Millbrae Council approves tax-exempt bonds for 97-unit Broadway affordable housing after union protests

The Millbrae City Council on March 11 unanimously authorized the California Municipal Finance Authority (CMFA) to issue tax-exempt bonds for a 97-unit affordable housing project at 1301 Broadway. The vote to approve the TEFRA (tax-exempt financing) authorization was 5-0.

The City’s action allows CMFA to proceed with an allocation the state awarded for tax-exempt debt in the amount the developer cited during the hearing. Community Development Director Andy Mogensen described the hearing’s purpose as limited to authorizing the bond issuance and said “the debt to be issued by the CMFA is the sole responsibility of the borrower” and will not obligate Millbrae taxpayers.

Why it matters: The project is 100 percent affordable housing located on a transit corridor. Supporters say the financing will move 97 units toward construction; opponents in the building trades argued that tax-exempt public subsidies should carry worker protections such as prevailing wages, health-care contributions and apprenticeship commitments.

During public comment, multiple union representatives asked the council to withhold approval until the developer guaranteed labor standards. Nels Landa, identified as a representative of Carpenters Local 217, told the council: “Why is it hard for them to take care of the workforce? ... Find a common ground with us and include health care and family supporting wages for all the workers on the project.” Harvey McKeown of the NorCal Carpenters Union and Anthony Carroll of Local 217 made similar appeals and suggested a local ballot question if the council would not require protections.

The project applicants — represented at the meeting by Alexis Gavorgian of AMG and Associates and by Pacific Companies representatives — said they are not anti-union and that many of their projects have used union labor. Gavorgian told the council, “We are not anti union. We are not anti prevailing wage,” and said the sponsor has hired union labor on recent projects. She said the developer is open to unions bidding on the work but that requiring higher labor costs would typically require additional public subsidy.

The City Attorney summarized legal risks the council would face if it denied the financing based on the subjective criteria the unions advocated. The City Attorney said the council’s discretion is limited by housing laws and by the city’s certified housing element; a denial tied to the financing could be treated as a de facto denial of the project and prompt litigation or state involvement. Council members repeatedly cited that legal risk in their deliberations.

Mayor Fung moved to approve the TEFRA item; Councilmember Rinaldi seconded. The motion carried 5-0 (Councilmembers Nguyen, Riley, Rinaldi, Vice Mayor Holiver and Mayor Fung voting yes). City staff and the developer said they will continue dialogue with unions going forward.

The CMFA-issued debt was described at the hearing as being structured so repayment is the borrower’s responsibility and does not count against city debt capacity. The city noted it would receive a share of issuance fees from CMFA. Members of the public earlier had submitted correspondence, including letters from the Carpenters Union, raising labor-standard concerns.