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Palmdale council holds TEFRA hearings and approves CMFA bond issuances for two housing projects
Summary
The council conducted TEFRA hearings and approved resolutions allowing the California Municipal Finance Authority to issue up to $20 million and up to $60 million in tax-exempt bonds for a 48-unit project and a 272-unit project respectively; staff emphasized the bonds are the borrower's responsibility and not city obligations.
The Palmdale City Council on Oct. 7 conducted required TEFRA public hearings and approved resolutions authorizing the California Municipal Finance Authority (CMFA) to issue tax-exempt revenue bonds for two separate residential projects.
For item 6.2 the council approved a resolution allowing CMFA to issue up to $20,000,000 to finance and refinance a 48-unit qualified residential rental project at 38732 9th Street East for the benefit of Ninth Street East Housing LP (or an entity to be created by Malaire Housing Investments, Inc.). Staff clarified the TEFRA hearing is required for the bonds to qualify as tax-exempt and emphasized that the bonds are not obligations of the city; any borrower default would be a borrower responsibility.
For item 6.3 the council approved a resolution allowing CMFA to issue up to $60,000,000 in exempt-facility bonds to finance or refinance the Zenith on 25th project (272 units) at 25th Street East and East Avenue Q. Staff reiterated that these bonds likewise are not a city liability.
Council members asked procedural questions about city exposure in the event of borrower default and were told the legal and foreclosure recourse would rest with the borrower and bond issuer. Both resolutions passed (the record notes unanimous passage for the $60 million item). No public speaker cards were filed for either hearing.
