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 Jefferson 82 Apartments Affordable Housing Project
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ABSTRACT
The Jefferson 82 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 funding. The City must conduct a public hearing in order for the bonds to be released.
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. 26-4929 entitled: A Resolution of the City Council of the City of Murrieta Approving a Plan of Finance of the California Municipal Finance Authority to Issue and Reissue Revenue Bonds for a Qualified Residential Rental Project for the Benefit of Mirka Jefferson LLP or an Affiliate Thereof, 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
In January 2022, the project applicant submitted a project to the City of Murrieta (City) for 100% affordable housing for very-low-income residents at 25185 Jefferson Avenue (Property), with 82 multi-family rental units (Project). On May 16, 2025, the Director of Development Services approved the Project. Subsequently, Mirka Jefferson, LP, a California limited partnership (Borrower), submitted an application to the CMFA, a Statewide joint powers authority (JPA) whose members are numerous public entities in the State, to request financing for the Project. For context, the City Council approved bond financing through the CMFA for three (3) affordable housing projects in 2025.
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 Property consists of two (2) parcels totaling approximately two (2) acres, Jefferson Avenue, Assessor’s Parcel Nos.: 909-030-032 and 909-030-033, that are zoned Multi-Family 4 (MF-4), requiring a minimum of 30 dwelling units per acre, should an applicant propose multi-family residential development.
The Borrower requested that the CMFA serve as the municipal issuer of the bonds in an aggregate principal amount not to exceed $20,000,000 of tax-exempt revenue bonds. The proceeds of the bonds will be used to finance or refinance the acquisition, construction, development, and equipping of the Project described above, as approved.
In order for all or a portion of the bonds to qualify as tax-exempt bonds, the City must conduct a public hearing (TEFRA Hearing) that provides members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for financing the Project. Prior to a TEFRA Hearing, reasonable notice must be provided to 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 by financing 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 in issuing taxable and tax-exempt bonds to improve 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 are to be paid solely from funds provided by the Borrower.
Project Analysis
The proposed Project, if fully funded and built, is an important, very 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 in recent years, the supply of affordable housing has not kept pace. Both HCD and 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 very low-income housing units constructed during the most recent housing cycle from 2013-2021. The proposed Project would be a big step in the new housing cycle to help meet the City’s RHNA for 2021-2029, especially as very low-income units are typically among the hardest to build of the affordable unit types.
In light of the foregoing, and to support affordable housing, staff recommends that the City conduct the TEFRA Hearing and adopt a resolution in favor of the issuance of the bonds by the CMFA.
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. The Guidelines for Implementation of the CEQA do not apply to the approval of this funding. The Development Plan for the Project has already been approved consistently 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 a 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 (the “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. Such grant may be used for any lawful purpose of the City.
ATTACHMENTS
ATT 1 - Resolution No. 26-4929
ATT 2 - Vicinity Map of Proposed Project Area