OCII approves up to $70M Mission Bay South tax allocation bonds; financing authority okays negotiated sale

The Commission on Community Investment and Infrastructure voted to confirm issuance and sale of successor‑agency tax allocation bonds for the Mission Bay South Redevelopment Project, authorizing up to $70,000,000 in principal and approving related disclosure documents.

Deputy Director for Finance and Administration Leo Levinson told commissioners the transaction uses a two‑step structure: the successor agency will sell the bonds to the Financing Authority, which will then sell to underwriters on a negotiated basis allowed under state law. Levinson said the interest rate is capped at 7% by approvals but is expected to be much lower, and the underwriters’ discount is not to exceed 0.65%. At current market rates, Levinson estimated net proceeds of roughly $56,000,000 to $57,000,000 rather than the full $70,000,000 authorization. He said the schedule depends on a 45‑day subordination period by taxing entities; if they do not respond, the subordination is automatically deemed approved, with a target to price in the third week of February and close in March.

A representative of the Mission Bay Citizens Advisory Committee, Corinne Woods, urged approval, saying the master developer has already invested substantial infrastructure and should be reimbursed. Levinson also introduced staff and advisors on the deal, including the office’s bond expert, the financial adviser from PFM, bond counsel and disclosure counsel.

After the OCII vote, the body moved into the Redevelopment Agency Financing Authority agenda. The Financing Authority elected Christine Johnson as Chair and Mara Rosales as Vice Chair, then approved, on behalf of the Financing Authority, the form of the bond purchase contract and the preliminary official statement for the negotiated sale. The Financing Authority vote on the purchase and sale recorded 3 ayes, 1 abstention and 1 absent.

The Commission and Financing Authority recorded recusals: one commissioner disclosed a conflict and recused from the item because an underwriter firm is a client of their law firm; the commissioner left the room for the discussion.

Next steps: staff will await the taxing‑entity subordination period, then proceed to price and close the negotiated sale if market conditions allow. The official statements and continuing disclosure certificates approved at the meeting will be used to inform investors about risks and terms.