CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: APRIL 7, 2026
FROM: HOUSING & COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: A RESOLUTION OF THE ANAHEIM CITY COUNCIL
AUTHORIZING CONDUIT FINANCING THROUGH ISSUANCE
OF HOUSING REVENUE BONDS BY THE CALIFORNIA
MUNICIPAL FINANCE AUTHORITY FOR
HERMOSA VILLAGE PHASE III PROJECT
ATTACHMENT (Y/N): YES ITEM # 15
GOVERNMENT CODE § 84308 APPLIES: NO
RECOMMENDATION:
That the City Council, following a public hearing, by Resolution, pursuant to Section 147(f) of the Internal Revenue Code of 1986, approve the issuance of certain tax-exempt bonds by the California Municipal Finance Authority for the Hermosa Village Phase III Apartments.
DISCUSSION:
On June 15, 1999, the Anaheim Housing Authority (Authority) approved the Jeffrey- Lynne Neighborhood Revitalization Plan (Plan) to guide the redevelopment of the Jeffrey-Lynne Neighborhood located at 1515 S. Calle Del Mar. The neighborhood had been identified as a revitalization priority under earlier City initiatives due to significant overcrowding, persistent code violations, deferred maintenance, deteriorating building conditions, and gang-related activity.
To implement the Plan, the Authority entered into a series of phased affordable housing agreements with Related Companies of California (Developer) for the acquisition, ground leasing, and substantial rehabilitation of properties within the neighborhood.
Through these efforts, the area was redeveloped as Hermosa Village Apartments. The Hermosa Village development consists of Phases I, II, III, and IV and includes a total of 521 affordable housing units.
On December 20, 2016, and October 6, 2020, the Authority approved the issuance of bonds to support the acquisition and rehabilitation of Hermosa Village Apartments Phases I and II, respectively. The rehabilitation of these phases—comprising a total of 409 units—also extended the affordability term for an additional 55 years and has since been completed.
Resolution Authorizing Bond Issuance Approval of certain tax-exempt bonds by the California Municipal Finance Authority (CMFA) for the Hermosa Village Apartments Phase III Project Apil 7, 2026
Building on the earlier phases of redevelopment at Hermosa Village, additional reinvestment is now necessary to preserve the long-term affordability and physical condition of the remaining properties.
On August 12, 2025, the Anaheim Housing Authority (Authority) approved and issued to the Developer a Preliminary Award Letter (Award Letter) for the proposed resyndication and substantial rehabilitation of the Hermosa Village Phase III and Phase IV Apartments, which together include 112 affordable units and are collectively referred to herein as the Hermosa Village Phase III Apartments. These properties were developed as part of the original neighborhood revitalization effort and, after many years of operation, now require significant reinvestment to address aging building systems, complete needed capital improvements, and extend the long-term affordability of the units.
Resyndication through the Low-Income Housing Tax Credit program allows the Developer to secure new equity and financing to fund these improvements while preserving the units as affordable housing for decades to come.
Following issuance of the Award Letter, the Developer requested a First Amendment to allow the replacement of the Authority with the California Municipal Finance Authority (CMFA) as the bond issuer in order to apply for CMFA’s Recycled Bond Program.
CMFA is a Joint Powers Authority authorized to issue taxable and tax-exempt bonds to support public and private development projects. In consideration of this request, the Developer agreed that the Authority would continue to receive a monitoring fee equal to one-eighth of one percent (0.125%) of the bond amount at issuance and annually thereafter, consistent with the fee the Authority would typically receive if serving as the bond issuer.
The use of the Recycled Bonds allowed the Developer to score sufficient points in their application for 4% Tax Credits from the California Tax Credit Allocation Committee (CTCAC), which could not have been achieved with the Authority serving as the issuer because the Authority does not issue recycled bonds. Recycled bonds preserve and reallocate prior year(s) tax-exempt bond authority that would expire if not used for construction and/or rehabilitation financing for eligible projects such as affordable multifamily rental housing for individuals, families, seniors, veterans or special-needs tenants.
On December 10, 2025, the Developer was awarded a 4% Tax Credit and bond allocation from CTCAC and the California Debt Limit Allocation Committee (CDLAC), respectively. Based on the terms and conditions of the Award Letter, as amended, Developer intends to extend the Authority Ground Lease and substantially rehabilitate, own and operate the 112-unit apartment community as income- and rent-restricted affordable housing occupied by extremely low, very low, and low income tenant households for an affordability period of not less than 55 years. Proceeds from the refinancing will be used to fund substantial rehabilitation efforts aimed at improving aging units including interior and exterior improvements. Funds will also enhance operations and supportive services, and ensure the long-term maintenance and management of the Project. The scope of work includes renovating 112 units and improving ADA accessibility, with 10% of the units upgraded to include mobility Resolution Authorizing Bond Issuance Approval of certain tax-exempt bonds by the California Municipal Finance Authority (CMFA) for the Hermosa Village Apartments Phase III Project Apil 7, 2026
features and 4% enhanced with hearing and vision accommodations. The interior improvements include kitchen and bathroom improvements such as new cabinets and countertops, new energy efficient appliances and lighting, and new flooring throughout the unit. Additionally, the Developer will be upgrading outdoor community spaces by installing outdoor fitness equipment or similar amenities, along with nearby seating and improved lighting. The exterior will also be refreshed with new paint, updated landscaping and irrigation improvements, new signage, termite treatment, and enhanced site security. Staff visited the housing site in February 2025 to assess the current conditions of the property, evaluate the visible wear and tear, and identify needed improvements. Based on this assessment, staff agreed that rehabilitation of the property was necessary to address wear and tear and ensure the long-term safety and habitability of the units. Tenants of the Project will be provided relocation benefits during construction for temporary relocation including hotel accommodations or a stipend should they choose to stay with family. The tenants are expected to be out of their units approximately ten (10) to sixty (60) days, depending on the scope of work being completed. Relocation will occur in phases, with one (1) building vacated per phase.
Tenants have been notified of the upcoming relocation, and ongoing communication will be maintained with residents throughout the process. All relocation costs, including moving expenses, will be covered through the project’s financing. The City and Developer conducted two separate in-person community meetings on February 10, 2026 to provide residents with detailed information regarding the project timeline and relocation process. Both meetings were well attended, and translation services were provided throughout the meeting.
The proposed Bond financing will be between the Developer and CMFA. If this resolution is approved after conducting the public hearing, CMFA will serve as the issuer of the Bonds for the Project financing in an amount not to exceed $25,000,000.
The proceeds of the Bonds will be used to finance the acquisition, rehabilitation, improvement, and equipping of the Project. This action by the City Council authorizes CMFA to provide bond financing for the project, as required by State and Federal Law.
The proposed action fulfills federal tax law requirements under the Tax Equity and Fiscal Responsibility Act (TEFRA). A public hearing notice was published in the Anaheim Bulletin on March 26, 2026. In order to move the project forward and complete the CDLAC application process, staff is requesting approval of the Resolution in accordance with Section 147(f) of the Internal Revenue Code. The proposed bond issuance is a not to exceed amount of $25,000,000. The bonds are to be repaid from project revenues; accordingly, there is no risk of default to the City or Housing Authority.
IMPACT ON BUDGET:
There is no budgetary impact. The bonds are to be repaid from project revenues.
Resolution Authorizing Bond Issuance Approval of certain tax-exempt bonds by the California Municipal Finance Authority (CMFA) for the Hermosa Village Apartments Phase III Project Apil 7, 2026
Respectfully submitted,
Grace Ruiz-Stepter
Director of Housing and Community Development
Attachment:
1. Resolution