|
DATE: |
November 18, 2025 |
11 |
SUBJECT:
Title
APPROVE THE ISSUANCE OF REVENUE OBLIGATIONS BY THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY FOR THE BENEFIT OF CARDIFF ORTHODOX HOUSING FOUNDATION AND/OR A SUCCESSOR ENTITY IN AN AGGREGATE MAXIMUM STATED PRINCIPAL AMOUNT NOT TO EXCEED $25,000,000.00 (DISTRICT: 3)
Body
OVERVIEW
The County has received a request from the California Enterprise Development Authority (“CEDA” or “Authority”) to conduct a public hearing as required by the Internal Revenue Code and to approve the Authority’s issuance of one or more series of tax-exempt and/or taxable revenue obligations in an aggregate principal amount not to exceed $25,000,000 (the “Revenue Obligations”), for the benefit of Cardiff Orthodox Housing Foundation, a California nonprofit religious corporation or a related or successor entity (the “Borrower”).
The Borrower has applied for the financial assistance of the Authority. The Authority will loan the proceeds of the Revenue Obligations to the Borrower pursuant to one or more loan agreements (the “Loan Agreement”). The proceeds of the Revenue Obligations will be applied by the Borrower to finance, refinance and/or reimburse the cost of acquisition, development, construction, equipping and furnishing of a 61-unit, multi-family, senior housing project located at 3459 Manchester Avenue, Cardiff by the Sea, California 92007 (the “Project”). A portion of the proceeds of the Revenue Obligations will be used to pay the costs of issuance and other related costs in connection with the financing. The Borrower is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the “Code”) and will own and operate the Project in connection with its mission of providing suitable independent housing for the elderly in a community where they can also receive social, recreational and religious support. The Revenue Obligations will be paid entirely from repayments by the Borrower under the Loan Agreement.
On May 18, 2021 (11), pursuant to Resolution 21-065, the Board of Supervisors approved the issuance of revenue obligations by the Authority for the benefit of the Borrower to facilitate the construction of the Project. The Revenue Obligations were acquired by First Republic Bank (“First Republic”) on October 18, 2021. Due to delays encountered in the approval of a required lot line adjustment and the collapse of First Republic in early 2023, the Borrower was not able to complete the Project as originally contemplated. In addition, since the initial financing, the cost of constructing the Project has increased considerably, requiring the Borrower to seek additional funding to complete the Project. Over the last several years, the Borrower has worked diligently to bring the Project to fruition and secured a commitment from JPMorgan Chase Bank, N.A. for the additional funding and is respectfully requesting the Board to approve the issuance of the Revenue Obligations to allow the Borrower to complete the Project to meet the needs of elderly individuals in the community.
The Authority is authorized to assist in financing of nonprofit public benefit organizations or for-profit corporations with a public benefit project wishing to issue or reissue bonds, notes or other evidences of indebtedness, including the Borrower. In order to initiate such a financing, the Borrower is asking the County of San Diego, a member jurisdiction in which the Project is located to approve the Authority’s issuance of the Revenue Obligations. Although the Authority will be the issuer of the Revenue Obligations for the Borrower, the financing cannot proceed without the approval of one of the applicable legislative bodies.
Today’s recommendations will provide the Authority with the required authorization to pursue its determination to issue the Revenue Obligations on behalf of the Borrower.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Adopt a Resolution entitled:
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO APPROVING THE ISSUANCE OF CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY REVENUE OBLIGATIONS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $25,000,000 FOR THE PURPOSE OF FINANCING AND/OR REFINANCING THE ACQUISITION, DEVELOPMENT, CONSTRUCTION, EQUIPPING AND FURNISHING OF MULTIFAMILY SENIOR HOUSING FACILITIES
EQUITY IMPACT STATEMENT
This financing will help in the creation of a new quality, affordable 61-unit senior housing facility in the County of San Diego. The bonds issued will be used to finance, refinance and/or reimburse the cost of acquisition, development, construction, equipping and furnishing of the property located at 3459 Manchester Avenue, Cardiff by the Sea, California 92007. This project will improve the health of the community by providing quality senior affordable housing in the County of San Diego.
SUSTAINABILITY IMPACT STATEMENT
The proposed action would result in economic, social, and educational benefits for the community, and will contribute to the County of San Diego Sustainability Goal No. 2, providing just and equitable access, by allowing the Borrower to provide safe housing for the elderly, low-income underserved communities of San Diego County.
FISCAL IMPACT
If approved, the proposal will result in approximately $991 of unanticipated revenue to be used to reimburse the County for staff time associated with this non-County financing. There will be no change in net General Fund cost and no additional staff years.
The Borrower will be responsible for the payment of all present and future costs in connection with the financing. The County will incur no obligation of indebtedness as a result of these actions.
BUSINESS IMPACT STATEMENT
N/A
Details
ADVISORY BOARD STATEMENT
The Debt Advisory Committee, composed of the Chief Financial Officer, Auditor and Controller, and the Treasurer-Tax Collector, concurs with this recommendation in order to permit the Authority to issue Revenue Obligations on behalf of the Borrower.
BACKGROUND
California Enterprise Development Authority (“Authority”)
The California Enterprise Development Authority provides tax-exempt loans and leases for qualified projects located throughout the State of California. The Authority’s mission is to support economic development, job creation, and social programs throughout the State of California. By assisting nonprofit corporations with various tax-exempt financing programs, the Authority is able to support programs that improve the health and welfare of California residents. The Authority finances a broad range of facilities including nonprofit projects such as education, health care and cultural facilities, affordable multi-family and senior housing, manufacturing facilities and equipment, solid waste, water, wastewater treatment facilities and infrastructure projects and government sponsored financing.
Cardiff Orthodox Housing Foundation (“Borrower”)
Saints Constantine and Helen Greek Orthodox Church (the “Church”) was organized in 1979 to provide for the spiritual and community needs of Orthodox Christians living in and around the northern San Diego County communities. The Church held church services, Sunday school, weddings and baptisms in the cafeteria of a local junior high school until the Church purchased and developed a five-acre parcel of land at 3459 Manchester Avenue, Cardiff-by-the-Sea, California 92007. Over time, the Church built a Senior Center, which served as the interim church for 14 years, and 30 housing units for senior citizens. In 1989, the Church organized Cardiff Orthodox Housing Foundation (the “Borrower”) to facilitate the management of the existing senior housing and the construction and management of additional affordable housing for seniors in the local community. The Borrower is managed by a Board of Directors.
Project
The Project consists of the development, construction, equipping and furnishing of a new 61-unit senior housing facility located at 3459 Manchester Avenue, Cardiff-by-the-Sea, California 92007. The land on which the Project will be built consists of approximately 2.91 acres, was acquired by the Church and is being provided to the Borrower to facilitate the Project. The Project will consist of two three-story buildings containing approximately 56,375 square feet of space. The total cost of the Project is approximately $31 million, of which approximately $25 million will be funded with the proceeds of the Revenue Obligations. The current 30 apartment units on the property consist of one- and two-bedroom units with heating and air conditioning, dishwashers and microwaves, as well as other amenities. The 61 additional units are expected to have the same level of amenities.
Public Benefit
The Project will provide additional much needed low-income senior housing for County residents. Within the 61-unit new development, 12 units will be restricted to seniors with incomes of 60% or less of Area Median Income (AMI). The lower interest rate associated with the Revenue Obligations will result in meaningful savings to the Borrower which will translate in lower rents and lower overall operating costs for the Project.
County Involvement
Section 147(f) of the Internal Revenue Code requires that an applicable elected body, with respect to the Project, approve the issuance and delivery of the Revenue Obligations following a public hearing for the Project. The Board of Supervisors of the County of San Diego, as an applicable elected body, is requested to approve the issuance of Revenue Obligations. The Borrower shall be responsible for the payment of all present and future costs in connection with the issuance of the Revenue Obligations.
The Authority will be issuing the Revenue Obligations in an aggregate principal not to exceed $25,000,000 and is seeking approval pursuant to Section 147(f) of the Internal Revenue Service for the Project located in San Diego County.
The Authority published a notice of public hearing on November 4, 2025 in the Public Notices section of its website which is designed to inform members of the general public about the public hearings to be held by the Authority on November 11, 2025 indicating that a public hearing pursuant to Section 147(f) of the Code would be held on November 11, 2025 with respect to the issuance of the Revenue Obligations and the Project. The results of the hearing will be posted by the Clerk of the Board after receipt of the signed Transcript after November 11, 2025.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed action supports the Equity: Housing Strategic Initiative in the County of San Diego’s 2025-2030 Strategic Plan by supporting and allowing the issuance of Revenue Obligations by CEDA for the Borrower to finance, refinance and/or reimburse the cost of acquisition, development, construction, equipping and furnishing of senior housing facilities located at 3459 Manchester Avenue, Cardiff-by-the-Sea, California 92007.
Respectfully submitted,
ebony n. shelton
Chief Administrative Officer
ATTACHMENT(S)
1. RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO APPROVING THE ISSUANCE OF CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY REVENUE OBLIGATIONS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $25,000,000 FOR THE PURPOSE OF FINANCING AND/OR REFINANCING THE ACQUISITION, DEVELOPMENT, CONSTRUCTION, EQUIPPING AND FURNISHING OF MULTIFAMILY SENIOR HOUSING
2. TRANSCRIPT OF PUBLIC HEARING
3, PROOF OF NOTICE OF PUBLIC HEARING
4. CEDA PROJECT APPLICATION FOR REVENUE OBLIGATIONS