REPORT TO CITY COUNCIL
SUBJECT
Title
Public Hearing - Adopt a Resolution Approving the California Municipal Finance Authority Issuance of Tax-Exempt Bonds for Financing of a 100% Affordable Multifamily Rental Housing Project located at 3550 El Camino Real
Report
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 throughout California. To date, over 350 municipalities have become members of CMFA.
The CMFA was formed to assist 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. The CMFA’s representatives and its Board of Directors have considerable experience in bond financing.
Clara Gardens LP, an affiliate of Resources for Community Development, (the “Borrower”) is building a 120-unit 100% affordable project for Extremely Low and Very Low Income Households at 3550 El Camino Real. RCD has applied to the CMFA for tax-exempt bonds to help finance the project. As part of the financing process for affordable housing projects when utilizing State tax-exempt bonds, the local jurisdiction, in this case, the City of Santa Clara, is required by State law to conduct a public hearing. The City is conducting this public hearing to allow members of the public to provide input on the issuance of the bonds for this project as required by State law.
DISCUSSION
Clara Gardens LP (the “Borrower”) has requested that the CMFA serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $50,000,000 (the “Bonds”) of tax-exempt revenue Bonds. The proceeds of the Bonds will be used to finance and refinance the acquisition, construction, development, and equipping of a 100% affordable 120-unit qualified residential rental project for extremely low and very low-income individuals and households at 3550 El Camino Real, Santa Clara, California (the “Project”) to be owned and operated by the Borrower.
For all or a portion of the Bonds to qualify as tax-exempt Bonds, the City of Santa Clara must conduct a public hearing under the Tax Equity and Fiscal Responsibility Act (the “TEFRA Hearing”) to provide a forum for providing a reasonable opportunity for interested individuals to express their views, orally or in writing, on the proposed issue of bonds and the location and nature of the proposed project to be financed. Public notice must be provided to community members prior to the TEFRA Hearing. Following the close of the TEFRA Hearing, an “applicable elected representative” of the City (in our case, the City Council) must provide its approval of the issuance of the bonds for financing the Project.
The City’s role is simply to hold a public hearing for public comment and approve the CMFA’s plan of finance. CMFA’s issuance of the bonds does not subject the City of Santa Clara to any additional obligations and the City is not financially obligated in any way to the funding of the project or the repayment of the bonds.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no cost to the City other than administrative staff time and expense.
The Bonds to be issued by the 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 Santa Clara, it is expected that a portion of the issuance fee attributable to the City will be granted by the CMFA to the General Fund. Such a grant may be used for any lawful purpose of the City.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by publishing a notice in The Santa Clara Weekly on April 22, 2026 and by posting the Council agenda on the City’s official notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Conduct the Tax Equity and Fiscal Responsibility Act (“TEFRA”) public hearing; and
2. Adopt the resolution in substantially the form presented approving the issuance of not to exceed $50 million in bonds by the CMFA for the benefit of Clara Gardens LP, as the borrower, to provide for the financing of the affordable housing project at 3550 El Camino Real to satisfy TEFRA requirements.
Staff
Reviewed by: Afshan Hamid, Director, Community Development Department
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. TEFRA Resolution for 3550 El Camino Real