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CITY OF
MURRIETA
File #: 25-1201    Version: 1
Type: Public Hearing Status: Agenda Ready
File created: 2/5/2025 In control: City Council
On agenda: 3/4/2025 Final action:
Effective date:    
Title: Financing for Viscar Terrace Apartments Vista Murrieta Affordable Housing Project
Attachments: 1. ATT 1 - Resolution No. 25-4814, 2. ATT 2 - Viscar Terrace Apartments Site Plan, 3. ATT 3 - TOD Vicinity Map

TO:                                                                HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

 

FROM:                                           David Chantarangsu, AICP, Development Services Director

 

PREPARED BY:                      Carl Stiehl, City Planner

 

SUBJECT:

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Financing for Viscar Terrace Apartments Vista Murrieta Affordable Housing Project

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RECOMMENDATION

recommendation

Conduct a Public Hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, (IRS Code) as amended; and


Adopt Resolution No. 25-4814 entitled:
A Resolution of the City Council of the City of Murrieta, California, Approving the Issuance by the California Municipal Finance Authority of the Exempt Facility Bonds in an Aggregate Principal Amount Not to Exceed $70,000,000, for the Purpose of Financing or Refinancing the Acquisition, Construction, Improvement and Equipping of Viscar Terrace Apartments.

 

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PRIOR ACTION/VOTE

None.


CITY COUNCIL GOAL

Plan, program and create infrastructure development.

 

BACKGROUND

The Viscar Terrace Apartments is an approved housing project with 172 units which will be restricted to occupancy by low-income residents spread across five buildings (Project) located at 40475 Vista Murrieta (Property). The Project was approved by staff on June 18, 2024, utilizing the ministerial Development Plan approval process adopted with the Multi-Family Residential Objective Design Standards (ODS) by the City Council in 2023.  Following approval, the developer subsequently applied to the State for and was awarded low-income tax credits in December 2024.  The project is being developed by the same team that funded and built the Monamos Terrace Apartments, which is near full occupancy at this time. 

 

The Project is located within the Transit Oriented Development (TOD) Overlay Area (See Attachment 3), and the Property is designated in the City’s Housing Element to help the City meet its Regional Housing Needs Allocation (RHNA) for lower-income households. The development of the TOD Overlay Area for housing has been part of the City’s approach to meeting State-mandated RHNA housing requirements since 2014, and the beginning of the 5th Cycle Housing Element (2014-2021). The Property is located between Skypark Lane/Myers Lane and Vista Murrieta and consists of three (3) parcels totaling approximately 5.7 acres, identified by Assessor’s Parcel Numbers 949-180-022, 023, and 025. The Project is consistent with the City’s ODS and meets the minimum density required of the TOD at 30 dwelling units per acre.  See Attachment 2 for the site plan. 

 

In order to secure additional funding for the Project, the applicant, in partnership with Viscar Terrace LP (Borrower), submitted an application for tax credits to the California Municipal Finance Authority (CMFA). The Borrower has requested that the CMFA serve as the municipal issuer of bonds (Bonds) in an aggregate principal amount not to exceed $70,000,000. The proceeds of the Bonds will be used to finance or refinance the acquisition, construction, improvement, and equipping of the multifamily rental housing project described above, as approved.

 

For all or a portion of the Bonds to qualify as tax-exempt bonds, the City must conduct a public hearing (TEFRA Hearing), providing the members of the community with an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Public notice was published as required ten days prior to the hearing in the Riverside Press-Enterprise. Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.

 

California Municipal Finance Authority

The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural, and community development through the financing of economic development and charitable activities throughout California.  To date, over 300 municipalities have become members of CMFA, including the City of Murrieta as part of the approval of the funding for the Monamos Terrace Apartments in 2022, and both phases of the Adams Avenue affordable housing project where Phase 1 is currently under construction. The City Council conducted the public hearing for Phase 2 on February 18, 2025. The CMFA was formed to assist local governments, non-profit organizations, and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financing.

 

Bond Financing and City Obligations

The bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City 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 obligations of the City or the State of California but are to be paid for solely from funds provided by the Borrower.

 

There are no costs associated with membership in the CMFA, and the City will in no way become exposed to any financial liability because of its existing membership. In addition, participation by the City in the CMFA does not impact the City’s appropriations limits or debt capacity and will not constitute any type of indebtedness by the City. Outside of holding the TEFRA hearing and approving the issuance of bonds, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required.

 

Project Analysis

The Project is an important low-income, affordable, multi-family residential project for the City.  Whereas this part of the region in the County has seen extensive residential growth in the past twenty years, the supply of affordable housing has not grown in the same manner.  Both the State of California Housing and Community Development Department and Southern California Association of Governments have noted that affordable multi-family residential developments are the type of projects currently most needed to address the State’s housing supply shortage. The City did not have any of these types of units constructed over the most recent housing cycle from 2014-2021.  The proposed Project is a core part of the City’s housing strategy to have the development of TOD housing sites with low-income housing, which will help to meet the City’s 6th Cycle Housing Element RHNA covering 2021-2029. 

 

Considering the foregoing, and to support the funding of affordable housing consistent with the City’s Housing Element, staff recommends that the City Council conduct the TEFRA Hearing and adopt the resolution (Attachment 1) to authorize the issuance of the Bonds by CMFA.

CEQA Determination

The Guidelines for Implementation of the California Environmental Quality Act (CEQA) do not apply to the approved Project or the approval of this funding.  The City’s ODS and Development Code provide for a ministerial (by-right) staff approval process for a Development Plan for affordable housing in the TOD and, therefore, this is not a project as defined by CEQA.  Therefore, the approval of funding for the Project is also not subject to CEQA. 

 

FISCAL IMPACT

There is no fiscal impact to the City in assisting with the issuance of bonds for the CMFA. The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its bond conduit issuance activities, the CMFA may share a portion of the issuance fees it receives with its member communities and donate a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Murrieta, a portion of the issuance fee attributable to the City may be granted by the CMFA to the General Fund of the City. Such a grant may be used for any lawful purpose of the City.


ATTACHMENTS

1.                     Resolution No. 25-4814

2.                     Viscar Terrace Apartments Site Plan

3.                     TOD Vicinity Map