Norton Rose Fulbright Helps Coachella Issue Bonds

Norton Rose Fulbright helped the Successor Agency of the City of Coachella issue $5,275,000 of refunding bonds in December of 2013. Norton Rose Fulbright acted as bond counsel and Urban Futures, Inc. acted as financial adviser to the Successor Agency. Savings total approximately $1.6 million, with the bulk of the savings benefiting the county and local school districts.

Prior to the Dissolution Act, the savings from a refunding transaction such as this would flow to the dissolved agencies by way of additional tax increment revenues. However, after the Dissolution Act, cities will now only benefit by an amount equal to their respective property tax rate. That means the City of Coachella will receive $112,000 out of the $1.6 million in savings. Despite this, the City of Coachella issued the bond for the benefit of the county and school districts.

Norton Rose Fulbright was bond counsel on the transaction. They prepared the legal documents relating to the issuance of the refunding bonds and render a final approving opinion letter going to the validity of the bonds and the tax-exemption of the interest on the bonds. The refunding bonds are being issued to refinance the previously issued $7,020,000 principal amount of the Coachella Redevelopment Agency.

After the passage of the Dissolution Act, each of California’s redevelopment agencies were dissolved, and the cities and counties that formed the redevelopment agencies started the process of unwinding the affairs of these dissolved agencies. Successor agencies were then established to manage redevelopment projects currently underway, make payments on enforceable obligations, and dispose of redevelopment assets and properties.

“Our Council determined that helping our county and school districts is a worthwhile endeavor. We are all trying our best to help each other,” said Bill Pattison, Finance Director of the City of Coachella.

Many other cities are also issuing refunding bonds in the hopes of helping their county and school districts.

“We are seeing that many of our clients who are issuing refunding bonds have the same perspective,” said Danny Kim, Partner at Norton Rose Fulbright.