18100 Von Karman Ave Suite 870 | Irvine, CA 92612
600 Bushel Rd, Mission Viejo, CA 92694
Travis Hickey, CPA August 31, 2026
Chief Financial Officer
City of Menifee
29844 Haun Road
Menifee, CA 92586
Re: Request for Waiver of 20% Facilities CFD Premium
Dear Travis,
FB Cypress Sands LLC (“ Developer”) recently submitted an application to the City of Menifee (“City”) requesting formation of a Community Facilities District (“CFD”) for Cypress Sands (the “Project”) to finance eligible City development fees and improvements . As part of the City’s review of the CFD application, we request that the City consider waiving the 20% premium applicable to the City development fees proposed to be financed through the CFD.
According to a recent policy update, if the Developer elects to utilize the City’s Facilities CFD, the Project would be required to annex into the Public Safety CFD in addition to paying the 20% premium. During the policy update meeting, it was also discussed that, to reduce the financial burden on projects, the City would consider reducing or waiving the 20% premium on a case-by- case basis.
Per the Conditions of Approval (“COA”), the Project is not required to annex into the City’s Public Safety CFD. The Developer is willing to comply with the Public Safety CFD annexation requirement. However, the combined impact of 20% premium and Public Safety CFD annexation requirements reduces the overall benefit of utilizing the City’s Facilities CFD.
The project has limited CFD financing capacity within its targeted overall property tax rate. In addition, by providing affordable housing, the project is advancing the City of Menifee’s affordable housing goals while effectively financing those units through a reduction in the project’s residual land value. Imposing the 20% premium would consume a portion of the project’s limited CFD capacit y without increasing the amount available for financing actual project costs.
Considering the project’s affordable housing contribution and its Public Safety CFD obligation, we respectfully request that the City waive the 20% premium.
If the waiver request cannot be considered, we ask that the City consider allowing the HOA to maintain the public right-of-way items that would otherwise be maintained through the Citywide CFD. This would allow the Project to utilize that CFD capacity toward financing eligible development fees and improvement.
For context, the 20% premium would generate approximately $379,000 in one-time revenue to the City. In comparison, the Public Safety CFD is expected to generate approximately $66,000 annually, or about $1,320,000 over 20 years. If the Project does not use the City’s Facilities CFD, the City will lose this ongoing Public Safety CFD revenue.
The Developer’s preference is to proceed with the City’s Facilities CFD. However, if neither the 20% premium waiver nor the alternative HOA maintenance approach can be accommodated, the Developer may need to evaluate other available financing options to determine the most beneficial financing structure for the Project.
We appreciate the City’s consideration of this request.
Sincerely,
James Walters
Fairbrook Communities LLC
CC: Chris Cole, Manju Pokharel and Russell Sager (DPFG) Shane Spicer (Spicer Consulting Group)