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 Issuance of California Statewide Communities Development Authority Tax-Exempt Revenue Bonds for the benefit of Sequoia Living, Inc.
RECOMMENDATION:
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Conduct a public hearing under the Tax Equity and Fiscal Responsibility Act (TEFRA) regarding the issuance of tax-exempt bonds by the California Statewide Communities Development Authority:
A) Open public hearing
B) Close public hearing
C) Adopt a resolution approving the issuance of one or more series of tax-exempt revenue bonds by the California Statewide Communities Development Authority in an aggregate principal amount not to exceed $165,000,000, including a portion thereof in an amount not to exceed $65,000,000 for the purpose of financing and/or refinancing the acquisition, construction, renovation, equipping and furnishing of certain capital projects at The Sequoias at Portola Valley and certain other matters relating thereto.
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BACKGROUND:
The California Statewide Communities Development Authority (the “Authority”) was created on June 1, 1988 pursuant to a joint exercise of powers agreement (the “Agreement”) to promote economic development by enabling local government and eligible private entities access to tax-exempt financing for projects that will provide public benefits. To date, hundreds of cities and 57 counties, including the County of San Mateo, have become members of the Authority.
The Agreement provides that the Authority is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations of the Authority do not constitute debts, liabilities or obligations of the members executing such Agreement.
DISCUSSION:
Sequoia Living, Inc., a California nonprofit public benefit corporation (the “Borrower”), has requested that the Authority issue revenue bonds in one or more series in an aggregate principal amount not to exceed $165,000,000 (the “Bonds”), for the purpose of, among other things, financing and refinancing the acquisition, construction, renovation, equipping and furnishing of capital projects at facilities operated by the Borrower, known as The Sequoias at Portola Valley, that provide senior residential and care services and located generally at 501 Portola Road, Portola Valley, California 94028 (the “Facility”) in an aggregate principal amount not to exceed $50,000,000, and refinancing prior obligations issued for the benefit of the Borrower, which financed and refinanced the costs of the acquisition, construction, renovation, equipping and furnishing of the Facility, shall be in an aggregate principal amount not to exceed $15,000,000 (collectively, the “Project”).
In order for all or a portion of the Bonds to qualify as tax-exempt obligations, the County, as the Authority member within whose jurisdiction the Facilities are sited, must conduct a public hearing under the Tax Equity and Fiscal Responsibility Act (“TEFRA”) 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 Facility. 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 June 3, 2025, notifying all interested persons that a public hearing would be held on June 10, 2025 by the County for the purpose of approving the issuance of the Bonds.
The Bonds to be issued by the Authority 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, the Facility or the repayment of the Bonds. 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 Authority 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 and 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.
COMMUNITY IMPACT:
The Bonds authorized by the Board’s action will help finance improvements to a facility that provide senior residential and care services in the County, which will provide benefits to the community.
FISCAL IMPACT:
There is no cost to the County associated with this action. There will be no fiscal impact to the County associated with any Bonds that are authorized or issued by this action.