Fremont City Council Meeting: 09/09/25 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5517) DOC ID: 5517
Updated: 9/4/2025 11:23 AM by Dina Lewis Page 1
BOND REISSUANCE FOR PACIFIC WEST COMMUNITIES, INC. - Public Hearing (Published Notice) in Accordance with the Tax Equity and Fiscal Responsibility Act (TEFRA) to Consider and Approve the Reissuance of Tax-Exempt Bonds by California Municipal Finance Authority (CMFA) for Fremont Pacific Associates, LP. (Osgood Apartments)
Contact Persons:
Name: Lauren Chu David Persselin
Title: Management Analyst Finance Director
Div/Dept: Finance Department Finance Department
Phone: (510) 494-4635 510-494-4631
E-Mail: [email protected] [email protected]
Executive Summary: The California Municipal Finance Authority (CMFA), a joint exercise of powers authority of which the City is a member, has been asked by Pacific West Communities, Inc. to serve as the conduit issuer of tax-exempt bonds for the Osgood Apartments affordable housing project (the “Project”) in the City of Fremont (City). The City previously conducted a public hearing (referred to as a “TEFRA hearing”) on November 16, 2021 for the project and a resolution was adopted to approve the issuance of Multifamily Housing Revenue Bonds by the CFMA for the purpose of financing an affordable housing project in the City to be developed by Fremont Pacific Associates, LP, a limited partnership company (the “Borrower”).
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) mandates a public accountability procedure involving the legislative body of a local agency in which a proposed project (to be funded with tax-exempt bonds) is located. The TEFRA hearing is intended to provide members of the community an opportunity to speak on behalf of or against the proposed project. Once the TEFRA hearing has been conducted, the City Council is then asked to adopt a resolution approving the issuance of tax-exempt bonds for the project.
The project has completed construction and there has been no change in the affordability breakdown since the first TEFRA hearing. The Borrower is extending the original conversion date to permanent financing that changes the weighted average maturity of the bonds, which triggers a technical reissuance of the bonds requiring an additional TEFRA hearing.
The bonds will be reissued as limited obligations of CMFA, and the City will have no liability with respect to the bonds or any role to play in the bond reissuance other than the TEFRA hearing.
Staff recommends that the City Council conduct a public hearing in accordance with the Tax Equity and Fiscal Responsibility Act and adopt a resolution approving the reissuance of tax-exempt bonds for the Project.
BACKGROUND: Pacific West Communities, Inc. has asked CMFA to serve as the conduit issuer of the bonds for the Project in the City. CMFA may not approve the bond financing Council Staff Report (ID # 5517) Meeting of September 9, 2025 Updated: 9/4/2025 11:23 AM by Dina Lewis Page 2
unless and until the City Council approves the bond reissuance after conducting a TEFRA hearing.
The City previously held a TEFRA hearing on November 16, 2021 for the project. The Borrower is extending the original conversion date to permanent financing which changes the weighted average maturity of the bonds. This triggers a technical reissuance of the bonds which requires an additional TEFRA hearing.
DISCUSSION/ANALYSIS: Pacific West Communities, Inc. was formed as a real estate development and financing firm, specializing in the construction and rehabilitation of affordable workforce housing throughout the western United States. With a particular emphasis on the use of the affordable housing tax credit, Pacific West Communities and its related companies develop multi-family and senior citizen housing in the states of California, Alaska, Arizona, New Mexico, Utah, Oregon, Montana, Idaho, Nevada, Colorado, Washington, and Wyoming. Currently Pacific West Communities owns and operates over 300 developments with over 25,000 units of affordable housing.
The Project, Osgood Apartments, is a 112-unit family, new construction rental located at 41829 and 41875 Osgood Road in Fremont. The Project has recently finished construction.
The Osgood Apartments were developed by Fremont Pacific Associates, a California Limited Partnership, consisting of Pacific West Communities, Inc. and a tax credit investor.
Occupancy began in June of 2025. With a mix of 50 studio units, 32 two-bedroom units, and 30 three-bedroom units, the Osgood Apartments have already started to provide affordable housing for families residing in the City.
The units are newly constructed apartments in two four-story residential buildings. The type of construction is wood frame supported by perimeter foundations with concrete slab flooring. There are three residential stories built over one level of concrete podium parking.
Residents can enjoy amenities such as a community center, exercise room, and an outdoor children’s playground. An on-site resident manager provides assistance and management while residing in a two-bedroom manager’s unit. Within the units, residents enjoy standard features including refrigerators, exhaust fans, disposals, and ranges with ovens.
Affordability: As detailed below, all rents will be reduced to an affordable level for very low and low-income households. There has been no change in the affordability breakdown since the first TEFRA hearing.
Percent of Restricted Rental Units in the Project: 100%
11% (12 Units) restricted to 30% or less of area median income households; and 11% (12 Units) restricted to 50% or less of area median income households; and 57% (64 Units) restricted to 60% or less of area median income households; and 21% (23 Units) restricted to 80% or less of area median income households. 1 manager’s unit
Unit Mix: Studio, 2 and 3-bedroom units
Term of Restriction: 55 years
TEFRA Hearing: The TEFRA mandates a public accountability procedure involving the legislative body of a local agency in which a proposed project (to be funded with tax-exempt bonds) is located. The TEFRA hearing is intended to provide members of the community an Council Staff Report (ID # 5517) Meeting of September 9, 2025 Updated: 9/4/2025 11:23 AM by Dina Lewis Page 3
opportunity to speak on behalf of or against the proposed project. Notice of the public hearing must be published in a newspaper of general circulation at least seven days prior to the date on which it is scheduled. To comply with federal tax laws, as well as with CMFA policy, once the TEFRA hearing has been conducted, the City Council is asked to adopt a resolution approving the reissuance of tax-exempt bonds for the Project.
Project Financing: The total development costs of the Project were $88.9 million. $33 million of the project costs were financed through multi-family housing revenue bonds issued by CMFA, with Low Income Housing Tax Credits as the other principal funding source.
Other funds came from the General Partner and Equity. An updated summary of the estimated sources and uses of funds for the project is presented in the following table.
Estimated Sources of Funds Estimated Uses of Funds
LIH Tax Credit Equity $40,367,074 New Construction $53,007,320 Tax-Exempt Bond Proceeds
25,000,000
Const. Interest, Perm.
Financing
10,724,650
Recycled Tax-Exempt Bond
Proceeds
8,000,000 Land Acquisition 8,234,243
Deferred Developer Fee 7,975,000 Developer Fee 8,000,000 City of Fremont- Affordable
Housing Loan
6,000,000 Local Development
Impact Fee
4,881,772
General Partner Loan 1,602,312 Architectural & Engineering 1,681,502 Soft Cost, Interest, etc. 1,572,311
Reserves 524,807
Legal & Professional
317,781
Total Sources $88,944,386 Total Uses $88,944,386
FISCAL IMPACT: The bonds will be issued as limited obligations of CMFA, payable solely from revenues and receipts derived from a loan to be made by CMFA to Fremont Pacific Associates, LP, with the bond proceeds. The City bears no liability with respect to the reissuance of the bonds. Further, the City is not a party to any of the financing documents related to the bond reissuance and is not named in any of the disclosure documents describing the bonds or the proposed financing.
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 reissuance activities, the CMFA shares a portion of the reissuance fees it receives with its member communities and donates a portion of these reissuance fees to the Foundation for the support of local charities. With respect to the City of Fremont, it is expected that a portion of the reissuance fee 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.
ENVIRONMENTAL REVIEW: Not applicable.
ATTACHMENTS:
• Draft Resolution - Osgood TEFRA
Council Staff Report (ID # 5517) Meeting of September 9, 2025 Updated: 9/4/2025 11:23 AM by Dina Lewis Page 4
RECOMMENDATIONS:
1. Hold a public hearing in accordance with the TEFRA;
2. Adopt a Resolution Approving the Reissuance of Multifamily Housing Revenue Bonds by the California Municipal Finance Authority for the purpose of financing an affordable housing project in the City of Fremont to be developed by Fremont Pacific Associates, LP.