OCII authorizes SB107 bond series for citywide affordable housing and Transbay infrastructure; Mission Bay housing bonds and consultant amendment also approved

The Successor Agency to the San Francisco Redevelopment Agency voted Dec. 6 to authorize multiple bond issuances under SB107 authority and to approve a contract amendment to support the financing work.

Deputy Director Bridal Mahorter told commissioners that SB107 (state legislation cited during the presentation) gave OCII authority to issue new‑money bonds to support enforceable affordable‑housing obligations and Transbay infrastructure. For the first issuance outside Mission Bay since dissolution, staff proposed two SB107 series: 2017A, a taxable series to fund affordable housing in OCII project areas not to exceed $112,000,000; and 2017B, a tax‑exempt series to fund Transbay infrastructure not to exceed $50,000,000. Mahorter described the credit structure in some detail — RPTTF credits, the new SB107 credit, and preserved Mission Bay pledge credits — and said staff had built conservative not‑to‑exceed interest‑cost assumptions to accommodate market volatility.

Mahorter said staff estimates a total interest cost assumption of about 8 percent for the taxable housing bonds and about 7 percent for the tax‑exempt Transbay bonds, noting that market rates were volatile and staff planned to return with an official statement after oversight‑board and Department of Finance review. She said the projected issuance window was spring, with the goal to issue and close in February–March pending required approvals.

Chair Rosales recused herself from the 5C consideration and left the room, citing a potential conflict: "At this time, I will need to recuse myself ... my law firm is a recipient of income on the last 12 months from one of the, consultants, the Backstrom firm. On advice of counsel, I need to leave the room," she said. The vote on the item passed 4–0 with one recusal.

Staff also asked the commission to authorize Mission Bay housing bonds (2017C) in an aggregate principal amount not to exceed $55,000,000 to fund affordable housing in Mission Bay North and South and to refund certain outstanding Mission Bay housing bonds to reduce debt service. Deputy Director Brea Mahorter described the rationale for a separate Mission Bay issuance: pledged Mission Bay property‑tax increment must be protected and spent in Mission Bay, so the Mission Bay issuance would cordon those pledged dollars for local use. The Mission Bay housing resolution passed on a 5–0 vote.

Finally, the commission approved a first amendment to the Urban Analytics personal‑services contract increasing the not‑to‑exceed amount by $27,500 (to a total of $197,500) to cover fiscal consultant reports and SEC‑mandated annual disclosure work for the 2017 bond issuances and a planned refunding in the spring. Urban Analytics is the fiscal consultant responsible for the fiscal consultant reports that inform the official statement and SEC annual disclosures.

Public commenters urged the commission and financing teams to include stronger community benefits and workforce-training commitments tied to large development and finance contracts. Litigation and agency counsel also told the commission they expected the Mission Bay Alliance to consider a petition to the California Supreme Court following a Court of Appeal ruling on related approvals; staff said the project will proceed while any petitions are considered.

Votes at a glance: Resolution 53 2016 (authorize 2017A and 2017B) — approved 4 ayes, 1 recusal; Resolution 54 2016 (authorize Mission Bay 2017C) — approved 5 ayes; Resolution 55 2016 (Urban Analytics amendment) — approved 5 ayes.

Next steps: staff will present the bond packages to the oversight board (scheduled for Dec. 12), seek Department of Finance approval, return with an official statement for commission review, and aim to issue in February with a March close if market conditions permit.