Fremont City Council Meeting: 05/05/26 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5625) DOC ID: 5625
Updated: 5/1/2026 12:40 PM by Dina Lewis Page 1
Bond Issuance for Resources for Community Development - 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 Thornton Affordable Housing, LP. (Thornton and Post Apartments) and Making Findings of CEQA Exemption 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 Resources for Community Development to serve as the conduit issuer of tax-exempt bonds for the Thornton & Post 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 federal 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 a public inquiry required by the Internal Revenue Service 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.
Council Staff Report (ID # 5625) Meeting of May 5, 2026 Updated: 5/1/2026 12:40 PM by Dina Lewis Page 2
Background: CMFA has been asked by Thornton Affordable Housing, L.P. (the “Borrower”) to serve as the conduit issuer of tax-exempt revenue bonds in an aggregate principal amount not to exceed $40,000,000 (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 116-unit affordable rental project to be owned and operated by the Borrower and located at 37027 Post Street (formerly 3900 Thornton Avenue), Fremont, CA.
Discussion/Analysis: Resources for Community Development (“RCD”) is a nonprofit affordable housing developer based in Alameda County. For the past 40 years, RCD has provided high-quality housing for low-income people in over 26 cities in the Bay Area, Northern California. Their model integrates housing with social services and addresses affordability by focusing on people whose income is between 20% and 60% of Area Median Income (AMI).
The project is a proposed redevelopment of an under-utilized site into 116 new affordable apartments for families and individuals, including one unrestricted manager’s unit. Located near the Fremont-Centerville ACE/Amtrak station and AC Transit bus lines, this development will provide residents with access to a variety of local and regional amenities. The development is also located near parks, schools, and other community amenities. Studios, 1-, 2- and 3-bedroom units will be available in this development for people earning between 20% and 60% AMI. Ten units will be subsidized by HUD Section 811 and set aside for very low-income and extremely low-income adults with disabilities, ages 18-61. On-site amenities will include a large second-level courtyard space, community room, and secure bicycle parking. Resident services and case management will be provided directly on-site to residents on a voluntary basis, free of charge.
The building features up to 102 parking spaces. The corner of the ground level will include a 1,398 square-foot commercial space.
Affordability: As detailed below, all rents will be restricted to an affordable level for extremely low- and very low-income residents. The project is 100% affordable, with a mix of studios, 1-, 2- and 3-bedroom apartments, and restricted rents for a 55-year term.
• 9% (10 Units) restricted to households earning 20% or less of AMI • 32% (37 Units) restricted to households earning 30% or less of AMI Council Staff Report (ID # 5625) Meeting of May 5, 2026 Updated: 5/1/2026 12:40 PM by Dina Lewis Page 3
• 24% (28 Units) restricted to households earning 50% or less of AMI • 34% (40 Units) restricted to households earning 60% 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 $99 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 November 2, 2021, the City Council awarded affordable housing funding and appropriated $7,600,000 in acquisition and pre-development funding to the project. On April 21, 2026, the City Council appropriated an additional $11,176,908 to the project for a total loan amount up to $18,776,908. Other funds will be from the Housing Trust Silicon Valley, Alameda County, Affordable Housing and Sustainable Communities, the Department of Toxic Substances Control, California Public Utilities Commission, General Partner, and Equity. A summary of the estimated sources and uses of funds for the project is presented in the following table.
A summary of the estimated sources and uses of funds for the project is presented below.
Sources of Funds: Uses of Funds:
Tax-Exempt Bond Proceeds:
$25,973,453
Land Acquisition: $6,600,000
Taxable Bond Proceeds: $41,266,874 New Construction: $65,125,136 Apple Construction Loan: $4,000,000 Architecture & Engineering:
$3,402,172
City of Fremont: $18,776,908 Legal & Professional: $193,029 AHSC Grant (GP Equity): $3,711,802 Construction Financing: $7,315,134 DTSC ECRG (GP Equity): $575,000 Insurance & Taxes: $1,063,346 CPUC (GP Equity): $72,960 Permits & Impact Fees: $5,229,338 Council Staff Report (ID # 5625) Meeting of May 5, 2026 Updated: 5/1/2026 12:40 PM by Dina Lewis Page 4
Sources of Funds: Uses of Funds:
Alameda County HOME: $642,761 Developer Fee: $5,000,000 LIH Tax Credit Equity: $3,752,317 Costs of Issuance: $76,136
Contingency: $4,767,783
Total Sources: $98,772,075 Total Uses: $98,772,075
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, 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 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: The Thornton & Post Apartments affordable housing development project satisfied all the eligibility requirements to qualify for processing under Government Code Section 65913.4, commonly known as Senate Bill (SB) 35. Accordingly, pursuant to SB 35, the project was subject to ministerial review and then approved on
September 22, 2022. The project was found to be exempt from the California Environmental Quality Act (CEQA) pursuant to, without limitation, CEQA Guidelines Sections 15268 and 15369 (ministerial project) and was classified as "not a project" under CEQA. 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), as the proposed activity to adopt a resolution to approve the issuance of bonds is covered by the commonsense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment.
Council Staff Report (ID # 5625) Meeting of May 5, 2026 Updated: 5/1/2026 12:40 PM by Dina Lewis Page 5
ATTACHMENTS:
• TEFRA Resolution-Thornton
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 project in the City of Fremont to be developed by Thornton Affordable Housing, L.P. and making findings of CEQA exemption