Council declines TEFRA approval for The Master's University after neighbors cite home purchases and tax concerns

The Santa Clarita City Council declined to approve a TEFRA resolution for The Master's University (TMU) after sustained public opposition from Placerita Canyon residents who said the university’s purchase of dozens of nearby houses has changed neighborhood character and reduced local tax revenue through nonprofit exemptions.

City staff described the TEFRA hearing as a procedural step required by federal tax rules for the California Municipal Finance Authority to issue tax‑exempt bonds in an amount not to exceed $65,000,000 to refinance and finance student housing, some apartment acquisitions and campus improvements. Assistant to the city manager Michael Villegas summarized the proposed bond uses and emphasized that adoption of the TEFRA resolution would not obligate the city financially.

Residents and neighborhood groups told the council they were not adequately engaged and cited what they described as aggressive, above‑market property purchases by TMU or affiliated entities, short‑term rental listings on platforms such as Airbnb, and large reductions in property tax bills tied to nonprofit exemptions. Speakers representing the Placerita Canyon Property Owners Association urged the council to delay any TEFRA endorsement until TMU’s amended master plan and transparent assurances about limits on bond uses are available.

During council questioning, members sought a mechanism the city could use to ensure bond proceeds would not be used to acquire additional single‑family homes in the canyon. Staff and the CMFA representative said reporting requirements and negotiated language can limit use of bond proceeds but acknowledged the city lacks a direct enforcement mechanism to police all downstream uses of funds once bond proceeds are disbursed.

Councilmember Gibbs moved the recommended action with an added comment; the motion received recorded yes votes from Councilmember Gibbs and Mayor Miranda but failed when other councilmembers voted no, so the TEFRA endorsement did not carry. Council members noted the university retains the option of pursuing approval through the state process if it wishes to proceed.

What residents said: Sandra Cattell and other Placerita Canyon speakers told the council TMU’s purchases — estimated in public testimony at dozens of properties — have altered a rural equestrian neighborhood and that reduced property tax revenues from nonprofit exemptions hurt local services. PCPOA representatives also said some TMU properties appeared to have been used as short‑term rentals, which they described as a public‑safety concern in a fire‑prone canyon.

What TMU said: University financial staff said the bond proceeds would refinance existing acquisitions, fund certain campus capital improvements, and that the university had agreed not to use proceeds to purchase additional single‑family homes in the immediate canyon community as part of the negotiated terms. Financial representatives acknowledged they could not fully bind the city to enforcement beyond CMFA/IRS reporting requirements.

Next steps: With the city declining to endorse the TEFRA action, TMU may seek the required hearing/approval from the state issuer. Several councilmembers said they would expect the university to continue to engage PCPOA and the community if it returns with a specific plan amendment or other proposals.

Sources: Presentation by Michael Villegas; public testimony from Placerita Canyon residents; council and staff exchange on enforcement and bond buckets.