Agenda Item Wording:
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Tax Equity and Fiscal Responsibility Act Public Hearing - Conduct a public hearing for the proposed issuance of revenue bonds by the California Municipal Finance Authority, in an amount not to exceed $75,000,000, to finance the acquisition, construction, development and equipping of a 306-unit multi-family residential rental project located at the northwest corner of E. Caldwell Ave. and S. Lovers Lane; and adopt Resolution 2026-62 to approve the financing of the project.
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Agenda Date: 09/21/2026
Prepared by: Margie Perez, Housing Specialist, margie.perez@visalia.gov <mailto:margie.perez@visalia.gov>, (559) 713-4460; Nichol Ritchie, Finance Manager, nichol.ritchie@visalia.gov <mailto:nichol.ritchie@visalia.gov>, (559) 713-4379;
Renee Nagel, Finance Director, renee.nagel@visalia.gov <mailto:renee.nagel@visalia.gov>, (559) 713-4375
Department Recommendation: Staff recommends the Council: 1) Conduct the public hearing under the requirements of Tax Equity and Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986. 2) Adopt Resolution 2026-62 authorizing the issuance of bonds by the California Municipal Finance Authority (CMFA) for an amount not to exceed $75 million for the benefit of Visalia Caldwell Associates, LP, to provide for the financing of the project. 3) Deposit the City’s share of bond issuance fees to the Redevelopment Agency (RDA) Successor Housing Fund to support affordable housing.
Summary:
Visalia Caldwell Associates, LP (the “Borrower”) submitted an application to the CMFA to be the issuer of tax-exempt financing for a project in the City of Visalia. The project is expected to be financed in an amount not to exceed $75,000,000 of tax-exempt revenue bonds. The proceeds of the bonds will be used to finance the acquisition, construction, development and equipping of the Caldwell Apartments a 306-unit multi-family residential rental project to be owned and operated by the borrower and located at the northwest corner of East Caldwell Avenue and South Lovers Lane as shown in Attachment D - Caldwell Apartments Map.
To satisfy the applicable federal and CMFA requirements, the City is required to complete the following:
• Conduct the public hearing, under the requirements of TEFRA and the Internal Revenue Code of 1986.
• Adopt Resolution 2026-62 (Attachment A - TEFRA Resolution) approving the issuance of the bonds by the CMFA for the benefit of Visalia Caldwell Associates, L.P. (the “borrower”) to provide for the financing of the Project. Such adoption is solely for the purposes of satisfying the public approval requirements of TEFRA, the Code and the California Government Code Section 6500 and does not create any financial liability or obligation on the part of the City of Visalia.
• Publish a public notice (Attachment B - TEFRA Public Notice) at least 7 days prior to the hearing.
Background Discussion:
Visalia Caldwell Associates, LP has requested that the CMFA serve as the municipal issuer of the bonds in an aggregate principal amount not to exceed $75,000,000 of tax-exempt revenue bonds. The proceeds of the bonds will be used to finance the acquisition, construction, development and equipping of a 306-unit multi-family residential rental project to be owned and operated by Visalia Caldwell Associates, LP and located at the northwest corner of East Caldwell Avenue and South Lovers Lane as shown in Attachment D - Caldwell Apartments Map.
In order for the bonds to qualify as tax-exempt bonds, the City of Visalia must conduct a public hearing (the “TEFRA Hearing”) providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the project. Prior to such TEFRA hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA hearing, an “applicable elected representative” of the governmental unit hosting the project must provide its approval of the issuance of the bonds for the financing of the project.
Caldwell Apartments Project:
Caldwell Apartments is a proposed new construction 306-unit affordable housing project with three (3) on-site manager units that is owned by Visalia Caldwell Associates, LP and the managing general partner is Kaweah Management Company, an affiliate non-profit partner of the Housing Authority of Tulare County. The project consists of ten (10) three-story residential buildings and a single-story community building. Project amenities include a community building, community room, exercise facility, outdoor children's playground, laundry facility, swimming pool, basketball half-court, and fenced dog park. The project will include (120) one-bedroom units, (105) 2-bedroom units, and (81) 3-bedroom units, providing affordable housing for families making between 30% and 70% of the area median income (AMI), with an average affordability of under 60% AMI. This project will carry a 55-year affordability covenant. This project does not have City of Visalia funds associated with it. However, the City of Visalia will benefit from creating 303-units of affordable housing and assist in meeting the City’s state-mandated Regional Housing Needs Allocation (RHNA) goals to maintain compliance with the City’s Housing Element. In addition, the City will is expected to receive a portion of the issuance fee. Staff anticipates that this funding will be in the range of $18,000 to $25,000 that can be used to support the development and/or operation of affordable housing.
CALIFORNIA MUNICIPAL FINANCE AUTHORITY:
The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 350 municipalities have become members of CMFA.
The CMFA was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. CMFA’s representatives and its Board of Directors have considerable experience in bond financing.
Joint Exercise of Powers Agreement:
In order for the CMFA to have the authority to serve as the issuer of the bonds for the project, the City of Visalia is required to be a member of the CMFA. The City became a member of the CMFA in 2022 during the development of the Lofts project that also received tax-exempt revenue bonds. A copy of the City’s executed Joint Exercise of Powers Agreement is included as Attachment C - CMFA JPA Agreement.
The Joint Exercise of Powers Agreement provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities, and obligations of the CMFA do not constitute debts, liabilities or obligations of the members executing such agreement.
The bonds to be issued by the CMFA for the project will be the sole responsibility of the borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the project or the repayment of the bonds for the financing of the project. All financing documents with respect to the issuance of the bonds will contain clear disclaimers that the bonds are not obligations of the City or the State of California but are to be repaid solely by funds provided by the borrower.
There are no costs associated with membership in the CMFA, and the City will in no way become exposed to any financial liability by reason of its membership in the CMFA. In addition, the City’s participation in the CMFA does not impact the City’s appropriations limits and does not constitute any type of indebtedness by the City. Outside of holding the TEFRA hearing, and adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the bonds will be required. The City is simply holding the public hearing pursuant to the TEFRA and will assume no responsibility for the repayment of the tax-exempt bonds. There will be no fiscal liability to the City, and legal documents related to the issuance of the bonds will provide that the borrowers indemnifies, holds harmless, and defends the City and its officers, officials, and employees, against any costs, claims, demands, or actions against the project.
The Joint Exercise of Powers Agreement expressly provides that any member may withdraw from such agreement upon written notice to the Board of Directors of the CMFA. In the case of the proposed bond financing for the borrower, the City, following its execution of the Joint Exercise of Powers Agreement, could, at any time following the issuance of the bonds, withdraw from the CMFA by providing written notice to the Board of Directors of the CMFA.
Fiscal Impact including annual maintenance and operating costs: The bonds to be issued by the CMFA for the project will be the sole responsibility of the borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the project or the repayment of the bonds for the financing of the project. All financing documents with respect to the issuance of the bonds will contain clear disclaimers that the bonds are not obligations of the City or the State of California but are to be paid for solely from funds provided by the borrower. The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Visalia, it is expected that a portion of the issuance fee attributable to the City will be granted by the CMFA. Staff recommends depositing the City’s issuance funds towards RDA Successor Housing fund (362) to help support development and/or operation of affordable housing. Staff anticipates that this funding will be in the range of $18,000 to $25,000. Staff will return at a later date to appropriate these funds once an eligible use has been identified.
Prior Council Action: None.
Alternatives: None recommended
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to:
1) Adopt Resolution 2026-62 authorizing the issuance of bonds not to exceed $75,000,000, by the CMFA for the benefit of Caldwell Associates, LP (the “borrower”), to provide for the financing of the project, and to satisfy the requirements of Tax and Equity Fiscal Responsibility Act , the Code and the California Government Code Section 6500; and
2) Deposit the City’s share of bond issuance fees into the Redevelopment Agency Successor Housing Fund (Fund 362) to support affordable housing.
Environmental Assessment Status: N/A
CEQA Review: N/A
Deadline for Action: 09/21/2026
Attachments: ● Attachment A - TEFRA Resolution: ● Attachment B - TEFRA Public Notice; Attachment C - CMFA JPA Agreement ● Attachment D - Caldwell Apartments Map
Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Check all that apply.
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