Fremont City Council Meeting: 09/01/26 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5622) DOC ID: 5622
Updated: 8/27/2026 11:02 AM by Alberto Quintanilla Page 1 Bond Issuance For Pacific West Communities, Inc. - 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 Fremont Warm Springs Pacific Associates, LP. (Warm Springs 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 Pacific West Communities, Inc. to serve as the conduit issuer of tax-exempt bonds for the Warm Springs 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 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 then 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 recommend 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 # 5622) Meeting of September 1, 2026 Updated: 8/27/2026 11:02 AM by Alberto Quintanilla Page 2 Background: CMFA has been asked by Pacific West Communities, Inc. (the “Borrower”) to serve as the conduit issuer of tax-exempt bonds in an aggregate principal amount not to exceed $70,000,000 (together with a like amount of refunding bonds) (the “Bonds”) for the Project in the City of Fremont. CMFA may not issue the bond financing unless and until the City Council approves the bond issuance by the CMFA after conducting a TEFRA hearing. The proceeds of the Bonds will be used to finance and refinance the acquisition, construction, development and equipping of the affordable rental project to be owned and operated by the Borrower.
Discussion/Analysis: Pacific West Communities, Inc. (“PWC”) 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 credits, PWC and its related companies develop multi- family and senior citizen housing in the states of California, Arizona, New Mexico, Utah, Oregon, Montana, Idaho, Nevada, Colorado, Washington, and Wyoming. Currently PWC owns and operates approximately 110 developments with over 6,000 units of affordable housing.
The proposed project, Warm Springs Apartments (located at 45021 Warm Springs Boulevard, in Fremont), is a 241-unit (including two on-site manager’s units) multi-family rental project. With a mix of 114 1-Bedroom, 64 2-Bedroom, and 63 3-Bedroom apartments, the proposed project will provide affordable housing for families residing in Alameda County.
The units will be newly constructed apartments in one six-story building, with parking at grade- and podium-level with five-stories of apartments.
Residents will enjoy amenities such as open courtyards on the second level, with community spaces and a fitness center. Two resident property managers will provide tenant assistance and management services. Within the units, residents will enjoy standard features including refrigerators, fans, dishwashers, and ranges. The design of the apartments will adhere to all necessary requirements and standards Fremont deems appropriate.
Affordability: As detailed below, all rents will be reduced to an affordable level for extremely 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.
Council Staff Report (ID # 5622) Meeting of September 1, 2026 Updated: 8/27/2026 11:02 AM by Alberto Quintanilla Page 3 • 23% (56 Units) restricted to households earning 30% or less of Area Median Income (AMI)
• 3% (6 Units) restricted to households earning 50% or less of AMI • 3% (6 Units) restricted to households earning 60% or less of AMI • 71% (171 Units) restricted to households earning 70% or less of AMI • 2 on-site manager’s units
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 are estimated to total approximately $175 Million. A large part of the project costs 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 Million from the Affordable Housing Development Fund (Fund 196). Other sources of funding include General Partner and Developer 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 B Bonds: $20,000,000 New Construction: $107,005,930 Taxable Bond Proceeds: $55,794,595 Arch & Eng: $2,250,000 Tax-Exempt A Bonds: $45,000,000 Construction Contingency: $5,400,000 City of Fremont: $12,000,000 Financing Costs & Interest: $13,274,689 Deferred Developer Fee: $20,893,998 Other Soft Costs: $13,246,573 Deferred Contractor Fee: $7,782,249 Developer Fees: $21,143,998 Deferred Costs: $2,068,208 Soft Costs Contingency: $800,000 LIH Tax Credit Equity: $10,872,848 Post-Const Int & Reserves: $2,068,208 Subordinate Loan Int.: $900,000 Total Land Cost: $10,122,500
Total Sources: $175,311,898 Total Uses: $175,311,898 Council Staff Report (ID # 5622) Meeting of September 1, 2026 Updated: 8/27/2026 11:02 AM by Alberto Quintanilla Page 4
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: The Warm Springs Apartments affordable housing development project, approved by the Zoning Administrator on August 19, 2025, was found to be exempt from the California Environmental Quality Act (CEQA) pursuant to, without limitation, CEQA Guidelines Sections 15183, as the project is consistent with the land use envisioned for the site as established by the General Plan for which an Environmental Impact Report (SCH#2010082060) was previously prepared and certified, and pursuant to CEQA Guidelines Sections 15162 and 15163, as none of the circumstances requiring preparation of a subsequent or supplemental EIR have occurred.
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:
• TEFRA Resolution-Warm Springs
Recommendation:
Council Staff Report (ID # 5622) Meeting of September 1, 2026 Updated: 8/27/2026 11:02 AM by Alberto Quintanilla Page 5
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 Fremont Warm Springs Pacific Associates LP.