HomeMy WebLinkAboutStaff Report 2511-5487CITY OF PALO ALTO
CITY COUNCIL
Monday, December 15, 2025
Council Chambers & Hybrid
4:30 PM
Agenda Item
16.Adoption of a Resolution Approving Conduit Financing for Charities Housing
Development Corporation, on behalf of El Camino PA, L.P., for the 130-Unit Affordable
Multifamily Housing Rental Project Located at 3001 El Camino Real, and Approving the
Issuance of Revenue Bonds not to exceed $80 Million by the California Municipal
Finance Authority (CMFA) for the Purpose of Financing and Refinancing the Acquisition,
Development, Construction and Equipping of Project; CEQA Status: Not a Project
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: December 15, 2025
Report #:2511-5487
TITLE
Adoption of a Resolution Approving Conduit Financing for Charities Housing Development
Corporation, on behalf of El Camino PA, L.P., for the 130-Unit Affordable Multifamily Housing
Rental Project Located at 3001 El Camino Real, and Approving the Issuance of Revenue Bonds
not to exceed $80 Million by the California Municipal Finance Authority (CMFA) for the Purpose
of Financing and Refinancing the Acquisition, Development, Construction and Equipping of
Project; CEQA Status: Not a Project
RECOMMENDATION
Staff recommend that City Council adopt a Resolution (Attachment A) approving the issuance of
the Bonds by the CMFA for the benefit of El Camino PA, L.P. (the “Borrower”), to provide for
the financing of the Project, such adoption is solely for the purposes of satisfying the
requirements of TEFRA, and California Government Code Section 6500 (and following).
BACKGROUND
Charities Housing Development Corporation (the “Sponsor”), on behalf of El Camino PA, L.P.
(the “Borrower”), has requested that the California Municipal Finance Authority (the
“Authority”) issue one or more series of revenue bonds in an aggregate principal amount not to
exceed $80 million (the “Bonds”), for the acquisition, development, construction, and
equipping of a 130-unit multifamily rental housing development for low-income households
(the “Project”), to be located in the City of Palo Alto, California (the “City”), at 3001 El Camino
Real.
There is no financial impact to the City from its approval of the issuance of the Bonds. The
Authority will act as issuer and perform all necessary legal and administrative responsibilities
associated with the financing. The Bonds are special, limited, obligations of the Authority
payable solely through the repayment of the loan by the Borrower, which will be used to pay
the principal of, and interest on, the bonds. The bonds issued by the Authority are not an
obligation of the City or any member of the Authority.
ANALYSIS
In order for all or a portion of the bonds to qualify as tax-exempt bonds, the Federal Tax Equity
and Fiscal Responsibility Act of 1982 (“TEFRA”) requires (a) a public hearing commonly referred
to as a “TEFRA Hearing”, to be conducted, providing members of the community an opportunity
to speak in favor of or against the use of tax-exempt bonds for the financing of the Project and
(b) adoption of a Resolution by the City Council approving the issuance of the Bonds by the
Authority for the benefit of the Borrower’s Project.
According to TEFRA requirements, prior to the hearing, reasonable notice must be provided to
the members of the community. Following the close of the TEFRA Hearing, an “applicable
elected representative” of the governmental unit hosting the Project must provide its approval
of the deemed issuance of the bonds for the financing of the Project.
The public hearing requirement under TEFRA was satisfied by the Authority, which conducted a
toll-free telephonic TEFRA hearing on November 20, 2025 at 10:30 A.M., in compliance with
Section 147(f) of the Internal Revenue Code of 1986. As cited in the published notice on
November 12, 2025 in the Daily Post, the public hearing is an opportunity for all interested
persons to speak or to submit written comments concerning the proposals to issue the debt
and the nature or location of the facility to be financed.
The next step, because the Project is located within the jurisdiction of the City of Palo Alto, is
for City Council to adopt the resolution (Attachment A), approving the issuance of bonds by the
Authority for the benefit of the Borrower.
The Bonds are intended to finance the acquisition, development, construction and equipping of
the Project, to be located in the City at 3001 El Camino Real. TEFRA approval is a precondition
to the use of tax-exempt obligations for the Project, without which financing of the Project as
affordable housing would have to be abandoned.
The Authority is a joint powers authority that the City became a member of on April 14, 2008.
The Authority is a public entity, separate and apart from each member executing such
agreement. The debts, liabilities and obligations of the Authority do not constitute debts,
liabilities or obligations of the members executing such agreement. The Bonds to be issued by
the Authority 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.
Outside of adopting the required resolution approving issuance of the bonds, no other
participation or activity of the City or the City Council with respect to the issuance of the Bonds
will be required. Based on the benefits of the Project to the Palo Alto community and the lack
of any financial obligations on the part of the City, staff recommend that Council adopt the
attached resolution.
POLICY IMPLICATIONS
e.g., approving tax-exempt financing through the
California Municipal Finance Authority for Wilton Court in 2020 (CMR: 10976).)
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
RESOLUTION NO. 25-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALO ALTO
APPROVING A PLAN OF FINANCE OF THE CALIFORNIA MUNICIPAL
FINANCE AUTHORITY TO ISSUE AND REISSUE REVENUE BONDS FOR A
QUALIFIED RESIDENTIAL RENTAL PROJECT FOR THE BENEFIT OF EL
CAMINO PA, L.P., AND CERTAIN OTHER MATTERS RELATING THERETO
WHEREAS, Charities Housing Development Corporation of Santa Clara County, a
California nonprofit public benefit corporation (the “Developer”), on behalf of El Camino PA, L.P.,
a California limited partnership, or another ownership entity created by El Camino PA DE LLC, a
Delaware limited liability company, its general partner (the “General Partner”), or by another
affiliate of the Developer (such limited partnership or other ownership entity, the “Borrower”),
has requested that the California Municipal Finance Authority (the “Authority”) undertake a
proposed plan of finance to issue and reissue from time to time one or more series of revenue
bonds in an outstanding principal amount not to exceed $80,000,000 (the “Bonds”) to finance
and refinance the acquisition, construction, development and equipping of a 130-unit qualified
residential rental project (the “Project”) to be owned and operated by the Borrower and located
at 3001–3017 El Camino Real within the City of Palo Alto, California (the “City”); and
WHEREAS, an “applicable elected representative” of the jurisdiction in which the Project
is to be located is required to approve the proposed plan of finance for the Project under Section
147(f) of the Internal Revenue Code of 1986, as amended (the “Code”); and
WHEREAS, the City Council of Palo Alto (the “City Council”) is the elected legislative body
of the City and is an “applicable elected representative” for purposes of Section 147(f) of the
Code; and
WHEREAS, the Authority has advised that the Bonds may be issued pursuant to a “plan of
finance” to issue an original issue of Bonds and to issue or reissue one or more additional series
of Bonds from time to time after the original issue of Bonds, if necessary or desirable to comply
with applicable legal requirements, all in an aggregate principal amount not to exceed
$80,000,000 to finance the Project, and all within the three-year period commencing on the date
of the issuance of the first series of Bonds pursuant to this resolution; and
WHEREAS, the Authority has requested that the City Council approve the proposed plan
of finance in order to satisfy the public approval requirement of Section 147(f) of the Code and the
requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California
Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”), among certain local
agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the Authority has, following notice
duly given, held a public hearing regarding the issuance of the Bonds, and the City Council now
desires to approve the proposed plan of finance for the Project;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of Palo Alto, as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The City Council hereby approves the proposed plan of finance of the Authority
to issue and reissue from time to time of one or more series of revenue bonds in an outstanding
principal amount not to exceed $80,000,000. It is the purpose and intent of the City Council that
this resolution constitute approval of the proposed plan of finance for the Project for the purposes
of (a) Section 147(f) of the Code by the applicable elected representative of a governmental unit
having jurisdiction over the area in which the Project is to be located, in accordance with said
Section 147(f) and (b) Section 4 of the Agreement.
Section 3. The officers of the City are hereby authorized and directed, jointly and
severally, to do any and all things and to execute and deliver any and all documents which they
deem necessary or advisable in order to carry out, give effect to and comply with the terms and
intent of this resolution and the financing transaction approved hereby.
Section 4. The City Clerk shall forward a certified copy of this Resolution to the Authority
in care of its counsel:
Ronald E. Lee, Esq.
Jones Hall LLP
4 West 4th Street, Suite 406
San Mateo, CA 94402
Section 5. This resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED by the City Council of the City of Palo Alto this day of
, 2025.
AYES:
NOES:
ABSTAIN:
ABSENT:
[SEAL]
Attest:
By:
City Clerk