Board approves Oak Hill financing plan with county serving as umbrella guarantor; allocates $2.5 million from Affordable Housing Trust

The Marin County Board of Supervisors voted on Tuesday to support a revised financing plan for the Oak Hill workforce housing project, joining the Oak Hill Joint Powers Authority, school district partners and developers in a structure that uses a county umbrella debt-service guarantee to reduce borrowing costs and close a financing gap.

Oak Hill is proposed as a two-project campus on roughly 8.5 acres of state-donated land near Larkspur Landing: a 115-unit affordable component (Eden Housing) and a 135-unit workforce component targeted for educators and county employees (total 250 units). Staff and the JPA reported the total workforce project cost at approximately $124 million and said the plan leverages state grants, philanthropic funds and bond proceeds.

Because the JPA holds no taxing or real property assets, the financing package relies on three bond series, a short-term philanthropic loan component and a series of sub-agreements among guarantors. To achieve a competitively priced bond sale and to reduce the initial $17 million financing gap created by higher market interest rates, staff recommended the county serve as an umbrella guarantor for Series A debt service. County staff and outside advisors (KNN Public Finance) outlined trade-offs: the guarantee lowers the interest burden and unlocks funding but creates contingent county exposure if revenues or operating assumptions fall short.

Staff proposed a set of risk-mitigation measures the board adopted as part of its approval: increase the JPA's vacancy assumption to 5% (above the market-study estimate), raise construction contingency and capital-reserve assumptions, add a $1.5 million budget stabilization reserve (to be funded first from construction savings, then from county trust funds if necessary), and expand the JPA's governance to better reflect guarantor agencies. The Board also approved a $2.5 million allocation from the Affordable Housing Trust Fund ($1 million was already included in the project sources and an additional $1.5 million will seed the budget stabilization reserve).

Board members asked detailed questions about market demand, vacancy sensitivity, debt-service mechanics and long-term exposure. County advisors said that the county's guarantee would be used to backfill the debt-service-reserve draw (approximately $3.5 million annual interest payment exposure), and that the JPA's sub-agreements with participating districts could reimburse the county for a significant portion of any draws that result from vacancies. Staff also noted that Eden Housing's portion had separately secured tax-credit awards that require prompt construction starts.

The Board considered letters and testimony both for and against the proposal. Supporters (including state legislators' offices, the Marin Organizing Committee, school-district leaders and housing nonprofits) emphasized the project's unique opportunity (donated land and braided state/philanthropic funds) to deliver workforce and affordable homes for teachers, county workers and essential staff. Opponents warned about long-term risk to the county and cautioned that underwriting assumptions deviate from typical affordable-housing norms; they asked for additional KNN modeling and a stronger set of written guarantees before committing county credit.

After an extended deliberation, the Board approved staff's recommendations and directed staff to finalize legal sub-agreements, JPA governance revisions and the implementation plan. Supervisors said they expect annual budget sign-off by the county and ongoing oversight and monitoring of the project's finances.