CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 9 Section Name: CONSENT CALENDAR Account Number: 10-3159 File ID: 26-11583 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Community Development Department
MEETING DATE: October 5, 2026
SUBJECT:
Child Care Facility Fund Program Loan Documents – Revision and Amendment RECOMMENDATION:
Approve a Loan Agreement Amendment, Deed of Trust, and Promissory Note with Mighty Tiger Preschool, LLC to change the real property loan collateral for the Child Care Facilities Fund loan in the remaining amount of $344,000; and authorize City Manager to execute the Loan Agreement Amendment, Deed of Trust, and Promissory Note in substantially the form presented.
BACKGROUND:
The Child Care Facilities Fund was originally established in 2004 with the Child Care Development Fee to address the critical need for more childcare spaces in the City. There has been a longtime need for greater amount of information and assistance for potential childcare providers who are interested in starting or expanding their businesses. For those interested in obtaining financial assistance, the City has a variety of methods. To date, the primary method has been secured loans. The funds are legally restricted to capital expenditures for child care uses related to construction and elements that are fixed in the property. These loans are available to childcare providers and/or developers to specifically develop, expand, or otherwise enhance childcare facilities resulting in new licensed child care spaces. The benefits to the loan option are that the terms include zero percent interest, deferred/no payments, and a loan forgiveness schedule based on the amount of money borrowed. The loan forgiveness is contingent upon consistently meeting the annual performance requirements.
On December 4, 2023, the City Council approved a Child Care Facility Fund loan of $430,000 to Geoffrey Choy and Ruth H.
Choy (Owners) for tenant improvements at 2575 Flores Street, Suite 1, to establish a new child care facility, Mighty Tiger Preschool, LLC, resulting in 48 new licensed childcare spaces. Since then, the Owners have operated the Mighty Tiger Preschool, LLC, successfully and have qualified twice for the annual ten percent (10%) loan forgiveness of $43,000 for the years of 2024 and 2025. The annual ten percent (10%) loan forgiveness, as established in the City’s loan program, is contingent on the submission of an annual report demonstrating implementation of program requirements for the past year. This annual report includes a narrative summarizing enrollment details to demonstrate that the business is operating per their approved scope and narratives summarizing the business’s annual efforts, highlights, challenges and professional development for staff that support quality and continuous improvement. A total of $86,000 has been forgiven from their original loan, and $344,000 remains outstanding.
Earlier this year, due to the pending sale of the Owners’ property that was originally used as collateral for securing the loan, the Owners submitted a request to change the collateral property securing the remaining loan funds. The original property securing the loan, located at 115 Agustin Narvaez St #4, San Jose, CA 95136, was sold in April 2026. Due to delays with the Owners’ purchase of the new property, the remaining unforgiven $344,000 loan funds were issued back to the City to hold in an escrow account until the new property that would serve as collateral came under full legal ownership of
CITY OF SAN MATEO
the Owners. The proposed collateral property is located at 400 El Camino Real #210, Belmont, CA 94002, and it meets the minimum valuation requirements to secure the outstanding loan. This requested change has been reviewed by staff, meets all applicable requirements, and does not change the monetary terms under which the original loan was granted in 2023. The current change only relates to the collateral property. If the Owners continue to successfully operate the preschool and qualify for the annual forgiveness at the regular rate of ten percent (10%) there will be an annual forgiveness of $43,000 based on the original loan amount of $430,000.
BUDGET IMPACT:
This is an existing loan from the Child Care Facilities Fund which was approved in 2023 and this change to the loan collateral does not have any impact to the Child Care Facilities Fund or the General Fund.
ENVIRONMENTAL DETERMINATION:
This loan collateral change is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment. (Public Resources Code Section 21065.) STRATEGIC PLAN ALIGNMENT:
Administration of the Child Care Facility Fund Program supports the Land Use and Economic Development initiatives.
NOTICE PROVIDED:
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Loan Agreement Amendment
Att 2 – Deed of Trust
Att 3 – Promissory Note
STAFF CONTACT
Jennifer Rosas, Business Manager
[email protected]
(650) 522-7164