Fremont City Council Meeting: 06/09/26 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5733) DOC ID: 5733
Updated: 6/5/2026 11:16 AM by Alberto Quintanilla Page 1 Adopt A Resolution Approving Additional Funding For The Canvas Apartments Project – Approval of Additional Affordable Housing Funding for the Canvas Apartments Project and Making Findings of CEQA Exemption Contact Persons:
Name: Lucia Hughes Joel Pullen
Title: Housing Manager Community Development Director
Div/Dept: Housing Community Development
Phone: 510-494-4506 510-494-4436
E-Mail: [email protected] [email protected]
Executive Summary: Community Development Partners (CDP) currently manages the development of the Canvas Apartments project. On March 19, 2024, the City Council approved an affordable housing loan and appropriated a total of $10,000,000 for the project. The City entered into a $1,000,000 pre-development loan with CDP Site Fund LLC (Borrower), a CDP affiliate, with the expectation that once CDP could demonstrate readiness, the City and Borrower would enter into a $9,000,000 construction loan. The City recently received a request from CDP for $1,000,000 in additional funding and has confirmed the legitimate basis for the request. Staff recommends that the City Council authorize the City Manager to execute loan documents and appropriate an additional $1,000,000 for a total loan amount of $11,000,000 to the project. The additional funds will come from the Affordable Housing Development Fund 196.
Background: CDP is a privately owned affordable housing developer based in Newport Beach, California and Portland Oregon. Founded in 2011, CDP has developed over 4,800 units in five western states, including California, Oregon, Nevada, Arizona and Colorado. Canvas Apartments will be their first development in Fremont, CA.
Under the 2023 Notice of Funding Availability (NOFA), CDP proposed a 100% affordable multi-family housing development at 39340 Fremont Boulevard and requested $10,000,000 in City financial assistance for pre-development and construction. On March 19, 2024, the City Council approved an affordable housing loan and appropriated a total of $10,000,000 for the project. Subsequently, the City entered into a $1,000,000 pre-development loan with CDP Site Fund LLC (Borrower), a CDP affiliate, with the expectation that once CDP could demonstrate readiness, the City and Borrower would enter into a $9,000,000 construction loan.
Council Staff Report (ID # 5733) Meeting of June 9, 2026 Updated: 6/5/2026 11:16 AM by Alberto Quintanilla Page 2
Discussion/Analysis: The Canvas Apartments project will provide 91 new apartments for families and individuals, with one unrestricted manager’s unit (92 total). Located on Fremont Boulevard, adjacent to the Fremont Hub, the site has access to parks, shopping, schools, and other local and regional amenities. Studios, 1-, 2- and 3-bedroom units will be available in this development for people earning between 30% and 70% AMI.
The costs of the project total approximately $52 Million. A large part of the project cost is proposed to be financed through multi-family housing revenue bonds, with Low Income Housing Tax Credits as another principal funding source. Construction financing will also include the following funding sources: City of Fremont, State Department of Developmental Services, Developer’s Contribution, hard debt, and Equity.
The project received Tax Credit and Bond commitments in December 2025, which stipulated a construction start date in June 2026. However, the project is facing a financing gap estimated at $2,100,000. The shortfall is primarily due to the significant shifts in the affordable housing financial markets: lower tax credit equity pricing, higher interest rates and increased reliance on debt financing. Furthermore, CDP proposed several financing sources in the NOFA proposal that were not available after changes in regulations, such as eliminated solar tax credits, HUD funded project-based vouchers and California Infill Infrastructure Grants. CDP worked closely with their financing partners to further reduce the funding gap through several measures, including contributing developer-funded General Partner equity during construction, using income received prior to permanent conversion as an anticipated source, pursuing increased tax credit pricing, and value engineering to reduce costs. Through these efforts, CDP was able to limit the additional funding request to the City to $1,000,000. The $1,000,000 loan increase will support the long-term financial feasibility of the project.
In May, CDP formally submitted a request for additional funding to the City.
This submission included a revised financial proposal, detailed Uses and Sources of funds, and other supporting documents as part of their request for additional funding. The documents were carefully reviewed and analyzed by the City’s financial consultant, Mosaic Urban Development, a firm that specializes in affordable housing finance. The consultant has determined that the project is facing a funding gap and considered that the additional loan of $1,000,000 was reasonable.
Council Staff Report (ID # 5733) Meeting of June 9, 2026 Updated: 6/5/2026 11:16 AM by Alberto Quintanilla Page 3 Staff recommends the City Council approve additional funding in the amount of $1,000,000 for the Canvas Apartments affordable housing development.
There is sufficient funding available in the Affordable Housing Fund (Fund 196) for this action. It would bring the City’s total contribution to $11,000,000. This equates to a local subsidy of $119,565 per unit. The per unit subsidy amount is considered to be at the lower end of the range when compared to similar affordable housing developments in the Bay Area. To reduce the risk of cost overruns within the City’s control, staff will undertake rigorous oversight measures throughout the project’s duration. These measures include participation in construction-related calls, ongoing review of the project’s financials, and consistent monitoring of progress. This approach is designed to safeguard the City’s investment and support the successful completion of the Canvas Apartments affordable housing development.
Fiscal Impact: There are sufficient funds available for this appropriation in the Affordable Housing In-Lieu Fee Fund (Fund 196).
Environmental Review: The Canvas Apartments affordable housing development project satisfied all the eligibility requirements to qualify for processing under Government Code section 65583.2(c), commonly known as Assembly Bill (AB) 1397. Accordingly, pursuant to AB 1397, the project was subject to ministerial review and then approved on December 4th, 2025. 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. The proposed additional funding for the project and loan agreement are exempt from CEQA as it does not constitute a project within the meaning of CEQA, without limitations, in accordance with CEQA Guidelines Section 15378(b)(2), (4) and/or (5) and/or 15061(b)(3), each as a separate and independent basis.
ATTACHMENTS:
• Draft Resolution-CDP Additional Funding Final
Recommendation:
1. Adopt a Resolution authorizing the City Manager or her designee to amend the existing loan documents to add $1,000,000 in funding to the project, and take such other actions as required to increase the total loan amount to $11,000,000 to Community Development Partners, and making findings of CEQA exemption; and,
Council Staff Report (ID # 5733) Meeting of June 9, 2026 Updated: 6/5/2026 11:16 AM by Alberto Quintanilla Page 4
2. Appropriate $1,000,000 from Fund 196 (Affordable Housing Development Fund) for the Canvas Apartments project.