Agenda Item: 1
CITY OF SANTA CLARITA
AGENDA REPORT
PUBLIC HEARINGS
CITY MANAGER APPROVAL:
DATE: June 23, 2026
SUBJECT: THE DIAMOND PARK APARTMENTS TAX EQUITY AND FISCAL
RESPONSIBILITY ACT (TEFRA) HEARING AND APPROVAL OF
AN AFFORDABLE HOUSING REGULATORY AGREEMENT
DEPARTMENT: Administrative Services
PRESENTER: Amber Rodriguez
RECOMMENDED ACTION
City Council:
1. Conduct a public hearing under the Tax Equity and Fiscal Responsibility Act and Internal Revenue Code section 147(f) on the proposed issuance of tax-exempt revenue bonds by the California Municipal Finance Authority for the Diamond Park Apartments project.
2. Adopt a resolution approving California Municipal Finance Authority’s issuance of tax-exempt obligations in an aggregate principal amount not to exceed 110 million dollars.
3. Authorize the City Manager to execute an Affordable Housing Regulatory Agreement with Maple Housing Foundation.
4. Authorize the City Manager or designee to execute all contracts and associated documents, subject to City Attorney review.
BACKGROUND
The California Municipal Finance Authority (CMFA) was created on January 1, 2004, pursuant to a Joint Exercise of Powers Agreement to promote economic, cultural, and community development through the financing of economic development and charitable activities by assisting local governments, non-profit organizations, and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. To date, over 350 municipalities, including the City of Santa Clarita (City), have become members of CMFA.
The City received a request from Maple Housing Foundation to conduct a public hearing under, and in accordance with, Section 147(f) of the Internal Revenue Code in order for CMFA to issue tax-exempt revenue bonds in an aggregate principal amount not to exceed $110 million on behalf of Maple Housing Foundation, or an affiliate thereof (the "Borrower"), which is an organization described in Section 501(c)(3) of the Internal Revenue Code.
The Borrower has requested that CMFA participate in the issuance of one or more series of revenue bonds in an aggregate principal amount not to exceed $110,000,000 (the "Bonds") to finance or refinance the acquisition, rehabilitation, improvement, and equipping of a multifamily rental housing project located at 27940 Solamint Road, Santa Clarita, California (the "Project").
The Project currently consists of 256 multifamily rental units and is subject to an existing Affordable Housing Regulatory Agreement (Agreement) with Los Angeles County entered into in February 1987 that remains in effect until January 1, 2036. Under the existing affordability restrictions, at least 20 percent of the Project's units are required to be occupied by low- or moderate-income households, with at least one-half of those restricted units reserved for very low-income households. This existing agreement results in 25 units at 50 percent. Average Median Income (AMI) and 26 units at 80 percent AMI that are restricted through January 1, 2036.
As a condition of this new financing, the Borrower must execute a new CMFA Bond Regulatory Agreement requiring the Project to increase its existing affordability restrictions from 25 units at 50 percent of Area Median Income (AMI) to 51 units at 50 percent AMI, and from 26 units at 80 percent AMI to 141 units at 80 percent AMI. In total, 192 units will be restricted under the CMFA Bond Regulatory Agreement for a term ending on the later of 15 years or the maturity of the bonds issued in connection with the Project.
In addition, the borrower must execute a separate Affordable Housing Regulatory Agreement (Affordability Agreement) with the City and CMFA that will require the Project to set aside 50 percent of the total project units representing 128 units, to remain restricted at 80 percent AMI for a period of 55 years. For clarity, these 128 units are inclusive of, and not in addition to, the units restricted under the CMFA Bond Regulatory Agreement. During the term of the CMFA Bond Regulatory Agreement, the 128 units subject to the City Affordability Agreement may include units restricted at either 50 percent AMI or 80 percent AMI under the CMFA Bond Regulatory Agreement. Upon expiration of the CMFA Bond Regulatory Agreement, those 128 units will continue to remain restricted at no more than 80 percent AMI under the City Affordability Agreement for the remainder of the 55-year term.
The Affordability Agreement will be recorded against the property and is separate from the existing agreement. These long-term restrictions advance the City’s affordable housing goals, support implementation of the Housing Element, and may help the City meet its Regional Housing Needs Assessment (RHNA) obligations.
The Bonds would be tax-exempt 501(c)(3) bonds for purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the Project to be financed is located. The approval and adoption of the resolution authorizing the issuance of the Bonds will not require the City to be financially
obligated, liable, or provide any financing for the Project. The City's credit and bond ratings are not at risk by adopting this resolution and no City revenues are at risk by this bond issuance.
In order for CMFA to issue such Bonds, the City must (1) conduct a public hearing allowing members of the public to comment on the proposed Project and the Bonds, and (2) approve CMFA's issuance of the Bonds for purposes of Section 147(f) of the Internal Revenue Code.
Although CMFA, not the City, will be the issuer of the tax-exempt revenue bonds for the Project, the financing cannot proceed without the City, as the governmental entity having jurisdiction over the site, approving the Bonds.
For this item, the Borrower selected CMFA as the financing agency. As a result of the Borrower selecting CMFA, the City will receive a one-time issuance fee paid by CMFA and allocated to the City. Participation by the City will not impact the City's appropriations limits or constitute any type of indebtedness by the City. Specifically, approval and adoption of the resolution authorizing the issuance of the Bonds will not require the City to be financially obligated, liable, or provide any financing for the Project. In addition, the City's credit, bond ratings, and revenues are not at risk whatsoever by adopting this resolution or bond issuance.
Once the City holds the required public hearing and adopts the required resolution following the public hearing, no other participation by the City in the actions of CMFA or in the financing will be required. Approval pursuant to this resolution does not constitute any other approval by any commission or agency of the City with respect to any other City regulatory or other requirements, such as planning approvals, permits, or other actions necessary in connection with the Project.
ALTERNATIVE ACTION
1. City Council not agree to approve the issuance of bonds by CMFA for Maple Housing Foundation.
2. Other action as determined by City Council.
FISCAL IMPACT
The City will receive 25 percent of a one-time issuance fee from the California Municipal Finance Authority, which will equate to approximately $6,300 which will be deposited to General Fund miscellaneous revenues (100-462101). The actual amount may vary and will be dependent on the actual closing of the Bonds.
ATTACHMENTS
TEFRA Hearing Notice Diamond Park Apartments
Diamond Park Apartments Resolution
Diamond Park - CMFA City Regulatory Agreement (available in the City Clerk’s Reading File)