Fremont City Council Meeting: 04/07/26 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5623) DOC ID: 5623
Updated: 4/2/2026 2:40 PM by Dina Lewis Page 1
BOND ISSUANCE FOR CENTERVILLE HOLDING 731, L.P. - Public Hearing (Published Notice) in Accordance with the Tax Equity and Fiscal Responsibility Act (TEFRA) to Consider the issuance of Tax-Exempt Bonds by California Municipal Finance Authority (CMFA) for Centerville Holding 731, L.P. (Centerville Plaza Apartments)
Contact Persons:
Name: Lucia Hughes David Persselin
Title: Housing Manager Finance Director
Div/Dept: Housing Finance Department
Phone: 510-494-4506 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 of Fremont is a member, has been asked by USA Properties Fund, Inc. to serve as the conduit issuer of tax -exempt bonds for the Centerville Plaza Apartments affordable housing project (the “Project”) in the City of Fremont. CMFA may not approve the bond financing unless and until the City Council approves the bond issuance after conducting a public hearing (referred to as a “TEFRA hearing”).
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 with an opportunity to speak on behalf of or against the proposed project. Once the TEFRA hearing has been conducted, the City Council is asked to adopt a resolution approving the issuance of tax-exempt bonds for the project.
The bonds will be issued 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 issuance 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 issuance of tax-exempt bonds for the Project.
BACKGROUND: CMFA has been asked by USA Properties Fund, Inc. (the “Borrower”) to serve as the conduit issuer of tax -exempt revenue bonds in an aggregate principal amount not-to-exceed $30,000,000 (together with a like amount of refunding bonds) (the “Bonds”) for the Project in the City of Fremont. CMFA may not approve the bond financing unless and until the City Council approves the bond issuance after conducting a TEFRA hearing. The proceeds of the Bonds will be used to finance and refinance the acquisition, construction, development and equipping of a 140 -unit affordable rental project to be owned and operated by the Borrower and located at 37358 Fremont Boulevard, Fremont, CA.
DISCUSSION/ANALYSIS: USA Properties Fund, Inc. (“USA”) is a privately -owned real estate development organization specializing in the creation of senior and family housing.
Council Staff Report (ID # 5623) Meeting of April 7, 2026 Updated: 4/2/2026 2:40 PM by Dina Lewis Page 2
Founded in 1981 and headquartered in Roseville, California, USA provides a full range of capabilities for community development, including financing, development, construction services, rehabilitation and property management. USA has developed over 19,000 units of family and senior apartments in over 90 communities throughout California (including Bay Area cities such as Newark, Union City, Santa Clara and San Jose), Oregon and Nevada.
Nearly all the communities developed by USA are public -private partnerships. This commitment to enrich and revitalize communities at a neighborhood level is enhanced by their expertise in obtaining bond and tax credit financing from local, state and federal sources. Centerville Plaza Apartments will be their first development in Fremont, CA.
Centerville Plaza Apartments is a new construction project to be located at 37358 Fremont Blvd., Fremont CA 94536. It consists of one five -story building with 140 residential units and community and common areas with approximately 1,618 square feet of retail space.
The project will offer apartments for people who earn 30%, 50%, 60%, 70% and 80% of the Area Median Income (AMI). Common area amenities include an exercise room, picnic area and resource room.
Affordability: As detailed below, all rents will be reduced to an affordable level for extremely low, very -low, and low -income residents. The project is 100% affordable, with a mix of 1-, 2- and 3-Bedroom apartments, and restricted rents for a 55-year term. • 10% (14 Units) restricted to households earning 30% or less of AMI • 20% (28 Units) restricted to households earning 50% or less of AMI • 25% (35 Units) restricted to households earning 60% or less of AMI • 39% (54 Units) restricted to households earning 70% or less of AMI • 6% (8 Units) restricted to households earning 80% or less of AMI • 1 on-site manager’s unit
TEFRA Hearing: 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 with an 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 is conducted, the City Council is asked to adopt a resolution approving the issuance of tax-exempt bonds for the project.
Project Financing: The costs of the project total approximately $83 Million. A large part of the project cost is proposed to be financed through multi -family housing revenue bonds issued by CMFA, with Low Income Housing Tax Credits as another principal funding source.
On March 19, 2024, the City Council approved a loan of $12,850,000 for property acquisition from a combination of the Affordable Housing Development Fund and the Low and Moderate Income Housing Asset Fund. Other funds will be from the General Partner, Developer, and Equity. A summary of the estimated sources and uses of funds for the project is presented in the following table.
Sources of Funds: Uses of Funds:
Tax-Exempt Bonds: $ 21,000,000 Land Acquisition: $ 13,900,000 LIH Tax Credit Equity: $ 29,191,986 New Construction: $ 41,067,594 Taxable Bonds: $ 9,815,000 Architecture & Engineering: $ 1,754,219 Council Staff Report (ID # 5623) Meeting of April 7, 2026 Updated: 4/2/2026 2:40 PM by Dina Lewis Page 3
Deferred Developer Fee: $ 6,875,000 Legal & Professional: $ 100,000 City of Fremont: $ 12,850,000 Permits & Impact Fees: $ 6,868,501 NOI During Construction: $ 2,186,436 Operating Reserve: $ 773,465 GP Investment: $ 1,200,916 Developer Fee: $ 8,321,745
Other Soft Costs: $ 10,037,686
Costs of Issuance: $ 296,129
Total Sources: $ 83,119,338 Total Uses: $ 83,119,338
FISCAL IMPACT : The Bonds to be issued by 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 Fremont, it is expected that a portion of the issuance fee attributable to the City will be granted by CMFA to the General Fund of the City. Such grant may be used for any lawful purpose of the City.
The Borrower will be the beneficiary of the CMFA’s charitable donation through a 25% reduction in issuance fees.
ENVIRONMENTAL REVIEW: In 2019, the prior project known as Silicon Sage Centerville Mixed-Use was approved with an associated certified Environmental Impact Report (EIR) (State Clearinghouse Number 2018072040). The City commissioned a CEQA analysis which found that, given the substantial evidence, the current project would not require subsequent analysis to the Prior EIR pursuant to CEQA Guidelines Section 15162. While the project has been revised since the Prior EIR, the assessment prepared for the prior project has determined that the addendum, in conjunction with the Prior EIR, serve to satisfy requirements under CEQA and no further documentation is required per CEQA Guidelines Sections 15162 and 15164 and none of the conditions described in CEQA Guideline Section 15162 requiring the preparation of a subsequent EIR or negative declaration have occurred. The Centerville Plaza project was entitled June 5, 2025. Additional environmental review under CEQA is not applicable pursuant to CEQA Guidelines Section 15061(b)(3) (Review for Exemption) and/or 15378(b)(2), (4) and/or (5), each as a separate and independent basis. The action is a governmental fiscal or administrative action which will have no potential to adversely affect the environment, directly or indirectly.
ATTACHMENTS:
• Draft Resolution- TEFRA Centerville
RECOMMENDATION:
1. Hold a public hearing in accordance with the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA); and,
2. Adopt a Resolution approving the issuance of Multifamily Housing Revenue Bonds by the California Municipal Finance Authority for the purpose of financing an affordable housing Council Staff Report (ID # 5623) Meeting of April 7, 2026 Updated: 4/2/2026 2:40 PM by Dina Lewis Page 4
project in the City of Fremont to be developed by USA Properties Fund, Inc. (the “Sponsor”) on behalf of a limited partnership of which the Sponsor or a related person to the Sponsor is the general partner (such limited partnership being referred to herein as the “Borrower”) and making findings of CEQA exemption.