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 the Vista Heights Apartments Affordable Housing Project
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ABSTRACT
The Vista Heights Apartments Affordable Housing Project was approved by staff in 2025, as required by state law. Subsequently the project developer applied to the California Municipal Finance Authority (CMFA) for bond financing. The City Council must conduct a public hearing so that CMFA may issue bonds for the housing project.
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. 26-4930 entitled: A Resolution of the City Council of the City of Murrieta, California, Approving the Issuance by the California Municipal Finance Authority Exempt Facility Bonds in an Aggregate Principal Amount Not to Exceed $42,000,000 for the Purpose of Financing or Refinancing the Acquisition, Construction, Improvement and Equipping of Vista Heights Apartments and Certain Other Matters Relating Thereto.
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PRIOR ACTION/VOTE
None.
STRATEGIC ALIGNMENT
The City Council’s goal of planning, programming and creating infrastructure development is associated with this administrative priority.
DISCUSSION
On March 12, 2025, the Development Services Department approved a 214-unit multi-family housing development for low-income households (Project) at 40740 and 40720 Vista Murrieta and 25342 Jackson Avenue (Property). Subsequently, Vista Murrieta Housing LP (Borrower), in partnership with American Neighborhood Housing (Developer), applied to the California Municipal Finance Authority (CMFA), a state-wide joint powers authority (JPA), whose members are numerous public entities in the State to request financing for the Project.
The Property is designated in the City’s Housing Element as a location intended to meet a portion of Murrieta’s Regional Housing Needs Allocation (RHNA) for lower-income households. The Property consists of three (3) parcels totaling approximately eight (8) acres between Vista Murrieta and Walsh Center Drive, Assessor’s Parcel Nos.: 949-190-020, 949-190-021, and 949-190-024, that is zoned Office with the underlying Transit Oriented Development (TOD) Overlay requiring a minimum of 30 dwelling units per acre should an applicant propose multi-family residential development utilizing the TOD Overlay.
The Borrower requested that the CMFA serve as the municipal issuer of the bonds in an aggregate principal amount not to exceed $42,000,000 of tax-exempt revenue bonds (Bonds). 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 of Murrieta (City) must conduct a public hearing (TEFRA Hearing) providing 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 the TEFRA Hearing, reasonable notice must be provided to the members of the community. 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 350 municipalities, including the City of Murrieta, have joined CMFA. 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.
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 stating that the Bonds are not obligations of the City or the State of California but will be paid for solely from funds provided by the Borrower.
Project Analysis
The proposed Project, if fully funded and built, would be an important low-income, affordable multi-family residential project for the City and Southwestern Riverside County. Whereas this part of the County has seen extensive residential growth over the past 20 years, the supply of affordable housing has not grown at the same rate. Both HCD and the Southern California Association of Governments (SCAG) 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 see any low-income housing units constructed in the previous housing cycle from 2013-2021. The proposed Project assists the City in meeting the low-income target for the current housing cycle covering 2021-2029.
Considering the foregoing and to support affordable housing, staff recommends that the City conduct the TEFRA Hearing, execute the Joint Exercise of Powers Agreement of the CMFA, and adopt the resolution.
CEQA DETERMINATION
The Project was determined to be exempt under the California Environmental Quality Act (CEQA), and a Notice of Exemption was prepared for the Project entitlement in 2025. The Guidelines for Implementation of the CEQA do not apply to the approval of this funding. The Development Plan for Project has already been approved consistent with the Exemption posted and filed for the Project in 2025. The approval of bond funding does not alter the approved Project and is not a project itself as defined by CEQA. Therefore, the approval of funding for the Project is also not subject to CEQA.
PUBLIC NOTICING
The agenda item has been publicly noticed as required by the Internal Revenue Code of 1986 and State law for Public Hearing. Notice was published 10 days prior to this hearing pursuant to the requirements for a noticed Public Hearing.
FISCAL IMPACT
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.
The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (Foundation), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Murrieta, it is expected that a portion of the issuance fee attributable to the City will be granted by the CMFA to the General Fund of the City, which may be used for any lawful purpose of the City.
ATTACHMENTS
ATT 1 - Resolution No. 26-4930
ATT 2 - Project Site Plan and Elevations