Special Notice / Hearing: 7 days newspaper publication (26 CFR §1.147(f)-1)
Vote Required: Majority
To: Honorable Board of Supervisors
From: John D. Nibbelin, County Attorney
Subject: Public Hearing and Resolution Approving California Municipal Finance Authority Tax-Exempt Revenue Bonds for the Benefit of North Fair Oaks Apartments, L.P
RECOMMENDATION:
title
Conduct a public hearing under the Tax Equity and Fiscal Responsibility Act (TEFRA) regarding the issuance of tax-exempt bonds by the California Municipal Finance Authority:
A) Open public hearing
B) Close public hearing
C) Adopt a resolution approving a plan of finance for the issuance of tax-exempt revenue bonds in an aggregate principal amount not to exceed $50,000,000, by the California Municipal Finance Authority for the benefit of North Fair Oaks Apartments, L.P., a California limited partnership, or another ownership entity to finance and refinance the acquisition, construction, improvement, and equipping of an 86-unit affordable rental housing facility for low-income households, to be located in the unincorporated community of North Fair Oaks in the County of San Mateo at 430-434 Douglas Avenue & 429-431 MacArthur Avenue, Redwood City, California.
body
BACKGROUND:
The California Municipal Finance Authority (the “CMFA” or “Authority”) was created on January 1, 2004 pursuant to a joint exercise of powers agreement (the “Agreement”) to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 350 municipalities, including the County of San Mateo, have become members of CMFA.
The Agreement provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations of the CMFA do not constitute debts, liabilities or obligations of the members executing such Agreement.
DISCUSSION:
Affirmed Housing Group, Inc., a Delaware for-profit corporation (the “Administrative General Partner” or “Sponsor”), and Compass for Affordable Housing, a California nonprofit corporation (the “Managing General Partner”) on behalf of North Fair Oaks Apartments, L.P., a California limited partnership, or another ownership entity to be created by AHG North Fair Oaks, LLC, a California limited liability company, an affiliate of the Sponsor or by another affiliate of the Sponsor (such limited partnership or other ownership entity being referred to herein as the “Borrower”), has requested that the CMFA adopt a plan of finance for the issuance from time to time of one or more series of tax-exempt revenue bonds in an aggregate principal amount not to exceed $50,000,000 (the “Bonds”) to finance and refinance the acquisition, construction, improvement and equipping of a 86-unit affordable rental housing facility for low-income households, to be located in the unincorporated community of North Fair Oaks in the County of San Mateo (the “County at 430-434 Douglas Avenue & 429-431 MacArthur Avenue, Redwood City, California (the “Project”).
In order for all or a portion of the Bonds to qualify as tax-exempt obligations, the County, as the CMFA member within whose jurisdiction the Project is sited, must conduct a public hearing (the “TEFRA Hearing”) to provide the members of the community an opportunity to speak in favor of or against the use of tax-exempt obligations for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. A Notice of Public Hearing was published in San Mateo County on or before April 29, 2025, notifying all interested persons that a public hearing would be held on May 6, 2025 by the County for the purpose of approving the financing.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the County will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not an obligation of the County or the State of California but is to be paid for solely from funds provided by the Borrower.
Participation by the County in the CMFA will not impact the County’s appropriations limits and will not constitute any type of indebtedness by the County. Outside of holding the TEFRA hearing, adopting the required resolution, no other participation or activity of the County or the Board of Supervisors with respect to the issuance of the Bonds will be required.
EQUITY IMPACT:
The Bonds authorized by the Board’s action will help finance the Project, which will provide needed affordable housing within the North Fair Oaks community.
FISCAL IMPACT:
There is no cost to the County associated with this action. The County will receive 25% of the issuance fee from the CMFA, which is estimated to be approximately $14,800 if the full amount of the Bonds is issued. These funds can be used at the County’s discretion. There will be no other fiscal impact to the County associated with any Bonds that are authorized or issued by this action.