government services including quality rating communities into vibrant and eco- schools, security, and infrastructure, as nomically diverse communities. Specif- well as providing for the welfare of those ically, communities need attention given to unable to care for themselves. the following sectors of their economies to WHAT IS COMMUNITY facilitate this transformation: REVITALIZATION? • Providing affordable housing, Over the past 30 years, disinvestment in • Increasing educational opportunities, urban neighborhoods has accelerated the • Improving access to health care, decline of these underserved communities, • Retaining and expanding business leading to deterioration, diminished tax opportunities, bases, increased crime, and deteriorating infrastructure. Community revitalization is • Improving infrastructure, and neighborhood-specific economic develop- • Fostering environmental cleanup of ment activity involving the residents, busi- contaminated sites. nesses, local government, community All of these sectors are fundamentally organizations, banks, and institutions, linked and are vital to a vibrant local econ- along with support from federal, state, pri- omy. Community revitalization initiatives vate, and nonprofit resources. All of these can foster the development of these sec-
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tors and increase investment of private ROLE OF THE STATE IN capital in these communities. PROVIDING COMMUNITY REVITALIZATION FINANCING PLAYERS IN COMMUNITY REVITALIZATION Traditionally, California’s state-funded eco- The major players in community revitaliza- nomic development tion include public and private sector enti- efforts were prima- ties and public-private partnerships. Public rily focused on the sector entities include local, state, and development and federal government agencies. Private sec- maintenance of tor entities include nonprofit organizations, infrastructure systems, such as churches, neighborhood groups, workforce training and skill and community development corporations. improvement programs, export promotion Other private sector entities that are major and assistance, and technology deploy- players in community development include ment and commercialization. Recent initia- utilities, universities, chambers of com- tives have expanded this focus to include merce, developers, and businesses located technology development and technical in areas undergoing revitalization efforts. assistance for businesses. In addition, Lastly, public/private partnerships can be state agencies now provide grants, loans, used to leverage multiple sources of fund- and loan guarantees to municipalities and ing, thus resulting in more revitalization companies for community revitalization and efforts than would have been available uti- business development or expansion. lizing either public or private funds alone.
6 TYPES OF COMMUNITY REVITALIZATION FINANCING
Community revitalization programs can be called the principal. The interest on the grouped by the type of financing they pro- bonds is simply referred to as the inter- vide, in addition to the sectors they seek to est. Principal and interest together are transform. Common types of financing known as debt service. In a conduit include debt financing (such as through financing, the proceeds of the issue are loans and conduit bonds), equity financing, loaned to a non-governmental borrower loan guarantees, grants, and tax credits. that then applies the proceeds for a Advisory services also are available to pro- project financing. Typically, the project vide communities with greater access to is owned and operated by the borrower. these types of financing. Statutes authorizing conduit financings generally specify the nature of the proj- DEBT FINANCING ects that may be financed and limit such Debt financing occurs through the lending projects to those with specified public of funds. This can be done either through purposes. In a conduit financing, the direct lending or through the selling of bond’s repayment is the responsibility conduit bonds. of the business or developer that bene- • Loan Financing fits from the financing, rather than the Direct lending allows a business to bor- issuer, which collects the taxes, fees, or row money to fund a project or make a revenues and passes them on to the purchase, such as for business develop- bondholders (or a trustee). ment or capital improvements. Under this type of financing, the lender EQUITY FINANCING requires that the borrower provide a In equity financing, the investor takes an pledge of its revenues or other collateral ownership interest in a fund or project in to ensure repayment. exchange for a rate of return that depends • Conduit Bond Financing on the profitability of the fund or project. Typically, this return is adjusted commen- In a traditional bond financing, an issuer surate with the fund or project’s asset class borrows money from investors and and risks. In this type of arrangement, the agrees, by written contract, to repay the investor owns part of the fund or project in amount borrowed plus an agreed upon proportion to its investment allocation. rate of interest at a specified date (the maturity date). The amount borrowed is
7 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
LOAN GUARANTEES tax deduction reduces a taxpayer’s income A loan guarantee involves the assumption on which its tax liability is calculated. If the of responsibility for payment of a debt or taxpayer’s marginal tax rate is 35 percent, performance of some obligation if the one dollar of tax deduction lowers the tax liable party fails to perform to expecta- liability by 35 cents. tions. In traditional governmental loan ADVISORY SERVICES guarantee programs, the guaranteeing Advisory services can provide entrepre- entity will guarantee a loan made by a neurs and businesses with assistance that lender, such as a conduit financing authori- may improve access to the various forms of ty or a commercial bank. Generally, these capital available and spur further invest- loan guarantees will provide the assurance ment, job creation, and assist in recovery of repayment of a percentage of the loan. A of distressed neighborhoods and communi- fee for this guarantee is usually required ties to strengthen economic recovery in by the guaranteeing entity. California. Advisory services may provide GRANTS individualized, targeted assistance; access A grant is a sum of money awarded to to high-caliber advisors (i.e., CEOs); and finance a particular activity or facility. assistance to develop needed skills and Unless the grant requirements are broken, expertise. these grant awards do not need to be paid back.
TAX CREDITS A tax credit is a dollar-for-dollar reduction in a taxpayer’s federal and/or state income tax liability. Provided the credit can be used, one dollar of tax credit reduces the taxpayer’s tax liability by an equivalent dollar, saving the taxpayer that dollar. This is different from a tax deduction, which is an offset to a taxpayer’s pretax income. A
8 SELECT COMMUNITY REVITALIZATION PROGRAMS IN CALIFORNIA
A. PROGRAM MATRIX
The following matrix classifies select state California Health Facilities Financing community revitalization programs by type Authority (CHFFA) loan and conduit bond of financing and by subject area. Subject programs, as well as an Office of Statewide area classifications include: real estate Health Planning and Development (OSHPD) development, education, health, business Cal-Mortgage loan guarantee program. development, infrastructure, pollution con- trol, and other types of programs. The Following the matrix are descriptions of the “other” category is for programs that do various programs, arranged according to not fit under the traditional community subject area. Readers will find brief revitalization umbrella. descriptions of the programs, the required fees, the assistance terms offered, and the Type of financing (as described in the pre- eligible activities and applicants. Contact vious section) includes debt financing information for those interested in pursu- (such as loans and conduit bonds), equity ing the programs for use in their communi- financing, loan guarantees, grants, and tax ties also are provided. In some cases, the credits. descriptions include success stories on the uses of these programs. The preferred The matrix is intended to assist individuals sources of these success stories were first- to identify potential sources of community hand accounts directly from the applicants. revitalization funding. For instance, some- When this was not possible, second-hand one seeking funding for a local community accounts from issuers were used. health clinic would see that there exists
9 SUBJECT AREA
Real Estate Business Pollution Development Education Health Development Infrastructure Control Other
CalHFA California CHFFA HELP II CPCFA I-Bank Homebuyer’s Loans California Infrastructure Downpayment (page 49) Capital Access State Assistance Program Program Revolving (CHDAP) Loans (page 18) (CalCAP) Fund (ISRF) for Small Program Loans CalHFA Extra Credit Businesses (page 79) Teacher Home Loans Purchase Program (page 64) (ECTP) Loans (page 19)
CalHFA Homeownership in Revitalization Areas Program (HIRAP) Loans (page 20)
CalHFA Preservation Acquisition Program Loans (page 22)
CPCFA California Recycle Underutilized Sites (CalReUSE) Loans (page 24)
HCD Building Equity and Growth in Neighborhoods (BEGIN) Program Loans (page 30)
HCD CalHome Program Loans DEBT FINANCING—LOANS (page 31) TYPE OF FINANCING HCD Emergency Housing and Assistance Program Capital Development (EHAPCD) Deferred Loans (page 32)
HCD Joe Serna, Jr. Farmworker Housing (Serna) Loan Program (page 33)
HCD Mobilehome Park Resident Ownership Program (MPROP) Loans (page 34)
HCD Multifamily Housing Program (MHP) Loans (page 35)
HCD Predevelopment Loan Program (PDLP) (page 37)
10 SUBJECT AREA
Real Estate Business Pollution Development Education Health Development Infrastructure Control Other
CDLAC Tax- CEFA CHFFA CIDFAC Tax- CAEATFA CPCFA exempt Private Simplified Standard and exempt Advanced Pollution Activity Bond Equipment Pooled Tax- Industrial Transporta- Control Tax- Allocation Finance exempt Bonds Development tion and exempt Bonds Program Program (page 52) Bonds Renewable (page 83) (page 13) (SEFP) (page 59) Energy Tax- (page 41) CHFFA Tax- exempt and exempt Taxable Bonds (page 71) CEFA Standard Equipment and Pooled Notes (page 55) I-Bank Conduit Tax-exempt Revenue Bonds Bonds – (page 43) 501(c)(3) Revenue CSFA Tax- Bonds, Exempt exempt Facilities, Financing Industrial
DEBT FINANCING—CONDUIT BONDS Program Development (page 47) Bonds (IDBs), (page 72) CTC/Caltrans Grant Anticipation Revenue Vehicle (GARVEE) Financing (page 81)
CalPERS CalPERS The PMIA Small California California Business Loan Urban Real Initiative Purchases
TYPE OF FINANCING Estate (CURE) (page 65) (page 87) Investments Program CalSTRS PMIA Time (page 27) Investments in Deposits Underserved (page 87) CalSTRS Urban Urban and Real Estate Rural Markets, Investments and New Program and Next
EQUITY FINANCING (page 27) Generation Managers (page 67)
CalFHA OSHPD Cal- Mortgage Mortgage Insurance California Services Health Facility Program Construction (page 21) Loan Insurance Program LOAN LOAN GUARANTEES (page 56)
11 SUBJECT AREA
Real Estate Business Pollution Development Education Health Development Infrastructure Control Other
CalHFA School CSFA State Facility Fee Charter School (SFF) Down Facilities Payment Program Assistance Incentive Program Grants Grants (page 23) Program (page 46) HCD Building Equity and Growth in Neighborhoods (BEGIN) Program Grants (page 30)
HCD CalHome Program Grants (page 31)
HCD CalHome Self-Help
GRANTS Technical Assistance Allocation (CHSHTAA) Grants (page 32)
HCD Joe Serna, Jr. Farmworker Housing (Serna) Grant Program (page 33)
TYPE OF FINANCING HCD Workforce Housing (WFH) Reward Program Grants (page 37)
CTCAC Federal CTCAC and State Commercial Low-income Revitalization Housing Tax Deduction Credits (CRD) Program (page 28) (page 68) TAX CREDITS/DEDUCTIONS TAX CPCFA California Capital Access Program (CalCAP) Business Strategic Targeted Advising Resources ADVISORY SERVICES ADVISORY (STAR) Program (page 63)
12 B. REAL ESTATE DEVELOPMENT
1. California Debt Limit (less $600 initial fee) is due upon the Allocation Committee (CDLAC) use of the allocation or first mortgage credit certificate. a. TAX-EXEMPT PRIVATE ACTIVITY BOND ALLOCATION PROGRAM ELIGIBLE ACTIVITIES CDLAC awards allocation of tax-exempt pri- • There are six main programs and several vate activity bonds for projects and pro- secondary programs that are available grams that fall under the federal bond vol- for allocation: ume cap for California. The bond volume > Multifamily Rental Housing: State cap is approximately $3 billion annually. and local governmental agencies and joint powers authorities can issue CDLAC awards the right to issue tax-exempt tax-exempt housing revenue bonds bonds for private projects of public purpose to assist developers of multifamily to state and local jurisdictions. Bonds are rental housing units acquire land and issued by state and local entities and are construct new projects or purchase purchased by the private sector. The bonds and rehabilitate existing units. are secured by the project or program for The tax-exempt bonds lower the which bonds are issued and are not an obli- interest rate paid by developers. gation of the state or local issuer. These developers produce affordable rental housing for low- and very The proceeds from the sale of bonds are low-income households by reducing used to finance projects that meet the pub- rental rates to these individuals lic policy goals and criteria of CDLAC. CDLAC and families. has a statutory emphasis on rental and > Single-Family Housing: State and homeownership housing for lower-income local governmental agencies and families and individuals. CDLAC also awards joint powers authorities can issue allocations to industrial development proj- tax-exempt mortgage revenue bonds ects, pollution control projects, and stu- (MRBs) to assist first-time home- dent loan programs. buyers purchase homes. Homebuyers FEES may purchase single-family homes, • Initial filing fee in the amount of $600 is freestanding detached homes, submitted at the time of application. condominiums, or townhouses. The • Second installment of filing fee equal to tax-exempt proceeds back below- 0.035 percent of the allocation amount market interest rate mortgages.
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As an alternative to issuing MRBs, tures. Today, most IDBs support state and local governmental agen- expansions of existing manufacturing cies and joint powers authorities may facilities. IDBs offer considerable issue mortgage credit certificates interest rate savings to small and (MCCs). The value of the credit midsize manufacturers in contrast to equals up to 20 percent of the inter- conventional loans. When used by est payments made annually on the manufacturers, IDBs serve to retain program participant’s first mortgage. and create new jobs within their com- Homebuyers use the MCCs to reduce munities. their federal tax liability by applying > Exempt Facility: State and local gov- the credit to their net tax due. ernmental agencies and joint powers Program participants must meet pro- authorities can issue exempt facility gram income limits and must pur- bonds to finance solid waste dispos- chase a home that falls within the al, waste recycling facilities, as well program’s purchase price limitations. as certain other facilities as allowed > Extra Credit Teacher Home Purchase under federal requirements. The tax- Program: State and local govern- exempt bonds provide facility owners mental agencies and joint powers with low-cost financing in the form of authorities can issue tax-exempt below-market interest rate loans. The MRBs or MCCs to assist teachers, interest rate savings enable the proj- principals, and other credentialed ect owners to maintain lower cus- school staff who are employed in tomer rates or minimize customer high-priority schools, purchase their rate increases, while at the same time homes. Participants must be willing assisting the communities they serve to make a commitment to stay at the to meet their mandated requirements high-priority school for at least three to protect and enhance the environ- years. ment. Exempt facility projects also > Small-Issue Industrial Development benefit the communities by creating Bonds: State and local governmental new jobs. agencies and joint powers authorities > Student Loan Financing: Student can issue industrial development Loan Program bonds are tax-exempt bonds (IDBs) to assist manufacturing private activity bonds issued by facilities finance capital expendi- authorized agencies for the purpose
14 Real Estate ...... Development ......
of either financing direct loans to POINT OF CONTACT college students and their parents or Laurie Weir, Executive Director purchasing already-originated loans CDLAC on the secondary market. When used Phone Number: (916) 653-3255 for direct lending programs, tax- Web Site: www.treasurer.ca.gov/cdlac E-mail Address: [email protected] exempt bond allocation allows Mailing Address: 915 Capitol Mall, Room 311 lenders to pass on interest rate sav- Sacramento, CA 95814 ings to needy students via below- market interest rate loans. Needy students are borrowers for whom the cost to attend college exceeds their ability to pay, as determined by their school’s financial aid office.
ELIGIBLE APPLICANTS • Any state or local governmental agency, joint powers authority, special district, nonprofit public benefit corporation that issues only student loan bonds, or other pubic agency that is empowered to issue debt may file an application. Private parties wishing to access the allocation must do so through one of the eligible applicants.
15 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
THE WILSHIRE/VERMONT STATION PROJECT CDLAC is the state agency responsible for approving the tax-exempt bond allocation The Wilshire/Vermont Station is an urban that is the primary source of financing for infill mixed-use, transit-oriented develop- the project. ment that will transform the existing Los Angeles Metropolitan Transportation Urban Partners, LLC’s equity partner for this Authority (MTA) Red Line station into an project is MacFarlane Partners, the leading attractive urban village. The minority-owned real estate investment community will include management firm in the United States, 449 residential units with $1 billion in investor equity and $5 with 20 percent set billion in completed properties and planned aside for low-income projects. MacFarlane Partners is investing tenants earning no in the project as part of its joint venture more than 50 percent with the California Public Employees’ of the area median Retirement System (CalPERS) to invest in income and 35,000 square urban-infill properties in California and feet of commercial retail space. other major metropolitan areas nationwide. CalPERS is the nation’s largest public pension The project is a public/private partnership fund, with assets of $190 billion. between the MTA; the Community Redevelopment Agency, as local adminis- The mixed use “village” of residential trator; and the developer, Urban Partners, apartments over ground floor retail stores LLC. While primarily a residential project will be arranged in two connected seven- with retail uses at the lower levels, the story buildings around semi-private court- project supports the major public feature yards. Amenities to encourage a community of the site—the Metro station itself. A new environment include a heated swimming entrance to the existing Metro station pool, fitness center, clubhouse, landscaping, portal will lead passengers to a new bus and a large public courtyard. The urban plaza, enhancing the transfer connection nature of Wilshire Boulevard and Vermont between bus and rail passengers. Avenue will be respected by creating an
16 Real Estate ...... Development ......
“urban” street-front experience through retail commercial space. The northern glass store windows with multiple entries portion of the site will be made available to and varying displays, sidewalk dining, the Los Angeles Unified School District for and signage. construction of a middle school for grades six through eight. The project is divided into two phases. Phase I entails improving the existing The development is scheduled for completion MTA subway portal facilities and Phase II in the Summer of 2006, with apartments involves construction of the housing and and retail space available for lease that fall.
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2. California Housing Finance • CHDAP cannot be combined with CalHFA’s Agency (CalHFA) Extra Credit Teacher Home Purchase Program or the Homeownership In a. CALIFORNIA HOMEBUYER’S DOWN- Revitalization Areas Program. PAYMENT ASSISTANCE PROGRAM • Be a single-family, one-unit residence, (CHDAP) LOANS including condo/planned unit develop- CHDAP is designed to provide a deferred ment (manufactured housing is allowed payment, simple interest rate junior loan of if permanently attached, fee simple an amount up to the lesser of three percent title). of the sales price or appraised value. For borrowers purchasing a newly-constructed ELIGIBLE APPLICANTS home in infill opportunity zones, transit • First-time homebuyer. village development districts, or transit- • U.S. citizen, permanent resident alien, oriented development plan area, the or qualified alien. amount of down payment assistance offered under CHDAP is the lesser of five • Occupy the property as a primary resi- percent of the purchase price or the dence; non-occupant co-borrowers are appraised value. not allowed.
ASSISTANCE TERMS • Within CalHFA-defined income limits. • This program is intended for low- and • Meet credit, income, and loan require- moderate-income, first-time homebuy- ments of the CalHFA lender and the ers anywhere in California. mortgage insurer...... • The junior loan may be used for down- POINT OF CONTACT payment or closing costs and may be combined with a CalHFA or non-CalHFA Phone Number: (916) 324-8088 WebSite: www.calhfa.ca.gov/homeownership/ conventional or government first mort- programs/chdap.htm gage loan. E-mail Address: [email protected] Mailing Address: LIGIBLE CTIVITIES E A Homeownership Programs • The sales price of the home cannot 1121 L Street, 7th Floor exceed CalHFA’s published sales price Sacramento, CA 95814 limits. • Purchase transactions only.
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b. EXTRA CREDIT TEACHER HOME PUR- ELIGIBLE ACTIVITIES CHASE PROGRAM (ECTP) LOANS • Sales price of the home cannot exceed ECTP provides financial incentives for eligi- CalHFA’s published sales price limits. ble teachers, administrators, classified • Purchase transactions only. employees, and staff members who other- wise may not be able to purchase a home. • Be a single-family, one-unit residence, It is intended to help high priority schools including condo/planned unit develop- attract and retain education professionals. ment (manufactured housing is allowed The incentive comes in the form of loan if permanently attached, fee simple title). financing and down payment assistance for • The program does not require the borrower the purchase of a primary residence any- to live in the same jurisdiction as the where in California, within sales price and employing school. income limits established for each county. • ECTP cannot be combined with CalHFA’s ASSISTANCE TERMS California Homebuyer’s Downpayment • The program consists of two loans: Assistance Program or the Homeownership > A CalHFA below-market rate first In Revitalization Areas Program. mortgage loan, and ELIGIBLE APPLICANTS > A deferred payment, junior mortgage loan: • First-time homebuyer. - Of an amount not to exceed the • U.S. citizen, permanent resident alien, or greater of $7,500 or three qualified alien. percent of the sales price in • Occupy the property as a primary resi- CalHFA-defined statewide non- dence; non-occupant co-borrowers are not high cost areas or; allowed. - Of an amount not to exceed the greater of $15,000 or three • Within CalHFA-defined income limits. percent of the sales price in • Meet credit, income, and loan require- CalHFA-defined high costareas. ments of the CalHFA lender and the mort- • Interest on the junior loan may be gage insurer. reduced to zero if the borrower meets • Currently employed in a public or charter continued eligibility by remaining school that scores in the bottom 50 percent employed in a high priority school on a statewide rank on the Academic continuous basis for three years from the date specified on the junior loan Performance Index (ranks 1-5) or be documents. 19 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
assigned to a school district but teach in, ment or closing costs and may be combined provide administration in, or provide serv- with a CalHFA or non-CalHFA conventional ice to at least one high priority school. or government first mortgage loan.
• Hold an appropriate credential for a ELIGIBLE ACTIVITIES teacher, administrator, or staff member or • The sales price of the home cannot exceed be employed as a “Classified Employee.” CalHFA’s published sales price limits. Classified Employee means an employee of a school district employed in a position • Purchase transactions only. not requiring certification qualifications. • HIRAP cannot be combined with CalHFA’s • Intend to work for three years continuous- Extra Credit Teacher Home Purchase ly from the date of the loan in a high pri- Program or the California Homebuyer’s ority school. Downpayment Assistance Program...... • Properties must meet the following POINT OF CONTACT requirements: Phone Number: (916) 324-8088 Web Site: > Located in a community revitalization www.calhfa.ca.gov/homeownership/programs/ area targeted by the CalHFA-approved ectp.htm nonprofit. E-mail Address: [email protected] > Be a single-family, one-unit Mailing Address: Homeownership Programs residence, including condo/planned 1121 L Street, 7th Floor unit development (manufactured Sacramento, CA 95814 housing is allowed if permanently ...... attached, fee simple title). c. HOMEOWNERSHIP IN REVITALIZATION ELIGIBLE APPLICANTS AREAS PROGRAM (HIRAP) LOANS • Be a first-time homebuyer. HIRAP is designed to provide a deferred pay- U.S. citizen, permanent resident alien, or ment, simple interest rate junior loan of an • qualified alien. amount not to exceed six percent of the home sales price. • Occupy the property as a primary resi- dence; non-occupant co-borrowers are not ASSISTANCE TERMS allowed. • This program is intended for low-income, first-time homebuyers anywhere in • Completed homeownership counseling California. from a CalHFA-approved nonprofit organi- • The junior loan may be used for downpay- zation. 20 Real Estate ...... Development ......
• Meet HCD’s lower income limits. > Homebuyers qualified under the terms of Community and Affordable • Meet credit, income, and loan require- Housing Programs, such as those ments of the CalHFA lender and the mortgage insurer. offered by Fannie Mae and Freddie ...... Mac. POINT OF CONTACT ELIGIBLE ACTIVITIES Phone Number: (916) 324-8088 Web Site: www.calhfa.ca.gov/homeownership/ • One to four unit dwellings within programs/hirap.htm California intended for owner occupan- E-mail Address: [email protected] cy. Mailing Address: Homeownership Programs • Purchase transactions. 1121 L Street, 7th Floor ELIGIBLE APPLICANTS Sacramento, CA 95814 ...... • Meet low- to moderate-income limits. d. MORTGAGE INSURANCE SERVICES • Meet credit standards established by PROGRAM investors that provide for flexibility to deserving homebuyers. The Mortgage Insurance Services Program (Program) provides credit enhancement for • Demonstrate the ability to maintain individual loans as an incentive for housing and living expenses. investors to participate in affordable hous- ...... ing loan programs. Special focus is given to POINT OF CONTACT low- and moderate-income earners who qualify for lower mortgage insurance pre- Phone Number: (916) 322-8936 miums than typically available in the mar- Web Site: www.calhfa.ca.gov/insurance E-mail Address: [email protected] ket. Lower premiums make housing finance Mailing Address: more affordable. Mortgage Insurance Services 1415 L Street, Suite 500 ASSISTANCE TERMS Sacramento, CA 95814 • The Program focuses on assisting home- buyers in the following areas: > Low mortgage insurance premiums. > Up to 100 percent loan-to-value.
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e. PRESERVATION ACQUISITION PRO- > Section 8, Section 221 (d)(3) - GRAM LOANS Below-Market Interest Rate Program, and Section 236 of the The Preservation Acquisition Program is United States Housing Act of 1937; designed to preserve at-risk affordable Section 202 of the Housing Act of housing developments by providing low- 1959; Section 101 of the Housing cost acquisition financing. The fund is com- and Urban Development Act of 1965 prised of monies authorized by Proposition - Programs for Rent Supplement 46 (Bond Funds) and funds from CalHFA Assistance; Section 515 of the (Agency Funds). A goal of the program is Housing Act of 1949; and Section 42 for the combined funds to be repaid from of the Internal Revenue Code. permanent financing sources and be recy- > Loans held by CalHFA are not cled for new acquisition loans. eligible for financing under this ASSISTANCE TERMS program.
• Loan to cost up to 100 percent of acqui- FEES sition cost, subject to CalHFA approval. • The application fee is $500, due at time • Minimum 110 percent debt service cov- of application submittal. The purchase erage. price may not exceed the “as is” • The acquisition loan, comprised of both appraised market value of the property. funds, plus all accrued interest, is due CalHFA reserves the right to accept or and payable two years from the date of reject the appraisal. funding. • The loan fee is one percent (on the • Bond Funds: Loans are three percent, Agency Funds only) payable from the simple interest, and are deferred until acquisition loan. permanent financing is obtained. • One-half of the loan fee can be credited • Agency Funds: Loan is four percent, toward permanent CalHFA financing simple interest. fees. • To offset the cost of acquisition, spon- ELIGIBLE ACTIVITIES sors may take a fee equal to one percent • Assisted housing developments eligible of the acquisition cost, or $75,000, for the Preservation Acquisition Program whichever is less, payable from the are specified in California Government acquisition loan proceeds. Code Section 65863.10 and include:
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ELIGIBLE APPLICANTS gage loan, subject to acceptance by the • Available to for-profit, nonprofit, or mortgage lender or the mortgage insurer. public agency sponsors. • Amount of assistance is based on the eli- • A single asset entity will not be required gible school facility fees paid by the for acquisition. builder...... • Assistance is in the form of a grant, not a POINT OF CONTACT loan. If the homeowner occupies his or Phone Number: (916) 322-5123 her home for five years, the lien placed Web Site: against the property is released. If the www.calhfa.ca.gov/multifamily/financing/ home is owner-occupied for less than programs/preservation.pdf E-mail Address: [email protected] five years, the grant must be repaid on a Mailing Address: pro rata basis. Multifamily Programs 1121 L Street, 7th Floor ELIGIBLE ACTIVITIES Sacramento, CA 95814 • Program #1 - Economically Distressed Area ...... > Purchasing newly-constructed home. f. SCHOOL FACILITY FEE (SFF) DOWN > Home must be located in an PAYMENT ASSISTANCE PROGRAM GRANTS eligible designated economically distressed county and the sales price SFF is designed to provide qualified home- of the home cannot exceed SFF’s buyers assistance with the purchase of sales price limits. their newly-constructed home. Eligible > Intend to occupy the home for five applicants receive either a partial or full years. rebate, in the form of a grant, of the school > Manufactured housing is allowed if facility fees paid by the builder. permanently attached, fee simple
ASSISTANCE TERMS title.
• This program is intended for California • Program #2 - First-time Homebuyer - homebuyers purchasing newly-con- Moderate Income Limits structed single-family homes or condo- miniums. > Purchasing newly-constructed home. > Be a first-time homebuyer. • The assistance can be used for down- > Be within HCD’s moderate-income payment, closing costs, or any costs limits. associated with the buyer’s first mort-
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> Intend to occupy the home for five year prior to the date the loan is made years. (the 2005 rate is 1.64 percent). > Manufactured housing is allowed if • Loan amount up to $125,000. permanently attached, fee simple • Borrower match up to 15 percent of title. loan amount...... POINT OF CONTACT • Loan term up to 36 months. Phone Number: (916) 324-8088 • Loan can be extended or totally forgiven Web Site: under certain circumstances. www.calhfa.ca.gov/homeownership/programs/ sff.htm ELIGIBLE ACTIVITIES E-mail Address: [email protected] • Reasonable and necessary brownfields Mailing Address: project costs: Homeownership Programs 1121 L Street, 7th Floor > Site assessment and Sacramento, CA 95814 characterization, ...... > Technical assistance, > Planning for remediation of 3. California Pollution Control hazardous material, and Financing Authority (CPCFA) > Obtaining access to a privately- held property to conduct an a. CALIFORNIA RECYCLE UNDERUTI- assessment. LIZED SITES (CALREUSE) LOANS ELIGIBLE APPLICANTS CalReUSE assists borrowers with the reuse • Nonprofit or for-profit developers, and redevelopment of underutilized prop- redevelopment agencies, cities, coun- erties with real or perceived contamination ties, and other entities that meet the issues (brownfields). CalReUSE addresses a requirements of California Health and funding and information gap in the rede- Safety Code Section 44506. velopment of brownfields to help bring these properties into productive reuse. FUNDS DISPERSEMENT
ASSISTANCE TERMS • Funds are disbursed through Strategic Partners who also receive and process • Fixed interest rate equal to the average applications as well as provide technical earnings rate of the state’s Surplus assistance. Money Investment Fund for the calendar
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• Statewide Strategic Partners POINT OF CONTACT > California Environmental Sherri Kay Wahl, Program Manager Redevelopment Fund. CPCFA - Cal ReUSE Phone Number: (916) 654-5951 > California Center for Land Recycling. Web Site: www.treasurer.ca.gov/cpcfa • Local Strategic Partners E-mail Address: [email protected] Street Address: 915 Capitol Mall, Room 457 > City of Oakland. Sacramento, CA 95814 > City of Emeryville. > City of San Diego, Centre City Development Corporation. > These Strategic Partners may charge their own fees to applicants.
25 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
INNOVATIVE FUNDING PROGRAM MOVES cent) for an environmental investigation. SITES FORWARD: BROWNFIELD STRATEGY The loan was facilitated by the City of CREATING DEVELOPMENT OPPORTUNITIES Emeryville, a CalReUSE Strategic Partner. The investigation led to the buyer purchas- Nestled on the waterfront at the foot of the ing the site and the City improving and San Francisco Bay Bridge, Emeryville is expanding the uses of this light industrial prime real estate. It is centrally located in site. In this case, CalReUSE minimized the the Bay Area, enjoys a temperate climate, buyer’s risk and helped clarify the cost of and has a world-class view of the bay. One development. This allowed the project to would expect that these features would move forward and the loan to be repaid, spur rapid development of Emeryville’s turning one of Emeryville’s blighted, vacant vacant properties, but that has not been properties into productive land. the case. Numerous prime development opportunities have been clouded by the One of the greatest barriers to redevelop- uncertainty surrounding the question of ment of properties with real or perceived contamination. contamination (often called “brownfields”) is the uncertainty regarding remediation In its early years, Emeryville was home to costs. Lenders require an understanding of several chemical-intensive manufacturing the extent of contamination and the cost of companies. These companies are long cleanup. Securing financing for this initial gone, but their legacy remains in the form stage of assessment, however, is very dif- of soil and groundwater contamination and ficult, and the costs can be prohibitive. abandoned buildings. In all, over 20 per- cent of Emeryville’s non-residential prop- CalReUSE provides the funds for these ini- erties are vacant and over 40 percent are tial inquiries at a very low interest rate, underutilized. One such site was owned by with loans that can be forgiven if, after a retiree who wanted to sell, but was having investigation, it is determined that the cost difficulty because the site was suspected of of cleanup is too great. The program uti- having chromium contamination. Compound- lizes highly experienced Strategic Partners ing this, the owner had no experience man- who administer the program statewide, or aging contaminated sites and no funds to for their particular municipalities. With a investigate the possible extent of chromi- primary goal of spurring infill develop- um damage. ment, CalReUSE addresses a financial impediment in the redevelopment of In 2003 a buyer, with plans to purchase and brownfields, helping to turn uncertainty improve the site, received a 2.66 percent into opportunity. CalReUSE loan (current rate is 1.64 per-
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4. California Public Employees’ • Product types include residential, Retirement System (CalPERS) office, retail, entertainment, hotel, and mixed-use projects. a. CALIFORNIA URBAN REAL ESTATE • Additional considerations include project (CURE) INVESTMENTS PROGRAM location, environmental factors, owner- The CURE strategy is focused on addressing ship and control, promotion of “smart both the housing shortage as well as a lack growth” strategies, and community of general development in urban infill redevelopment...... locations throughout California. The pro- gram began in 1995 with the approval of POINT OF CONTACT California Urban Investment Partners Barbara Stocking, Investment Officer (CUIP) to invest $50 million in California CalPERS Phone Number: (916) 795-3400 urban retail centers in predominately Web Site: www.calpers.ca.gov minority trade areas. CURE has grown to E-mail Address: include 13 partners with a total of $3.4 bil- [email protected] lion allocated primarily for California urban Mailing Address: Lincoln Plaza, 400 P Street Sacramento, CA 95814 infill investment, community redevelop- ...... ment, and rehabilitation of core properties. 5. California State Teachers’ ASSISTANCE TERMS Retirement System (CalSTRS) • Capital is deployed using CalPERS’ exist- ing CURE partners. a. URBAN REAL ESTATE INVESTMENTS PROGRAM • Projects are underwritten based on risk- return characteristics, with higher risk The Urban Real Estate Investments Program projects requiring a higher return. (Program) is designed to invest in real • Investment structures may vary, and property in underserved markets on the include direct equity and mezzanine west coast of the United States. debt financing. ASSISTANCE TERMS
ELIGIBLE ACTIVITIES • As of March 31, 2005, the Program had $700 million invested in commingled • Asset selection is based upon traditional funds, joint venture partnerships, and real estate measurement for long-term direct investments, with an additional sustainability. $1.3 billion in future commitments.
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• The Program intends to seek equity Web Site: www.calstrs.com partners with experience in underserved E-mail Address: [email protected] Mailing Address: 7667 Folsom Boulevard markets and to provide capital to devel- Sacramento, CA 95826 op real property and to achieve equity ...... returns. • The equity structures and investment 6. California Tax Credit vehicles through which the Program Allocation Committee (CTCAC) invests include: a. FEDERAL AND STATE LOW-INCOME > Direct equity mortgages, HOUSING TAX CREDITS > Equity joint ventures, and > Convertible participating mortgages. CTCAC administers two low-income housing tax credit programs - a federal and a state ELIGIBLE ACTIVITIES program. Both programs were authorized to • Residential, office, retail, entertain- encourage private investment in rental ment, hotel, and mixed-use projects. housing for low- and lower-income fami- lies and individuals. In 2004, CTCAC • Other projects that may not be specifi- cally defined, but that benefit certain approved $63 million in federal and $73 economic groups or geographic areas million in state housing tax credit that will and meet the risk/return objective, create or preserve 4,591 affordable apart- also may be considered. Such projects ments throughout the State. Additionally, include: CTCAC awarded an additional $65 million in > Low-income housing, non-competitive, “four percent” credit to > Multi-family, low-income assist over 12,300 affordable apartments housing, and financed with the proceeds of tax-exempt > Urban infill and “smart growth” bonds. The annual federal ceiling is $1.85 strategy. per state resident plus a pro rata share of unused credits from other states. This ELIGIBLE APPLICANTS amount is indexed for inflation. The state • Private developers and real estate oper- tax credit ceiling is $70 million annually (in ators with an appropriate track record. addition to any unused or returned tax ...... credits from previous years). POINT OF CONTACT Mike DiRé, Director of Real Estate Congress authorized the federal program in CalSTRS 1986 to replace traditional housing tax Phone Number: (916) 229-3722
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incentives, such as accelerated deprecia- per unit to cover the costs associated tion. The tax credit program enables devel- with compliance monitoring throughout opers of affordable rental housing to raise the extended-use period. project equity through the “sale” of tax benefits to investors. Each state legislature ASSISTANCE TERMS designates the “housing credit agency” to • Tax credit is taken over a ten-year administer this program. Since 1987, CTCAC period although the Internal Revenue administers this program in California. Service requires that the project remain Recognizing the high cost of developing in compliance for a minimum of 15 years. housing in California, the state legislature • Investors take the state tax credit over a authorized a state low-income housing tax four-year period. credit program in 1987. Authorized by Chapter 1138, Statutes of 1987 (AB 53, ELIGIBLE ACTIVITIES Klehs), the state credit is only available to Tax credits can be allocated to new con- a project which has previously received, or • struction projects or for the acquisition is concurrently receiving, an allocation of and rehabilitation of certain projects. federal tax credits. The state program does not stand alone, but supplements the fed- • Tax credits are based upon the cost basis eral tax credit program. of the projects, including hard and soft development costs. FEES • Land cannot be included in determining • Non-refundable application filing fee of the amount of tax credits needed. $2,000. An additional $1,000 filing fee is required for applicants reapplying in the • Rental Restriction: Rents on tax same calendar year for an essentially credit units cannot exceed 30 similar project on the same project site. percent of an imputed income based on 1.5 persons per bedroom. The adjust- • Every applicant who receives a reserva- ment for family size made during the tion of credit, except for tax-exempt computation of the gross rent restriction bond applicants, pays an allocation fee is not based on the actual number of four percent of the dollar amount of of persons in the household. Instead, a the first year’s federal credit amount designated number of persons is reserved. Tax-exempt bond applicants deemed to occupy a household based on pay a reservation fee equal to one percent the number of bedrooms in the unit. This of the annual federal credit amount is referred to as the “imputed income reserved. limitation.” • Compliance monitoring fee of $410 29 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
• Income Restriction: A minimum of 40 7. Department of Housing and percent of the units must both be rent Community Development restricted and occupied by households Programs (HCD) whose incomes are 60 percent or less of the area median gross income or 20 per- a. BUILDING EQUITY AND GROWTH IN cent of the units must be both rent NEIGHBORHOODS (BEGIN) PRO- restricted and occupied by households GRAM GRANTS AND LOANS whose incomes are 50 percent or less of the area median gross income. BEGIN offers incentives to cities and coun- ties to reduce local regulatory barriers to • Long-term Affordability: Under the fed- affordable ownership housing. The program eral program, the tax credit projects provides grants to cities, counties, and must remain affordable for at least 15 cities and counties to make deferred-pay- years. Under the state program, the ment second mortgage loans to qualified project must remain affordable for 55 buyers of new homes, including manufac- years. tured homes on permanent foundations, in ELIGIBLE APPLICANTS projects with affordability enhanced by • Those utilizing tax credits must have an local regulatory incentives or barrier reduc- ownership interest in the project for tions. BEGIN does not loan directly to indi- which the credits are awarded. viduals...... SSISTANCE ERMS POINT OF CONTACT A T William J. Pavão, Executive Director • Grants to cities, counties, and cities and CTCAC counties. Phone Number: (916) 654-6340 • Loans by grant recipients at simple Web Site: www.treasurer.ca.gov/ctcac interest to qualifying homebuyers, not E-mail Address: [email protected] Mailing Address: 915 Capitol Mall, Room 485 to exceed 20 percent of the home sales Sacramento, CA 95814 price or $30,000, whichever is less.
ELIGIBLE ACTIVITIES • Second mortgage loans for down-pay- ment assistance to low- or moderate- income first-time homebuyers.
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• Eligible homes must be newly construct- rehabilitation, including manufactured ed in projects facilitated by local regula- homes not on permanent foundations; tory incentives or barrier reductions and acquisition and rehabilitation; home- may include manufactured homes. buyer counseling; self-help mortgage assistance programs; or technical assis- ELIGIBLE APPLICANTS tance for self-help homeownership. All • Cities, counties, and cities and counties. funds to individual homeowners will be ...... in the form of loans. POINT OF CONTACT • Loans for real property acquisition, site Marilyn Lawson, Program Manager development, predevelopment, con- HCD-BEGIN Program struction period expenses of homeown- Phone Number: (916) 327-2855 Web Site: www.hcd.ca.gov/fa/begin ership development projects, or perma- E-mail Address: [email protected] nent financing for mutual housing and Mailing Address: cooperative developments. Project loans Financial Assistance Division to developers may be forgiven as devel- 1800 Third Street, Room 390-2 opers make deferred payment loans to Sacramento, CA 95814 ...... individual homeowners. b. CALHOME PROGRAM GRANTS • Assistance to individual households will AND LOANS be in the form of deferred-payment loans, payable on sale or transfer of the CalHome enables low- and very low- homes, when they cease to be owner- income households to become or remain occupied, or at maturity. homeowners but does not loan directly to individuals. CalHome was allocated $115 ELIGIBLE ACTIVITIES million by Proposition 46 (see MHP Loans • Predevelopment, site development, and on page 35), of which about $84 million site acquisition for development projects. was committed by June 30, 2005. The • Rehabilitation, acquisition, and remainder is expected to be awarded by the rehabilitation of site-built housing, summer of 2007. and rehabilitation, repair, and replace- ASSISTANCE TERMS ment of manufactured homes. • Grants to local public agencies or non- • Down-payment assistance, mortgage profit corporations for first-time home- financing, homebuyer counseling, and buyer down-payment assistance; home technical assistance for self-help.
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ELIGIBLE APPLICANTS ELIGIBLE APPLICANTS • Local public agencies and nonprofit • Local public agencies and nonprofit cor- corporations. porations......
POINT OF CONTACT POINT OF CONTACT Peter Solomon, Program Manager Dee Franklin, Program Manager HCD-CalHome Program HCD-CHSHTAA Phone Number: (916) 327-3646 Phone Number: (916) 445-9581 Web Site: www.hcd.ca.gov/fa/calhome Web Site: www.hcd.ca.gov/fa/calhome E-mail Address: [email protected] E-mail Address: [email protected] Mailing Address: Mailing Address: Financial Assistance Division Financial Assistance Division 1800 Third Street, Room 390-2 1800 Third Street, Room 390-2 Sacramento, CA 95814 Sacramento, CA 95814 ...... c. CALHOME SELF-HELP TECHNICAL d. EMERGENCY HOUSING AND ASSIS- ASSISTANCE ALLOCATION (CHSHTAA) TANCE PROGRAM CAPITAL DEVELOP- GRANTS MENT (EHAPCD) DEFERRED LOANS
CHSHTAA funds programs that help low-and From the passage of Proposition 46 in moderate-income families to build their November 2002, to June 30, 2005, approxi- homes with their own labor. Grants are mately $99 million in EHAPCD bond funds made to sponsor organizations that provide have been awarded as forgivable deferred technical assistance for participating fami- loans for capital development to acquire, lies. The program was allocated $10 million construct, or rehabilitate emergency shel- by Proposition 46, of which about half had ters, transitional housing, and safe haven been awarded by June 30, 2005. facilities for homeless persons. The remaining available funds ($87 million) are ASSISTANCE TERMS expected to be awarded by the summer of • Grants for technical assistance opera- 2007. tions. ASSISTANCE TERMS ELIGIBLE ACTIVITIES • Deferred payment loans at three percent • Training and supervision of low- and simple interest, forgiven when loan term moderate-income self-help home- is complete. Term ranges from five to builders. ten years, based on the development activity. 32 Real Estate ...... Development ......
• Competitive application process Mailing Address: announced annually via a Notice of Financial Assistance Division 1800 Third Street, Room 390-2 Funding Availability. Eighty percent of Sacramento, CA 95814 the total allocation is available to urban ...... counties and 20 percent to non-urban counties. e. JOE SERNA, JR. FARMWORKER HOUSING (SERNA) GRANT AND LOAN ELIGIBLE ACTIVITIES PROGRAM • Funds may be used for any of the fol- The Serna Program finances the new con- lowing: struction, rehabilitation, and acquisition of > Acquisition of an existing facility owner-occupied and rental units for agri- in conjunction with rehabilitation cultural workers, with a priority for lower- and/or construction. income households. It is comprised of > Acquisition, including land, in grants and loans to assist development or conjunction with new construc- rehabilitation of various types of housing tion. projects for agricultural worker households. > New construction. A match of at least 100 percent is required for the primary Serna Program. > Rehabilitation. ASSISTANCE TERMS > Administrative costs up to five percent of total loan amount. • Homeowner Grants: Grants are for reha- bilitation or new home construction. ELIGIBLE APPLICANTS Lien restrictions are required for twenty • Local governments agencies and non- years. If the unit is sold to a non-farm- profit corporations that shelter the worker buyer before completing the homeless on an emergency or transi- tenth year, the full grant amount must tional basis and provide support servic- be repaid under most circumstances. es. Between the tenth and 20th years, the ...... grant is forgiven at a rate of ten percent POINT OF CONTACT per completed year. The grant is fully Carlos Patterson, Program Manager forgiven after 20 years. HCD-EHAPCD Program • Rental Construction Grants or Loans: Phone Number: (916) 445-0845 Lien restrictions for assisted units are Web Site: www.hcd.ca.gov/fa/ehap/ ehapcd.html required for 40 years for grants and 55 E-mail Address: [email protected]
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years for loans. If assisted units are sold corporations; and federally-recognized for uses other than farmworker housing Indian tribes. before the 40th year, the grant must be • Eligible beneficiaries of the grants are repaid in full, under most circumstances. households with at least one person Loans may be made in conjunction with who derives, or prior to retirement or low-income tax credit financing only. disability, derived a substantial portion • Rental Rehabilitation Grants or Loans: of their income from agricultural Lien restrictions for assisted units are employment. required for 20 years for grants and 55 ...... years for loans. If assisted units are sold POINT OF CONTACT for uses other than farmworker housing Pat Dyas, Program Manager before the 20th year, the grant must be HCD-Serna Program repaid in full, under most circumstances. Phone Number: (916) 324-0695 Loans may be made in conjunction with Web Site: www.hcd.ca.gov/fa/fwhg low-income tax credit financing only. E-mail Address: [email protected] Mailing Address: ELIGIBLE ACTIVITIES Financial Assistance Division 1800 Third Street, Room 390-8 Activities incurring costs in the develop- • Sacramento, CA 95814 ment of homeowner or rental housing ...... for agricultural workers including land acquisition, site development, construc- f. MOBILEHOME PARK RESIDENT tion, rehabilitation, design services, OWNERSHIP PROGRAM (MPROP) LOANS operating and replacement reserves, repayment of predevelopment loans, MPROP finances the preservation of afford- provision of access for the elderly or able mobilehome parks by conversion to disabled, relocation, homeowner coun- ownership or control by resident organiza- seling, and other reasonable and neces- tions, nonprofit housing sponsors, or local sary costs. public agencies. The program operates with a small revolving fund and in recent years ELIGIBLE APPLICANTS has made loans totaling from $3 million to • Local government agencies; nonprofit $6 million annually. corporations; cooperative housing ASSISTANCE TERMS corporations; limited partnerships, where all the general partners are • Short-term conversion loans at three nonprofit mutual or public benefit percent simple annual interest for up to 34 Real Estate ...... Development ......
three years to enable a resident organi- POINT OF CONTACT zation, nonprofit sponsor, or local public Lorraine French, Program Manager agency to purchase a mobilehome park. HCD-MPROP Phone Number: (916) 445-0110 • Long-term blanket loans at three per- Web Site: www.hcd.ca.gov/fa/mprop cent for up to 30 years for long-term E-mail Address: [email protected] financing of a park purchase, or for a Mailing Address: resident organization, nonprofit, or Financial Assistance Division public agency that has purchased a park 1800 Third Street, Room 390-5 to help low-income residents to buy Sacramento, CA 95814 ...... shares or spaces in the park. • Long-term individual loans at three per- g. MULTIFAMILY HOUSING PROGRAM (MHP) LOANS cent to low-income residents of a park that has been converted, to ensure MHP assists in the new construction, reha- housing affordability when the resident bilitation, and preservation of buys a cooperative share, a planned unit permanent and tran- development space, or a condominium sitional rental space in the park. housing for lower-income ELIGIBLE ACTIVITIES households • Purchase (conversion) of a mobilehome through low- park by a resident organization, non- interest, 55-year profit entity, or local public agency; deferred-payment rehabilitation or relocation of a pur- loans. The principal fund- chased park; or purchase by a low- ing source is Proposition 46, approved by income resident of a share or space in a the voters in November 2002, which converted park. authorized the issuance of $2.1 billion in General Obligation bonds for a variety of ELIGIBLE APPLICANTS housing programs. MHP was allocated $995 • Mobilehome park resident organiza- million, of which $582 million has been tions, nonprofit entities, and local pub- awarded as of June 30, 2005. The last lic agencies. Low-income residents Proposition 46 awards are expected by the apply for individual loans to the entity summer of 2007. that has purchased the park.
35 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
MHP consists of the following the conversion of nonresidential struc- programs: tures to rental housing. • The General Program provides funding • Projects are not eligible if construction for the development of rental housing. has commenced as of the application • The Supportive Housing Program pro- date or if they are receiving nine per- vides funding for the development of cent federal low-income housing tax units with associated health and social credits. services for low-income disabled popu- • MHP funds will be provided for post- lations. construction permanent financing only. • The Services Space Program provides Eligible costs include the cost of child funding for the development of space care, after-school care and social serv- for health and social services connected ice facilities integrally linked to the to MHP projects. assisted housing units, real property • The Student Housing Program provides acquisition, refinancing to retain afford- funding for the development of units for able rents, necessary onsite and offsite low-income university students. improvements, reasonable fees and consulting costs, and capitalized ASSISTANCE TERMS reserves. • Deferred payment loans. ELIGIBLE APPLICANTS • Maximum loan term is 55 years. • Local public entities, for-profit and non- • Three percent simple interest on unpaid profit corporations, limited equity hous- principal balance. ing cooperatives, individuals, Indian • Payments of 0.42 percent are due annu- reservations and rancherias, and limited ally to support loan monitoring, with the partnerships in which an eligible appli- balance of principal and interest due and cant or an affiliate of an applicant is a payable upon completion of the loan general partner. term. • Applicants or their principals must have ELIGIBLE ACTIVITIES successfully developed at least one • New construction, rehabilitation, or affordable housing project. acquisition and rehabilitation of perma- nent or transitional rental housing and
36 Real Estate ...... Development ......
POINT OF CONTACT mobilehome parks. Eligible costs Kim Losoya, Program Manager include, but are not limited to, site con- HCD-MHP trol, site acquisition, engineering stud- Phone Number: (916) 323-3178 ies, architectural plans, application Web Site: www.hcd.ca.gov/fa/mhp fees, legal services, permits, bonding, E-mail Address: [email protected] and site preparation. Mailing Address: Financial Assistance Division ELIGIBLE APPLICANTS 1800 Third Street, Room 390 • Local government agencies, nonprofit Sacramento, CA 95814 corporations, cooperative housing cor- ...... porations, and limited partnerships or h. PREDEVELOPMENT LOAN PROGRAM limited liability companies where all of (PDLP) the general partners are nonprofit mutu- al or public benefit corporations. PDLP provides predevelopment capital in ...... the form of short-term loans to finance the POINT OF CONTACT start-up expenses of low-income housing Margery Winter, Program Manager HCD-PDLP projects. Supported by a revolving fund, Phone Number: (916) 445-0877 the program has recently made loans total- Web Site: www.hcd.ca.gov/fa/pdlp ing about $5 million annually. E-mail Address: [email protected] Mailing Address: ASSISTANCE TERMS Financial Assistance Division 1800 Third Street, Room 390-5 • Three percent simple annual interest Sacramento, CA 95814 loans for up to two years. Maximum loan ...... amount, except for site option, site pur- chase, or site development is $100,000. i. WORKFORCE HOUSING (WFH) The maximum amount committed to any REWARD PROGRAM GRANTS one borrower at any one time is The WFH Program provides financial incen- announced in each Notice of Funding Availability. tives, through grants to cities and counties, for the issuance of building permits for new ELIGIBLE ACTIVITIES housing affordable to very low- or low- • Predevelopment costs of projects to income households. In June 2005, a total of develop or preserve assisted housing, $23 million was awarded. Two more annual including manufactured housing and rounds of $23 million each will be funded.
37 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
ASSISTANCE TERMS ELIGIBLE APPLICANTS • Grant amounts will be based on the • Cities, counties, and cities and counties numbers of bedrooms in units restricted that, by the end of the twelve-month for very low-and low-income house- period for which application is made, holds for which final land use approval is have adopted housing elements that issued during the twelve-month report- HCD has found to be in substantial com- ing period. pliance with housing element law, and • Qualifying rental units must be rent- have submitted to HCD the annual restricted for at least 55 years. progress report required by California Government Code Section 65400 within • Ownership units must be initially sold to the preceding twelve months. qualifying households at an affordable ...... cost. POINT OF CONTACT • Any public funds used to achieve afford- Linda Nichols, Program Manager ability in ownership units must be HCD-WFH Program recovered on resale and reused for Phone Number: (916) 323-3175 affordable housing for at least 20 years. Web Site: www.hcd.ca.gov/fa/whrp E-mail Address: [email protected] • Grants for very low-income units will be Mailing Address: greater than grants for low-income Division of Housing Policy Development units. 1800 Third Street, Room 430 • Very low-income means not over 50 per- Sacramento, CA 95814 cent of area median income, adjusted for family size. Low-income means not over 80 percent of area median income, adjusted for family size.
ELIGIBLE ACTIVITIES • Construction or acquisition of capital assets such as traffic improvements, neighborhood parks, bike paths, libraries, school facilities, play areas, community centers, police, or fire sta- tions.
38 Success Story ......
MACARTHUR PARK LIBRARY Other recent projects funded through Workforce Housing Reward Program grants Melanie S. Fallon, Director of Community include the following: Development for the City of Long Beach stated, “The City of Long Beach is thrilled • Valley View Park - City of Oakdale. that our successful efforts to increase our • Coe Park - City of Hanford. housing stock the past several years has • Leo Ryan Park, Foster City. been recognized by the State, along with Entrance Sign - City of Riverbank. our need for amenities to serve our new • residents. Our new MacArthur Park Library • Street Improvements - Fresno County. will be our first 21st century library to meet • Fire Station - Kings County. the needs of a growing population, includ- • ADA Retrofit - City of Galt. ing access to computer technology and cul- turally-diverse services and programs.”
39 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
CEFA ISSUES CONDUIT
RENENUE BONDS TO ASSIST
PRIVATE NONPROFIT INSTITUTIONS
OF HIGHER LEARNING IN THE
EXPANSION AND CONSTRUCTION
OF EDUCATIONAL FACILITIES AND
QUALIFYING EQUIPMENT AND
TECHNOLOGY PURCHASES.
40 C. EDUCATION
1. California Educational $7,500 to $17,500, based on financing Facilities Authority (CEFA) amount. • CEFA Fees: The initial fee for SEFP is CEFA issues conduit revenue bonds to assist 0.075 percent of the issue amount due at private nonprofit institutions of higher closing. CEFA does not charge an appli- learning in the expansion and construction cation fee and the annual fee shall be of educational facilities and qualifying waived for participants having other equipment and technology purchases. CEFA debt. All other participants will be Because it is authorized to issue tax- charged an annual fee of $500, declining exempt bonds, CEFA may provide more to $250 after five years. favorable financing to such private institu- tions than might otherwise be obtainable. ASSISTANCE TERMS a. SIMPLIFIED EQUIPMENT FINANCE • Lease purchase financing. PROGRAM (SEFP) • Tax-exempt interest rate competitively bid. A borrower under the program may fund qualifying equipment purchases of • Standardized documents. $100,000 or more. The maturity of the loan • Easy application process. must be related to the useful life of the equipment to be financed. Notes issued ELIGIBLE APPLICANTS through SEFP will be collateralized by the • Private, nonprofit college with same eli- equipment that is purchased. gibility requirements as for CEFA Tax- Funds may be used to purchase or reim- exempt Bonds. burse all types of qualifying equipement by ...... an eligible educational facility, including, POINT OF CONTACT but not limited to, heating and air condi- Frank Vega, Executive Director tioning systems, computers, and telecom- CEFA monications equipment. Funds also may be Phone Number: (916) 653-2872 used to finance minor equipment installa- Web Site: www.treasurer.ca.gov/cefa E-mail Address: [email protected] tion costs. Mailing Address: 915 Capitol Mall, Room 590 Sacramento, CA 95814 FEES • Low all-in program fees (excluding cor- porate counsel and CEFA fees) between
41 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
ST. MARY’S COLLEGE OF CALIFORNIA leges and universities of all sizes an effi- cient, cost-effective mechanism to finance St. Mary’s College of California (St. Mary’s) equipment. is one of the oldest colleges in the West. Founded in San Francisco in 1863, the cam- St. Mary’s updated its campus with various pus was relocated to Oakland in 1889 and energy and water conserving equipment then moved to its present site in Moraga in that included four main categories: water 1928. The college offers a comprehensive conservation, lighting, architectural, and array of liberal arts and professional under- mechanical measures. Under the terms of graduate and graduate programs. the seven-year lease agreement, St. Mary’s was provided with the option to purchase In early 2004, St. Mary’s was approved for an the equipment. The college expects to real- equipment loan through the SEFP offered by ize an annual savings of nearly $242,000 CEFA. This was the second application through these additional energy conserva- approved by CEFA for this relatively new pro- tion measures. gram, which was developed to provide col-
42 Education ......
b. STANDARD AND POOLED TAX- ELIGIBLE ACTIVITIES EXEMPT BONDS • All projects and related costs to be This program provides a borrower with financed must meet the definitions of access to low-interest rate loan markets “project” and “cost” as defined in CEFA’s through the issuance of tax-exempt rev- enabling statute [California Education enue bonds. Proceeds from the loan may Code Section 94110(c) and (j)]. be used by eligible borrowers to fund con- • In general, CEFA financing may be used struction/renovation projects, acquisition, for the following project-related costs: refinancing of existing debt, and costs of > Construction, issuance. Given the cost of issuing bonds, > Remodeling and renovation, this is the option usually pursued by bor- > Land acquisition (as part of the rowers with capital projects in excess of $5 proposed project), million. > Purchase/lease of equipment, Borrowers with more modest financing > Refinancing/refunding of prior needs are sometimes grouped or “pooled” debt, and by CEFA into a single bond financing, where > Costs of bond issuance and reim- bond issuance costs are shared by partici- bursement of prior expenses. pants. ELIGIBLE APPLICANTS FEES • Private, nonprofit college, situated in • $1,000 non-refundable application fee. California. • Initial fee of 0.15 percent of the issue • College must be non-sectarian and can- amount (up to a maximum of $75,000) not restrict entry on racial or religious due and payable at closing. grounds. • Annual administrative fee of $500 for • College must be functional for at least the first five years and $250 thereafter, three years prior to submitting an appli- for the life of the bond. cation and be able to provide three years of audited financial statements. ASSISTANCE TERMS • College must be able to demonstrate the • Loans from tax-exempt bonds. ability to repay the debt and must show • Financing must meet certain minimum revenue or collateral sufficient to cover requirements as set forth in CEFA’s Bond the debt service. Issuance Guidelines.
43 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
• College must be accredited by the Western Association of Schools and Colleges or, in the case of law schools, by the Committee of Bar Examiners of the State Bar or the American Bar Association...... POINT OF CONTACT Frank Vega, Executive Director CEFA Phone Number: (916) 653-2872 Web Site: www.treasurer.ca.gov/cefa E-mail Address: [email protected] Mailing Address: 915 Capitol Mall, Room 590 Sacramento, CA 95814
44 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
PITZER COLLEGE The College has embarked on a substantial Housing Master Plan implementation for Pitzer College (Pitzer) was founded in 1963 the construction of new housing on campus. and is an independent, coedu- The Housing Master Plan calls for the con- cational, liberal arts and struction of seven new residence halls to sciences’ college offer- replace three existing 40-year old dormito- ing a Bachelor of Arts ries housing 200 students each. The degree with a curric- Housing Master Plan assumes phased con- ular emphasis in the struction in three stages. In April 2005, social and behavioral CEFA issued $36,660,000 in bond proceeds sciences. Pitzer’s edu- for two series. Series A was issued in the cational objectives amount of $16,085,000 at a fixed rate for emphasize development of 30 years. Series B was issued in the amount critical thinking, formal analysis, effective of $20,575,000 at a variable rate for 40 expression, and breadth and depth of years. The College plans to use the bond knowledge. In addition, the objectives proceeds to implement Phase I of the con- place a major focus on development of struction project. This phase consists of intercultural understanding, interdiscipli- constructing three new residence halls and nary perspective, and a concern for social demolishing an existing dormitory. Phases responsibility and the ethical implications II and III of the Housing Master Plan will be of knowledge and action. implemented as funds become available to Enrolling approximately 900 students, move forward with the project. By taking Pitzer is part of a unique educational envi- advantage of tax-exempt interest rates, the ronment known as The Claremont Colleges– College is saving approximately $18 million a consortium of five undergraduate col- over the term of the loans versus commer- leges and two graduate institutions. The cial rates. seven institutions occupy contiguous cam- Currently, there are an increasing number puses and jointly finance a central admin- of students who desire to live on campus, istration for the operation of shared pro- thus creating a shortage of housing for stu- grams and facilities and services, including dents. Phase I will accommodate 318 stu- a library system, a computer center, a dents in three new buildings, increasing the security force, maintenance services, a residential capacity by 118 beds or 20 per- chaplain’s office, professionally staffed cent. The new construction is necessary to medical and counseling centers, and the provide students with accommodations and Claremont Center for the Performing Arts. to create more living space for students.
45 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
2. California School Finance renovation costs may be as much as Authority (CSFA) $1,000 per student. • Maximum grant awards may not exceed CSFA was established in 1986 to provide 75 percent of annual eligible costs for tax-exempt, low-cost financing to school which the applicant is applying. districts and community college districts for use in the repair and construction of ELIGIBLE ACTIVITIES school facilities, as well as for working cap- • The grant funds will be awarded over ital purposes. CSFA also assists with fund- five years to eligible charter schools, ing opportunities for California charter and will be applied toward costs of rent, school facilities. CSFA has offices in lease, mortgage, or debt service pay- Sacramento and Los Angeles. ments, or toward the purchase, design, and construction costs of acquiring land a. STATE CHARTER SCHOOL FACILITIES INCENTIVE GRANTS PROGRAM and constructing or renovating a facility.
CSFA administers the federally funded $50 ELIGIBLE APPLICANTS million Charter School Facilities Incentive • Charter school must be in good standing Grants Program, which provides per-pupil with its chartering authority and be in facilities aid for the purpose of assisting compliance with the terms of its charter California charter schools to provide ade- at the time of application submission. quate facilities. • Charter school must have completed at FEES least one school year of instructional operations. • None. • At least 80 percent of the instruction PROGRAM FEATURES time offered by the charter school shall • Grants to charter schools for annual be at the school site, and the charter costs of rent, lease, mortgage, or debt school shall attain an average daily service payments may be as much as attendance rate of at least 80 percent. $750 per student. • Grants to charter schools for the pur- chase, design and construction, and
46 Education ......
POINT OF CONTACT • Stand-Alone or Pooled Option - Pooling Katrina M. Johantgen, Executive Director several financings allows participants to CSFA achieve lower interest rates and costs of Phone Number: (213) 620-4467 issuance, greater investor demand, and Web Site: www.treasurer.ca.gov/csfa reduced administrative burden. E-mail Address: [email protected] Mailing Address: ELIGIBLE ACTIVITIES Los Angeles Office: 304 S. Broadway, Suite 550 • Reconstruct, remodel, or replace public Los Angeles, CA 90013-1224 school facilities. Sacramento Office: • Acquire new school sites and buildings 915 Capitol Mall, Room 576 Sacramento, CA 95814 to be made available to public school ...... districts (K-12) and community college b. TAX-EXEMPT FINANCING PROGRAM districts.
CSFA serves as a conduit issuer of bonds on ...... behalf of school districts and community POINT OF CONTACT college districts. Katrina M. Johantgen, Executive Director FEES CSFA Phone Number: (213) 620-4467 • Application, bond issuance, and annual Web Site: www.treasurer.ca.gov/csfa administrative fees may apply. Please E-mail Address: [email protected] contact CSFA for further information. Mailing Address: Los Angeles Office: PROGRAM FEATURES 304 S. Broadway, Suite 550 Los Angeles, CA 90013-1224 • Fixed or Variable Rate Option - Districts Sacramento Office: may elect a fixed rate financing or a 915 Capitol Mall, Room 576 variable rate program on either an inter- Sacramento, CA 95814 im or long-term basis. • Intercept Program Option - District may pledge an intercept of their annual allotment of state revenue limit funds to guarantee the debt service on lease rev- enue bonds or certificates of participa- tion.
47 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
SINCE THE PROGRAM’S INCEPTION
IN 1988, CHFFA HAS LOANED
OVER $43.7 MILLION TO OVER
148 SMALL AND RURAL HEALTH
FACILITIES.
48 D. HEALTH
1. California Health Facilities • No prepayment penalty. Financing Authority (CHFFA) • Loans are funded within approximately 60 days from the application date. a. HELP II LOANS • Standard covenants include annual The HELP II Loan Program provides low- audits, adequate hazard insurance, interest loans of up to $500,000 in an effi- and a requirement to notify CHFFA of cient, timely, and cost-effective manner. any significant changes in corporate Since the program’s inception in 1988, existence prior to the occurrence. CHFFA has loaned over $43.7 million to over 148 small and rural health facilities. ELIGIBLE ACTIVITIES Applications are accepted on a monthly • Funds may be used to: basis. > Purchase, construct, renovate, FEES or remodel real property; • $50 non-refundable application fee. > Perform feasibility studies, site tests, and surveys associated • One time administrative fee of 1.25 with real property; percent of the loan amount. > Pay permit fees, architectural fees, and other pre-construction ASSISTANCE TERMS costs; • Direct loan. > Purchase equipment and • Three percent fixed interest rate. furnishings; and • Loan amounts of $25,000 to $500,000. > Refinance existing debt when • Maximum loan-to-value ratio of 95 there is a significant interest rate percent. savings or a balloon payment due within 12 months. • Maximum loan term is 15 years (for
equipment loans, the maximum term is ELIGIBLE APPLICANTS five years). • Must be a nonprofit 501(c)(3) • Borrowers must contribute a minimum of corporation or a public health facility, five percent toward project costs. i.e., district hospitals. • Revenue pledge required. • Must have been in existence for at least • Fully amortized loans. three years performing the same type of
49 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
services. POINT OF CONTACT • Must provide three years of audited Sandra Simpson-Fontaine, Executive Director financial statements. CHFFA Phone Number: (916) 653-2799 • Must demonstrate fiscal soundness E-mail Address: [email protected] and the ability to meet the terms and Web Site: www.treasurer.ca.gov/chffa conditions of the loan. Mailing Address: 915 Capitol Mall, Room 590 Sacramento, CA 95814 • Must show readiness to begin projects shortly after funding for construction and remodeling projects. • Must provide for consumer savings and community benefit. • Must be able to qualify as a “health facility” under CHFFA’s enabling statute [California Government Code Section 15432(d)]. • Must be licensed by the State of California. • Annual gross revenues cannot exceed $20 million.
50 Health ......
Success Story ......
DIENTES COMMUNITY DENTAL CLINIC enabled them to eventually open on a full- time basis. In 2000, Dientes expanded Dientes Community Dental Clinic (Dientes) operations by installing two more dental was founded in 1992 by a group chairs, resulting in scheduling approxi- of local dentists who were mately 6,000 patient visits annually. concerned about the lack of dental care In May 2002, Dientes opened a clinic on available to low- Commercial Way in Santa Cruz that will income residents of increase services by 50 percent. This new Santa Cruz County. The clinic replaced the Mission Street Clinic. County Health Over the past nine years, Dientes has pro- Department did not operate vided services for 40,000 residents, one- a dental clinic, so patients had third of whom are children. nowhere to turn for affordable, yet critical- In 2002, Dientes received a Cedillo-Alarcón ly needed care. Dientes’ mission is to pro- grant in the amount of $150,000 that was vide lasting oral health for the underserved used to renovate the new facility and pur- children and adults of Santa Cruz County. chase equipment to expand its dental oper- In October 1994, Dientes opened the doors atories from six chairs to an eight-chair of its Mission Street Clinic. It began as a dental clinic. part-time operation consisting of three Dientes also accessed the HELP II Loan dental chairs in a 2,700 square foot clinic Program in 2003 in the amount of $400,000 rented from a local orthodontist. With a to refinance a higher interest rate loan budget of about $200,000 during the first originally used to purchase its Commercial year, Dientes scheduled approximately Way Clinic, thus improving its operating 1,400 appointments. Dientes grew steadily cash flow. This refinancing will save every year thereafter, particularly with help Dientes approximately $110,000 over the from foundations such as The California life of the loan. Endowment and the Packard Foundation. The City and County of Santa Cruz provided additional financial assistance, which
51 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
b. STANDARD AND POOLED TAX- revenues of $2.5 million or greater pay EXEMPT BONDS 0.02 percent of outstanding bonds).
Financings are normally accomplished • $500 fee for extending an approved res- through the issuance of tax-exempt bonds, olution. sold by CHFFA, for individual borrowers or ASSISTANCE TERMS for groups of borrowers. CHFFA is author- ized to issue bonds statewide with no effect • Loans funded by the issuance of tax- on the bonding capacity of any particular exempt bonds. city, county, or political subdivision. • Financing must meet certain minimum requirements as set forth in CHFFA’s Given the cost of issuing bonds, the stan- Bond Issuance Guidelines. dard option is usually pursued by borrowers with capital projects in excess of $5 million. ELIGIBLE ACTIVITIES • CHFFA’s enabling legislation allows it to Borrowers with more modest financing finance a number of types of healthcare needs are sometimes grouped or “pooled” projects. For example, funds may be by CHFFA into a single bond financing, used to construct or remodel facilities where bond issuance costs are shared by and finance the interest expense (capi- participants. This type of financing will talized interest) over the generally allow a borrower to finance a loan construction/renovation period. for a minimum of $500,000 for eligible projects. • Funds may also be used to refinance debt, acquire a new facility, buy equip- FEES ment, or in certain instances, finance • $500 non-refundable application fee. working capital. • Initial fee of $1,000 (private health ELIGIBLE APPLICANTS facilities with gross revenues of $2.5 million or greater pay 0.075 percent of • Must be a nonprofit 501(c)(3) corpora- aggregate amount of issue, up to a max- tion or authorized health facility (public imum of $300,000). health facilities also qualify for financ- ing). • Annual administration fee of the lesser of 0.02 percent of outstanding bonds or $500 (private health facilities with gross
52 Health ......
• Must be able to qualify as a “health facility” under CHFFA’s enabling statute [California Government Code Section 15432(d)].
...... POINT OF CONTACT Sandra Simpson-Fontaine, Executive Director CHFFA Phone Number: (916) 653-2799 E-mail Address: [email protected] Web Site: www.treasurer.ca.gov/chffa Mailing Address: 915 Capitol Mall, Room 590 Sacramento, CA 95814
53 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
CHILDREN’S HOSPITAL OF ORANGE COUNTY demand, during the summer of 2002, CHOC (CHOC) added ten new intensive care beds. This brought the current Newborn Intensive Care unit bed CHOC has grown dramatically since it began complement to 42, and CHOC’s total beds to 202. operating in 1964. The original 62- bed facility was located in a In 2004, CHOC received approval for approxi- leased wing of St. Joseph mately $84 million in tax-exempt bond financing Hospital of Orange, with through CHFFA to finance a portion of the con- which CHOC shared hospital struction of a new tower adjoining its existing services, such as surgery, facility and to finance the conversion of existing laboratory, and radiology. space. With a growth in demand, in 1975 The CHOC South Tower design is a four-story CHOC moved to a former skilled nursing facil- (including one lower level) tower consisting of ity that was renovated into an acute care approximately 220,000 square feet and will have pediatric hospital. Services provided included direct connections into the existing CHOC North neonatal and pediatric intensive care and the Tower. The South Tower will have the capacity to licensed capacity increased to 190 beds. house both clinical and ancillary services. This CHOC Realty Corporation (“Realty”), which construction is expected to begin in 2005 with holds title to all of CHOC’s land and buildings, completion expected in 2010/2011. The total purchased a two-story building adjacent to estimated cost is $180 million. Of that total, $35 CHOC’s acute care pediatric hospital and ren- million in acquisition and pre-construction costs ovated the building to house ambulatory care will be financed by the 2004 bond proceeds. services, including an outpatient clinic and Bond proceeds were also earmarked for the outpatient pharmacy, psychology services, expanding ambulatory services and the conver- medical records, computer services, pediatric sion of a portion of the existing intensive care subspecialty medical offices, and several space for a step-up intermediate care unit as administrative departments. In 1990, Realty well as building-out the sixth floor for 30 inten- constructed a six-story research building and sive care beds. The project also includes con- an expanded clinic facility adjacent to CHOC’s struction of a new parking structure adjacent to acute care pediatric hospital, and, in 1991, the South Tower, an additional parking structure Realty constructed a 192-licensed bed near CHOC’s existing facilities, as well as a replacement facility for all inpatient services pedestrian walkway into hospital buildings. (CHOC North Tower). Because of increased 54 Health ......
> Competitive Equipment Program - CHFFA would competitively bid c. TAX-EXEMPT EQUIPMENT NOTES the placement of the note and CHFFA has established this program to the setting of the interest rate; provide health facilities with access to > Generic Equipment Program – tax-exempt fixed-rate financing for their Applicant has identified financing equipment purchases. for the equipment purchase, requests CHFFA to act as issuer of A borrower under the program the tax-exempt notes; and may fund qualifying equip- > G.E. Capital Equipment Program – ment purchases of Applicant would negotiate with $500,000 or more. The G.E. Capital on the interest rate, maturity of the loan subject to approval by CHFFA. must be related to the useful life of the equip- ELIGIBLE ACTIVITIES ment to be financed. Notes issued through the program • Funds may be used to purchase or reim- would be collateralized by the equipment burse all types of qualifying equipment that is purchased. by an eligible health facility, including, but not limited to, medical and diagnostic FEES equipment, computers, and telecommu- nications equipment. • $500 non-refundable application fee. • Funds may also be used to finance minor • Initial fee for each completed financing equipment installation costs. of 0.05 percent of the issue amount.
• Annual administrative fee of $400 as ELIGIBLE APPLICANTS long as there is an outstanding balance. • Must be a nonprofit 501(c)(3) corpora- • There may be a charge for administrative tion or authorized health facility (public costs for applications that are not health facilities also qualify for financing). approved. • Must be able to qualify as a “health ASSISTANCE TERMS facility” under CHFFA’s enabling statute [California Government Code Section • Loans funded by tax-exempt notes. 15432(d)]. • There are three types of financings available:
55 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
POINT OF CONTACT bond interest rates. Sandra Simpson-Fontaine, Executive Director Loan insurance is available to non-rated CHFFA and below-investment-grade health care Phone Number: (916) 653-2799 E-mail Address: [email protected] facilities that demonstrate community Web Site: www.treasurer.ca.gov/chffa need. Mailing Address: 915 Capitol Mall, Room 590 Sacramento, CA 95814 FEES ...... • One-time, non-refundable, application 2. Office of Statewide Health fee of $500. Planning and Development • Certification and inspection fee of (OSHPD) 0.4 percent of the amount insured. CAL-MORTGAGE LOAN INSURANCE • One-time insurance premium of up to DIVISION (CAL-MORTGAGE) three percent of total principal and interest (premiums may be reduced for a. CALIFORNIA HEALTH FACILITY projects with a credit rating from CONSTRUCTION LOAN INSURANCE Moody’s, Standard & Poor’s, or Fitch). PROGRAM
The California Health Facility Construction ELIGIBLE ACTIVITIES Loan Insurance Program (Program) is mod- • Loans may be insured to finance the eled after federal home mortgage programs construction of new facilities; the and enables nonprofit and public health- acquisition of existing buildings; or care facilities to obtain private financing to facility expansion, modernization, develop or expand their services in and renovation. communities throughout California. The • Loan guarantees are available for the Program’s mission is to improve access to financing of fixed or moveable equip- needed health care services, without a cost ment needed to operate the facility. to taxpayers. Under the Program, qualifying nonprofit ELIGIBLE APPLICANTS or public health care facilities can borrow • Some examples of health facilities funds for capital needs from long-term eligible for Cal-Mortgage Loan lenders with loan Insurance. The guarantee Insurance include: provides borrowers with greater access to the financial market at lower tax-exempt
56 Health ......
> General acute care hospitals, POINT OF CONTACT > Skilled nursing facilities, Dale Flournoy, Deputy Director > Clinics, OSHPD - Cal Mortgage > Laboratories, Phone Number: (916) 324-9957 > Mental health centers, Web Site: www.oshpd.ca.gov/calmort E-mail Address: [email protected] > Nursing homes, Mailing Address: 300 Capitol Mall, Suite 1500 > Adult day health centers, Sacramento, CA 95814 > Rehabilitation facilities, > Intermediate care facilities, > Facilities for the developmentally disabled, > Group homes, > Facilities for the treatment of chemical dependency, > Accredited nonprofit work activity programs, > Offices and central service facili- ties operated in connection with licensed health care facilities, and > Multi-level facilities, operated in conjunction with a health care facility.
57 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
CTCAC ADMINISTERS THE
COMMERCIAL REVITALIZATION
DEDUCTION PROGRAM, A FEDERAL
PROGRAM DESIGNED TO STIMULATE
JOB GROWTH AND ECONOMIC
DEVELOPMENT IN SOME OF THE
NATION’S MOST DISTRESSED
COMMUNITIES.
58 E. BUSINESS DEVELOPMENT
1. California Industrial tary investment program that has a mis- Development Financing sion to match entrepreneurs, nonprofit Advisory Commission (CIDFAC) groups, and local governments either directly or through intermediaries with a. TAX-EXEMPT INDUSTRIAL DEVELOP- insurance industry investment capital. MENT BONDS • The State Teachers’ Retirement System CIDFAC approves the issuance of Industrial (STRS) Letter of Credit Program: Development Bonds (IDBs) as a partner Provides a mechanism for IDBs to be with local governments. The local govern- issued under STRSs strong credit rating ment can be a city, county, economic while allowing borrowers to maintain development authority, redevelopment their existing banking relationships. agency, or a joint powers authority. A • The Small Business Program: potential borrower applies through its local Streamlined small business “one-stop entity, but must be approved by CIDFAC, shop” issuance process. CDLAC alloca- which issues the “Certificate of Sale” at the tion and CIDFAC approval are received bond closing. simultaneously to finance land, build- ings, and equipment. • Empowerment Zone (EZ) Bonds: Developed by the federal government to • Energy Financing Program: assist distressed communities. Unlike Provides financing for manufacturers to traditional IDBs, empowerment zone construct or renovate energy efficient bonds are not limited to a maximum $10 facilities, to acquire energy efficient million par amount. Borrowers are not equipment, or to clean distributed power limited to manufacturers but include generation systems. retailers and any service that operates in FEES the EZ. • $1,250 non-refundable application fee. • The California Organized Investment Network (COIN) Program: • General fee of 0.25 percent of the total A division of the California Department amount of the bond issued. of Insurance that provides a mechanism for insurance companies to purchase privately placed IDBs. COIN is a volun-
59 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
ASSISTANCE TERMS ELIGIBLE APPLICANTS • 95 percent of proceeds must be used for • CIDFAC approves the issuance of IDBs as the defined IDB project. a partner with local governments. • A public hearing (TEFRA) must be held • The local government can be a city, before the bonds are issued. county, economic redevelopment • To acquire a used building, a minimum agency, or a joint powers authority. of 15 percent of the bond proceeds must • The local governmental entity is the be used to renovate the facility. issuer of the IDBs and CIDFAC is the • The weighted life of the bond issue can- approval agency. not exceed 120 percent of the weighted • Local governments who do not wish to average of the estimated useful life of participate in the CIDFAC issuance the assets being financed. process can contact the California • Maximum bond term is 40 years. Infrastructure and Economic Development Bank Conduit Revenue • Maximum par amount of $10 million. Bond Program (see page 72). • Total outstanding IDBs by any one com- ...... pany cannot exceed $40 million nation- POINT OF CONTACT wide. Joanie Jones-Kelly, Executive Director CIDFAC ELIGIBLE ACTIVITIES E-mail Address: [email protected] • Industrial projects include manufactur- Phone Number: (916) 653-3843 Web Site: www.treasurer.ca.gov/cidfac ing and processing. Mailing Address: 915 Capitol Mall, Room 457 • Bond proceeds can be used to acquire: Sacramento, CA 95814 > Land (up to 25 percent of the pro- ceeds); > Buildings and equipment; > Machinery and furnishings; > Landscaping; > Costs of architects, engineers, attorneys, and permits; and > Costs of bond issuance (up to two percent).
60 Business ...... Development ...... Success Story ......
MALMBERG ENGINEERING, INC. ship lines just got easier for the American Fish & Seafood Company. Los Angeles City Malmberg Engineering, Inc., whose major officials have just signed off on a $10.2 customers are medical instrumentation million bond deal that will allow the family- manufacturers, has added two new depart- owned company to build a new processing ments. The two new departments are for and distribution facility in the downtown assembly and for tooling to accommodate Produce Mart area, which is located in a their customers’ requests for federal Empowerment Zone (EZ). This is assembly service. With the second bond issuance by the City of the addition of the Los Angeles utilizing the new allocation, new departments, and the largest in California. American Malmberg no longer Fish & Seafood will use the multi-million needs to subcontract dollar bond to build a new 63,000 square orders to meet foot processing and distribution facility. customer needs. The Stimulating businesses’ growth and devel- company is able to produce opment in neighborhoods is the foundation products at a faster rate, which enables of the EZ bond program. them to meet end product demand to medical and hospital facilities. “Our company has a stake in this community. By building and expanding, we hope to see Malmberg issued $3 million in tax-exempt more businesses move to the downtown bond financing through Alameda County area. As more businesses come in, goods with CIDFAC approval. The project included and services will follow and have a positive the acquisition of two acres, site prepara- impact on the overall area,” said James tion, construction of a 30,000 square foot Doizaki, who heads the company’s real facility, and the purchase and installation estate branch, DF Associates. of new equipment. The project expansion added approximately 90 new jobs to the Doizaki’s grandfather started American Fish county. & Seafood in the 1940’s. Today the whole- sale fish distributor employs 125 people MERICAN ISH EAFOOD A F & S and operates from a 30,000 square foot Getting fresh and frozen seafood to super- facility that it has outgrown. The new plant market chains, hotels, and national cruise will give the company twice the operating
61 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
room and include state of the art machinery. community. American Fish & Seafood is “Right now we’re using 25 year old tech- working with a Worksource Center, run by nology. One new piece of machinery we’re Goodwill Industries, and partially paid for looking at will allow us to automate our by federal Workforce Investment Act funds, shrimp steaming process, which is now to meet the hiring goal. done by hand,” Doizaki says, “The drain on Meanwhile, Los Angeles has a federal city services, such as power and water will allocation of $230 million in bond authority be relieved with the use of new technology.” available to the City through 2009. The CDD The Industrial and Commercial Development is actively seeking companies, within the Division of the Los Angeles Community EZ or that are willing to relocate in the EZ, Development Department (CDD) oversees to take advantage of this economic bond, loan, and tax incentive programs incentive package. within the City’s EZ. One of the EZ bond requirements calls for a business to hire 35 percent of its workforce from the local
62 Business ...... Development ......
2. California Pollution Control ELIGIBLE APPLICANTS Financing Authority (CPCFA) • 500 employees or less.
a. CALIFORNIA CAPITAL ACCESS PRO- • Must demonstrate potential for growth GRAM (CALCAP) BUSINESS STRATE- and profitability, commitment to work- GIC TARGETED ADVISING RESOURCES ing with a business advisor, and commit- (STAR) PROGRAM ment to local hiring.
CPCFA provides a small business advisory • Preference for companies with: service through Pacific Community Ventures > $500,000 to $20 million in annual that helps small businesses to grow and revenues, develop their companies. This form of > Located in and/or employing (or assistance will improve access to other having the potential to employ) forms of capital for these small businesses, residents from low-and moder- spur further investment, create jobs, ate-income communities, expand economic opportunities, and assist > At least two years of operational in the recovery of distressed neighbor- history, or > Successful CalCAP experience hoods and low- and moderate-income (see CalCAP Program on page 64). communities to strengthen economic recovery in California. • Businesses that meet the eligibility cri- teria, received CalCAP financing, or are CalCAP’s Business STAR Program will pro- located in severely affected communi- vide entrepreneurs with valuable no-cost ties (e.g., State Enterprise Zones) are business development resources through especially encouraged to apply. various programs and services including: ...... POINT OF CONTACT • Individualized, professional assistance; Eugene Lee, Program Manager • Access to high-caliber business advisors CPCFA - CalCAP Business STAR Program (i.e., CEOs and senior, experienced Phone Number: (916) 654-5610 business professionals); Web Site: www.treasurer.ca.gov/cpcfa E-mail Address: [email protected] • Assistance to develop skills and expert- Mailing Address: 915 Capitol Mall, Room 457 ise in sales, marketing, finance, man- Sacramento, CA 95814 agement, and operations; and • Assistance in overcoming specific busi- ness challenges.
63 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
• The CalCAP lender approves loans b. CALIFORNIA CAPITAL ACCESS PRO- directly without burdensome govern- GRAM (CALCAP) FOR SMALL BUSI- mental approval of the loan-making NESSES LOANS process. • CPCFA provides a 100 percent match of CalCAP is a loan program that provides an the combined borrower and lender loss important source of capital for small busi- reserve account contributions. nesses that may otherwise have difficulty in obtaining financing. CalCAP provides • Special benefits for severely affected incentives for a lender to make small busi- communities: ness loans by establishing a loss reserve > CPCFA increases its deposit to account as a form of loan portfolio insur- CalCAP loss reserve accounts by ance. The loss reserve account provides up 50 percent for loans made to to 100 percent coverage to the lender. small businesses in severely affected communities, such as FEES State Enterprise Zones. • The borrower and lender each pay a two ELIGIBLE ACTIVITIES percent to 3.5 percent fee (the lender determines the exact amount) to the • Loans can be used to finance the acqui- CalCAP loss reserve account to enroll a sition of land, the construction or reno- loan. vation of buildings, the purchase of equipment, working capital, and other ASSISTANCE TERMS capital projects. There are limitations on • A lender can enroll all or a portion of a real estate loans and loan refinancing. term loan or line of credit into CalCAP. • Examples of ineligible uses of loan pro- • The maximum loan amount is $2.5 ceeds include any type of luxury facility, million. such as a golf course or country club, • Loans can be short- or long-term, have racetrack, airplane, or gambling facility fixed or variable rates, be secured or or any company whose principal busi- unsecured, and bear any type of amorti- ness is the sale of alcoholic beverages zation schedule. consumed off site, the sale of firearms, or the sale of tobacco products. • The borrower works directly with a CalCAP lender to obtain a loan.
64 Business ...... Development ......
ELIGIBLE APPLICANTS rates of return while still promoting growth • Most small businesses, with few exclu- and development of the targeted areas. sions, qualify for CalCAP. PROGRAM STRUCTURE • A typical definition of a small business • In May 2001, the CalPERS Investment is one with 500 or fewer employees. Committee approved a commitment of • The small business must have its pri- $475 million to eleven investment firms mary location in California. targeting the following stages of private equity capital: • The small business activity resulting from the loan must be primarily created > Seed and early stage capital, and retained in California. > Later stage venture capital, ...... > Growth/expansion stage capital, POINT OF CONTACT > Middle market buyouts, and Eugene Lee, Program Manager > Corporate partnerships to relocate CPCFA - CalCAP or expand operations in under- Phone Number: (916) 654-5610 served areas. Web Site: www.treasurer.ca.gov/cpcfa E-mail Address: [email protected] TARGETED OPPORTUNITIES Mailing Address: 915 Capitol Mall, Room 457 • Underserved markets include urban and Sacramento, CA 95814 rural areas where underutilized and ...... untapped assets and resources exist that 3. California Public Employees’ may be leveraged for the formation of Retirement System (CalPERS) new business activity. • Underserved markets also include com- a. THE CALIFORNIA INITIATIVE panies that provide goods and services The California Initiative is designed to to traditionally overlooked consumer deploy equity capital in traditionally groups. underserved markets, primarily, but not exclusively, located in California. The ELIGIBLE APPLICANTS objective is to discover and invest in • Small to middle market companies oper- opportunities that may have been bypassed ating in underserved markets in various or not reviewed by other sources of invest- stages of the growth cycle. ment capital. This program provides CalPERS with competitive risk-adjusted
65 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
POINTS OF CONTACT • Green Equity Partners California Opportunity Joncarlo Mark, Portfolio Manager Fund, LP (Consumer services, middle CalPERS market), Peter Nolan (310) 954-0444 Phone Number: (916) 795-3267 • Nogales Investors Fund, LP Web Site: www.calpers.ca.gov (Consumer-related businesses - retail, E-mail Address: [email protected] media, and distribution), Luis Nogales Mailing Address: Lincoln Plaza, 400 P Street (310) 276-7439 Sacramento, CA 95814 • Opportunity Capital Partners Fund IV, LP Jesús S. Argüelles, Investment Officer (Middle-market multistage - technology, CalPERS manufacturing, and media throughout Phone Number: (916) 795-3151 California), Peter Thompson Web Site: www.calpers.ca.gov (510) 795-7000 E-mail Address: • Pacific Community Ventures II, LLC (Small [email protected] enterprises in low- and moderate-income Mailing Address: Lincoln Plaza, 400 P Street areas of Northern California), Penelope Sacramento, CA 95814 Douglas (415) 442-4300
AND • Provender Opportunities Capital Fund, LP (Middle-market multistage - financial services, technology, and media), Frederick Fund Managers: Terrell (212) 271-8878 • American River Ventures Fund, LP (Venture capital for Sacramento, Central Valley, East • Yucaipa Corporate Initiatives Fund, LP Bay, and North Bay areas), Corley Phillips (Corporate relationships and joint ventures), (916) 780-2828 Ed Renwick (310) 228-3500 • Bank of America California Community Venture Fund, LLC (Fund-of-funds for partnerships targeting underserved markets primarily in California), Sanjiv Shah (312) 828-6378 • Draper Fisher Jurvetson Frontier (California Venture Capital), Scott Lenet (916) 444- 9000 • Garage California Entrepreneurs’ Fund, LP (Seed capital), Guy Kawasaki (650) 354-1800
66 Business ...... Development ......
4. California State Teachers’ • New and Next Generation Managers: Retirement System (CalSTRS) CalSTRS has selected Invesco Private Capital to manage the CalSTRS New and a. INVESTMENTS IN UNDERSERVED Next Generation Manager Fund. This is a URBAN AND RURAL MARKETS, AND fund-of-funds that invests in private NEW AND NEXT GENERATION equity managers overseeing first- or sec- MANAGERS ond-time funds that satisfy the required performance criteria. These funds are designed to make private equity investments in markets that have ELIGIBLE MANAGERS been traditionally underserved. Managers selected by CalSTRS to manage these • Eligible fund managers can be in the fol- investment funds serve as fiduciaries to lowing private equity sectors: CalSTRS and have sole discretion for all > Early and late stage venture investments that are expected to meet pri- capital. vate equity risk/return requirements. > Equity expansion. > Buyout. INVESTMENT STRUCTURE > Mezzanine. • CalSTRS has committed $350 million, > Other sectors as deemed fit by the which consists of a $250 million alloca- investment manager. tion to Underserved Urban and Rural ...... Markets and a $100 million allocation to POINTS OF CONTACT New and Next Generation Managers. Richard Rose, Principal Investment Officer CalSTRS STRATEGIES Phone Number: (916) 229-3697 • Underserved Urban and Rural Markets: Web Site: www.calstrs.com CalSTRS has selected several managers E-mail Address: [email protected] to oversee this strategy. The Mailing Address: 7667 Folsom Boulevard CalSTRS/Banc of America Capital Access Sacramento, CA 95826 Fund is a fund-of-funds, which selects AND funds that target the underserved mar- kets, and the Yucaipa Corporate Underserved Urban and Rural Markets: Initiatives and the Nogales Investor • CalSTRS/Banc of America Capital Access Fund, Funds both make direct investments in LLC (Fund-of-funds for partnerships targeting companies meeting each of their underserved markets primarily in California), respective underserved strategies and Guillermo Borda, E-mail: [email protected] performance criteria.
67 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
• Nogales Investors Fund, LP, Luis Nogales Program is one of the tax incentive pro- (310) 276-7439 grams. • Yucaipa Corporate Initiatives Fund, LP, Ed Renwick (310) 228-3500 Pursuant to an adopted Qualified Allocation Plan, CTCAC administers the real estate part CalSTRS New and Next Generation Managers: of the program. CTCAC can allocate up to • CalSTRS New and Next Generation Manager $12 million in tax deductions annually to Fund, LP, Amit Tiwari (650) 253-3600 qualifying businesses in each of the ...... Renewal Communities through 2009. These 5. California Tax Credit deductions are available to businesses Allocation Committee (CTCAC) located in the renewal communities to acquire, renovate, and rehabilitate existing a. COMMERCIAL REVITALIZATION structure(s), or build property for commer- DEDUCTION (CRD) PROGRAM cial use. CTCAC administers the CRD Program, a fed- eral program designed to stimulate job Interested persons should contact the des- growth and economic development in some ignated official in that Renewal Community of the nation’s most distressed communi- for more information. ties. FEES • Non-refundable application fee in the In December 2000, Congress, through the amount of $300 must be submitted with U.S. Department of Housing and Urban the initial application. Development (HUD), designated 40 com- munities across the nation as Renewal • A reservation fee of $500 is due and Communities. Five of these Renewal payable within 20 days after CTCAC takes Communities are in California; they are action to reserve the deduction for the portions of the cities of Los Angeles, San applicant. For projects receiving less Diego, and San Francisco, as well as the than $50,000 in deduction reservations, rural communities of Orange Cove and the fee may be waived upon request. Parlier. This Renewal Community designa- • For those projects that are placed in tion allows each community to utilize a service in the year in with the applica- variety of tax incentive programs to stimu- tion is made, an allocation/monitoring late economic revitalization. The CRD fee equal to 0.25 percent of the deduc-
68 Business ...... Development ......
tion award must be paid. tation of appropriate commercial prop- erty within the Renewal Community. • For projects that will not be placed in service in the year in which the alloca- • To encourage revitalization of the tion is made and will require a carryover economies of the Renewal Communities. allocation, an additional carryover fee • To provide opportunities for participa- equal to $500 or one percent of the tion in Renewal Community partnerships deduction award must be paid. to Renewal Community residents and nonprofit groups. ASSISTANCE TERMS ...... • Once the applicant has received a POINTS OF CONTACT deduction allocation, the applicant LOS ANGELES chooses either to: Cliff Weiss > Claim 50 percent of the qualifying Renewal Community Manager expenditures as CRD Tax Credits in 1200 West 7th Street, 6th Floor Los Angeles, CA 90017 the year in which the building is placed in service and to capitalize ORANGE COVE the remaining expenses under Bill Little Renewal Community Manager applicable tax law; or 633 6th Street > Claim the entire qualifying Orange Cove, CA 93646 expenditures of CRD Tax Credits at a rate of ten percent per year for PARLIER Lou Martinez ten years, beginning in the year Director of Economic Development the project is placed in service. 1100 E. Parlier Ave OBJECTIVES OF COMMERCIAL Parlier, CA 93648 REVITALIZATION DEDUCTIONS SAN DIEGO • To maximize the number of permanent, Ples Felix Renewal Community Manager full-time job opportunities for residents 600 B Street, 4th Floor, MS 904 of Renewal Communities. San Diego, CA 92101-4506
• To allocate commercial revitalization tax SAN FRANCISCO deductions to those entities providing Albert Lerma the greatest overall public benefit to the Program Director Renewal Community. 25 Van Ness Avenue, Suite 700 San Francisco, CA 94102 • To encourage development and rehabili-
69 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
THE INFRASTRUCTURE STATE
REVOLVING FUND PROVIDES
LOW-COST FINANCING TO PUBLIC
AGENCIES FOR A WIDE VARIETY OF
INFRASTRUCTURE PROJECTS.
70 F. I NFRASTRUCTURE
1. California Alternative Energy ELIGIBLE ACTIVITIES and Advanced Transportation • Pursuant to CAEATFA’s statute, the fol- Financing Authority lowing are permissible advanced trans- (CAEATFA) portation and renewable energy projects: a. ADVANCED TRANSPORTATION AND > Advanced Transportation RENEWABLE ENERGY TAX-EXEMPT Technologies: AND TAXABLE BONDS - Advanced telecommunications In 1980, state legislation was enacted for transportation. to “promote the prompt and efficient - Command, control, and development of energy sources which are communications for public renewable or which more efficiently utilize transit vehicles and systems. and conserve scarce energy resources.” - Electric vehicles and ultra-low Recognizing the importance of developing emission vehicles. a secure energy future to protect the - High-speed rail and magnetic environment and ensure economic stability, levitation passenger systems. the intent of the legislation was to promote energy sources designed to reduce the - Fuel cells. degradation of the environment. Originally > Advanced Transportation called California Alternative Energy Source Technologies: Financing Authority, the Authority later - Biomass. became CAEATFA in 1994, when the statute was amended to include development and - Solar thermal. commercialization of advanced transporta- - Photovoltaic. tion technologies. - Wind.
FEES - Geothermal.
• Application, board issuance, annual FINANCING THROUGH CAEATFA administrative, and other fees may • CAEATFA is a conduit bond issuer that is apply. Contact CAEATFA for further able to issue tax-exempt and taxable information. bonds for projects that qualify under its authorizing statute. CAEATFA also may
71 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
provide financial assistance in the form 2. California Infrastructure and of loans, loan loss reserves, interest rate Economic Development Bank reductions, insurance, guarantees, or (I-Bank) other forms of enhancement. a. CONDUIT REVENUE BONDS ELIGIBLE APPLICANTS • Any individual, entity, or group of enti- 501(c)(3) Revenue Bonds ties, whether organized for profit or not for profit, may apply to CAEATFA for Tax-exempt revenue bond financing is financial assistance. Public agencies available to nonprofit corporations that also may apply to CAEATFA for financing have received a determination letter from of renewable energy and advanced the Internal Revenue Service that they transportation projects. qualify as organizations as defined under ...... Section 501(c)(3) of the Internal Revenue POINT OF CONTACT Code.
Katrina M. Johantgen, Executive Director FEE CAEATFA Phone Number: (213) 620-4467 • Issuance fee is calculated on a graduat- Web Site: www.treasurer.ca.gov/caeatfa ed basis, based upon the amount of the E-mail Address: [email protected] financing. Maximum fee amount is Mailing Address: $75,000 Los Angeles Office: 304 S. Broadway, Suite 550 ASSISTANCE TERMS Los Angeles, CA 90013-1224 Sacramento Office: • Must be a qualified nonprofit 915 Capitol Mall, Room 576 corporation. Sacramento, CA 95814 • Project must be located in California. • Provides defined public benefit. • Project must be consistent with any existing local or regional comprehensive plan. • Low interest rates. • Long-term financing. • Allows borrower to retain endowments and accumulated funds.
72 Infrastructure ......
ELIGIBLE ACTIVITIES • I-Bank normally does not finance proj- • Bond proceeds may be used for the fol- ects that qualify for bond financing lowing purposes: through established statewide financing authorities such as the California > Capital expenditures; Educational Financing Authority (page > Refinancing prior debt 41) or the California Health Facilities (under certain conditions); Financing Authority (page 49). > Reimbursing prior expenditures Additionally, I-Bank is prohibited by (under certain conditions); statute from financing housing projects. > Working capital; and ...... > Costs of issuance, capitalized interest, and debt reserve funds. POINT OF CONTACT Jeffrey Emanuels, Manager ELIGIBLE APPLICANTS I-Bank - Conduit Financing • Nonprofit corporations organized pur- Phone Number: (916) 324-1299 suant to Internal Revenue Code Section Web Site: www.ibank.ca.gov 501(c)(3) are generally operated for the E-mail Address: [email protected] Mailing Address: 1001 I Street, 19th Floor following purposes: religious, charita- Sacramento, CA 95814 ble, scientific, educational, health, housing, and the prevention of cruelty to children and animals.
73 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
THE CALIFORNIA ACADEMY OF SCIENCES donations, were used to finance a $400 million major reconstruction of the The California Academy of Sciences, locat- Academy’s facilities, including the demoli- ed in Golden Gate Park in the City of San tion, renovation, construction, replace- Francisco, is the oldest scientific institution ment, and equipping of the Academy’s in the western United States and one of the museum (aquarium, natural history ten largest natural history museums in the exhibits, and planetarium), research, and world. The Academy is an international educational facilities in Golden Gate Park. center for environmental research that pro- vides its community and region with the When completed, this unique private/pub- highest quality exhibitions, programs, edu- lic project will strengthen the Academy’s cation, and outreach. The Academy’s three role as one of the preeminent natural his- main areas of activity are public exhibi- tory research and educational facilities in tions, research, and education. the world. I-Bank 501(c)(3) revenue bond financing of $180 million, together with approxi- mately $220 million in City of San Francisco, state, and federal funds and
74 Infrastructure ......
Exempt Facilities ELIGIBLE APPLICANTS
Exempt facility bonds are a category of • Narrowly defined list of eligible appli- bonds created by special provisions of the cants. Call I-Bank for clarification...... Internal Revenue Code that allow private, POINT OF CONTACT for-profit companies to utilize the pro- Jeffrey Emanuels, Manager ceeds of tax-exempt bonds to finance lim- I-Bank - Conduit Financing ited types of projects. Phone Number: (916) 324-1299 Web Site: www.ibank.ca.gov ASSISTANCE TERMS E-mail Address: [email protected] • Similar to the provisions for 501(c)(3) Mailing Address: 1001 I Street, 19th Floor Revenue Bonds. Sacramento, CA 95814
ELIGIBLE ACTIVITIES • Privately used or leased facilities at air- ports and ports, provided they are owned by a government agency. • Other categories exist, but have numer- ous limitations and conditions.
75 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
MERCURY AIR GROUP, INC. projects. Mercury Air’s facility located at the Burbank-Glendale-Pasadena Airport Mercury Air Group, Inc. (Mercury Air) received funds to renovate office, shop, received Airport Exempt Facility and maintenance space in order to provide Revenue Bond financing enhanced fixed base and ground support for a project in 1998. services to the general aviation industry. Mercury Air provides a Mercury Air concurrently expanded its air broad range of services cargo operations at Los Angeles to the aviation industry International Airport. Bond proceeds were through four principal used to demolish an abandoned Delta operating units: fuel sales Airlines hangar and construct the largest and services, cargo operations, cargo warehouse at the second busiest fixed base operations, and government cargo airport in the world. contract services. Bond proceeds were uti- lized to finance two separate expansion
76 Infrastructure ......
Industrial Development Bonds • The project should result in the creation (IDBs) of jobs that otherwise would be lost. One IDBs allow manufacturers and processors to job should be created/retained within finance acquisition and expansion projects two years of project completion for at very low interest rates through tax- every $50,000 in bond financing. exempt bond issuance. IDBs issued through • 95 percent of the bond proceeds must the I-Bank offer flexible financing terms be used for the defined project. and low administrative costs. • 75 percent of the assets purchased with
FEES bond proceeds must be for actual manu- facturing/processing. • Application fee of $1,500. • Up to 25 percent of the bond proceeds • Issuance fee is 0.25 percent of the can be used for land purchases. amount financed. • Up to two percent of the bond proceeds • Administrative fee of $500 per year, can be used for costs of issuance. until the bonds are redeemed. • If the bond proceeds are used to acquire an existing building, the building must ASSISTANCE TERMS be rehabilitated within two years, by an • Low interest rate. amount equal to at least 15 percent of • Typical maturity of 15-30 years, however, the portion of the building financed with the weighted average life of the bond bonds. cannot exceed 120 percent of the estimated useful life of the assets to ELIGIBLE APPLICANTS be financed. • Manufacturers or processors only. • No prepayment penalty...... • The maximum amount of a tax-exempt POINT OF CONTACT IDB is $10 million per applicant per Jeffrey Emanuels, Manager jurisdiction. I-Bank - Conduit Financing • The total outstanding amount of IDBs by Phone Number: (916) 324-1299 any one company nationwide may not Web Site: www.ibank.ca.gov exceed $40 million. E-mail Address: [email protected] Mailing Address: 1001 I Street, 19th Floor • A letter of credit from a bank with a Sacramento, CA 95814 minimum long-term rating of “A” is necessary to market the bonds.
77 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
APPLIED AEROSPACE STRUCTURES jobs that pay higher than average wages for CORPORATION the area, AASC employees are offered sta- ble employment rather than the temporary The I-Bank has issued $6.1 million in tax- and/or seasonal employment that is typical exempt IDBs in favor of the Applied in agricultural areas. At the time of the Aerospace Structures Corporation (AASC), a bond issue, the company employed 221 leading designer and fabricator of precision individuals and management estimated space components for the aerospace indus- that 235 new manufacturing jobs would be try. Founded over 50 years ago as an air- created within two years of project comple- craft parts manufacturer, AASC has com- tion as a result of the IDB financing. All pleted numerous contracts for such notable non-management positions are union jobs customers as Boeing Commercial Aircraft, that provide full health and medical bene- Boeing North America, Hughes Space and fits, retirement, vacation, and sick leave. In Communications, Lockheed Martin, the addition, AASC has a liberal educational National Aeronautics and Space reimbursement program designed to Administration (NASA) Ames, and NASA encourage self-development. The company Goddard Space Flight Center. participates in a “co-op” program with stu- dents at the University of the Pacific who AASC is located in an economically dis- are studying engineering and physics. tressed area of Stockton, California, in an Many of these students are eventually area identified as a state-designated offered full-time employment at AASC. Enterprise Zone. In addition to providing
78 Infrastructure ......
b. INFRASTRUCTURE STATE REVOLVING > Environmental mitigation FUND (ISRF) PROGRAM LOANS measures; > Parks and recreational facilities; The ISRF Program provides low-cost financ- > Port facilities; ing to public agencies for a wide variety of > Power and communication; infrastructure projects. > Public transit; ASSISTANCE TERMS > Sewage collection and treatment; • Direct loans. > Solid waste collection and disposal; • Loan amounts from $250,000 to $10 > Water treatment and distribution; million. > Defense conversion; • Terms of up to 30 years. > Public safety facilities; and • Interest rates are fixed for the term of > Military infrastructure. the financing and set upon bank board approval at a rate equal to 67 percent of ELIGIBLE APPLICANTS Thomson’s Municipal Market Index for an • Any subdivision of a local government, “A” rated security with a weighted aver- including: age life similar to the loan term. > Cities, • Eligible repayment sources: > Counties, > General Fund revenues, > Redevelopment agencies, > Enterprise Fund revenues, > Special districts, and > Tax increment revenues, > Joint powers authorities. > Assessment revenues, and ...... > Other recurring revenues accept- POINT OF CONTACT able to the I-Bank. Roma Cristia-Plant, Manager I-Bank - Infrastructure State Revolving Fund ELIGIBLE ACTIVITIES Phone Number: (916) 324-8942 Web Site: www.ibank.ca.gov • Public infrastructure including: E-mail Address: [email protected] > City streets; Mailing Address: 1001 I Street, 19th Floor Sacramento, CA 95814 > County and state highways; > Drainage, water supply, and flood control; > Educational facilities;
79 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
THE CITY OF EL SEGUNDO an integral component of a comprehensive multi-modal transportation investment The City of El Segundo borrowed $10 million strategy to improve traffic and transporta- in financing for the Douglas Street Gap tion infrastructure in the city and South Bay Closure Project. The project involved the region, and designed to increase the use of construction of a new arterial roadway to local public transit. The project will also aid connect two discontinuous segments of in the elimination of blight and increased Douglas Street north of Rosecrans Avenue community revitalization through the via an underpass under existing railroad development of adjacent brownfield land and light rail facilities, and the construc- into a mix of office, research and develop- tion of a park and ride lot and a pedestrian ment, retail, restaurant, and light industrial bridge to facilitate access to the uses. The project had widespread support Metropolitan Transportation Authority’s from major city employers and the cities of Green Line. Total project costs were over Manhattan Beach and Hawthorne. $32.5 million, with the ISRF Program funds providing the gap financing. The project is
80 Infrastructure ......
2. California Transportation GARVEE debt service is repaid from future Commission (CTC)/Department receipts of federal transportation funds of Transportation (Caltrans) received by the state that are legally avail- able for this purpose. By statute, the total a. GRANT ANTICIPATION REVENUE of all annual repayment obligations may VEHICLE (GARVEE) FINANCING not exceed 15 percent of annual federal transportation funds deposited in the State GARVEEs are tax-exempt debt financing Highway Account. Each year, the State mechanisms that are used to accelerate the Treasurer prepares an analysis of the bond- funding and construction of critical trans- ing capacity for issuing GARVEEs to assist portation infrastructure projects in order to the CTC in its compliance with this statutory provide congestion relief benefits to the requirement. public significantly sooner than would be possible through the use of traditional ASSISTANCE TERMS funding mechanisms. • By statute, the bonds have a 30-year maximum term; however, the CTC’s poli- This type of financing was authorized at the cy limits the term to 12 years. federal level under the National Highway • Projects will be selected through the System Designation Act of 1995. State law, programming process for the STIP and enacted in 1999, authorizes the issuance of the SHOPP. GARVEE bonds. The CTC is authorized to select and designate transportation projects • Projects must be major improvements to to be funded for accelerated construction corridors and gateways for interregional from bond proceeds. Caltrans is responsible travel and goods movement. Major for administering GARVEE-related work- improvements include projects that loads and, in conjunction with the CTC and increase capacity, reduce travel times, regional agencies, proposes projects or provide long-life rehabilitation of key through the State Transportation Improvement bridges or roadways. Program (STIP) or the State Highway Operation and Protection Program (SHOPP).
81 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
ELIGIBLE ACTIVITIES GARVEE financing. • The federally-funded portion of any • Other local entities, such as city or highway or other transportation project county governments or local transporta- that has been designated for accelerated tion authorities, must apply jointly with construction by the CTC is eligible for their regional transportation planning GARVEE financing. The project also must agency. have environmental clearance, complet- ...... ed project design, federal approval for POINT OF CONTACT the use of advance construction, and Barbara Lewis, Manager meet all federal aid requirements. Caltrans - Office of Alternative Financing • Financing is available only for right-of- Phone Number: (916) 324-7623 Web Site: www.dot.ca.gov/hq/innovfinance/ way and construction of a project. garveebond.htm • Funding considerations include: E-mail Address: [email protected] > Public and other economic bene- Mailing Address: 1120 N Street, MS #6 Sacramento, CA 95814 fits resulting from early construc- tion exceed financing costs; > Other funding mechanisms are not available; and > The anticipated useful life of the project exceeds the term of the GARVEE financing.
ELIGIBLE APPLICANTS • Applicants must be a regional trans- portation agency that is the approving authority for the county’s submission of projects to the STIP. Caltrans and CTC staff may also propose projects for
82 G. POLLUTION CONTROL
1. California Pollution Control > Land; Financing Authority (CPCFA) > Buildings, fixtures, and furnishings; > Machinery and equipment; and a. POLLUTION CONTROL TAX-EXEMPT > Architectural, engineering, sur- BONDS veying, permitting, and other incidental costs. The Pollution Control Tax-exempt Bond Financing Program provides tax-exempt • Projects can involve construction of a bond financing to California businesses for new facility, expansion of an existing the acquisition, construction, or installa- facility, rehabilitation or replacement of tion of qualified pollution control and all or part of an existing facility, or resource recovery facilities and new equip- acquisition and installation of new ment, including recycling facilities and equipment. equipment. Tax-exempt bond financing • Types of projects that may qualify for provides qualified borrowers with lower tax-exempt bond financing include, interest costs than are available through among others: conventional financing mechanisms. > Materials recovery facilities, CPCFA financing assists municipalities in > Recycling facilities, meeting their waste management needs, > Waste-to-energy facilities, including compliance with waste diversion > Composting facilities, and recycling mandates of the California > Transfer stations, Integrated Waste Management Act of 1989. > Landfills, > Waste collection vehicles, and CPCFA works in conjunction with the > Residential waste containers. California Debt Limit Allocation Committee (CDLAC) (see page 13). ELIGIBLE APPLICANTS ASSISTANCE TERMS • California businesses with a • Bond financing amounts range from $1 qualifying project. million and above...... POINT OF CONTACT ELIGIBLE ACTIVITIES Janet Haynes, Program Manager CPCFA - Pollution Control Tax-exempt Bonds CPCFA issues tax-exempt bonds to • Phone Number: (916) 653-0289 finance projects that abate, eliminate, Web Site: www.treasurer.ca.gov/cpcfa prevent, or control pollution. E-mail Address: [email protected] • Proceeds may be used to pay for: Mailing Address: 915 Capitol Mall, Room 457 Sacramento, CA 95814 83 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES Success Story ......
SACRAMENTO DEVELOPS PROJECT TO the state’s waste stream. California’s cities ASSIST SOLID WASTE MANAGEMENT, and counties are increasingly implement- DIVERSION, AND RECYCLING ing MSW management practices such as source reduction, recycling, and compost- Municipal Solid Waste (MSW) (more ing, which prevent or divert materials from commonly known as trash or the waste stream. CPCFA has been on the garbage) consists of forefront assisting the financing of these everyday items such as efforts. product packaging, grass clippings, cans, One project CPCFA assisted with financing bottles, food scraps, is BLT Enterprises of Sacramento, Inc. and newspapers. In (BLT). In 1999, CPCFA issued $15 million in 2001, U.S. residents, Pollution Control Tax-Exempt Bonds on businesses, and institutions behalf of BLT in order to purchase land, produced more than 229 million tons equipment, and complete the construction of MSW. California, in particular, annually of a Materials Recovery Facility and generates more than 75 millions tons of Transfer Station in Sacramento. This facili- MSW. As part of this waste stream, ty, consisting of a 120,000 square foot Americans throw away enough aluminum building located on 19 acres, provides every three months to rebuild our entire waste management and recycling services commercial air fleet. We also throw away for commercial, industrial, municipal, and enough office and writing paper annually to residential customers. build a 12-foot high wall stretching from The BLT facility has achieved a number of Los Angeles to New York City. public benefits. It receives over 1,500 tons However, our ability to place this waste in of MSW and recyclables per day and diverts landfills is diminishing as existing landfills approximately 25 percent (or 375 tons) of are nearing capacity and new landfills are those materials from landfills to productive extremely costly and difficult to site. CPCFA use. In addition, it conducts local tours, plays an important role in assisting educational training, and events that reach California’s cities and counties to manage over 500 participants annually. Moreover,
84 Pollution Control ......
the facility has created approximately 100 panies that have received low cost, tax- new full-time jobs in the City of Sacramento. exempt bond financing through CPCFA for There is an ongoing need to develop facili- projects that have assisted the State in its ties to manage California’s significant waste management, diversion, and recy- waste stream. BLT is one of the many com- cling efforts.
85 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
ASOFJUNE 30, 2005, THE PMIA
HAD $7.1 BILLION IN TIME
DEPOSITS IN 95 CALIFORNIA
FINANCIAL INSTITUTIONS.
86 H. OTHER
1. Pooled Money Investment POINT OF CONTACT Account (PMIA) Bill Dowell, Treasury Program Manager Investments Division a. SMALL BUSINESS LOAN PURCHASES Phone Number: (916) 653-3147 Web Site: www.treasurer.ca.gov/pmia-laif To accommodate loan servicing for low- to E-mail Address: [email protected] moderate-income areas of the State, the Mailing Address: 915 Capitol Mall, Room 106 PMIA has a program to purchase the guar- Sacramento, CA 95814 anteed portion of California-only securi- ...... tized small business loans, with a concen- a. TIME DEPOSITS tration on low-to-moderate income areas. To accommodate the strong need for capital This provides a secondary Small Business to fund loans within their service area and Administration market to encourage small to combat community banks’ inability to business lending in underserved areas of tap into capital markets and compete with the State and provides diverse and prudent strong regional and national banks, the investment alternatives to the PMIA. PMIA has a program to invest California tax dollars in California communities. This pro- Between January 1, 1999 and June 30, gram stimulates growth in small business- 2005, PMIA had purchased $850 million of es, home mortgages, equity loans, auto small business loans. loans, and personal loans while providing ASSISTANCE TERMS safe and attractive returns for the PMIA. • PMIA purchase of small business loans in low-to-moderate income areas of the As of June 30, 2005, the PMIA had $7.1 bil- State. lion in Time Deposits in 95 California finan- • Concentration in areas designated by cial institutions. census tract (zip code) as underserved ASSISTANCE TERMS or CRA-eligible. • PMIA Time Deposits in California com- • Loans must be less than a year old from munity banks, savings & loans, and date of note. credit unions. • Deposits do not exceed 100 percent of ELIGIBLE APPLICANTS an institution’s equity. • Primary sellers (poolers) of SBA loans.
87 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
• Deposits collateralized at 100 percent of POINT OF CONTACT FDIC guarantee for first $100,000 and Bill Dowell, Treasury Program Manager 110 percent to 150 percent on balances Investments Division over $100,000. Phone Number: (916) 653-3147 Web Site: www.treasurer.ca.gov/pmia-laif • Consideration is given to the CRA rating E-mail Address: [email protected] of each institution (CRA ratings of less Mailing Address: 915 Capitol Mall, Room 106 than satisfactory eliminate the institu- Sacramento, CA 95814 tion from the program).
ELIGIBLE APPLICANTS • California community banks, savings & loans, and credit unions.
88 APPENDIX
CONTACT INFORMATION FOR STATE COMMUNITY REVITALIZATION PROGRAMS
California Housing Finance Agency School Facility Fee (SFF) Down Payment Programs (CalHFA) Assistance Program Grants www.calhfa.ca.gov/homeownership/ California Homebuyer’s Downpayment programs/sff.htm Assistance Program (CHDAP) Loans [email protected] www.calhfa.ca.gov/homeownership/ Homeownership Programs programs/chdap.htm 1121 L Street, 7th Floor [email protected] Sacramento, CA 95814 Homeownership Programs (916) 324-8088 1121 L Street, 7th Floor Sacramento, CA 95814 California Infrastructure and (916) 324-8088 Economic Development Bank Extra Credit Teacher Home Purchase Program (I-Bank) (ECTP) Loans Roma Cristia-Plant, Manager www.calhfa.ca.gov/homeownership/ • Infrastructure State Revolving Fund programs/ectp.htm (ISRF) Program Loans [email protected] Homeownership Programs www.ibank.ca.gov 1121 L Street, 7th Floor [email protected] Sacramento, CA 95814 1001 I Street, 19th Floor (916) 324-8088 Sacramento, CA 95814 Homeownership in Revitalization Areas Program (916) 324-8942 (HIRAP) Loans Jeffrey Emanuels, Manager www.calhfa.ca.gov/homeownership/ Conduit Revenue Bonds programs/hirap.htm • 501(c)(3) Revenue Bonds [email protected] • Exempt Facilities Homeownership Programs • Industrial Development Bonds (IDBs) 1121 L Street, 7th Floor www.ibank.ca.gov Sacramento, CA 95814 [email protected] (916) 324-8088 1001 I Street, 19th Floor Mortgage Insurance Services Program Sacramento, CA 95814 www.calhfa.ca.gov/insurance (916) 324-1299 [email protected] Mortgage Insurance Services California Public Employees’ 1415 L Street, Suite 500 Retirement System (CalPERS) Sacramento, CA 95814 Barbara Stocking, Investment Officer (916) 322-8936 • California Urban Real Estate (CURE) Preservation Acquisition Program Loans Investments Program www.calhfa.ca.gov/multifamily/financing/ www.calpers.ca.gov programs/preservation.pdf [email protected] [email protected] Lincoln Plaza Multifamily Programs 400 P Street 1121 L Street, 7th Floor Sacramento, CA 95814 Sacramento, CA 95814 (916) 795-3400 (916) 322-5123
89 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
Joncarlo Mark, Portfolio Manager California Transportation • The California Initiative Commission (CTC)/Department of www.calpers.ca.gov [email protected] Transportation (Caltrans) Lincoln Plaza Barbara Lewis, Manager 400 P Street Office of Alternative Financing Sacramento, CA 95814 • Grant Anticipation Revenue Vehicle (916) 795-3267 (GARVEE) Financing Jesús S. Argüelles, Investment Officer www.dot.ca.gov/hq/innovfinance/ • The California Initiative garveebond.htm www.calpers.ca.gov [email protected] [email protected] 1120 N Street, MS #6 Lincoln Plaza Sacramento, California 95814 400 P Street (916) 324-7623 Sacramento, CA 95814 (916) 795-3151 Department of Housing and Community Development (HCD) California State Teachers’ Programs Retirement System (CalSTRS) Marilyn Lawson, Program Manager Mike DiRé, Director of Real Estate • Building Equity and Growth in Neighborhoods • Urban Real Estate Investments Program (BEGIN) Program Grants and Loans www.calstrs.ca.gov www.hcd.ca.gov/fa/begin [email protected] [email protected] 7667 Folsom Boulevard Financial Assistance Division Sacramento, CA 95826 1800 Third Street, Room 390-2 (916) 229-3722 Sacramento, CA 95814 Richard Rose, Principal Investment Officer (916) 327-2855 • Investments in Underserved Urban and Peter Solomon, Program Manager Rural Markets, and New and Next • CalHome Program Grants and Loans Generation Managers [email protected] www.calstrs.com Financial Assistance Division [email protected] 1800 Third Street, Room 390-2 7667 Folsom Boulevard Sacramento, CA 95814 Sacramento, CA 95826 (916) 327-3646 (916) 229-3697 Dee Franklin, Program Manager • CalHome Self-Help Technical Assistance Allocation (CHSHTAA) Grants www.hcd.ca.gov/fa/calhome [email protected] Financial Assistance Division 1800 Third Street, Room 390-2 Sacramento, CA 95814 (916) 445-9581
90 Appendix ......
Carlos Patterson, Program Manager Linda Nichols, Program Manager • Emergency Housing and Assistance Program • Workforce Housing (WFH) Reward Capital Development (EHAPCP) Deferred Loans Program Grants www.hcd.ca.gov/fa/ehap/ehapcd.html www.hcd.ca.gov/fa/whrp [email protected] [email protected] Financial Assistance Division Division of Housing Policy Development 1800 Third Street, Room 390-2 1800 Third Street, Room 430 Sacramento, CA 95814 Sacramento, CA 95814 (916) 445-0845 (916) 323-3175 Pat Dyas, Program Manager Office of Statewide Health Planning • Joe Serna, Jr. Farmworker Housing (Serna) Grant and Loan Program and Development (OSHPD) www.hcd.ca.gov/fa/fwhg Dale Flournoy, Deputy Director [email protected] Cal-Mortgage Loan Insurance Division Financial Assistance Division • California Health Facility Construction 1800 Third Street, Room 390-8 Loan Insurance Program Sacramento, CA 95814 www.oshpd.ca.gov/calmort (916) 324-0695 [email protected] Lorraine French, Program Manager 300 Capitol Mall, Suite 1500 • Mobilehome Park Resident Ownership Sacramento, CA 95814 Program (MPROP) Loans (916) 324-9957 www.hcs.ca.gov/fa/mprop Pooled Money Investment Account [email protected] Financial Assistance Division (PMIA) 1800 Third Street, Room 390-5 Bill Dowell, Treasury Program Manager Sacramento, CA 95814 Investments Division (916) 445-0110 • Small Business Loan Purchases Kim Losoya, Program Manager • Time Deposits • Multifamily Housing Program (MHP) Loans www.treasurer.ca.gov/pmia-laif www.hcd.ca.gov/fa/mhp [email protected] [email protected] 915 Capitol Mall, Room 106 Financial Assistance Division Sacramento, CA 95814 1800 Third Street, Room 390 (916) 653-3147 Sacramento, CA 95814 (916) 323-3178 Margery Winter, Program Manager • Predevelopment Loan Program (PDLP) www.hcd.ca.gov/fa/pdlp [email protected] Financial Assistance Division 1800 Third Street, Room 390-5 Sacramento, CA 95814 (916) 445-0877
91 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES
State Boards, Authorities & Sandra Simpson-Fontaine, Executive Director California Health Facilities Financing Authority Commissions (CHFFA) Katrina M. Johantgen, Executive Director • HELP II Loans California Alternative Energy and Advanced • Standard and Pooled Tax-exempt Bonds Transportation Financing Authority (CAEATFA) • Tax-exempt Equipment Notes • Advanced Transportation and Renewable www.treasurer.ca.gov/chffa Energy Tax-exempt and Taxable Bonds [email protected] www.treasurer.ca.gov/caeatfa 915 Capitol Mall, Room 590 [email protected] Sacramento, CA 95814 Los Angeles Office: (916) 653-2799 304 S. Broadway, Suite 550 Joanie Jones-Kelly, Executive Director Los Angeles, CA 90013-1224 California Industrial Development Financing (213) 620-4467 Advisory Commission (CIDFAC) Sacramento Office: • Tax-exempt Industrial Development Bonds 915 Capitol Mall, Room 576 www.treasurer.ca.gov/cidfac Sacramento, CA 95814 [email protected] (916) 653-2995 915 Capitol Mall, Room 457 Jane W. Thompson, Executive Director Sacramento, CA 95814 California Debt and Investment Advisory (916) 653-3843 Commission (CDIAC) Eugene Lee, Program Manager • Data Collection, Policy Research, and California Pollution Control Financing Authority Continuing Education (CPCFA) www.treasurer.ca.gov/cdiac • California Capital Access Program (CalCAP) [email protected] Business Strategic Targeted Advising 915 Capitol Mall, Room 400 Resources (STAR) Program Sacramento, CA 95814 • California Capital Access Program (CalCAP) for (916) 653-3269 Small Businesses Loans Laurie Weir, Executive Director www.treasurer.ca.gov/cpcfa California Debt Limit Allocation Committee [email protected] (CDLAC) 915 Capitol Mall, Room 457 • Tax-exempt Private Activity Bond Sacramento, CA 95814 Allocation Program (916) 654-5610 www.treasurer.ca.gov/cdlac Sherri Kay Wahl, Program Manager [email protected] California Pollution Control Financing Authority 915 Capitol Mall, Room 311 (CPCFA) Sacramento, CA 95814 • California Recycle Underutilized Sites (916) 653-3255 (CalReUSE) Loans Frank Vega, Executive Director www.treasurer.ca.gov/cpcfa California Educational Facilities Authority (CEFA) [email protected] • Simplified Equipment Finance Program (SEFP) 915 Capitol Mall, Room 457 • Standard and Pooled Tax-exempt Bonds Sacramento, CA 95814 www.treasurer.ca.gov/cefa (916) 654-5951 [email protected] 915 Capitol Mall, Room 590 Sacramento, CA 95814 (916) 653-2872
92 Appendix ......
Janet Haynes, Program Manager California Pollution Control Financing Authority (CPCFA) • Pollution Control Tax-exempt Bonds www.treasurer.ca.gov/cpcfa [email protected] 915 Capitol Mall, Room 457 Sacramento, CA 95814 (916) 653-0289 Katrina M. Johantgen, Executive Director California School Finance Authority (CSFA) • State Charter School Facilities Incentive Grants Program • Tax-Exempt Financing Program www.treasurer.ca.gov/csfa [email protected] Los Angeles Office: 304 S. Broadway, Suite 550 Los Angeles, CA 90013-1224 (213) 620-4467 Sacramento Office: 915 Capitol Mall, Room 576 Sacramento, CA 95814 (916) 653-2995 William J. Pavão, Executive Director California Tax Credit Allocation Committee (CTCAC) • Commercial Revitalization Deduction (CRD) Program • Federal and State Low-income Housing Tax Credits www.treasurer.ca.gov/ctcac [email protected] 915 Capitol Mall, Room 485 Sacramento, CA 95814 (916) 654-6340
93 T OOLS TO R EVITALIZE C ALIFORNIA C OMMUNITIES ACKNOWLEDGEMENTS
This reference guide was written by Frank Moore, Research Specialist in CDIAC’s Policy Research
Unit, with the assistance of several members of CDIAC’s staff, as well as outside contributors.
Executive Director Jane W. Thompson and Director of Policy Research Kristin Szakaly-Moore reviewed and edited the guide. CDIAC appreciates the assistance of various departments men- tioned in this guide and private sector professionals who provided information used in this guide.